Findings Of Fact Petitioner was employed with the Collier County Health Department, Department of Health and Rehabilitative Services, on March 9, 1973. Petitioner's date of birth is November 26, 1916. On October 1, 1980, Petitioner's medical insurance coverage was entered into the payroll system under the Spouse Program, State of Florida plan. The proper amount of premiums under the Spouse Program were paid to Blue Cross Blue Shield from October 1, 1980, up to and including June, 1983. On November 26, 1981, Petitioner reached the age of 65. Under the State plan, coverage at age 65 is automatically reduced and changed to Medicare Supplement Coverage. In order to have remained fully covered, Petitioner would have had to apply for the Medicare insurance prior to reaching age 65, which he did not do. Due to both spouses being covered, there was no change in policy premium deductions even after Petitioner reached age 65 and his State coverage was reduced. The Blue Cross Blue Shield (State program) paid several claims of Petitioner subsequent to his 65th birthday and through December, 1982. On March 8, 1983, Petitioner was admitted to the hospital and on March 11, 1983, heart bypass surgery was performed. Respondent normally notifies the employee and employing agency of the coverage change prior to the employee's 65th birthday, as required by Rule 22K- 1.16, F.A.C. In this case, Respondent did not do so due to a failure in its computer program. Petitioner could have determined that he was required to apply for Medicare coverage had he read in detail a copy of the plan's benefit booklet furnished to all State employees in 1978.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent direct its insurer to pay Petitioner's claims arising from his March, 1983, hospitalization. DONE and ENTERED this 2nd day of September, 1983, in Tallahassee, Florida. R. T. CARPENTER, 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 2nd day of September, 1983. COPIES FURNISHED: Mr. John H. Adams 2596 Linwood Avenue Naples, Florida 33962 Daniel C. Brown, Esquire Department of Administration 435 Carlton Building Tallahassee, Florida 32301 Nevin G. Smith, Secretary Department of Administration Carlton Building Tallahassee, Florida 32301
The Issue The issue in this case is whether the Petitioner is entitled to have her bills paid for medical services rendered to her by Tallahassee Memorial Regional Medical Center, on January 12, 1997, through January 16, 1997, by the State of Florida, Group Health Self Insurance Plan.
Findings Of Fact The Petitioner was insured under the State of Florida Employees' Group Health Self Insurance Plan (Plan) at the time of her treatment which is in question and payment therefore was denied by the Respondent. Claims were processed at the time of the Petitioner's treatment by Unisys Corporation. The Division of State Group Insurance (DSGI) administers health coverage benefits for the Plan. The processing of the payment of claims by Unisys Corporation and now by Blue Cross/Blue Shield is based on the number of employees enrolled in the Plan. Neither Unisys or Blue Cross/Blue Shield have an economic interest in whether the claim is paid. Prior to midnight on January 12, 1997, the Petitioner went to Tallahassee Memorial Regional Medical Center (Hospital) and was seen in the hospital's emergency room (ER). The Petitioner gave statements regarding her complaint and her prior activities to several doctors and nurses at the hospital. Page 71 of Joint Exhibit 1 is the Psychiatric Center Psychiatric Emergency Response Preliminary (PERP) Assessment Form filled out on January 12, 1997, at 2250 hours. Of particular note on this form is the statement by the Petitioner of an overdose of thirty 500-milligram Tylenol PM eleven hours previously. See Presenting Problems Section, aforementioned form. The form states that the Petitioner was very cooperative, was clean and neat, and was appropriately attired. Her facial expression was sad, but her posture, gait, and motor activity were unremarkable. She had logical associations. Her language was normal. Under stream of mental activity, her productivity was marked spontaneous. At the time of the review by the PERP nurse, the nurse could not conclude that the Petitioner was suicidal. The conclusion of the medical staff was summed up in the note that suicidal ideations could not be ruled out. Page 16 of Joint Exhibit 1 is the report of the admitting physician, Dr. Broadway, who stated as follows at 0100 hours (1:00 a.m.) on January 13, 1997, (abbreviations and symbols have been written out for clarity): Twenty-seven year old white, female presents to emergency room twenty-three hours after ingesting thirty tablets of Tylenol PM. Patient had an argument with her boyfriend and started drinking wine. She began taking Tylenol tablets one after another until she had taken a whole bottle. Patient awoke with nausea and vomiting, didn't feel well and thought she should be checked. She denies any thoughts of suicide. Patient history: Bi-Polar Disorder, suicide attempt at age fifteen by shooting herself in the soft tissue of neck. Medications: Lithium, 600 milligrams daily followed [monitored] by doctor. Generally awake and alert and no apparent distress, Cooperative. Physical exam without focal findings - essentially normal. Anatomy/Physiology Tylenol OD not accidental. Will start Mucomyst protocol [treatment for Tylenol overdose]. Get PREP and Psych consults. Bi-Polar - continue regular dose of Lithium. On page 13 of Joint Exhibit 1, the patient's history and report of physical examination made by a physician whose name is illegible and at an unknown time prior to 0200 hours (2:00 a.m.) on January 13, 1997, states as follows in pertinent part (the abbreviations and symbols have been written out for clarity): Personal History: Twenty-seven year old White, Female presents approximately twenty-four hours after taking thirty Tylenol. She called her Psychologist, who told her to come to the emergency room, about which time she felt "funny." She denies protracted nausea and vomiting, loss of consciousness, or change in bowel or urine. She is a manic-depressive, presently treated with Lithium, who denies suicidal intentions. Medical History: Gun shot suicide attempt in neck at age fifteen; facial lacerations as small child. Family History: Non-Contributory Social History alcohol abuse. Medication: Lithium 600 milligrams daily. Allergies: No known drug allergies Page 14, of Joint Exhibit 1, appears to be a continuation of the preceding note made on January 13, 1997, at 0200 hours (2:00 a.m.). This charting records the results of a physical examination of the Petitioner and the results of laboratory values of blood work performed on the Petitioner. At the time of her first test, the level of acetaminophen level in the Petitioner's blood was 11.1 grams per liter; however, the time the blood was drawn is not noted. The note concludes that the diagnosis and prognosis are: 1. Tylenol overdose - treat four times with Mucomyst 7.6 gram load, then 3.8 gram x 4 x 17. Monitor LFT and acetaminophen level. 2. Bi-Polar Disorder - continue Lithium four times PERP consulted. Page 15, of Joint Exhibit 1, are the notes of the Psychiatric Consult performed by Dr. Sebastian on January 13, 1997, at an unknown hour. His notes read as follows (abbreviations and symbols have been written out for clarity): Cate Stoecklin, twenty-seven year old, White Female, who took overdose of (?) [Dr. Sebastian uses the question symbol mark in the note prior to the number of pills.] thirty Tylenol because her boyfriend left her. Patient says she has been feeling panicky. She came to emergency room about twenty-four hours after taking the Tylenol. Personal History: Suicidal attempt, manic depressive illness. Family history of suicide (grandfather). Observations: Alert, reportedly nervous, answers relevantly, denies suicidal thoughts/plans, evasive [note that the copy cuts off portions of the right margin and the note may be "not evasive"]. Diagnosis: Mental depressive illness, symptoms of depression. Recommendation: Transfer to Tallahassee Memorial Psychiatric. CHAST received or reviewed signed by Dr. Sebastian The first entry in the progress notes signed by Dr. Ward is on January 14, 1997, at 0900 hours. Dr. Ward's notes at that time read as follows (abbreviations and symbols are written out for clarity when understandable): Subjective: Patient wants to see Dr. Kagin, her Psychologist. He is coming this morning to see the patient with me; she had nausea while taking Mucomyst last evening. Observation: AF/vital signs stable no SI/HI today. Cardiovascular PRRØ M lungs CTA (B) abdomen soft, mild tenderness diffusely right upper quadrant ND, liver not enlarged, no guarding or rebound Anatomy/Physiology Acetaminophen overdose - patient to complete seventeen dose course of Mucomyst to finish Thursday; SGOT and PT continued to rise, VAK given to counteract rising PT; acetaminophen levels falling; continue to monitor patient. Bi-Polar Disorder, continue Lithium; level B is circled today. H/O suicide attempt age fifteen with gun- patient Baker Act Code 52, now although she claims this acetaminophen overdose was not suicide attempt; Dr. Sebastian recommends transfer to in-patient psychiatric facility when medically stable. Will see patient with Dr. Kagin this morning, signed Dr. Ward. The family practice faculty note of January 14, 1997, following Dr. Ward's notes indicates agreement with the care, indicates the patient prefers eating vegetables, and requests a dietitian interview the Petitioner. A family practice note by Dr. Ward for January 15, 1997, at 0745 hours, reads as follows (abbreviations and symbols are written out for clarity): Subjective: Patient without complaint of cough dysnia; has emesis [vomiting] with mucomyst sometimes. Objective: temperature 101 1/2. Vital signs stable. PE: unchanged, lungs clear Anatomy/Physiology: Acetaminophen overdose. Continue Mucomyst - finishes seventeenth dose tonight; continue to monitor LFT's. Baker Act Code 52- transferred to Tallahassee Memorial Psychiatric Center in morning per Dr. Sebastian. Bi-Polar Disorder - continue Lithium. Fever - twenty-four hours no symptoms of infection monitor closely. Dr. Ward's family practice note of January 16, 1997, at 0740 hours reads as follows (abbreviations and symbols are written out for clarity): Subjective: Patient without complaint of nausea and vomiting, abdominal pain, or yellow skin. Objective: Temperature 101 PE unchanged, Anatomy/Physiology: acetaminophen overdose, Mucomyst completed; check LFT's today and perhaps transfer to Tallahassee Memorial Psychiatric Center is patient stable medically; Patient still Baker Act Code 52. Bi-Polar Disorder: Continue Lithium Fever, resolving; PDB two hours probably due to acute hepaticdic damage. The physicians' orders of January 13, 1997, at 1130 hours state: Please change chart to Drs. Ward/Eastum. Transfer to private room. Arrange twenty-four hour sitter. Cannot rule out suicidal ideations. Begin Colace, 100 milligrams two times daily. The physician's order by Dr. Ward of January 13, 1997, at 1145 hours state: Please consult psychiatric emergency response preliminary assessment (in patient consult) Baker Act Code 52 patient The nursing notes and doctor's notes regarding the patient's history are inconsistent regarding when the Petitioner took the medication. It was initially reported as having been taken eleven hours prior to admission. In some instances, the record reflects that the medication was taken twenty-four hours prior to admission. When she took the medication is critical to the Rumack-Matthew Nomogram analysis. See Paragraph 21, below. The Petitioner's blood was drawn sometime after her admission and prior to the time the results of the blood test were recorded in the notes at 1400 hours, on January 13, 1997. The test reveal Petitioner had an acetaminophen level of 11.1. As part of the protocol, the Petitioner's liver function continued to be monitored over her stay in the hospital. The review of these liver functions reveals that the Petitioner suffered from acetaminophen toxicity upon presenting at the ER. Treatment was required. Petitioner was admitted and treated at Tallahassee Memorial Hospital for an acetaminophen overdose. This treatment consisted of the Mucomyst protocol which called for the administration of Mucomyst over a two-to three-day period. The expert called by the Respondent testified regarding his examination of the liver function tests of the Petitioner. His opinion was based upon the information obtained in the lab reports, commonly accepted facts concerning acetaminophen toxicity, and his professional experience. Paramount to the expert's testimony regarding how much Tylenol Petitioner took was Petitioner's acetaminophen level of 11.1 at admission. The expert found, using the Rumack-Matthew Nomogram, that the acetaminophen level of 11.1 on admission supported the taking of a large number of Tylenol PM Twenty-four hours prior to presenting. An acetaminophen level of 11.1 does not work out as toxic in a twelve hour scenario on the Nomogram. The cautions for the use of the Rumack-Matthew Nomogram with regard to acetaminophen poisoning includes the following caution: The graph should be used only in relation to a single acute ingestion and blood value taken within 24 hours. The time coordinates refer to the time of ingestion. Serum levels drawn before four hours may not represent peak levels. The testimony of the state expert is discounted because it was based upon the evidence of the Rumack-Matthew Nomogram and the Petitioner's lab values upon admission. The use of the Rumack-Matthew monogram is limited to a single acute dose and blood levels taken within twenty-four hours. The blood work, at best, was taken right at twenty-four hours from the alleged single ingestion or, perhaps twelve hours prior to admission, if one uses the eleven-hour statement taken down by the PERP nurse. However, a blood level of acetaminophen of 11.1, eleven hours after ingestion would not indicate a toxic dose. In sum, the twenty-four hour period is based upon the Petitioner's history which is not precise, and further no one knows when the blood sample was drawn. The course of the pathology of acetaminophen toxicity based upon a single ingestion of a toxic dose is as follows: Stage One (day one 0-24 hours): Anorexia, diaphoresis, lethargy, malaise, nausea and vomiting palor. Stage Two (day two 24-48 hours): Stage One symptoms disappear; hepaticdic necrosis begins; abdominal pain and tenderness occur, enlarged liver, elevated AST, ALT, bilirubin, and PT. Stage Three (days three-four 48-96 hours): Stage One symptoms reappear; hepaticdic necrosis peaks with jaundice, encephalopathy, acute renal failure, bleeding, and hypoglycemia. Stage Four (after day four 96 hours +): A resolution of symptoms and hepatic dysfunction. The patient either dies or gets better in stage four. Had Petitioner taken a massive dose twenty-four hours prior to presenting, she would have developed physical symptoms on January 13, 1997, and her blood and liver values would have been normal on admission. Petitioner had acetaminophen blood level of 11.1 on admission, as stated above. The acetaminophen level of 11.1 is not per se toxic unless it is the residual reading after a prior massive dose as determined by reference to the Nomogram. The only scenario which explains acetaminophen toxicity upon presenting with the late on-set of observed physical symptoms and the Petitioner's acetaminophen blood levels on admission is the history given by Petitioner. The facts do not support a single massive dose, but a slower, although excessive, dosage rate. However, this latter scenario, in the absence of other supporting evidence, cannot be concluded to show an intent to harm oneself. There is no such credible evidence. The patient notes are inconsistent. The deposition of Dr. Melanie Ward, at page 9, reflects that the only physical symptom of acetaminophen overdose which she observed was tenderness in the right upper quadrant in the area of her liver. This was at 0900 hours on January 14, 1997, fifty-seven hours after the supposed overdose. On page 11 of Dr. Ward's deposition, she states that she could not say 100% whether the Petitioner really intended to hurt herself; however, they had to take the episode seriously even though the Petitioner stated she was not intending to hurt herself. Dr. Ward explains on pages 16 and 17 of her deposition, the terms PT and PTT. PT is the Prothrombin Time and activated Partial Thromboplastin Time. The doctor explains that these are liver function tests in the general sense and that an elevated PT tends to suggest that the liver is not working as well as it should. On Page 18 of Dr. Ward's deposition, she states that the Petitioner's PT values are elevated on the first test, explaining that normal value should be no higher than 12.5 and that the first value was 14.5. The doctor indicates that it then went up to 17.3 and then started trending downward. On page 21 of her deposition, Dr. Ward indicates that the Petitioner's liver enzyme tests were elevated upon admission. On page 27 of the medical records, the SGPT shows a very significant rise. On page 74 of the transcript of Dr. Ward's testimony in the hearing, the doctor indicates that the elevated enzyme readings are consistent with the Petitioner ingesting excessive amounts of acetaminophen. However, Dr. Ward states that she cannot determine how many Tylenol would have been necessary to create the toxicity. Petitioner testified by deposition. The Petitioner had had some difficulty sleeping because of breaking up with her boyfriend, and had been taking Tylenol PM, as a sleeping aid, for several days prior to her hospitalization. She reported this at the ER and that she had exceeded the maximum recommended dosage with this medication. In the twenty-four hours preceding her hospitalization, the Petitioner reported further difficulty sleeping, and taking increasing doses of acetaminophen in order to sleep while drinking the remainder of a bottle of wine which she had in her apartment. When she awoke from sleeping around 2100 hours on January 12, 1997, she was nauseated and was vomiting. Feeling poorly, she called her psychologist fearing that she was suffering from a Lithium-induced problem; however, when the psychologist learned that the Petitioner had been taking acetaminophen in combination with alcohol, he recommended that the Petitioner seek emergency treatment. It was under these circumstances that the Petitioner presented herself for treatment at the emergency room.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Plan pay the medical bills of the Petitioner. DONE AND ENTERED this 26th day of February, 1999, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN 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 26th day of February, 1999. COPIES FURNISHED: Dr. Sara Stoecklin 1559 Christobal Drive Tallahassee, Florida 32303-5625 Joan Van Arsdall, Esquire Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 Paul A. Rowell, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 Thomas D. McGurk, Secretary Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
The Issue Whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, the penalty that should be imposed.
Findings Of Fact At all times material hereto, Respondent was licensed by Petitioner as an insurance agent in the State of Florida licensed to sell health insurance. At all times material hereto, Respondent was not formally affiliated with Cleveland Insurance Agency. However, Cleveland Insurance Agency often referred clients to Respondent for health and Medicare supplement policies because Cleveland Insurance Agency did not handle those type policies. Prior to November 1987, Respondent, working in conjunction with Cleveland Insurance Company, sold to Irene Goldberg a health insurance policy issued through Provider's Fidelity Insurance Company (Provider's Fidelity). On November 29, 1987, Ms. Goldberg paid $1,504.56 as the annual renewal premium for this health insurance policy which extended her coverage through December 4, 1988. In March of 1988, Ms. Goldberg contacted Cleveland Insurance Agency and requested that someone review her health insurance coverage. Cleveland Insurance Agency referred Ms. Goldberg's request to Respondent. Respondent was familiar with the terms and conditions of the health insurance coverage Ms. Goldberg had in place and he knew that she had paid the premium for this policy through December 1988. Upon visiting with Irene Goldberg on or about March 10, 1988, Respondent presented Ms. Goldberg with a business card that intentionally misrepresented his status with Cleveland Insurance Company. Because Ms. Goldberg had placed most of her insurance needs through Cleveland Insurance Agency during the past few years, Respondent intentionally misled Ms. Goldberg into thinking that he was formally affiliated with Cleveland Insurance Agency. During that visit, Respondent recommended to Ms. Goldberg that she purchase a policy of insurance issued by First National Life Insurance Company (First National) to replace her Provider's Fidelity policy. Ms. Goldberg specifically discussed with Respondent a preexisting medical condition which required periodic medical treatment and the need for the treatment required by this condition to be covered by the new policy. Respondent assured Ms. Goldberg that the preexisting condition would be covered by the new policy. Respondent also told Ms. Goldberg that he would cancel the Provider's Fidelity policy and that he would secure on her behalf a pro rated refund of the premium she had paid to Provider's Fidelity. Based on Respondent's representations, Ms. Goldberg agreed to purchase the First National policy. On March 30, 1988, Ms. Goldberg gave to Respondent a check made payable to First National Life Insurance Company in the amount of $1,892.00, the amount Respondent had quoted as the full annual premium. A few days later, Respondent contacted Ms. Goldberg and advised her that there would be an additional premium in the amount of $1,360.00, which Ms. Goldberg paid on April 4, 1988. This additional premium was, according to Respondent, for skilled nursing care coverage which First National had added as a mandatory feature of the policy Ms. Goldberg had purchased. The skilled nursing care coverage was, in fact, a separate policy which was not a mandatory feature of the policy Ms. Goldberg thought she was purchasing from First National. Respondent misled Ms. Goldberg as to the terms of the policies he had sold her and as to the number of policies he had sold her. Respondent represented that the premiums he had collected on behalf of First National were in payment of a single health insurance policy. Respondent had sold Ms. Goldberg four separate policies, and he collected a commission for each of the policies. When Ms. Goldberg received her insurance documents from First National, she learned for the first time that Respondent had sold her four separate policies of insurance, including a cancer policy that she and Respondent had never discussed. In addition to the health and cancer policies, Respondent sold Ms. Goldberg a home convalescent care policy and a separate skilled nursing care policy. Respondent had sold Ms. Goldberg policies of insurance that Ms. Goldberg had not requested and that she did not know she was buying. Upon reading the health policy, Ms. Goldberg discovered that her new First National Life policy excluded her preexisting condition. Ms. Goldberg contacted Respondent who told her that he had not cancelled the Provider's Fidelity policy as he had agreed to do and that he had not tried to get the pro rated refund of the Provider's Fidelity premium. Respondent told her that any claim she might have for the preexisting condition should be filed under the Provider's Fidelity policy. Ms. Goldberg then complained to First National which, after an investigation, refunded to Ms. Goldberg the premiums she had paid for the three policies. Respondent had received a commission on the policies of insurance he had sold to Ms. Goldberg. As of the time of the hearing, Respondent had not reimbursed First National for the commission he had received based on the premiums that were subsequently refunded to Ms. Goldberg. In February 1988, Respondent met with Helen Krafft to discuss her health insurance needs. During the course of the meeting, Respondent presented to Ms. Krafft a business card which intentionally misrepresented his affiliation with Cleveland Insurance Agency. This business card misled Ms. Krafft into believing that Respondent was formally affiliated with Cleveland Insurance Agency. On February 18, 1988, Respondent sold to Ms. Krafft a health insurance policy through First National and a health insurance policy issued through American Sun Life, at which time he collected a premiums in the total amount of $519.80 for six months of coverage from each of the two policies. In July 1988, Respondent visited with Ms. Krafft at her place of work and told her that she should pay her renewal premiums for the health insurance policies on or before August 1, 1988, to avoid a premium increases. Respondent knew, or should have known, that there were no premium increases scheduled for those policies and that there were no discounts for early payment of the premiums The renewal premiums Respondent quoted Ms. Krafft for the two policies totaled $485.40. At Respondent's instructions Ms. Krafft delivered to Respondent her signed check dated July 18, 1988, in the amount of $485.40 with the payee's name left blank. Respondent accepted these trust funds from Ms. Krafft in a fiduciary capacity. Instead of using these funds to pay the premiums as he had agreed to do, Respondent filled his name in on Ms. Krafft's check and cashed it. Ms. Krafft learned that Respondent had not used the funds she had given him to renew her two policies when she started getting late payment notices from the two insurance companies with accompanying threats of cancellation if the premiums were not paid. In late September 1988, Respondent paid to Ms. Krafft the sum of $485.40 in cash. In June of 1988, Steven R. and Marilyn Hill applied, through Respondent, for a health policy with First National. The Hills paid the initial premium of $304.37 by check made payable to First National on June 26, 1988. Because of underwriting considerations, First National informed Respondent that the Hills would have to pay a higher premium to obtain the insurance they wanted. The Hills were not willing to pay the higher premium and requested a refund of the amount they had paid. First National made the refund check payable to Steven Hill and mailed the check to Respondent. There was no competent, substantial evidence as to what happened to the check other than First National Life stopped payment on the check and it never cleared banking channels. A second refund check was later delivered to Steven Hill. First National contended at the hearing that Respondent had accrued a debit balance in the amount of $2,692.45 as a result of his dealings as an agent of the company. Respondent contended that he is entitled to certain offsets against the amount First National claims it is owed based on commissions he contends that he had earned but had not been paid. First National had not, prior to the hearing, submitted to Respondent any type of accounting of sums due, nor had it explicitly demanded any specific sum from Respondent. Instead, First National had made a blanket demand that Respondent return all materials belonging to First National and advised that future commission checks would be held in escrow. From the evidence presented it could not be determined that Respondent was indebted to First National.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Insurance and Treasurer enter a final order which finds that Respondent committed the multiple violations of the Florida Insurance Code as set forth in the Conclusions of Law portion of this Recommended Order and which further revokes all licenses issued by the Department of Insurance and Treasurer to Respondent, John Richard Klee. DONE AND ENTERED this 30th day of November, 1989, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 Filed with the Clerk of the Division Of Administrative Hearings this 30th day of November, 1989. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 89-3269 The following rulings are made on the proposed findings of fact submitted by Petitioner: The proposed findings of fact in paragraph 1 are adopted in material part by paragraph 1 of the Recommended Order. The proposed findings of fact in paragraph 2 are adopted in material part by paragraph 1 of the Recommended Order. The proposed findings of fact in paragraph 3 are adopted in material part by paragraph 12 of the Recommended Order. The proposed findings of fact in paragraph 3 are rejected in part as being a conclusion of law. The proposed findings of fact in paragraph 4 are adopted in material part by paragraph 5 of the Recommended Order. The proposed findings of fact in paragraph 5 are adopted in material part by paragraph 3 of the Recommended Order. The proposed findings of fact in paragraph 6 are adopted in material part by paragraph 4 of the Recommended Order. The proposed findings of fact in paragraph 7 are rejected as being unsubstantiated by the evidence. The proposed findings of fact in paragraph 8 are adopted in material part by paragraph 5 of the Recommended Order. The proposed findings of fact in paragraph 9 are adopted in material part by paragraphs 5 and 6 of the Recommended Order. 10 are adopted in material part 11 are adopted in material part 12 are adopted in material part 13 are adopted in material part 14 are adopted in material part 15 are adopted in material part 16 are adopted in material part 17 are adopted in material part 18 are adopted in material part 19 are adopted in material part 20 are adopted in material part 21 are adopted in material part 22 are adopted in material part 23 are adopted in material part 24 are adopted in material part 25 are rejected as being The proposed findings of fact in paragraph by paragraphs 5 and 6 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 5 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 6 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 6 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 6 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 6 of the Recommended Order. The proposed findings of fact in paragraph by paragraphs 5 and 7 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 10 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 11 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 11 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 12 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 2 and 10 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 13 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 13 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 13 of the Recommended Order. The proposed findings of fact in paragraph unsubstantiated by the evidence. The proposed findings of fact in paragraph 26 are rejected as being unsubstantiated by the evidence. The proposed findings of fact in paragraph 27 are rejected as being unsubstantiated by the evidence. The proposed findings of fact in paragraph 28 are rejected as being unsubstantiated by the evidence. The proposed findings of fact in paragraph 29 are adopted in material part by paragraph 14 of the Recommended Order. The proposed findings of fact in paragraph 30 are adopted in material part by paragraph 14 of the Recommended Order. COPIES FURNISHED: Roy H. Schmidt, Esquire Office of the Treasurer Department of Insurance 412 Larson Building Tallahassee Florida 32399-0300 Greg Ross, Esquire 400 Southeast Eighth Street Fort Lauderdale, Florida 33316 Don Dowdell General Counsel The Capitol Plaza Level Tallahassee, Florida 32399-0300 Hon. Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300
The Issue The issue in this case is whether Respondent, Charles Steven Lieberman, committed the offenses alleged in an Administrative Complaint issued by Petitioner, the Department of Financial Services, on January 26, 2004, and, if so, what penalty should be imposed.
Findings Of Fact The Parties. Petitioner, the Department of Financial Services (hereinafter referred to as the "Department"), is the agency of the State of Florida charged with the responsibility for, among other things, the investigation and prosecution of complaints against individuals licensed to conduct insurance business in Florida. Ch. 626, Fla. Stat. (2004).1 Respondent, Charles Steven Lieberman, is currently, and was at all times pertinent to this matter, licensed in Florida as a resident Life & Variable Annuity (2-14); Life, Health & Variable Annuity (2-15); Life (2-16); Life & Health (2-18); and Health (2-40) Agent. (Stipulated Facts). The Department has jurisdiction over Mr. Lieberman's licenses and appointments pursuant to Chapter 626, Florida Statutes. (Stipulated Facts) Mr. Lieberman's license identification number is A155409. (Stipulated Facts). Mr. Lieberman graduated from Columbia University. From 1974 through 1992, Mr. Lieberman worked as a trader initially on the floor of the Chicago Board of Options Exchange, and later, the Chicago Mercantile Exchange. Mr. Lieberman has held his insurance licenses for ten years. This is the first administrative complaint issued against him. Mr. Lieberman's Business. Mr. Lieberman, at all times pertinent, served as president of Charles Lieberman, Inc. (Stipulated Facts). Mr. Lieberman, at all times pertinent, was the designated primary agent, as defined in Section 626.592, Florida Statutes, of Charles Lieberman, Inc. (Stipulated Facts). Charles Lieberman, Inc., at all times pertinent, owned and did business as "National Medical Services" and "The Insurance Center." (Stipulated Facts). Mr. Lieberman's "Medical Benefits Plan"/"Medical Savings Plan." Mr. Lieberman offers customers who are seeking medical insurance a plan which he calls a "Medical Benefits Plan" or "Medical Savings Plan" (hereinafter referred to as the "Lieberman Medical Benefits Plan"). The Lieberman Medical Benefits Plan consists of the following components (hereinafter referred collectively as the "Plan Products"): A hospital and surgery expense payment policy (hereinafter referred to as the "Hospital Insurance Plan"); A Catastrophe Major Medical Insurance Plan (hereinafter referred to as the "Major Medical Insurance Plan"); and A discount card titled "The Chamber Card" (hereinafter referred to as the "Chamber Card"), with a "Limited Product Warranty." None of the Plan Products included insurance coverage for physician office visits, a fact which Mr. Lieberman was fully aware of. The Hospital Insurance Plan. The Hospital Insurance Plan provides coverage for hospital and surgical expenses. It does not provide coverage for physician office visits. The Hospital Insurance Plan is a medical insurance plan offered by United American Insurance Company (hereinafter referred to as "United American"). Mr. Lieberman is an agent for United American. Petitioner's Exhibit 64 is a copy of the hospital and surgery expense policy that constitutes the Hospital Insurance Plan sold by Mr. Lieberman. (Stipulated Facts). Petitioner's Exhibit 65 is a copy of the Schedule of Benefits for the Hospital Insurance Plan. (Stipulated Facts). The Major Medical Insurance Plan. The Major Medical Insurance Plan provides coverage for major medical expenses in excess of $25,000.00. It does not provide coverage for physician office visits. The Major Medical Insurance Plan is also a medical insurance plan. It is offered by United States Life Insurance Company (hereinafter referred to as "U.S. Life"). In order to purchase a Major Medical Insurance Plan, customers are required to join one of many organizations which purchase Major Medical Insurance Plans through Seabury & Smith2, an organization which administers the sale of health insurance for U.S. Life. Customers, once they join such an organization, are then required to purchase the Major Medical Insurance Plan through the organization they joined. Mr. Lieberman is not an agent for U.S. Life or affiliated with Seabury & Smith. He does not, therefore, sell Major Medical Insurance Plans. Nor does he receive any compensation if any of his customers purchase a Major Medical Insurance Plan. Mr. Lieberman does, however, recommend the purchase of a Major Medical Insurance Plan as part of the Lieberman Medical Benefits Plan. In order to facilitate the purchase, Mr. Lieberman has his customers join the "American Contract Bridge League."3 His customers then purchase a Major Medical Insurance Plan directly based upon their League membership. Petitioner's Exhibit 63 is a copy of the Major Medical Insurance Plan which by Mr. Lieberman recommended that his customers purchase. (Stipulated Facts). The Chamber Card. In an effort to provide some relief for cost of physician office visits, which was not covered by the Hospital Insurance Plan or the Major Medical Insurance Plan, Mr. Lieberman sold his customers the Chamber Card. The Chamber Card, which is not insurance (Stipulated Facts), is a card which entitles the holder thereof to a discount4 for various medical services, including physician office visits. In an effort to enhance the discounts from the Chamber Card available to Mr. Lieberman's customers, Mr. Lieberman also provided what he termed a "Limited Product Warranty" which he offered through Charles Lieberman, Inc., d/b/a National Medical Services. This Limited Product Warranty is also not insurance. Pursuant to Mr. Lieberman's Limited Product Warranty, Mr. Lieberman purportedly agreed to provide reimbursement of the cost of any physician office visit in excess of $15.00, an amount which he referred to as a "copay," which was not paid for by the Chamber Card. The additional discounts were dependant, however, on Mr. Lieberman's ability to negotiate a reduction in the fees incurred by his customers directly from the physician.5 In describing the Chamber Card and the Limited Product Warranty sold by Mr. Lieberman, he used the acronyms "PPO" and "PHCS," and terms like "copay" and "claims" normally associated with the insurance industry. Customer W.E. (Count I of the Administrative Complaint). Prior to September 12, 2002, W.E. spoke with Mr. Lieberman by telephone. She explained to him that she was interested in purchasing health insurance, and before she could explain what she meant in any detail, he informed her that he could provide any health insurance she wanted as long as she did not have high blood pressure, which she did not. On September 12, 2002, W.E. met with Mr. Lieberman (Stipulated Facts) at his home to discuss purchasing health-care insurance. She explained to Mr. Lieberman that she wanted a health insurance plan similar to what she had had before she recently moved to Florida and that she wanted a plan with minimum co-payments. She also indicated that she wanted a basic insurance plan until she was able to find employment where her health insurance would be provided for her. W.E. did not specifically tell Mr. Lieberman that she wanted insurance that covered physician office visits.6 Rather, she reasonably assumed that by telling Mr. Lieberman that she wanted to purchase "health insurance" that, as an insurance agent, he would understand that she wanted coverage for physician office visits. Mr. Lieberman, rather than providing the insurance coverage which he knew or should have known W.E. was seeking, coverage which included physician office visits, suggested that she purchase the Lieberman Medical Benefits Plan. While Mr. Lieberman attempted to give some limited explanation of his plan to W.E., based upon the manner in which he explained his plan at hearing, it is understandable that W.E. did not understand what she was purchasing, or, more specifically, that the plan, while including some health care coverage, did not include coverage for physician office visits. On September 12, 2002, Mr. Lieberman sold or arranged for the sale of the Plan Products, as more fully described in Findings of Fact 9 through 25, to W.E.: W.E. signed an application for membership in the American Contract Bridge League (Stipulated Facts); W.E. wrote a check for her membership in the American Contract Bridge League (Stipulated Facts); W.E. signed an application and wrote checks for the Chamber Card and a United American Hospital Insurance Plan (Stipulated Facts); and W.E. signed an application for a Major Medical Insurance Plan from U.S. Life and wrote a check to Seabury & Smith. (Stipulated Facts). Mr. Lieberman knew or should have known that he was selling W.E. a product which she was not interested in purchasing and that he was not providing her with a significant part of the insurance coverage she was interested in purchasing, coverage of physician office visits. While Mr. Lieberman gave some limited explanation of what the Chamber Card was, he did not fully explain to W.E. that it was not an insurance program, plan, or policy; that it would not pay for physician office visits; or that it only provided some unspecified discount on the cost of physician office visits. W.E. did not understand what she was purchasing. She even believed incorrectly that she had not been provided any insurance at all by Mr. Lieberman. While this incorrect assumption was based in part upon comments she perceived were made by a Department investigator, her comments show that she was unknowledgeable about insurance and, therefore, placed her full reliance on upon Mr. Lieberman. Even though W.E. issued separate checks made payable to "A.C.B.L." (the American Contract Bridge League), Seabury & Smith (for the Major Medical Insurance Plan), United American (for the Hospital Insurance Plan), and National Medical Services (for the Chamber Card); signed an Acknowledgement & Disclaimer and an Acknowledgement & Disclosures (both of which are quoted, infra, in Finding of Fact 35); and signed a document titled "Medical Benefits Plan” which contained an acknowledgement (quoted, infra. In Finding of Fact 36), W.E., unlike Mr. Lieberman, did not understand that she was purchasing a product which she had not requested and did not want. The Acknowledgement & Disclaimer and Acknowledgement & Disclosures signed by W.E. provided the following: ACKNOWLEDGEMENT AND DISCLAIMER I understand that the US Life Catastrophic Insurance Policy is being purchased through the mail from Seabury & Smith (Group Insurance Plans), who are the brokers for that plan. Although I am purchasing other insurance from Charles Lieberman, I realize that Mr. Lieberman is in no way representing Seabury & Smith or US Life and that he is only making me aware that this plan is available. I acknowledge that it is my sole responsibility to review this plan and its features to determine suitability once the policy is received. Insured Date ACKNOWLEDGEMENT AND DISCLOSURES I hereby acknowledge that I am purchasing insurance that covers approximately 75% of the first $10,000 in the hospital then covers 100% hospitalization above $25,000. Although my PHCS PPO Access/Medical Savings Card (which is not insurance) will, in most cases, reduce this potential liability; through negotiated savings, it is not guaranteed to eliminate it in it [sic] entirety. INSURED DATE The foregoing Acknowledgement & Disclaimer and the Acknowledgement & Disclosures are misleading at best, and deceiving at worst. While the Acknowledgement & Disclosures includes the language "which is not insurance," that language is included after the terms "PHCS PPO Access/Medical Savings Card," terms which are not clearly identified or explained and are, along with other terminology used in the Disclosures (i.e., "PPO" and "copay") reasonably associated with health-care insurance. More importantly, the Acknowledgement & Disclaimer and the Acknowledgement & Disclosures do not explain that physician office visits are not being provided through health care insurance. Finally, W.E. was not given an opportunity by Mr. Lieberman to read the Acknowledgement & Disclaimer, the Acknowledgement & Disclosures, or any other documents shown to her by Mr. Lieberman. He simply placed most of the documents which she had to sign in front of her with only the part she was required to sign visible and told her to sign them, which she did. The following acknowledgment was also contained in a document titled "Medical Benefits Plan" which W.E. signed: By signing below, I agree that all information provided above is complete, accurate, and truthful. I recognize that because of the high cost of health insurance, National Medical Savings, plan administrator, has attempted to put together a "medical savings/benefit plan" which allows clients to purchase reasonably priced hospitalization insurance from well known a- rated insurance companies and combine it with a product which is not insurance to better suit the clients' needs. I understand that anything associated with the PPO repricing or copay rebates is part of the "medical savings plan" and is in no way to be considered as insurance, but rather as an affordable alternative to satisfy the need to reduce medical costs. Like the Acknowledgments quoted in Finding of Fact 35, this acknowledgement, which appears after a paragraph titled "Pre- Authorized Payment Plan" on the form, is misleading. It is not clear that it is referring to the Chamber Card, it contains terms normally associated with insurance coverage in spite of the disclaimer, and Mr. Lieberman gave W.E. no reasonable opportunity to read the disclaimer before having her sign it. After enrolling W.E. in the Lieberman Medical Benefits Plan, Mr. Lieberman mailed all the documents which W.E. had signed on September 12, 2002, to her. This was her first realistic opportunity to read the documents. After receiving the documents concerning the Lieberman Medical Benefits Plan, W.E. cancelled all of the Plan Products. Although there was some language in the Acknowledgement and Disclosures and the form titled "Medical Benefits Plan" signed by W.E. indicating that some part of the Lieberman Medical Benefits Plan was not insurance, due to the ambiguity of the language of the Acknowledgement and the disclaimer, the lack of opportunity that W.E. had to read the documents, the other language normally associated with insurance used in the documents, and the lack of coherent explanation provided by Mr. Lieberman, it is found that, as to W.E., Mr. Lieberman: Did not inform her that the Chamber Card was not an insurance program, plan, or policy; "Portrayed" the Chamber Card as an insurance program, plan, or policy; and Sold her products, none of which provided insurance coverage for the cost of physician office visits. Customer A.H. (Count II of the Administrative Complaint). Prior to April 11, 2003, Mr. Lieberman contacted and spoke to A.H. by telephone. A.H. told Mr. Lieberman that she was interested in purchasing health insurance, including insurance covering physician office visits, with co-pay, and hospitalization expenses, with a deductible. On April 11, 2003, A.H. met with Mr. Lieberman (Stipulated Facts) at his home to discuss purchasing health-care insurance. She again explained to Mr. Lieberman that she was interested in a policy that covered physician office visits, with a co-pay, and hospitalization expenses, with a deductible. Mr. Lieberman, rather than providing insurance coverage which he knew or should have known A.H. was seeking, coverage which included physician office visits, suggested that she purchase the Lieberman Medical Benefits Plan. While Mr. Lieberman attempted to give some limited explanation of his plan to A.H., based upon the manner in which he explained his plan at hearing, it is understandable that A.H. did not understand what she was purchasing, or, more specifically, that the plan, while including some health care coverage, did not include coverage for physician office visits. On April 11, 2003, Mr. Lieberman sold or arranged for the sale of the same Plan Products to A.H. that he had sold to W.E., described in Finding of Fact 30, supra. (Stipulated Facts). Mr. Lieberman knew or should have known that he was selling A.H. a product which she was not interested in purchasing and that he was not providing her with a significant part of the insurance coverage she was interested in purchasing, coverage of physician office visits. While Mr. Lieberman gave some limited explanation of what the Chamber Card was, he did not fully explain to A.H. that it was not an insurance program, plan, or policy; that it would not pay for physician office visits; or that it only provided some unspecified discount on the cost of physician office visits. Like W.E., A.H. signed the Acknowledgment and Disclaimer and the Acknowledgement and Disclosures quoted, supra, in Finding of Fact 35, and the disclaimer quoted, supra, in Finding of Fact 36. The Acknowledgements and the disclaimer were deficient for the same reasons described in Findings of Fact 35 and 36. Like W.E., even though A.H. issued separate checks made payable to "A.C.B.L." (the American Contract Bridge League), Seabury & Smith (for the Major Medical Insurance Plan), United American (for the Hospital Insurance Plan), and National Medical Services (for the Chamber Card); signed the Acknowledgement & Disclaimer and an Acknowledgement & Disclosures; and signed the disclaimer contained in a form titled "Medical Benefits Plan," A.H., unlike Mr. Lieberman, did not understand that she was purchasing a product which she had not requested and did not want. Having explained to Mr. Lieberman that she wanted a policy that covered physician office visits and not having been told that was not what she was purchasing, she simply relied upon Mr. Lieberman. After enrolling A.H. in the Lieberman Medical Benefits Plan, Mr. Lieberman mailed all the documents which A.H. had signed on April 11, 2003, to her. Some time after receiving the documents concerning the Lieberman Medical Benefits Plan, A.H. cancelled all of the Plan Products. Although there was some language in the Acknowledgement and Disclosures and the form titled "Medical Benefits Plan" signed by A.H. indicating that some part of the Lieberman Medical Benefits Plan was not insurance, due to the ambiguity of the language of the Acknowledgement and the Disclaimer, the other language normally associated with insurance used in the documents, and the lack of coherent explanation provided by Mr. Lieberman, it is found that, as to A.H., Mr. Lieberman: Did not inform her that the Chamber Card was not an insurance program, plan, or policy; "Portrayed" the Chamber Card as an insurance program, plan, or policy; and Sold her products, none of which provided insurance coverage for the cost of physician office visits. Customer R.G. (Count III of the Administrative Complaint). R.G. did not testify at the final hearing. The factual allegations of Count III of the Administrative Complaint were not proved. Customer J.E. (Count IV of the Administrative Complaint). Prior to January 17, 2003, J.E. spoke with Mr. Lieberman by telephone. J.E. explained to Mr. Lieberman that he was interested in purchasing health insurance to replace the Blue Cross/Blue Shield health-care insurance he currently had. On January 17, 2003, J.E. met with Mr. Lieberman (Stipulated Facts) at his home to discuss purchasing health-care insurance. He explained to Mr. Lieberman that he was interested in a policy to replace his current policy with Blue Cross/Blue Shield. J.E. specifically requested a policy that covered physician office visits. Mr. Lieberman, rather than providing insurance coverage which he knew or should have known J.E. was seeking, coverage which included physician office visits, suggested that he purchase the Lieberman Medical Benefits Plan. While Mr. Lieberman attempted to give some limited explanation of his plan to J.E., based upon the manner in which he explained his plan at hearing, it is understandable that J.E. did not understand what he was purchasing, or, more specifically, that the plan, while including some health care coverage, did not include coverage for physician office visits. On January 17, 2003, Mr. Lieberman sold or arranged for the sale to J.E. of the same Plan Products he sold to W.E. described in Finding of Fact 30, supra. (Stipulated Facts). Mr. Lieberman knew or should have known that he was selling J.E. a product which he was not interested in purchasing and that he was not providing him with a significant part of the insurance coverage he was interested in purchasing, coverage for physician office visits. While Mr. Lieberman gave some limited explanation of what the Chamber Card was, he did not fully explain to J.E. that it was not an insurance program, plan, or policy; that it would not pay for physician office visits; or that it only provided some unspecified discount on the costs of physician office visits. Like W.E. and A.H., J.E. also signed the Acknowledgment and Disclaimer and the Acknowledgement and Disclosures quoted, supra, in Finding of Fact 35, and the disclaimer quoted, supra, in Finding of Fact 36. The Acknowledgements and the disclaimer were deficient for the same reasons described in Findings of Fact 35 and 36. Like W.E. and A.H., even though J.E.. issued separate checks made payable to "A.C.B.L." (the American Contract Bridge League), Seabury & Smith (for the Major Medical Insurance Plan), United American (for the Hospital Insurance Plan), and National Medical Services (for the Chamber Card); signed the Acknowledgement & Disclaimer and an Acknowledgement & Disclosures; and signed the disclaimer contained in a form titled "Medical Benefits Plan," J.E., unlike Mr. Lieberman, did not understand that he was purchasing a product which he had not requested and did not want. Having explained to Mr. Lieberman that he wanted a policy that covered physician office visits and not having been told that was not what he was purchasing, he simply relied upon Mr. Lieberman. After enrolling J.E. in the Lieberman Medical Benefits Plan, Mr. Lieberman mailed all the documents which J.E. had signed on January 17, 2003, to him. Some time after receiving the documents concerning the Lieberman Medical Benefits Plan, J.E. cancelled all of the Plan Products. Although there was some language in the Acknowledgement and Disclosures and the form titled "Medical Benefits Plan" signed by J.E. indicating that some part of the Lieberman Medical Benefits Plan was not insurance, due to the ambiguity of the language of the Acknowledgement and the disclaimer, the lack of opportunity to read the documents before he signed them, the other language normally associated with insurance used in the documents, and the lack of coherent explanation provided by Mr. Lieberman, it is found that, as to J.E., Mr. Lieberman: Did not inform him that the Chamber Card was not an insurance program, plan, or policy; "Portrayed" the Chamber Card as an insurance program, plan, or policy; and Sold him products, none of which provided insurance coverage for the cost of physician office visits. The Administrative Complaint. On January 26, 2004, the Department issued a four- count Administrative Complaint against Mr. Lieberman. (Stipulated Facts).7 The Administrative Complaint contains four counts, one each for Mr. Lieberman's association with W.E. (Count I), A.H. (Count II), R.G. (Count III), and J.E. (Count IV). The Administrative Complaint alleges that Mr. Lieberman's conduct with all four individuals violated Section 626.611(6), (7), and (8), Florida Statutes, and Section 626.621(2), Florida Statutes. The Administrative Complaint also alleges that, as to A.H., Mr. Lieberman violated Section 626.621(6), Florida Statutes. In support of the alleged statutory violations, the Department alleged, in part, that with regard to all four individuals: Mr. Lieberman "did not inform [his customers] that The Chamber Card was not an insurance program, plan or policy"; Mr. Liberman "portrayed The Chamber Card as an insurance program, plan or policy"; and That "[n]one of the products you, CHARLES STEVEN LIEBERMAN, sold to [W.E., A.H., R.G., and J.E.] provide insurance coverage for the cost of doctors' visits."
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department finding that Charles Steven Lieberman violated Sections 626.611(7) and (8), Florida Statutes, as alleged in Counts I, II, and IV of the Administrative Code; dismissing Count III of the Administrative Code; and suspending his licenses for a period of 12 months from the date of the final order. DONE AND ENTERED this 31st day of August, 2004, in Tallahassee, Leon County, Florida. LARRY J. SARTIN 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 31st day of August, 2004.
The Issue The issue in this case is whether the Department of Insurance should discipline the Respondent on charges contained in the Administrative Complaint filed June 1, 1994. The Administrative Complaint charges that the Respondent failed to accurately disclose certain aspects of the true physical condition of two applicants for health insurance and failed to disclose to the applicants the existence of certain deductibles and a six-month waiting period for preexisting conditions.
Findings Of Fact The Respondent, Blair John Reuther, is eligible for licensure and is licensed in Florida as an insurance agent. At the times referred to in this case, the Respondent was licensed to solicit health insurance on behalf of National States Insurance Company (National States). Some time prior to April, 1993, National States solicited health insurance from Earl and Jessie Lane, an elderly couple who lived in Ft. Pierce, Florida, and invited them to return a postcard in order to express their interest in more information about health insurance policies National States had to offer. They sent in the postcard, and their names were referred to the Respondent. Without an additional contact with the Lanes, the Respondent went to their home during the week preceding April 3, 1993, and asked to be permitted to talk with them about National States health insurance policies in which they had expressed an interest. The Lanes invited him in, and the Respondent discussed their existing coverage. At the time, the Lanes had a Level A Medicare Supplement policy, which carried the standard deductibles for such a policy. After some additional discussion, the Respondent promised to return with his proposals and with applications. On Saturday, April 3, 1993, the Respondent returned to the Lane home and proposed to sell each of them a National States Level A Medicare Supplement policy and a limited benefit medical expense policy. It is found, contrary to the Lanes' testimony, that the Respondent did not tell the Lanes that the National States policies would "cover everything," that the Respondent told the Lanes that the National States Medicare Supplement policies had deductibles (just like their previous Level A Medicare Supplement policies), and that there was a six-month waiting period for preexisting conditions under the National States limited benefit medical expense policies. (There was no waiting period for preexisting conditions under any of the Medicare Supplement policies.) After discussing the proposal, the Lanes decided to apply for the National States policies being proposed by the Respondent. It is found that the Respondent went over the applications for the National States policies with the Lanes and filled out the applications in accordance with the information given to him by the Lanes. As to the medical questions on the applications, it is found that the Respondent read the questions aloud and recorded the answers given to him by the Lanes. Specifically, question 5 on the Medicare Supplement applications asked, in pertinent part: Does the Applicant have or had within the past 5 years any of the following: (Underline condition) Tumor, cancer, malignancy or growth of any kind? * * * c. High or low blood pressure, varicose veins or disorder of the heart or circulatory system? * * * Amputation, because of sickness, paraplegia, disease of the back or spine? Disease of the rectum or intestine, stomach, kidney, prostate, urinary bladder, liver, gall bladder? Question 6.b. asked, "Has the Applicant been confined in a hospital in the last five years? The Lanes answered, "no," to all of the questions set out in the preceding paragraph. They also signed the applications, which state in part: "I agree that all answers above are true and complete to the best of my knowledge." Effective April 14, 1993, National States issued the limited benefit medical expense policies for which the Lanes had applied; the Medicare Supplement policies were issued with effective dates of April 18, 1993. All four policies were delivered on April 22, 1993. The Respondent returned to the Lane home on April 30, 1993, to go over the policies with the Lanes and answer any questions they had. During the review of the policies after delivery, the Lanes never expressed to the Respondent any dissatisfaction with any of the policies. To the contrary, they both signed a statement that they had reviewed their policies with the Respondent, who had explained them in full. Jessie Lane contends that she told the Respondent that she "had had a heart problem, a small heart problem." She testified that, at the time of her deposition, she had a pace maker but that, at the time of the application, she "wasn't that bad . . . I was just having--missing heart beats." She also testified that she has: "a light case of arthritis. . . . Not bad." She also testified that she had been hospitalized during the five years preceding the applications: "That's when I had my heart problem too." Earl Lane contends that he told the Respondent that he had a back injury that required hospitalization several times, but he did not testify that he told the Respondent that he was hospitalized, or that he continued to have back problems, within the five years preceding the application. He testified that he had a swollen prostate that required surgery, but he did not testify that the surgery was within the five years preceding the application. He testified that he had skin cancer "at one time," but that it "was successfully treated" and "didn't amount to nothing." He did not testify that the cancer or the treatment was within the five years preceding the application. He contended for the first time in his deposition testimony that he had a "rupture," but not that he had it within the five years preceding the application. He testified during his deposition: "I've been in the hospital in the last five years." Later during his deposition, he was asked: "How many times have you been in the hospital in the last five years?" He answered: "Just once, I guess, before he was here." He did not clearly testify that he had been hospitalized within the five years preceding the application. Earl Lane also contended for the first time in his deposition testimony that he told the Respondent that he had varicose veins, but he did not testify that they were not surgically removed or that he still had them within the five years preceding the application. The Lanes also filed a complaint listing other alleged violations by the Respondent: (1) that the Respondent misrepresented that the National States policies covered dental and eyeglasses; (2) that these coverages duplicated policies the Lanes already had; (3) that the National States policies were more expensive than policies the Lanes already had; (4) that the National States policies did not pay skilled nursing; and (5) that the Respondent tricked the Lanes into signing a bank draft agreement. The Department chose not to charge those alleged violations, presumably either because there was insufficient evidence that they were true or because they were not violations. It appears that someone helped the Lanes draft their requests for refunds from National States and their initial list of complaints against the Respondent. Although the evidence was not clear who helped, it may well have been the insurance agent whose Medicare Supplement policies were replaced by National States and who was trying to recover the business. In response to the Lanes' request, dated May 7, 1993, to cancel the policies, National States cancelled the Medicare Supplement policies as if the request had been made within the 30 day cancellation period and refunded all but 5 percent of the premium, which was retained as a processing fee. In their cancellation request, the Lanes' alleged: "Our health conditions were not accurately written on the applications by agent Blair Reuther and we will not take any chances on not being paid on future medical bills for misrepresentations by this agent." Nonetheless, National States refused to cancel the limited benefit medical expense policies. They remained in full force and effect until they lapsed a year later for failure to pay the premium when next due. There is no evidence that National States investigated the Lanes' true health status. During the year that the National States limited benefit medical expense policies were in effect, National States paid out more in claims under the policies than the Lanes paid in premiums.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Insurance and Treasurer enter a final order dismissing the Administrative Complaint in this case. RECOMMENDED this 1st day of February, 1995, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of February, 1995. APPENDIX TO RECOMMENDED ORDER To comply with the requirements of Section 120.59(2), Fla. Stat. (1993), the following rulings are made on the Department's proposed findings of fact (the Respondent not having filed any): 1.-2. Accepted and incorporated. Accepted and incorporated; however, the Respondent was responding to a "lead" given to him by his employer after the Lanes returned a postcard expressing interest. Accepted and incorporated. Rejected as not proven. (It was not clear from the evidence what the Respondent was told.) Accepted and incorporated; however, it is not clear from the evidence whether the Respondent should have answered the medical history questions on the application differently based on the information given to him by the applicants. First sentence, rejected as not proven. Second sentence, accepted but subordinate and unnecessary. First sentence, accepted and incorporated. Second sentence, rejected as not proven that there were health conditions that should have been disclosed; otherwise, accepted and incorporated. Last sentence, accepted and incorporated. COPIES FURNISHED: James A. Bossart, Esquire Department of Insurance 412 Larson Building Tallahassee, Florida 32399-0300 Blair John Reuther 8535 Blind Pass Drive, #202 Treasure Island, Florida 33706 Honorable Bill Nelson State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Dan Sumner, Esquire Acting General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, Florida 32399-0300
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 Whether the Department of Management Services properly denied medical insurance reimbursement to Petitioner, a covered dependent of a state employee insured by the State Employees' Preferred Provider Organization health plan, for Genotropin recombinant growth hormone prescribed for the treatment of long- term growth failure associated with idiopathic short stature.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing, and the entire record in this proceeding, the following findings of fact are made: The state group insurance program is a package of insurance plans offered to, among others, state employees and their dependents. § 110.123(2)(k), Fla. Stat.1/ Petitioner Arturo Puerto is insured as a dependent of a state employee, and is a participant in the state's group self- insured plan, known as the State Employees' Preferred Provider Organization health plan ("PPO plan" or "state plan"). The state plan includes a state employees' prescription drug program. § 110.12315, Fla. Stat. Pursuant to Section 110.123(3)(c), Florida Statutes, the Department is responsible for contract management and day- to-day management of the state employee health insurance program. Section 110.123(5)(c), Florida Statutes, authorizes the Department to contract with an insurance carrier or professional administrator to administer the state plan. The current contract provider of the state plan's pharmacy program is CareMark Inc. ("CareMark"). However, the Department makes all final decisions concerning the existence of coverage or covered benefits under the state plan. The Department's authority in this regard may not be delegated to a contract provider. § 110.123(5), Fla. Stat. Petitioner was born on February 12, 1992. On or about February 3, 2009, Petitioner's physician prescribed Genotropin, a recombinant growth hormone ("GH")2/ approved by the United States Food and Drug Administration ("FDA") as therapy for short stature, including idiopathic short stature ("ISS"). ISS is short stature that does not have a diagnostic explanation, in an otherwise healthy child. ISS is also called "non-GH-deficient short stature." The Group Health Insurance Plan Booklet and Benefits Document, effective January 1, 2007, as modified on January 1, 2009, includes the terms and conditions of participation in the PPO plan and the benefits provided by the PPO plan. The booklet and benefits document contains a section describing the prescription drug program. Participants in the PPO plan are automatically enrolled in the prescription drug program, which features a network of retail pharmacies and a mail order program. The participant makes a co-payment for covered prescriptions. The booklet and benefits document sets forth a list of drugs that are covered, and a list of drugs that are not covered under the prescription drug program. Under the heading "Important Information about the Prescription Drug Program," the document states the following concerning specialty medications:3/ 5. Certain medications, including most biotech drugs, are only available through Caremark Specialty Pharmacy Services. Generally, these drugs are for chronic or genetic disorders including, but not limited to, multiple sclerosis, growth deficiency and rheumatoid arthritis and may require special delivery options, (i.e. temperature control). Caremark Specialty Pharmacy provides 24/7 access and can be contacted at 1-800-237-2767. * * * 12. As part of the Caremark Specialty Services, Caremark will administer the Advanced Guideline Management program for the State Employees' PPO Plan. Advanced Guideline Management is intended to optimize outcomes and promote the safe, clinically appropriate and cost-effective use of specialty medications supported by evidence based medical guidelines. Failure to meet the criteria for Advanced Guideline Management during the respective use review will result in denial of medication coverage for the Plan participant and discontinuation of medication coverage for the Plan participant in the case of concurrent use review. The Advanced Guideline Management Program is a process by which authorization for a specialty medication is obtained based on the application of currently acceptable medical guidelines and consensus statements for appropriate use of the medication in a specific disease state. Therapies reviewed under the Specialty Guideline Management Program include, but are not limited to, the following: multiple sclerosis, oncology, allergic asthma, human growth hormone, hepatitis C, psoriasis, rheumatoid arthritis, and respiratory syncytial virus. Additional therapies may be added from time to time.... CareMark's current guideline covering Genotropin and similar GH medications is set forth in a 2008 CareMark document titled, "Specialty Pharmacy Program for Growth Hormone and Endocrine-Metabolic Disorders." The document contains flow charts describing the criteria employed by CareMark to determine coverage for specific conditions. Among the criteria set forth in the flow chart for prescribing GH to children with ISS is the following question: "Does pre-treatment growth velocity and height meet the AACE (American Association of Clinical Endocrinologists) criteria for short stature?" (See Appendix N). If the answer to the question is "no," then the criteria direct that coverage for the prescription of GH should be denied. Appendix N sets forth the following "AACE criteria for short stature": < -2.25 standard deviations below the mean for age and sex based on patient's growth rate, adult height prediction of less than 5'3" for boys and less than 4'11" for girls. Appendix N is based on the AACE's "Medical Guidelines for Clinical Practice for Growth Hormone Use in Adults and Children-- 2003 Update" and a December 2003 AACE Position Statement on growth hormone usage in short children.4/ The CareMark document is not explicit as to whether the quoted elements of the AACE criteria for short stature are to be considered in the disjunctive. However, the AACE Position Statement expressly states that GH use is indicated for ISS only for children whose height is "< - 2.25 standard deviations below the mean and have an adult height prediction of less than 5'3" for boys and less than 4'11" for girls." (Emphasis added.) The height standard deviation criterion used by CareMark to determine the appropriateness of Genotropin therapy as a treatment for ISS was shown to be consistent with FDA criteria and the specifications established by Pfizer, the manufacturer of Genotropin. The medical records submitted on behalf of Petitioner show that at the time Genotropin therapy was prescribed in February 2009, Petitioner's height was 162.5 cm (5'4"). This was 1.66 standard deviations below the mean for his age and sex. Untreated, his predicted final height was 164 cm (5'4 1/2"). At the time Genotropin therapy was prescribed, Petitioner did not meet the height standard deviation requirement. His height standard deviation was 1.66 standard deviations below the mean. The deviation required by the CareMark criteria was greater than 2.25 standard deviations below the mean. At the time Genotropin therapy was prescribed, Petitioner did not meet the adult height prediction requirement. Petitioner was already 5'4" tall and was projected to reach a height of 5'4 1/2" without treatment. The CareMark criteria required a projected adult height without treatment of 5'3" or below. The PPO plan denied payment for the Genotropin therapy because Petitioner did not meet criteria established by CareMark through its Specialty Pharmacy Program guidelines. The booklet and benefits document makes no provision for exceptions to strict conformity to the CareMark criteria. At the hearing, Petitioner's representative acknowledged that Petitioner does not meet the criteria for Genotropin therapy, but requested that the Department order such coverage as an exception to the criteria.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Department of Management Services, Division of State Group Insurance enter a final order denying coverage for Petitioner's prescription for Genotropin therapy. DONE AND ENTERED this 10th day of March, 2010, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON 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 10th day of March, 2010.
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 The issues concern the question of Petitioner's responsibility to pay additional insurance premiums related to Family I coverage in the State Employees' Group Health Insurance program for the period February 1981 through April 1982, based upon alleged underpayments of required premiums. See Section 110.123, Florida Statutes and Rule 22K-1.20, Florida Administrative Code.
Findings Of Fact According to the Florida law which has application in this dispute, when a husband and wife were employed by separate agencies of the State of Florida, cost of the Family I coverage under the State Group Health Insurance Plan was defrayed by those state agencies. This is as contrasted with the circumstance in which one spouse would be responsible for contributing to the cost of the Family I coverage under the State Group Health Insurance Plan, should the second spouse cease to be employed by the second state agency. The State of Florida, Department of Administration, has she responsibility for administering the State Group Health Insurance Plan, to include collection of necessary premium payments. Both Petitioner and his wife had been reported in the records of the Department of Administration as employed by the Department of Corrections and Department of Health and Rehabilitative Services respectively, as employees entitled to participate in the spouse program for payment of health care, i.e., the program in which no contribution is made by the employees toward payment of health insurance premiums. On October 28, 1982, the Petitioner informed the Department of Administration on a form provided by the Bureau of Insurance of the Department of Administration that his wife, Caroline Wilson, had terminated her employment with Health and Rehabilitative Services effective March 23, 1982. This form was executed in cooperation with the Petitioner's employing agency. The second part of the form related to information to be provided by the wife and her employing agency on the question of her employment was not completed by the spouse nor signed off by her employing agency. A copy of this item or form may be found as Respondent's Exhibit No. 3, admitted into evidence. As a result of information he provided, Petitioner was informed of an underpayment of premiums for the period May 1982 through November 1982, related to his wife's lack of eligibility for contribution from her employing agency and the responsibility of the Petitioner to substitute as payor of those premiums. This referred to the point of departure identified by the Petitioner allowing for a grace month of April 1982, thereby making the period of underpayment May 1982 through November 1982. The amount of nonpayment was $280.06, which was eventually reimbursed by the Petitioner. Subsequently, in January 1984, Respondent, Bureau of Insurance, in an attempt to ascertain why Health and Rehabilitative Services had not contributed the full amount of its share to the insurance related to Caroline P. Wilson in times before March 23, 1982, discovered that the wife, Caroline P. Wilson, had terminated her employment some time before March 23, 1982. As was revealed in the final hearing, the last day of employment with Health and Rehabilitative Services was January 3, 1981. After that date, Mrs. Wilson did not return to her job at the Florida State Hospital in Chattahoochee, Florida, and was eventually considered to have abandoned that job. (It was the first impression of the Department of Administration that she had last been employed in December 1980 and as a consequence this case pertains to the claim of the Department of Administration that there is an underpayment related to the family coverage which starts on February 1, 1981 and runs until April 1, 1982, allowing for a credit of overpayment in the amount of $48.46 for the month of September 1983, leaving a total claimed of $382.64. It is this amount that Petitioner took issue with and requested a timely formal Section 120.57(1), Florida Statutes' hearing to resolve.) Based upon the evidence adduced at the hearing, the date from which the responsibility of the husband to contribute the premiums share no longer being provided by Health and Rehabilitative Services would be January 1981, as opposed to December 1980. Allowing for the grace month of February 1981, the payments would be due for March 1, 1981, through April 1, 1982, allowing credit again for the $48.46 for the month of September 1983, leaving a total due and owing in the way of underpayment of $353.90.
Findings Of Fact Findings regarding general matters The Respondent, Elnor Darlene Johnson, is currently licensed in the State of Florida as a life insurance agent and as a health insurance agent. At all times pertinent to the issues in this case, the Respondent was licensed in the State of Florida as a health insurance agent and was employed by National States Insurance Company and Transport Life. In order to become a licensed Florida Insurance agent, the Respondent was required to become familiar with the provisions of the Florida Insurance Code and pass an examination given by the Department of Insurance. Respondent is familiar with the provisions of the Florida Insurance Code applicable to health and life insurance agents. Findings regarding Count I (Anna Hajek) The Respondent visited Anna Hajek for the first time on December 6, 1988. Mrs. Hajek had sent in an advertising card to the Respondent's insurance agency requesting information on several health insurance programs. When the Respondent arrived at Mrs. Hajek's home, she asked Mrs. Hajek what other insurance coverage she had in addition to her Medicare coverage. Mrs. Hajek told the Respondent that she did not have any other existing health insurance coverage at that time. During the visit on December 6, 1988, Mrs. Hajek appeared to understand what she and the Respondent were talking about. They discussed the meals Mrs. Hajek was having, Mrs. Hajek's son, and some of Mrs. Hajek's activities. The Respondent was under the impression that Mrs. Hajek was handling her own affairs and that Mrs. Hajek's son was not involved in the management of her affairs. The Respondent and Mrs. Hajek discussed Mrs. Hajek's son and the fact that she wanted to protect her assets (money invested in certificates of deposit) for her son and that she did not want to spend it all on a nursing home. Mrs. Hajek invited the Respondent to return for another visit to have lunch. During the course of the December 6, 1988, visit, the Respondent sold Mrs. Hajek a Medicare Supplement insurance policy. Respondent explained the various benefits and coverages under the policy. Mrs. Hajek appeared to understand the policy. The Respondent did not fill out any "replacement forms" because Mrs. Hajek had told her that she did not have any existing Medicare Supplement insurance. Mrs. Hajek appeared to understand the Respondent's questions regarding whether Mrs. Hajek had any existing coverage. When she left Mrs. Hajek's house, the Respondent left identification, including her telephone number. The insurance policy sold too Mrs. Hajek on December 6, 1988, was a Medicare Supplement insurance policy to be issued by National States Insurance Company, with an intensive care benefit rider, a dental, vision, and hearing care expense rider, an extended care facility confinement rider, and a rider to increase benefits to Supplement Medicare Part B. The initial annual premium was $1,264.00. Mrs. Hajek paid the initial annual premium by delivering a check to the Respondent. National States Insurance Company issued the policy on December 28, 1988. On December 8, 1988, the Respondent made a second visit to Mrs. Hajek's home. At that time Mrs. Hajek told the Respondent she thought she needed nursing home coverage because she did not believe she could rely on her son to help her. The Respondent sold Mrs. Hajek three insurance policies during the course of the December 8, 1988, visit. The first of these policies was an Extended Care Confinement policy with an initial premium in the amount of $121.00 The second was a Limited Medical-Surgical Expense policy with an initial premium in the amount of $668.00. The third was a Nursing Home Policy with a home nurse benefit rider with an initial premium in the amount of $1,496.00. On December 8, 1988, Mrs. Hajek paid the initial premiums on all three policies by delivering a check to the Respondent. National States Insurance Company issued the three policies on December 28, 1988. The Respondent explained all of the coverages and benefits provided under the various policies prior to selling them to Mrs. Hajek, and Mrs. Hajek appeared to understand the policies she was purchasing. During the December 8, 1988, visit with Mrs. Hajek, the Respondent also discussed policies that would provide long-term custodial-type care, which is a different type of coverage than skilled nursing coverage. On December 20, 1988, the Respondent made a third visit to Mrs. Hajek's home. During the course of that visit, the Respondent sold Mrs. Hajek a Long- Term Care policy with an inflation rider to be issued by Transport Life Insurance Company. The initial premium for that policy was $2,380.88. On December 20, 1988, Mrs. Hajek delivered a check in the amount of $2,404.80 in payment of the initial premium and the application fee for the Long-Term Care policy. Transport Life Insurance Company issued a Long-Term Care policy to Mrs. Hajek with an effective date of December 20, 1988. Mrs. Hajek was enrolled in and covered under Humana Gold Plus HMO from at least June 1, 1987, until December 31, 1988. On December 16, 1988, a disenrollment form dated December 6, 1988, and apparently signed by Mrs. Hajek, was received at the offices of the Humana Gold Plus HMO. The disenrollment form was processed and Mrs. Hajek was disenrolled from the HMO effective December 31, 1988, or January 1, 1989. The annual premiums of all of the policies sold to Mrs. Hajek by the Respondent during December of 1988 total $5,869.88. At that time Anna Hajek had an annual income of approximately $7,500.00. 1/ During the time period when the Respondent sold the several insurance policies to Mrs. Hajek, Mrs. Hajek appeared to be mentally competent and in charge of her own affairs. At that time, Mrs. Hajek had her own checking account, was handling her own financial affairs, and was living on her own in a condominium. As of that time, Mrs. Hajek had never been diagnosed as suffering from dementia or any other type of mental disorder that would prevent her from handling her own affairs. 2/ When Mrs. Hajek's son, Frank Hajek, discovered that his mother had purchased several insurance policies, he attempted to contact the Respondent, but she did not return his calls. Ultimately, Frank Hajek wrote to the issuing insurance companies requesting that the policies be cancel led and that the premiums be refunded to his mother. In due course all the policies were cancelled and all of the premiums were refunded. The coverage provided by the policies the Respondent sold to Mrs. Hajek overlaps in several respects. However, all of the coverage appears to be cumulative in the sense that where a specific circumstance is covered by two policies, both policies will pay. 3/ Findings regarding Count II (Sadie & Joseph Grossman) No evidence was received regarding the allegations contained in Count II of the Second Amended Administrative Complaint. 4/ Findings regarding Count III (Paul and Mary Kline) The Respondent visited Paul and Mary Kline at their home in response to a "lead card" the Klines had sent requesting information on long-term nursing home insurance. The Respondent reviewed the Klines' existing coverage and left them information outlining the various benefits and coverages that were available from the companies the Respondent represented. The Klines indicated they were interested in long-term nursing coverage, but did not buy any insurance during the first visit. Mr. Kline later telephoned the Respondent and told her that he and his wife were interested in purchasing the nursing home insurance they had discussed during the first visit. In the meantime, National States had introduced a new policy, the LTC, and the Respondent returned to the Klines' home on January 26, 1989, and showed them the coverages provided by the new policy. The LTC policy provided for skilled, intermediate, and custodial care, and also provided money back to the policyholder if the coverage was not used. During the visit on January 26, 1989, the Respondent solicited, and Paul and Mary Kline signed, applications for long-term nursing care policies to be issued by National States Insurance Company. The premium due on the two policies totaled $2,596.00. On January 26, 1989, Mrs. Kline wrote a premium payment check in the amount of $2,357.60 payable to the order of National States Insurance Company and gave the check to the Respondent. At the time of receiving the check, the Respondent did not notice that the amount on the check was less than the total amount of the premium due on the two policies. On January 26, 1989, the Respondent left receipts and outlines of coverage with the Klines. The receipts were for the full amount of the premium, an amount $238.40 greater than the check received by the Respondent on January 26, 1989. The discrepancy between the receipts and the check were noticed when the Respondent submitted the applications to her agency. Thereupon, the Respondent called Mr. Kline and explained what had happened. The Respondent told Mr. Kline that the company would process the applications, but that the $238.40 shortage would be charged against her account and she hoped he would pay the shortage. Mr. Kline told the Respondent he would pay the difference. The Respondent then wrote a personal check to the insurance company and submitted the Klines' insurance applications for processing. Shortly thereafter Mrs. Kline signed a check payable to the Respondent in the amount of $238.40 and delivered it to the Respondent. At some time subsequent to the purchase of the policies, but before the policies were actually issued, the Klines saw a television show that caused them to believe they had purchased the wrong type of insurance. The Klines tried unsuccessfully to contact the Respondent by telephone. Towards the end of February, the Klines wrote a letter to National States Insurance Company requesting that the policies be cancel led and that their premiums be refunded. Mr. Kline also contacted the Department of Insurance service office about his inability to contact the Respondent. Shortly after that contact, the Respondent called Mr. Kline. The policies were canceled and the Klines received a full refund of the $2,596.00 they had paid in premiums. At the time of the purchase of the policies, the Respondent fully explained the policies to the Klines and the Klines voluntarily purchased same. Mr. Kline was satisfied with the policies on the day he purchased them. Mr. Kline's main complaint was that the Respondent failed to return his telephone calls. Mr. Kline did not believe that the Respondent had lied to him or misrepresented any of the coverages provided by the policies. Findings regarding Count IV (Charles Retty) In November of 1988, Charles Retty contacted the St. Petersburg offices of National States Insurance Company and Diversified Health Services with questions regarding the effect of changes in the Medicare program, and how those changes might affect the need for insurance coverage. At that time, Mr. Retty and his wife were insured under two nursing home policies he had purchased from National States Insurance Company. The Respondent had not sold him either of those policies. As a result of that contact, someone in the management of the insurance company asked the Respondent to call on Mr. Retty. Shortly thereafter, the Respondent visited Mr. Retty, discussed his concerns with him, told him she did not know the answers to all of his questions, and told him she would get back in touch with him with further information. Following the initial meeting between Mr. Retty and the Respondent, Mr. Retty made several unsuccessful efforts to get in touch with the Respondent. Mr. Retty then complained to the Department of Insurance service office regarding his concerns and the failure of the Respondent to get back in touch with him. Shortly after his complaint to the Department of Insurance, the Respondent again visited Mr. Retty, at which time they did not get along very well. Each thought the other somewhat rude and antagonistic. The Respondent was never Mr. Retty's insurance agent. She had never sold him any insurance prior to the visit in November of 1988 and she did not attempt to sell him any insurance during any of her communications with him. The Respondent did not attempt to have Mr. Retty cancel any of his existing insurance or allow any such insurance to lapse. Mr. Retty never gave the Respondent any money. Findings regarding Count V (Minnie Holden) The Respondent has been Minnie Holden's insurance agent since about 1976 or 1977, when the Respondent enrolled Mrs. Holden and her husband in a Medicare Supplement program. When Mr. Holden passed away, the Respondent continued to service Mrs. Holden's policies. In 1986, the Respondent sold Mrs. Holden a Medicare Supplement policy issued by United American. In February of 1987, the Respondent converted that policy to an updated United American Medicare Supplement policy. Mrs. Holden also had a long-term nursing home policy issued by Transport Life. On February 18, 1988, United American Insurance Company received a $990.00 renewal premium for the renewal of Mrs. Holden's Medicare Supplement insurance policy. United American Insurance Company renewed the policy for another year, and it remained in force, paid in full, until its lapse date of February 26, 1989. The Respondent was listed as the agent of record for the renewal of that policy. United American Insurance Company credited the Respondent's debit balance account with a commission in the amount of $138.60 for the February 1988 renewal of Mrs. Holden's Medicare Supplement insurance policy. United American Insurance Company also sent the Respondent a statement of account covering the month of February 1988. The statement of account included the information that Mrs. Holden had renewed her Medicare Supplement insurance policy and that the Respondent's account had been credited with a commission for that renewal. The statement of account also contained information about many other policy holders and contained information about many things other than commissions. 5/ The Respondent visited Mrs. Holden on August 25, 1988, at which time Mrs. Holden told the Respondent that she (Holden) had cancelled her Medicare Supplement policy because she could no longer afford it. Mrs. Holden told the Respondent that she (Holden) had kept her long-term nursing home policy in effect because her daughter was thinking of placing Mrs. Holden in a nursing home. 6/ Respondent advised Mrs. Holden that she really should have Medicare Supplement coverage, and during the August 25, 1988, visit the Respondent solicited and obtained from Mrs. Holden an application for a Medicare Supplement insurance policy to be issued by National States Insurance Company. In filling out the application for the policy, the Respondent answered "No" to Question 4, which inquired, "Is the insurance being applied for intended to replace any accident or sickness insurance, health service or health maintenance contract? " She also answered "No" to Question 5, indicating that no other existing policies were in force. The Respondent believed that her answers to Questions 4 and 5 on the application form were correct on the basis of what Mrs. Holden had said about the cancellation of the prior policy. On August 25, 1988, Mrs. Holden paid for only six months of coverage because she said that was all she could afford. The Respondent told Mrs. Holden that the National State policy was less expensive than the prior United American policy because it provided slightly less coverage. The Respondent did not fill out a "replacement form" when she filled out the application on August 25, 1988, because she thought the United American policy had expired and was no longer in effect. On September 8, 1988, National States Insurance Company issued a Medicare Supplement policy to Mrs. Holden. Mrs. Holden had two Medicare Supplement insurance policies in effect from September 8, 1988, until February 26, 1989. Findings regarding Count VI (Louella Riley) The Petitioner did not offer any evidence regarding the allegations contained in Count VI of the Second Amended Administrative Complaint. Findings regarding Count VII (Violation of probation) In 1986, the Florida Department of Insurance conducted an investigation Into the activities of the Respondent as an insurance agent in this state. As a result of that investigation, the Department filed Investigation Report No. 86- 158-IA-TP, alleging violation of the replacement laws relating to the solicitation and sale of Medicare Supplement insurance. On August 28, 1987, the Respondent entered into a Settlement Stipulation For Consent Order with the Department, Case No. 87-L-321DF, whereby she was placed on departmental probation for a period of one year, effective upon the date of signing of the Consent Order in that case. A condition of that probation was that the Respondent strictly adhere to all provisions of the Florida Insurance Code and of the rules of the Department of Insurance. The settlement stipulation also provided that the Department of Insurance would initiate proceedings to revoke all licensure and eligibility for licensure of the Respondent if she violated provisions of the Florida Insurance Code or rules of the Department of Insurance during her probationary period. On September 9, 1987, a Consent Order was issued by the Department of Insurance in Case No. 87-L-321DF, which incorporated all terms and conditions of the Settlement Stipulation For Consent Order. Accordingly, the Respondent was on departmental probation from September 9, 1987, through September 8, 1988.
Recommendation For all of the foregoing reasons, it is recommended that the Department of Insurance issue a Final Order in this case dismissing all charges against the Respondent in this case. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 5th day of November 1990. MICHAEL M. PARRISH 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 November 1990.
