Findings Of Fact There are no issues of material fact in dispute. Respondent, Department of Children and Families (Department), pursuant to section 394.9151, Florida Statutes (2018),1/ has contracted with a private entity, Wellpath, LLC (Wellpath), to use and operate a facility, Florida Civil Commitment Center (FCCC), to comply with the requirements of chapter 394, part V (entitled “Involuntary Civil Commitment of Sexually Violent Predators”). Each Petitioner is a sexually violent predator, and collectively are persons subject to chapter 394, part V. Petitioners are confined in the FCCC. Petitioners allege that the FCCC Resident Handbook is an unpromulgated rule which is imposed on FCCC residents, and that the same is an improper exercise of delegated legislative authority as a de facto agency rule that has not been adopted pursuant to the rulemaking procedures of section 120.54(1)(a), Florida Statutes. Petitioners also claim that because “Baker Act residents” are housed at FCCC, then “all rules governing every aspect of the facility must be implemented” in accordance with section 394.457. Petitioners do not allege that they are housed at FCCC pursuant to the Baker Act.2/
The Issue In its request for hearing Petitioner disputes HRS' reduction of $127,206.00 of Baker Act funds from its fiscal year 1988/89 contract, and HRS' demand of payback of an additional $50,107.00 for fiscal years 1987/88 and 1988/89. These funds relate to an expansion of crises stabilization unit beds at Petitioner's facility. The additional beds were not licensed until March, 1989. Petitioner claims that all but $42,517.00 of the disputed funds were appropriately and reasonably expended and should not be disallowed. Respondent claims that the beds were not filled until approximately one year after the funds were allocated, and that three months' actual operation and three months start up costs are all that can be reasonably allowed, thus requiring a $177,313.00 reduction in contract funds.
Findings Of Fact Petitioner, Seminole Community Mental Health Center, Inc. (SCMHC) is a non-profit corporation which entered into annual contracts with Respondent, Department of Health and Rehabilitative Services (HRS) for fiscal years 1987/88 and 1988/89 to provide certain alcohol, drug abuse and mental health services in Seminole County Florida, HRS District 7. These services included a Crises Stabilization Unit (CSU) which provides brief, intensive residential treatment services to mentally ill persons in acute crisis. The CSU has been in operation since 1983, with twelve beds. The 1987 Legislature provided a special appropriation to District 7 for additional CSU beds, including funds for construction and two months operation. During fiscal year 1987/88, the parties amended their contract, in Amendment No. 3, to increase SCMHC's Baker Act funds by $74,896.00 for an eight (8) bed expansion of SCMHC's existing twelve bed CSU This amendment is dated February 8, 1988. The amendment provides that $52,184.00 of the $74,896.00 is designated for operations and that $22,712.00 is designated for a one time non- recurring expense for the eight (8) bed expansion. SCMHC received the one time non-recurring funds of $22,712.00 in March of 1988, and said funds are not at issue in this case. During February, March and April of 1988, SCMHC and HRS worked together on the construction, renovation, hiring and financial plans for the expansion. The original goal was to have the beds on-line by May 1, 1988, but the parties soon realized that the bidding and county purchasing requirements would extend that date. On April 26, 1988, Jim Berko, the Executive Director of SCMHC, and Stan Wagy, the District 7 Program Supervisor of HRS, worked out plans that would allow SCMHC to provide the eight (8) temporary CSU beds while undertaking renovations and construction for the eight (8) permanent new beds. The new beds were to be ready in September, 1988. On May 12, 1988, Jim Berko sent a letter to Vince Smith, the Health Services and Facilities Consultant for the HRS Office of Licensure and Certification (OLC) requesting temporary licensure of the eight (8) new CSU beds while the renovation and construction was being completed at SCMHC. This plan for temporary licensure was developed with the involvement and approval of Stan Wagy. It included six temporary new beds at SCMHC's facility, and SCMHC's purchase of services of two beds at Florida Hospital in Altamonte Springs. HRS never once voiced any objection to SCMHC's expansion plans or progress; however, OLC responded to the temporary license request by stating that it was premature. In April of 1988, SCMHC began hiring the new staff required for the eight (8) bed expansion. This was necessary because of the difficulty in finding and training qualified staff, a three to six month process according to SCMHC's expert, Rod Guzman. There is a shortage of nurses, and SCMHC, as a non- profit corporation, has a hard time competing with the salaries offered to nurses by private doctors, clinics and hospitals. Stan Wagy admitted at the hearing in this case, that if the figure for the salary and benefit expenses of the staff required for the eight (8) bed expansion for the last two months of fiscal year 1987/88 were known, said expense would be considered as an allowable operating expense by HRS. SCMHC established that its expenditure for salaries and benefits for the additional staff required by the eight (8) bed expansion for the last two months in the fiscal year 1987/88 was $27,314.00. For fiscal year 1987/88, SCMHC spent in excess of its Baker Act funds and met the required local match for Baker Act funds, so that the entire $27,314.00 in staff salaries and benefits required by the eight (8) bed expansion for the last two months (May and June of 1988) of fiscal year 1987/88 is an allowable cost. No payback is due HRS for fiscal year 1987/88 according to the following: 1987/88 Contract (8 New Beds) $74,896.00 - Total contract amendment -22,712.00 - One time non-recurring cost $52,184.00 - Operating expenses -27,009.00 - OCO - includes architectural fees and land survey (uncontroverted cost) -27,314.00 - Staff salaries and benefits $(2,139.00) The parties entered into a new contract on June 30, 1988, for fiscal year 1988/89, which began on July 1, 1988 and ended on June 30, 1989. The fiscal year 1988/89 contract does not mention any number of CSU beds to be provided with the Baker Act funds. For fiscal year 1988/89, the parties' contract allocated $313,152.00 as Baker Act funds. The eight (8) bed expansion of SCMHC's CSU required construction of 1,600 square feet of additional clinical space and major renovations of the existing facilities. The renovation and construction of SCMHC's physical facilities began in June of 1988 and terminated in September of 1988. This time schedule was in accord with the time schedule discussed with the HRS program office on at least a monthly basis. The eight (8) beds were on-line in September, 1988. They were purchased from Florida Hospital until the SCMHC license was issued. A mental health center must be ready to put clients in their beds before they can send in their application for licensure to the Office of Licensure and Certification. SCMHC's application for licensure was sent to OLC on September 20, 1988. A memorandum dated September 19, 1988 from Stan Wagy, District VII Program Supervisor of HRS, to Vince Smith, Program Manager of OLC, verifies the addition of the eight (8) beds in SCMHC's CSU. It was uncontroverted that the application for licensure in September of 1988 was in accordance with the parties' agreed upon time schedule. On November 8 and 9, 1988, OLC performed a site survey of the facilities and staff at SCMHC, and on November 30, 1988, sent their Deficiency Report to SCMHC. SCMHC's responses to OLC were immediate. On March 1, 1989, OLC acknowledged receipt of SCMHC's Quality Assurance Plan and enclosed regular license number 510, which increased SCMHC's licensed CSU capacity from twelve (12) to twenty (20) beds. SCMHC did everything possible to expedite the licensure of its eight (8) new CSU beds and had no basis to anticipate the time it would take for approval. The first time Jim Berko heard that HRS had reduced SCMHC's Baker Act funds was during lunch with Stan Wagy on March 14, 1989, when Stan Wagy casually mentioned that HRS had reduced SCMHC's 1987/88 and 1988/89 Baker Act funds by approximately $127,000.00. On March 15, 1989, at the request of Jim Berko, official written notification was provided to SCMHC stating that a payback of $127,206.00 was due HRS from SCMHC's 1987/88 and 1988/89 Baker Act funds. On June 5, 1989, Paul Snead wrote a letter to Dr. Barry Hersone, President of the Board of Directors of SCMHC, requesting an additional $50,107.00 in payback by SCMHC of their 1987/88 and 1988/89 Baker Act funds. At the hearing in this case, the parties agreed that the year-end audited Baker Act expenditures of SCMHC should be utilized by the Hearing Officer instead of the projected or estimated annual Baker Act expenditures utilized in the June 5, 1989 letter of Paul Snead, Administrator of District VII. The actual year end audited Baker Act expenditures of SCMHC for fiscal year 1988/89 are as follows: 1988/89 Contract (20 Beds) TOTAL BAKER ACT EXPENDITURES Salaries and Benefits $556,155.00 Contractual Services 68,650.00 Operating Expenses 138,883.00 OCO/Renovations 31,609.00 Occupancy 59,499.00 The total allowable expenditures for SCMHC's Baker Act funds for fiscal year 1988-1989 attributable to the new beds are $360,847.00, which are calculated as follows: 1988-1989 Contract (prorated for the 8 new beds) TOTAL EXPENDITURES 40% Salaries and Benefits $556,155.00 divided by 20 x 8 = 222,462.00 Contractual Services 68,650.00 divided by 20 x 8 = 27,424.00 Operating Expenses 138,883.00 divided by 20 x 8 = 55,553.00 OCO/Renovations 31,609.00 31,609.00 Occupancy 59,499.00 divided by 20 x 8 = 23,799.00 FISCAL YEAR 1988/89 TOTAL ALLOWABLE EXPENDITURES $360,847.00 The State's share of the 1988/89 Total Allowable Expenditures is $270,635.00, which is calculated as follows: 1988/89 Total Allowable Expenditure $360,847.00 State's Share (less local match of 25%) x .75 $270,635.00 For fiscal year 1988/89, SCMHC met the required local match for its Baker Act funds. A payback of $42,517.00 was due HRS from SCMHC for fiscal year 1988/89, which is calculated as follows: 1988/89 Total Baker Act Fund Contract Allocation $313,152.00 Less Total State Share of Expenditures -270,635.00 PAYBACK DUE STATE FOR FISCAL YEAR 1988/89 $ 42,517.00 HRS contends that since the eight (8) beds were not licensed until March, 1988, the center in not entitled to operating funds for those beds until that time. Stan Wagy conceded that some start-up time is reasonable and he estimated that three months would be sufficient. For that reason HRS disallowed all but six months expenses prorated for the eight (8) beds. No basis for the three-month cut-off was presented by HRS. SCMHC, however, presented competent substantial evidence that the funds were spent, and reasonably so, well in advance of the date of license for the eight (8) beds. Hiring of staff commenced in March, 1988 and was finished by July, 1988. Some turnover was experienced, and vacancies were filled. The patients for the eight (8) beds were treated elsewhere until licensure, but the center was paying for that treatment. Once the renovation and construction was complete in September, 1988, costs associated with those beds were incurred, even without licensure. Those costs include, but are not limited to, rent and utilities and sub-contractual expenses related to the provision of the additional eight-bed services elsewhere. At the time that the parties' contract for 1988/89 was executed in June, 1988, all were aware of the status of the eight (8) additional beds, yet no provision was made at that time to prorate the expenses or to condition compensation on the actual number of licensed beds. It was reasonable and necessary for SCMHC to incur the full $360,847.00 expenses in fiscal year 1988/89. Because HRS has already erroneously reduced SCMHC's Baker Act funds by $127,206.00 for fiscal year 1988/89, HRS is calculated as follows: Amount Reduced from SCMHC owes SCMHC a return of $84,689, which for Fiscal Year 1988/89 Less Correct Payback Figure to HRS from SCMHC for Fiscal Year 1988/89 $127,206.00 -42,517.00 AMOUNT OWED TO SCMHC FROM HRS $ 84,689.00 The remaining payback of $50,107.00 requested by HRS for fiscal years 1987/88 and 1988/89 is not owed to HRS by SCMHC.
Recommendation Based on the foregoing, it is hereby RECOMMENDED: That a Final Order be entered finding Petitioner entitled to the disputed funds and to restoration of $84,689.00 of the Baker Act funds withheld from its 1988/89 contract payments. DONE and RECOMMENDED this 20th day of December, 1989, in Tallahassee, Florida. MARY CLARK 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 20th day of December, 1989. COPIES FURNISHED: Donna L. McIntosh, Esquire Frank C. Whigham, Esquire Post Office Box 1330 Sanford, Florida 32772-1330 James Sawyer, Jr., Esquire Dept. of Health and Rehabilitative Services District 7 Legal Office 400 West Robinson St., Suite 701 Orlando, Florida 32801 Gregory L. Coler, Secretary Dept. of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32399-0700 John Miller, General Counsel Dept. of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32399-0700 R. S. Power, Agency Clerk Dept. of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32399-0700 =================================================================
The Issue The issue to be determined in this proceeding is whether Petitioner is entitled to a refund of premiums paid for life insurance coverage during the 2013 plan year.
Findings Of Fact Petitioner is a state employee with over 30 years of public employment. Respondent, Department of Management Services, Division of State Group Insurance (Division), is the state agency charged with administering the state group insurance program. Pursuant to section 110.123(5), Florida Statutes, its duties include determining the benefits to be provided to state employees and the contributions to be required for the state group insurance program. The Department of Management Services is also authorized, pursuant to section 110.161, to administer a pre-tax benefits program that allows employees’ contributions to premiums be paid on a pre-tax basis, and to provide for the payment of such premiums through a pre-tax payroll procedure. Among the insurance products available to state employees are group health insurance, basic group term life insurance, and optional group term life insurance. At the crux of this case is the premium to be paid for group term life insurance. Basic insurance is noncontributory insurance (meaning the employer pays the premium) for full-time employees and is contributory insurance (meaning the employee pays the premium) for part-time employees. Optional insurance is contributory insurance for all employees. At the time relevant to this proceeding, career service, university system support staff, senior management, and select exempt service employees, as well as active state senators and representatives, were entitled to a basic group term life insurance benefit of $25,000. For retired vested legislators, the basic group term life benefit was $150,000, and for retirees who were not vested legislators, the benefit was either $2,500 or $10,000. Optional group term life insurance was also available to active employees enrolled in basic term life. This insurance coverage was available for purchase up to seven times an employee’s annual earnings, to a maximum of $1,000,000. Both basic and optional life insurance are provided through Minnesota Life. The opportunity to enroll in or make changes to insurance coverage occurs during open enrollment each year. During open enrollment in 2012, Petitioner made selections for the 2013 plan year, which corresponds with the calendar year. Among his selections, Petitioner opted to continue his optional life insurance coverage at four times his annual salary. To make his selection, Petitioner used the People First System. The Minnesota Life screen shot for determining the premium for coverage contains the following information: Determining the cost To determine the new monthly cost of changing your Optional Life coverage, please follow the example below: How is your monthly premium calculated? Your annual earnings = Basic amount Choose the salary multiple of one = to seven times your annual Optional multiple earnings Multiply your basic amount by your = optional multiple and round to the Coverage amount next higher thousand Divide your coverage amount by = 1,000 $1,000 increments Of coverage From the table on the right, find = the rate that corresponds with Rate from table your age X Answer from #4 = Your monthly Insurance premium The table referenced above provides the premium rates based on age bands, such as under age 30, 30-34, 35-39, etc. For ages 55-59, the rate is $0.335. From 60-64, the rate is $0.613. Below the rate/age table is the statement, “[r]ates increase with age and all rates subject to change.” However, nothing in the worksheet indicates that the rate changes during a plan year if the insured has a birthday that puts the employee in a different age band. Based upon his completion of the worksheet in People First, the monthly premium for the optional life insurance selected by Petitioner was $81.08. Petitioner received a document entitled “State of Florida Confirmation of Benefits for 2013 Plan Year.” The Confirmation of Benefits document confirmed that for the 2013 plan year, Petitioner’s monthly cost for optional life insurance would be $81.08. For the first two months of 2013, the expected amount of $81.08 was deducted from Petitioner’s salary. However, beginning in March 2013, for the coverage beginning in April 2013, the premium increased from $81.08 to $148.36, a difference of $67.28 per month.1/ Petitioner did not receive any specific notice regarding the change in policy premiums. He did not notice the difference in his net pay immediately because his salary is subject to additives, and it was not unusual for the net pay to vary from month to month. Employees do not automatically receive a copy of their pay stubs. They must affirmatively retrieve them electronically from a Department of Financial Services website. Petitioner first called the People First information line on August 27, 2013, to inquire regarding the increase in premiums. He followed up with a letter dated September 10, 2013, asking for a refund of the amount deducted from his salary in excess of $81.08 a month. On September 12, 2013, the People First Service Center responded to his request by stating that the increase was a “Significant Cost Increase Qualifying Status Change (QSC) event,” and that inasmuch as Petitioner did not request a decrease in coverage level within 60 days of the QSC event, any change to his benefits would have to wait until open enrollment. The letter referenced Florida Administrative Code Rule 60P-2.003, stating, We are charged with the responsibility of administering the State Group Insurance Program pursuant to these state regulations, as well as the federal regulations. The rules pertaining to changes in health plans are found in Chapter 60P-2.003 which states: “An employee may elect, change or cancel coverage within thirty-one (31) days of a Qualified Status Change (QSC) event if the change is consistent with the event pursuant to subsection 60P-2.003(7), F.A.C. or during the open enrollment period.” While the letter purports to quote the rule, rule 60P- 2.003, the language above does not actually appear as quoted in the rule. Rule 60P-2.003 states in relevant part: An employee enrolled in the Health Program may apply for a change to family coverage or individual coverage within thirty-one (31) calendar days of a QSC event if the change is consistent with the event or during the open enrollment period. * * * All applications for coverage changes must be approved by the Department, subject to the following: The Department shall approve a coverage change if the completed application is submitted to the employing agency within thirty-one (31) calendar days of and is consistent with the QSC event. Documentation substantiating a QSC event is as follows: If changing to family coverage, proof of family status change or proof of loss of other group coverage is required. If changing to individual coverage, proof of family status change or proof of change of employment status is required. If adding an eligible dependent to family coverage, proof of family status change is required. If terminating coverage, proof of family status change or proof of employment change is required. On September 23, 2013, Petitioner sought a Level-II appeal, forwarding all of his correspondence to the Division. On October 11, 2013, Barbara Crosier, Director of the Division, wrote to Petitioner and advised that his Level-II appeal was denied. The letter cited rule 60P-2, and stated that Petitioner needed to have acted within 31 days of the QSC event if the change was consistent with the event, or wait until the open enrollment period. The letter provided Petitioner with notice of his right to a hearing pursuant to chapter 120, Florida Statutes, and on November 6, 2013, Petitioner filed a request for hearing that resulted in these proceedings. Both the correspondence from People First and the letter from Ms. Crosier refer to a qualifying status change. However, the definition of a QSC event in rule 60P-1.003(17) does not include a change in age band. The events identified in the rule are “the change in employment status, for subscriber or spouse, family status or significant change in health coverage of the employee or spouse attributable to the spouse’s employment.” There is a table available somewhere through People First2/ entitled “State of Florida Qualifying Status Change Event Matrix.” The matrix identifies changes in status, the type of documentation required, and the options available to the employee. There was no evidence presented indicating that the matrix has been adopted by rule and in some instances, the matrix is inconsistent with both section 110.123 and rule 60P-1.003. Petitioner did not see this matrix when making his insurance selections during open enrollment. Included in the matrix as a category of QSC events is a category entitled “Significant Cost Changes.” Under this category, the grid identifies “[p]remium increase or decrease to subscriber of at least $20 per month as a result of a change in pay plan (e.g., Career Service to SES), FTE (e.g., part-time to full-time), LWOP, FMLA, legislative premium mandates, Optional Life age banding, etc.” The category “significant cost changes” is not identified as a QSC event in rule 60P-1.003(17). Footnote four of the matrix states, “[t]he period of time to make allowable changes to benefits, as defined by the IRS. All QSC windows are 60 days unless otherwise specified.” Footnote four is appended to text within the cell for information related to a change in marital status, which states “60-day QSC window4.” Petitioner credibly testified that he was not experiencing any change to marital status, so did not believe that the information identified in footnote four would necessarily relate to his circumstances. On December 19, 2008, the Division published the State of Florida Salary Reduction Cafeteria Plan with a Premium Payment Feature, a Medical Reimbursement Component, and a Dependent Care Component (Salary Reduction Cafeteria Plan), which Petitioner submitted without objection as Petitioner’s Exhibit 10. This document is available on the DMS website but has not been identified as a rule. However, it is consistent with the requirements of 26 U.S.C. § 125, which authorizes cafeteria plans, and 26 C.F.R. § 125-4, which identifies permitted election changes in cafeteria plans. The Salary Reduction Cafeteria Plan states: Establishment of Plan The Department of Management Services, Division of State Group Insurance established the State of Florida Flexible Benefits Plan effective July 1, 1989. The Department of Management Services, Division of State Group Insurance hereby amends, restates and continues the State of Florida Flexible Benefits Plan, hereafter known as the State of Florida Salary Reduction Cafeteria Plan (“the Plan”), effective December 19, 2008. This plan is designed to permit an Eligible Employee to pay on a pre-tax basis for his or her share of premiums under the Health Insurance Plan, the Life Insurance Plan and the Supplemental Insurance Plan, and to contribute to an account for pre-tax reimbursement of certain medical care expenses and dependent care expenses. Legal Status This Plan is intended to qualify as a “cafeteria plan” under Section 125 of the Internal Revenue Code 1986, as amended (“the Code”), and regulations issued there under. The Medical Reimbursement Component of this Plan is also intended to qualify as a “self- insured medical reimbursement plan” under Code 105(h), and the Medical Care Expenses reimbursed under that component are intended to be eligible for exclusion from participating Employees’ gross income under Code 105(b). The Dependent Care Component of the Plan is intended to meet the requirements of Code 129. The Life Insurance Plan is intended to meet the requirements of Code 79. The Salary Reduction Cafeteria Plan contained definitions for a change in status. Those definitions are consistent with the definitions in rule 60P-1.003(17), although more detailed in terms of description. The definition does not include a change in cost due to age banding. Section 4.3 of the Salary Reduction Cafeteria Plan provides: Each eligible Employee’s Salary Reduction Agreement shall remain in effect for the entire Plan Year to which it applies, shall be irrevocable (except as provided in Sections 5.6, 6.4, and 7.4) and shall set forth the amount of the Participant’s Compensation to be used to purchase or provide benefits and the benefits to be purchased or provided. Sections 6.4 and 7.4 deal with a participant’s election to participate in the medical reimbursement component and the dependent care components of the plan and have no bearing on this proceeding. Section 5.6 deals with the irrevocability of the election under the premium component of the plan. The section states in pertinent part: In other words, unless one of the exceptions applies, the Participant may not change any elections for the duration of the Plan Year regarding: Participation in this Plan; Salary Reduction Amounts; or Election of particular component plan benefits. The exceptions to the irrevocability requirement, which would permit a Participant to make a mid-year election change in benefits and/or Salary Reduction amounts for this Premium Payment Component, are as follows: Change in Status: A Participant may change or terminate his actual or deemed election under the Plan upon the occurrence of a change in status, but only if such change or termination is made on account of, and is consistent with, the change in status. The Administrator (in its sole discretion) shall determine whether a requested change is on account of, and is consistent with, a change in status. Special HIPAA Enrollment rights. . . . Certain judgments, decrees and orders. . . . Medicare and Medicaid. . . . Significant Change in Cost or Coverage. A Participant may revoke a prior election with respect to pre-tax contributions and, in lieu thereof, may receive, on a prospective basis, coverage under another plan with similar coverage if any independent, third-party provider of medical benefits previously elected by the Participant either significantly increases the premium for such coverage, or significantly curtails the coverage available under such plans, during the plan year coverage period. (Note: if any mid- year premium increase by the third-party provider is insignificant, the Participant’s Salary Reduction election will be automatically adjusted by the Administrator or its agent. Significant Change in Coverage Attributable to Spouse’s Employment. . . . (emphasis added). None of the exceptions to irrevocability identified above apply in this instance. Section 5.2 of the Agreement addresses the Participant’s contributions and is the provision upon which Petitioner relies. It states in pertinent part: If an employee elects to participate in the Premium Payment Component the Participant’s share (as determined by the employer) of the premium for the plan benefits elected by the Participant will be financed by salary reductions. The salary reduction for each pay period is an amount equal to the annual premium divided by the number of pay periods in the plan year, or an amount otherwise agreed upon. . . . (emphasis added). Petitioner did not experience a QSC event. The Confirmation of Benefits received by Petitioner identifies the amount of premium Petitioner has agreed to pay and the benefit he was to receive for that premium. He elected optional life insurance coverage in accordance with the information provided to him on the People First screen. The statement “rates increase with age” can be construed, as Petitioner did, to explain the differences in rates reflected in the table described in paragraph 10. Nothing placed Petitioner on notice that upon achieving his 60th birthday, his premium would automatically increase to the next premium category. Such an interpretation is inconsistent with the method of premium calculation described in paragraph 5.2 of the Salary Reduction Cafeteria Plan.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Division enter a Final Order authorizing the refund of excess premiums in the amount of $605.52. DONE AND ENTERED this 13th day of March, 2014, in Tallahassee, Leon County, Florida. S LISA SHEARER NELSON 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 13th day of March, 2014.
Findings Of Fact Upon consideration of the oral testimony and documentary evidence adduced at the hearing, the following relevant facts are found: At all times pertinent to this proceeding, Petitioners were producers of agricultural products in the State of Florida as defined in Section 604.15(5), Florida Statutes (1983). At all times pertinent to this proceeding, Respondent GMS was a licensed dealer in agricultural products as defined by Section 604.15(1), Florida Statutes (1983), issued license no. 936 by the Department and bonded by Commercial Union Insurance Company (Commercial) in the sum of $50,000.00 - Bond No. CZ 7117346. At all times pertinent to this proceeding, Respondent Commercial was authorized to do business in the State of Florida. The complaint filed by Petitioner was timely filed in accordance with Section 604.21(1), Florida Statutes (1983). Prior to Petitioners selling or delivering any watermelons (melons) to Respondent GMS, Petitioners and Respondent GMS entered into a verbal contract whereby: (a) Petitioners would harvest and load their melons on trucks furnished by Respondent GMS at Petitioners' farm; (b) the loading, grading and inspection, if any, was to be supervised by, and the responsibility of Respondent GMS or its agent; (c) the melons were to be U.S. No. 1 grade; (d) the melons were purchased F.O.B. Petitioner's farm subject to acceptance by Respondent GMS, with title and risk of loss passing to Respondent GMS at point of shipment (See Transcript Page 95 lines 5-7); (e) the price was left open subject to Petitioners being paid the market price for the melons at place of shipment on the day of shipment as determined by Respondent GMS less one (1) or two (2) cent sales charge, depending on the price; and requiring Respondent GMS to notify Petitioners on a daily basis of that price and; (f) the settlement was to be made by Respondent GMS within a reasonable time after the sale of the melons by Respondent GMS. Respondent GMS was not acting as Petitioners agent in the sale of the melons for the account of the Petitioners on a net return basis nor was it acting as a negotiating broker between the Petitioners and the buyers. Respondent GMS did not make the type of accounting to Petitioners as required by Section 604.22, Florida Statutes had it been their agent. Although Respondent GMS purchased over twenty (20) loads of melons from the Petitioners, there are only ten (10) loads of melons in dispute and they are represented by track report numbers 536 dated April 29, 1985, 534 dated April 30, 1985, 2363 and 537, dated May 1, 1985, 2379, 2386 and 538 dated May 2, 1985, and 2385, 2412 and 2387 dated May 3, 1985. Jennings W. Starling (Starling) was the agent of Respondent GMS responsible for loading; grading- inspecting and accepting and approving the loads of melons for shipment that Respondent GMS was purchasing from Petitioners during the 1985 melon season. Petitioners and Starling were both aware that some of the melons had hollow hearth a conditions if known, would cause the melons to be rejected. Aware of this condition in the melons, Starling allowed Petitioners to load the melons on the truck furnished by Respondent GMS. Starling rejected from 20 percent to 40 percent of the melons harvested and brought in from Petitioners' fields before accepting and approving a load for shipment. Starling accepted and approved for shipment all ten (10) of the disputed loads of melons. On a daily basis, Robert E. McDaniel, Sr., one of the Petitioners, would contact the office of Respondent GMS in Lakeland Florida to obtain the price being paid that day by Respondent GMS to Petitioners but was not always successful, however, he would within a day or two obtain the price for a particular day. Robert E. McDaniel did obtain the price to be paid by Respondent GMS for the ten (10) disputed loads and informed his son Robert E. McDaniel, Jr. of those prices. The prices quoted to Robert E. McDaniel, Sr. by Respondent GMS on the ten (10) disputed loads were 12 cents, 10 cents, 8 cents, 8 cents, 8 cents, 8 cents, 8 cents, 7 cents, 7 cents, and 7 cents on tract reports number 536, 534, 2363, 537, 2379, 2386, 538, 2385, 2412 and 2387, respectively. No written record of their prices was produced at the hearing but the testimony of Robert E. McDaniel Sr. concerning these prices was the most credible evidence presented. After the melons were shipped, sometimes as much as one week after, a track report was given to Robert E. McDaniel Jr. by Starling for initialing. Sometimes a price would be indicated on the track report but this price was based on selling price at point of destination and not the market price at point of shipment. Also, the letters "H.H." would also appear on the track report which, according to the testimony of Starling, indicated hollow heart but the evidence was insufficient to prove that Starling had rejected these loads for shipment because of a hollow heart condition in the melons. The loads in question were paid for by Respondent GMS based on a price at point of destination under its drafts no. 831912 and 851311. The amount in dispute is as follows: DATE TRACK NET AMOUNT AMOUNT SHIPPED
Recommendation Based upon the Findings of Fact and Conclusions of Law recited herein, it is RECOMMENDED that Respondent GMS be ordered to pay to the Petitioners the sum of $11.212.31. It is further RECOMMENDED that if Respondent GMS fails to timely pay the Petitioners as ordered, then Respondent Commercial be ordered to pay the Department as required by Section 604.21, Florida Statutes (1983) and that the Department reimburse the Petitioners in accordance with Section 604.21, Florida Statutes (1983). Respectfully submitted and entered this 13th day of June, 1986, in Tallahassee, Leon County, Florida. Hearings Hearings WILLIAM R. CAVE Hearing Officer Division of Administrative The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 FILED with the Clerk of the Division of Administrative this 13th day of June, 1986.
The Issue Whether certain operating procedures or policies at Baker Correctional Institution, a prison operated by respondent, are unpromulgated rules and therefore invalid under Section 120.56, Florida Statutes (1981)
Findings Of Fact and CONCLUSIONS OF LAW I. Generally CONCLUSIONS OF LAW The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. $120.56, Fla.Stat. (1981). Petitioners are substantially affected by the specific policies and procedures at issue. The Department concedes that they have standing to bring and maintain this administrative rule challenge proceeding. See, 120.56, Fla.Stat. The parties' proposed findings of fact have been considered in preparing this order. To the extent the proposed findings were not consistent with the weight of credible evidence, they have been either rejected, or, when possible, modified to conform to the evidence. Additionally, proposed findings which were subordinate, cumulative, immaterial, or unnecessary, have been rejected. II. Findings of Fact The parties stipulate that the following written policy is in effect at Baker Correctional Institution: Inmates will be permitted to purchase and receive legal materials, such as law books, and keep them in their personal lockers if space is available. Baker Correctional Institution Operating Procedure (I0P) #78-G-1, Section VI, and 80-G-34, Section IV, pg. 2 of 3. Conclusions of Law This policy is not an unpromulgated rule, but rather is a restatement of Rule 33-3.05(6), Florida Administrative Code, which reads, in relevant part: (6) Inmates shall be allowed to purchase legal materials (such as law books) at their own expense, limited only by the amount of space available to the inmate for the storage of such items. Inmates shall be allowed to keep legal material in their quarters subject to storage limitations. III. Findings of Fact The parties stipulate that the following written policy is in effect at Baker Correctional Institution: If the inmate does not send his property out of the institution within thirty (30) days after proper notification, he shall forfeit ownership of such and it will be disposed of by the institution in accordance with Department of Corrections rules and regulations 33-3.2, 33-3.06, and in accordance with the guidelines on DC Form #4, Authorization for Disposition of Mail and Property. I0P #78-G-3, Section VII p. 2 of 2, and 80-G-32, Section III B. Conclusions of Law Contrary to petitioners' contention, it has not been shown that this policy has the effect of a rule but was not promulgated as such. See, State Department of Administration v. Stevens, 344 So.2d 290 (Fla. 1st DCA 1977) In effect, the challenged policy simply requires that impounded or unauthorized inmate property be disposed of in accordance with Department rules and DC Form #4, Authorization for Disposition of Mail and Property, an authorization which each inmate must sign as a condition of being allowed to keep personal property within a correctional institution. See, Section 3.025(7), (8), Fla. Admin. Code. DC Form #4, which is not in evidence, has not been shown to contain a Department interpretation of law or policy which is virtually self-executing, intended by its own effect to create rights, require compliance, or otherwise have the direct and consistent effect of law. Stevens, supra at 296; McDonald v. Department of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977). IV. Findings of Fact Petitioners allege that there is an unwritten rule at Baker Correctional Institution which requires that any and all legal material, books, and files be destroyed by the institution after 30 days. There is no written or unwritten policy at Baker Correctional Institution which imposes such a requirement. Conclusions of Law Petitioners' claim is rejected for failure to prove the existence of such a policy at Baker Correctional Institution. V. Findings of Fact The parties stipulate that the following written policy statement is in effect at Baker Correctional Institution: Any radio that is altered in any way, cabinet, case electronically and/or electrically will be confiscated and the inmate will lose possession of the radio and/or disciplinary action will be taken. I0P #78-G-15, Section VIII, pg. 2 of 3. Conclusions of Law This policy is nothing more than a logical restatement of Rule 33- 3.06(1)(b) Any item or article not originally contraband shall be deemed contraband if it is passed from one inmate to another without authorization or if it is altered from its original condition. (Emphasis added) Further, Subsection (7)(d) of this rule allows contraband to be confiscated and Rule 33-3.08, generally, authorizes disciplinary action against inmates who violate Department rules. VI. Findings of Fact The parties stipulate that the following institutional operating procedure is in effect at Baker Correctional Institution: Inmates are prohibited from using typewriters for personal correspondence, filing grievances, or other personal use. Any violation of this operating procedure may constitute a basis for disciplinary action. I0P #78-G-21. This is a Department policy, never promulgated as a rule, which is uniformly applied throughout Baker Correctional Institution, is--by its own terms--virtually self-executing, and intended to require compliance and otherwise have the consistent effect of law. Conclusions of Law This policy has the effect of a rule, as defined by Section 120.52(14), Florida Statutes (1981), and is therefore an invalid exercise of delegated legislative authority. See, Stevens, supra. The Department, in its post-hearing proposed findings of fact and conclusions of law, "does not deny that . . . [this policy] is an invalid rule." VII. Findings of Fact Petitioners allege that there is an unwritten policy at Baker Correctional Institution which allows only one legal size envelope, at a time, to be issued an inmate. There is no such policy. Rather the number of legal size envelopes issued to inmates depends on the availability of envelopes and the reasonableness of the requests. Within these guidelines, the exact number of envelopes issued is left to the discretion of the correctional officer involved. Conclusions of Law Since this policy has been shown to operate as no more than a guideline, subject in application to the discretion of the enforcing officer, it is not a rule within the meaning of Chapter 120, Florida Statutes (1981), and need not be promulgated as such. See, Department of Highway Safety and Motor Vehicles v. Police Benevolent Association, 400 So.2d 1302 (Fla. 1st DCA 1981). VIII. Findings of Fact The parties stipulate that the following written policy is in effect at Baker Correctional Institution: Visitors or regular visitors will either be Saturday or Sunday, but not both days. I0P #78-6-7. This policy, never promulgated as a rule, is uniformly applied, virtually self-executing, and intended by its own effect to create rights or require compliance, or otherwise have the direct and consistent effect of law. Conclusions of Law This policy is, in effect, a rule, but was not promulgated as such. It is therefore an invalid exercise of delegated legislative authority. See, Stevens, supra; Sumner v. Department of Corrections, (DOAH 82-676R), 4 FALR 1198-A (1982), where a memorandum, issued by the Superintendent of Polk Correctional Institution, restricting prisoners' visitation rights to one weekend day, was declared invalid. IX. Findings of Fact The parties stipulate that the following written policy is in effect at Baker Correctional Institution: We will discontinue receiving funds for inmates from visitors. Interoffice Memo 4-1-83. This policy, never promulgated as a rule, is applied uniformly, virtually self-executing, and intended by its own effect to create rights or require compliance, or otherwise have the direct and consistent effect of law. Conclusions of Law This policy has the effect of a rule, but was not promulgated as one. Thus it is an invalid exercise of delegated legislative authority. See, Stevens, supra; Sumner, supra. Contrary to the Department's contention, this policy is not a mere restatement of Rule 33-3.06(5) which, at least by implication, allows visitors to bring money to inmates of a correctional institution. Findings of Fact The parties stipulate that the following written policy is in effect at Baker Correctional Institution: Only one dollar bills will be spent by visitors in the visiting park. This policy, too, is uniformly applied, virtually self-executing, and intended by its own effect to create rights or require compliance, or otherwise have the direct and consistent effect of law. Conclusions of Law This policy, which has the effect of a rule but was not adopted as such, is therefore an invalid exercise of delegated legislative authority. See, Stevens, supra; Sumner, supra. Further, the Department's post-hearing proposed findings of fact state at page 5: The . . . [Department] does not deny that the above written policy is an invalid rule. For these reasons, it is ORDERED: That the Department procedures or policies described in Sections VI, VIII, IX, and X, are invalid exercises of delegated legislative authority; and That, in all other respects, petitioners Petition to Determine the Invalidity of a Rule, filed October 11, 1983, is denied. DONE and ENTERED this 6th day of February, 1984, in Tallahassee, Florida. R. L. CALEEN, JR. 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 6th day of February, 1984. COPIES FURNISHED: Randall A. Holland, Esquire Assistant Attorney General Room 1601, The Capitol Tallahassee, Florida 32301 Douglas L. Adams, Joe Lewis Holland Union Correctional Institution Post Office Box 221 Raiford, Florida 32083 Liz Cloud, Chief Department of State Bureau of Administrative Code Room 1802, The Capitol Tallahassee, Florida 32301 Carroll Webb, Executive Director Administrative Procedures Committee Room 120, Holland Building Tallahassee, Florida 32301 Louie L. Wainwright, Secretary Department of Corrections 1311 Winewood Boulevard Tallahassee, Florida 32301 Curtis Head and Melvin Davis Baker Correctional Institution Post Office Box 500 Olustee, Florida 32072
The Issue The issue to be determined is whether the Board of Trustees for the City of Coral Springs Police Officers' Pension Fund (Respondent or the Board) should issue final orders suspending payment of pension benefits to Douglas Williams and Sherry Williams (Petitioners or the Williamses) pending a later Board decision on forfeiture pursuant to section 112.3173, Florida Statutes (2016),1/ consistent with initial orders recommending such suspension of benefits issued on March 15, 2016.
Findings Of Fact The City of Coral Springs is a municipality in Broward County, Florida. It exercises broad power pursuant to Article VIII, section 2, Florida Constitution, and the Municipal Home Rule Powers Act, chapter 166, Florida Statutes. The City Commission of the City of Coral Springs (Commission) may create other offices, boards, or commissions to administer the affairs of the city and may grant them powers and duties. The Commission has adopted the Coral Springs Police Officers' Pension Plan (the Plan), which is amended from time to time by ordinance and is set forth in sections 13-5 through 13-17 of the Code of Ordinances of the City of Coral Springs. The Plan is administered by the Board, the powers of which are set forth in sections 13-13 through 13-15 of the Code of Ordinances of the City of Coral Springs. The Plan requires mandatory participation from all officers. Officers must provide continuous service to the department and contribute to the Plan to receive benefits. The Plan creates a 100-percent vested interest after ten years of continuous service and contribution. The Plan allows officers to enter the Deferred Retirement Option Plan ("DROP") on the first day of the month coincident with their normal retirement date. When an officer enters DROP, no additional contributions are made to the Plan, and the benefits are calculated as if the officer had actually retired. Those benefits are transferred to an investment account and cannot be distributed until the officer's actual separation from service. Officers who enter DROP must resign from their employment within five years of entry into the program. Once an officer enters DROP, any changes in the Plan's benefits do not apply to that officer. After entering DROP, changes in the Plan may only be applied to those officers if the changes are also applicable to retired members. The only provisions that mention revision of benefits after DROP are the cost-of-living adjustment provision and the repeal or termination of the entire system provision. The Plan does not provide for change in the vested interest in the Plan after the officer enters DROP. The Plan does not provide for the Board to suspend an officer's vested interest in the Plan after the officer enters DROP. Section 112.3173 provides for the forfeiture of pension benefits if a member is convicted of certain "specified offenses." This section of the statute applies, with some exceptions, to any employee pension benefit plan supported in whole or in part by public funds. Section 112.3173 applies to the Plan. Section 112.3173 does not contain a provision for suspending a member's benefits pending criminal charges. Douglas Williams was a full-time Coral Springs police officer from September 1981 through September 30, 2009. Douglas Williams's vested interest in his pension plan reached 100 percent in 1991, after ten continuous years of service and contributions. On December 1, 2004, Douglas Williams became eligible for retirement, and he entered into DROP. Effective October 1, 2009, Douglas Williams began receiving monthly pension payments after terminating his employment. From December 1, 2004, through February 1, 2016, Douglas Williams received $703,819.30 in pension payments. Douglas Williams's contributions to his pension plan totaled $80,302.74. On September 4, 2014, Douglas Williams was arrested and charged with multiple counts of grand theft related to his volunteer position with the Coral Springs Fraternal Order of Police Lodge No. 87, Inc. Sherry Williams was a full-time Coral Springs police officer from August 1995 through September 30, 2014. Sherry Williams's vested interest reached 100 percent in 2005, after ten continuous years of service. On February 1, 2012, Sherry Williams became eligible for retirement, and she entered DROP. Effective October 1, 2014, Sherry Williams terminated her employment and began receiving monthly pension payments. From February 1, 2012, through February 1, 2016, Sherry Williams received $363,901.65 in pension payments. Sherry Williams's contributions to her pension plan totaled $97,901.65. On September 5, 2014, Sherry Williams was arrested and charged with multiple counts of grand theft and fraud related to her position with the Coral Springs Fraternal Order of Police Lodge No. 87, Inc. The Williamses' positions with the Coral Springs Fraternal Order of Police Lodge No. 87, Inc., required them to be police officers with the City of Coral Springs. Sergeant Scott Myers, and possibly other members of the Board, became aware of the possibility of suspending the payment of benefits to individuals charged with certain crimes at a Florida Public Pension Trustees Association (FPPTA) conference in September 2015. No contract has been entered into between the City Commission and the Fraternal Order of Police allowing for the enactment of a statute or ordinance that amends the Plan to allow the Board to suspend a member's benefits after retirement before an adjudication of guilt of a specified offense under section 112.3173. On January 25, 2016, the Board adopted its "Policy Regarding Payment of Pension Benefits Pending Forfeiture Under Florida Statute §112.3173" (Board Policy). The Board Policy provides that when a member has commenced receipt of benefits, and evidence has been brought to the Board's attention that the member has been charged with what may be a specified offense, the Board shall vote at the next regularly scheduled meeting to allow the member to continue to receive the monthly pension up to an amount equal to their employee contributions. Thus, when monthly pension payments exceed the employee contribution, payments would be suspended pending the outcome of charges and held in the interim by the Board. The Board Policy further provides that while benefits are being held by the Board, the balance will accrue interest at the Plan's assumed rate of return. The Board provided notice to Douglas and Sherry Williams, both personally and through their attorney of record in the criminal cases, that the Board would consider the suspension of their benefits pursuant to the Board Policy at its February 24, 2016, meeting. Douglas Williams attended the meeting; Sherry Williams did not. On February 24, 2016, determining that the offenses with which Douglas and Sherry Williams had been charged may be specified offenses under section 112.3173, the Board decided to suspend Douglas and Sherry Williams's pension benefits, and the Board issued each of them an Order Recommending Suspension of Benefits (Board Orders) on March 15, 2016. The Board conducted no factual inquiry into the basis for the charges against Douglas and Sherry Williams. Each Board Order states that the Board reviewed the records, including charging documents from the Broward Clerk of Court; section 112.3173; and the case of Warshaw v. City of Miami Firefighters' and Police Officers' Retirement Trust, 885 So. 2d 892 (Fla. 3rd DCA 2004). The Board Orders stated that Doug and Sherry Williams were "charged with . . . felonies which may be specified offenses under Florida Statutes 112.3173." The Information against Douglas Williams charged, in part, that he committed the second-degree felony of engaging in an organized scheme to defraud, and: [U]tilizing his position on the Coral Springs Fraternal Order of Police Lodge No. 87, Inc. to defraud the Coral Springs Fraternal Order of Police Lodge No. 87, Inc. by systematically, and through an ongoing course of conduct with intent to defraud, did misappropriate funds to himself and did unlawfully convert to his use or the uses of others not entitled thereto property, to wit: United States Currency in an aggregate amount in excess of twenty thousand dollars ($20,000.00) but less than fifty thousand dollars ($50,000.00) or more belonging to Coral Springs Fraternal Order of Police Lodge No. 87. In addition, the Information contained seven related counts of the third-degree felony of grand theft. The Information against Sherry Williams similarly charged that she committed the first-degree felony of engaging in an organized scheme to defraud the Coral Springs Fraternal Order of Police Lodge No. 87, Inc., of property consisting of United States Currency in an aggregate amount in excess of $50,000.00. Her Information also contained one second-degree felony of grand theft in excess of $20,000.00 and five counts of the third-degree felony of grand theft. The crimes Douglas and Sherry Williams were charged with have not been determined by the Board to be specified offenses under section 112.3173. The Board Orders for Douglas Williams and Sherry Williams were served on Petitioners on March 16, 2016. The orders provided: The Claimant has thirty (30) days from receipt of this Administrative Order to request a full hearing on the suspension of benefits by sending a letter outlining the specific reasons for the appeal to Gina Orlando at the City of Coral Springs, Pension Office, 9551 West Sample Road, Coral Springs, FL 33065. The hearing process followed will be pursuant to Florida Statutes §120.569 and §120.57(1). The Williamses timely requested formal hearings pursuant to sections 120.569 and 120.57 on April 15, 2016. The Williamses have not been convicted of the crimes with which they have been charged.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Board of Trustees for the City of Coral Springs Police Officers' Pension Fund not issue final orders suspending payment of pension benefits to Douglas Williams and Sherry Williams in the absence of provisions in the Coral Springs Pension Plan providing for such action. DONE AND ENTERED this 18th day of November, 2016, in Tallahassee, Leon County, Florida. S F. SCOTT BOYD 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 18th day of November, 2016.
Findings Of Fact Petitioner contracted with Respondent to provide, inter alia, through appropriate subproviders, mental health services in accordance with the provisions of the Baker Act, Chapter 494 Part I, Florida Statutes and rules and regulations promulgated pursuant thereto (Exhibit 3). Respondent subcontracted with Apalachee Community Mental Health Services, Inc. (MHS) to provide, as an independent contractor, or through subagreement with qualified providers, services according to the Mental Health Board Plan; and, in carrying out these services, to comply with federal and state statutes and regulations. In carrying out this contract MHS processed and paid, from funds receivec rem Petitioner, provider services in connection with the Baker Act program. During the period covered by this audit, Dr. Robert G. Head and Dr. Cyril Phillips provided psychiatric care to Baker Act patients for which they were reimbursed by MHS. Most of this care was provided at Goodwood Mental Health Facility, a unit operated by Tallahassee Memorial Regional Medical Center (TMRMC). Both Head and Phillips were designated as mental health providers by Petitioner. Head and Phillips shared office space and a secretary but were not a partnership or organized as a professional association. While conducting the audit, the auditors contacted Dr. Head to audit his racords for the Baker Act patients treated. Dr. Head claimed he had no advance notice of this audit and when he was called by his office at his home while suffering from the flu he refused permission for the auditors to examine his records. The audit was completed without benefit of any of Head's or Phillips' records and the discrepancy in failing to account for third party reimbursements formed the basis for the deficiency here claimed. When Dr. Head was told the auditors had the right to inspect Baker Act patient records, he rescinded his refusal and some four months later his office was visited to check these records. Upon the auditor's arrival no Baker Act patient records for the audit period could be located. The secretary for Head and Phillips had absconded and their accountant found she had embezzled a considerable sum ($75,000 - $100,000) from the office by forging endorsements on checks received and depositing in her or her husband's bank account. Apparently patient records were removed or destroyed to conceal the embezzlement. In any event no such records were produced by the doctors and no effort was made by the doctors to obtain from TMRMC records of those patients treated by them who had insurance to cover part or all of their treatment. Such insurers would be third party payers from whom the provider is required to collect and account to Petitioner for such collections. That the doctors provided the treatment is evidenced by the bills they submitted. The only issue is whether the doctors were also paid by third parties for these services, and if so, how much were they paid that should be returned to Petitioner. Neither Head nor Phillips gave sufficient attention to the paperwork involved with the Baker Act patients but left this up to the secretary. The missing records covered two fiscal years so the inadequate supervision of the office continued over a prolonged period. Respondont suggests that Petitioner's auditors could have reconstructed the doctors' records by comparing the Baker act patients for whom they billed MHS with TMRMC records to show which of those patients costs could have been part reimbursed by third parties. Had that been done it would have shown that a majority of those patients had no "third Party" source of funds. No evidence was submitted that Petitioner has such a duty. Exhibit 3 provides the Board and the provider will retain all financial records, supporting documents, statistical records and any other doctments pertinent to this agreement for a period of three years after submission of final report, if an audit has not been initiated during that period, and the findings have not been resolved at the end of three years, the records shall be retained until the resolution of the audit findings. Exhibit 6 consists of records of seven patients treated by Head or Phillips during the audit period. Of these seven, two had insurance available from which third party payments were available. No audits of providers were made by Respondent during the period covered by the audit.
The Issue The issue for determination at final hearing is whether Petitioner should be granted interim rate adjustments.
Findings Of Fact Sunrise Community, Inc. (Petitioner) is a charitable organization which serves individuals with developmental disabilities. Petitioner is a licensed Medicaid provider which owns, and/or operates Intermediate Care Facilities for the Mentally Retarded and Developmentally Disabled (ICF/MR-DD). The Agency for Health Care Administration (Respondent) is the state agency responsible for the administration and implementation of the Florida Medicaid Program. In August 1995, Petitioner submitted interim rate requests, i.e., requests for interim changes in its Medicaid reimbursement rate, for costs incurred associated with several of its facilities. The costs were incurred to comply with existing state and federal regulations. Petitioner submitted requests for the following Intermediate Care Facilities (ICFs): Sunrise Main Facility Number 285013, St. Petersburg Cluster Number 280186-01, Greentree Court Cluster Number 280283-01, McCauley Cluster Number 280208-1, Mahan Cluster Number 280291-01, Bayshore Cluster Number 280313- 01, Dorchester Cluster Number 280496-01, Cape Coral Cluster Number 285331-01, 26th Terrace (Number 12) Number 285528, County Meadows (Number 13) Number 285536, 138th Court Number 285480-00, 62nd Place Number 285471-00, 55th Court Number 285609-00, 53rd Court Number 285595-00, Wentworth Number 285617-00, Oakmont Number 285587-00, and 148th Court Number 285579-00. Reimbursement to participating ICF/MR-DD for services provided must be in accordance with Florida Title XIX ICF/MR-DD Reimbursement Plan, Version VI, dated November 15, 1994 (Reimbursement Plan). Respondent timely denied Petitioner's interim rate requests. 2/ Section III.G.7 of the Reimbursement Plan provides: After June 30, 1984, additional costs incurred after enrollment in the program that are due to capital additions or expansions must have prior approval by the HRS Office of Developmental Services if such costs exceed 1 percent of the provider's current total reimbursement rate, with the exception of the addition of new beds which are approved through the state's Certificate of Need process. Costs for specific expansion or additions that exceed the 1 percent limit shall not be reimbursable if not previously approved. Further, financing costs for approved expansions or additions shall be limited by the prudent buyer limits established in Section III.G.4. above. Section IV.G of the Reimbursement Plan provides in pertinent part: Requests for rate adjustments for increases in property-related costs due to capital additions, expansion, replacements or repairs shall not be considered in the interim between cost report submissions, except for the addition of new beds or if the cost of the specific expansion, addition, repair, or replacement would cause a change of 1 percent or more in the provider's total per diem reimbursement rate. Requests for interim rate changes reflecting increased costs occurring as a result of resident care or administration changes or capital replace- ment other than that specified in (1) above shall be considered only if such changes were made to comply with existing state or federal rules, laws, or standards, and if the change in cost to the provider is at least $5000 and would cause a change of 1.0 percent or more in the provider's current total per diem rate. The provider must submit documentation showing that the changes made were necessary to meet existing state or federal requirements. Around February or March 1993, Petitioner's representatives discussed with the then Assistant Secretary of Development Services (DS) its plans for the ICFs, including the day centers, six-bed facilities, and office building. No costs were discussed because only the approximate costs, not the actual costs, for the projects were known at that time. The then Assistant Secretary verbally gave Petitioner's representatives approval to proceed with their plans. Following numerous public hearings, Petitioner executed leases for properties from Regional Properties, Inc., which acquired the properties through its tax exempt bond issue in October 1993. Regional Properties is a not-for- profit corporation, exempt from taxation under Section 501(c)(3) of the Internal Revenue Code. Subsequently, a new Assistant Secretary took the helm of DS. Around March 1994, Petitioner representatives met with the new Assistant Secretary and discussed the ICF projects with him. He advised Petitioner's representatives to continue with the projects. Respondent required that the costs be incurred before requesting reimbursement. Petitioner submitted interim rate adjustment requests for the costs associated with the ICF projects. Medicaid had received approval from DS for the property items in the interim rate requests. Since the requests involved items which were required as part of the ICF/MR-DD program, DS took the position that it could not disapprove the requests. The Assistant Secretaries of DS did not give Petitioner written prior approval for the costs associated with the projects. However, although not written, the new Assistant Secretary did give prior approval for the costs. This finding is consistent with the approval of all of Petitioner's requests for interim rate adjustments (for reimbursement) of the costs associated with the projects submitted during the tenure of the new Assistant Secretary. In 1995, the new Assistant Secretary of DS was replaced by the present Acting Assistant Secretary. The present 1995 interim rate adjustment requests are a continuation of costs associated with the ICF projects which have already been approved. The identification of costs, as for capital additions or expansions, by a provider is accepted and not questioned or challenged by DS. The costs in the 1995 interim rate requests were accepted by DS. The costs in the 1995 interim rate change requests were considered by DS to be a continuation of costs for the ICF projects previously approved. As a result, the Acting Assistant Secretary of DS took the position that DS could not disapprove the requests. Written prior approval was not required by DS prior to Petitioner's 1995 interim rate change requests. Petitioner was entitled to rely upon the terms of the Reimbursement Plan and the past practice of Medicaid, DS, and Respondent regarding prior approval. In reliance on the past practice, Petitioner proceeded and continued with the ICF projects and incurred costs associated with the projects. Petitioner leases properties from Regional Properties, Inc. The Phineas Corporation controls both Petitioner and Regional Properties. Petitioner leases the properties from a "related" party or organization. The lease payments are not costs for capital additions or expansions under the Reimbursement Plan. Repairs and replacements are not capital additions or expansions under the Reimbursement Plan. Each facility must be evaluated separately regarding capital additions or expansions in terms of the 1 percent requirement of Section III.G.7 of the Reimbursement Plan. In the 1995 interim rate adjustment requests, there are no capital additions or expansions beyond those identified by Petitioner in its requests. The 1 percent requirement of Section III.G.7 does not apply to any of Petitioner's 1995 interim rate adjustment requests. The costs submitted by Petitioner in the 1995 interim rate adjustment requests are reasonable and necessary and are, therefore, allowable subject to audit.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order granting Petitioner's interim rate adjustment requests submitted in August 1995, subject to auditing. DONE AND ENTERED this 5th day of August 1996, in Tallahassee, Leon County, Florida. ERROL H. POWELL, 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 5th day of August 1996.
The Issue The issue in this case is whether, in deciding to award a contract for comprehensive re-entry services to be provided at the Baker Re-Entry Center (”Baker”), Respondent, Department of Corrections (the “Department” or “DOC”), acted contrary to one or more governing statutes, rules, policies, or procurement specifications, or any combination thereof; and if so, for each such instance, whether the misstep was clearly erroneous, arbitrary, capricious, or contrary to competition.
Findings Of Fact In 2014, the Florida Legislature authorized DOC to open two 432-bed substance abuse treatment, transition and vocational training centers (“Re-Entry Centers”) by way of the 2014-2015 General Appropriations Act. The Department was also authorized, pursuant thereto, to issue a competitive solicitation for comprehensive program services for the inmates at the Re-Entry Centers. On June 10, 2014, the Department issued the ITN entitled, “Comprehensive Re-Entry Services at Everglades and Baker Re-Entry Centers.” The stated purpose of the ITN was to select “qualified vendors to provide comprehensive criminal justice re-entry services which include substance abuse services, academic programs, vocational programs, case management, chaplaincy and other program services to a medium to high-risk inmate population” at the Baker and Everglades Re-Entry Centers. On July 10, 2014, DOC issued Addendum #1 to the ITN which made changes to the original specifications in the ITN in response to some vendor inquiries. For example, in response to a vendor inquiry about the mental health classifications of inmates, the following information was contained in the Addendum: Question #77: Will there be any inmates placed at the Everglades or Baker Re-Entry Centers with mental health psych grades? If so, is there going to be any mental health personnel on-site at either facility? Answer #77: The Department will house Psych Grade 1*, 2*, at the Baker Re-Entry Center and 1*, 2*, and 3* at the Everglades Re-Entry Center, however 3*s will be housed on a limited basis. Mental Health Services will be provided by Corizon, Inc. at Baker Re- Entry Center and [by] Wexford Health Sources at Everglades Re-Entry Center. These services, which will be under the direction of a licensed psychologist, may be provided on site, or at the parent institution. The Department utilizes a 1-to-5 scale to measure the level of mental illness an inmate is demonstrating to determine what kind of personnel is necessary to manage the inmate. Psych grade 3 (called “S3”) is the highest grade of mental illness where the inmate does not have to be separated from the general population. S3 inmates are generally those who have been prescribed psychotropic medications. On or about July 23, Replies to the ITN were submitted by Bridges; UPI; Geo Re-Entry Services, LLC; The Transition House; and Westcare Gulfcoast Florida, Inc., for the Baker contract. Bridges and Geo also submitted Replies to the Everglades ITN. The Department designated Kelly Wright as the procurement manager for this ITN. Ms. Wright opened all the timely-filed Replies to the ITN. She determined whether each Reply contained the “Mandatory Documentations” identified in section 4.22.2 of the ITN, e.g., the information cost sheet, price sheet, and attestations. She then forwarded the Replies to a group of five “evaluators” for further review. Each of the evaluators was experienced in the review process. They were provided a manual and training by Ms. Wright to help focus their reviews of the Replies. The evaluators individually scored each Reply using the scoring criteria set forth in revised Attachment 7 of the ITN. As they reviewed the Replies, some of the evaluators also prepared negotiation topic sheets for use during the upcoming negotiation phase. Upon completion of their review, the evaluators scored the Replies as follows: UPI – 940.06 Bridges – 846.00 Geo – 805.80 Westcare – 710.38 Transition – 700.83 The scores were presented to Ms. Wright, who forwarded them to Patrick Mahoney, DOC’s bureau chief of Transition and Substance Abuse Treatment Services. Mr. Mahoney served as the lead negotiator in this ITN process as well. He reviewed the scores and decided the Department would only negotiate with UPI due to that vendor’s substantially higher score than its competitors. The Department then scheduled a negotiation session with UPI. In addition to Mahoney, two other negotiators (James Freeman and Dan Eberlein, both of whom had served as evaluators) took part in the process. The negotiation session with UPI was held on August 15. Thereafter, DOC was satisfied that UPI’s proposal met the Department’s needs and decided to close the negotiation process. The Department was ready to award a contract to UPI for the Baker Re-Entry Center. Meanwhile, on or about August 20, a newspaper article was published in the Miami Herald which discussed possible inmate populations at Baker and Everglades. The article seemed to infer that all inmates at the Re-Entry Centers would be inmates with significant mental health issues. When DOC personnel reviewed the Miami Herald article, the Department’s initial perception was that the mental health issue may substantially affect the ITN as posted. The Department decided to reopen the negotiation process for both Baker and Everglades to address any possible changes to the ITN caused by the change in inmate population. This time, the Department also invited Bridges and Geo to negotiate regarding the Baker contract. A telephonic negotiation session was noticed and then held on September 4 between the Department and each of three vendors: Bridges, UPI, and Geo. The negotiation session for Bridges was opened by Kelly Wright who stated, “This is . . . a negotiation meeting for comprehensive re-entry services at Everglades and Baker Re-Entry Centers.” Bridges (represented at the session by its CEO, Lori Constantino-Brown), was asked if it had a plan to handle S3 inmates and Bridges replied in the affirmative. Bridges’ representative was specifically asked whether her responses would be any different for Baker than for Everglades (because Everglades already contemplated the presence of S3 inmates). She replied in the negative, saying “The approaches would be the same on both facilities in terms of the types of programs we would be using. The way that we would staff pretty much is exactly the same, I think, maybe give or take one position. I mean, there are I would say about 95, 99 percent similar, you know, except, you know, where the RFP kind of dictated something different.” When the Department further inquired whether Bridges had anything to add separately for Baker, the representative replied, “No.” And once again when the Department asked Bridges if there were any “additional issues or anything you would like to tell us,” Bridges replied, “No.” Bridges had every opportunity at the negotiation session to provide information or ask questions about the Baker Re-Entry Center proposal. On September 5, the Department issued its Requests for Best and Final Offer (RBAFO) to UPI and Bridges concerning their interest in offering contracts for the Baker center. A RBAFO is only sent to vendors the Department believes can adequately and efficiently meet the requirements of the ITN. Bridges would not have been part of the RBAFO process but for the negotiation having been reopened. Each vendor submitted their Best and Final Offer (BAFO) on September 11. After review of the BAFOs from the vendors, the Department chose to award the contract to UPI. Bridges timely filed a formal written protest and petition for formal administrative hearing, resulting in the instant proceeding. The BAFOs were independently reviewed by each of the negotiators. They used the selection criteria set forth in the ITN, specifically: Experience in similar delivery of criminal justice services; Staffing quality and schedules; Quality and flexibility of Programming; and Cost. The negotiators unanimously decided that UPI’s proposal best satisfied the selection criteria. During their reviews, the negotiators did not specifically refer back to the vendors’ Replies to the ITN. However, the two negotiators who had also been evaluators were already familiar with the information in the Replies and considered that information as part of their evaluation review. Mahoney, who had not initially evaluated the Replies, reviewed the ITN Replies during the negotiation process. Although Bridges did not specifically direct the negotiators to review its ITN Reply, the ITN Reply had nonetheless been reviewed. By way of example, the negotiators found that Bridges’ value-added services were the same in its Reply and its BAFO, a clear indication that both were considered. The process for this particular ITN admittedly had some unusual but unforeseeable issues. Normally, once the Department has decided which vendors to negotiate with, it will close the process from further review. And that did in fact occur in this case. However, the publication of the article in the Miami Herald caused an anomalous blip in procedures. Personnel within the Department at first believed that the article was correct, i.e., that all inmates to be processed through the Baker and Everglades Re-Entry Centers would be suffering from significant mental illness. If so, that would be considered a “game changer” for the ITN, requiring amendment or rescission of the ITN. The article was not entirely correct. In fact, while there would be inmates at each of the centers with some level of mental illness, those would be limited to no more than 50 of the 432 inmates at Baker. The Everglades contract already presupposed some level S3 inmates, those with psychiatric levels which might require psychotropic medications. The only change to the ITN after the newspaper article was that Baker might also house some level S3 inmates. At any rate, the Department decided to reopen negotiations in order to allow the interested vendors to address the S3 inmate issue. Bridges was included in the reopened negotiations although it had been excluded from the prior negotiations. The Department had already deemed UPI the most qualified vendor, but decided that if Bridges could address the S3 situation better, it might warrant further review. The Department also had further negotiation sessions with UPI for Baker and Everglades on September 4. The same question--almost verbatim--was asked of UPI that had been asked of Bridges, i.e., how do you intend to handle the S3 inmates? UPI’s response was more in depth than Bridges response, even though both vendors essentially said their proposals as submitted would cover the S3 inmates. Bridges’ claim that it was not aware the Baker contract would be discussed at the September 4 negotiation meeting is not credible; the email sent to Ms. Constantino-Brown is entitled, “Bridges of America, Inc. Negotiations for Comprehensive Re- Entry Services at Everglades and Baker Re-Entry Centers.” While Ms. Constantino-Brown may have interpreted the email to address only the Everglades contract and that a session for Baker would follow, her interpretation was mistaken. That is borne out by the statements made during the session by Department representatives as set forth above. As a result of the negotiation session, the Department requested BAFOs from both UPI and Bridges for the Baker facility contract. Both vendors timely submitted their BAFO for consideration by the Department. As stated previously, the Department selected UPI’s proposal to the exclusion of Bridges. Bridges asserts it was not given the same opportunity as the other vendor to discuss core issues within its Reply and BAFO, e.g., unit management. Again, the evidence does not support Bridges’ contention. Bridges suggests that the addition of the S3 inmates at the Baker Re-Entry Center substantially altered the substance of the ITN. That contention is not supported by the evidence. In fact, Bridges specifically stated that its proposal for Everglades (which already had S3 inmates) was essentially the same as its Baker proposal. The totality of the evidence suggests that Bridges may have operated under a false assumption concerning the negotiation session, but its mistake does not void the Department’s actions.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Corrections upholding its award of the contract for services at the Baker Re-Entry Center to Unlimited Path of Central Florida, Inc. DONE AND ENTERED this 31st day of December, 2014, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN 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 31st day of December, 2014. COPIES FURNISHED: Jonathan P. Sanford, Esquire Department of Corrections 501 South Calhoun Street Tallahassee, Florida 32399-2500 (eServed) Amy W. Schrader, Esquire GrayRobinson, P.A. 301 South Bronough Street, Suite 600 Tallahassee, Florida 32302-3189 (eServed) Jodi Nicole Cohen, Esquire Panza, Maurer and Maynard, P.A. 3600 North Federal Highway, Third Floor Fort Lauderdale, Florida 33308 (eServed) Timothy Cannon, Interim Secretary Department of Corrections 501 South Calhoun Street Tallahassee, Florida 32399-2500 (eServed) Jennifer Parker, General Counsel Department of Corrections 501 South Calhoun Street Tallahassee, Florida 32399-2500 (eServed)
