The Issue The issue in this proceeding is whether Petitioner is entitled to prospective enrollment in the State Group Insurance Program.
Findings Of Fact In or around May 2010, the Florida Department of Economic Opportunity hired Petitioner as an "Other Personal Services Employment" ("OPS") worker——a category of state employee that that is not entitled to benefits, and, as a consequence, does not participate in the State Group Insurance Program. Petitioner's entitlement to benefits changed, however, on November 22, 2011, when she was promoted to deputy clerk, which is a career service position. At or around that time, Petitioner was informed that she had 60 days from the effective date of her promotion to enroll in any benefit plan for which she was eligible. Benefits, including insurance plans, are administered by a private contractor, NorthgateArinso, through an online system called "People First." Following her promotion, Petitioner, with the assistance of her supervisor, investigated the benefit plans available to her by accessing the "My Benefits" pages at www.myflorida.com. Subsequently, on December 13, 2011, Petitioner logged on to the People First system with the intent to make her benefit elections and complete her enrollment.1/ Upon entering the website, Petitioner properly clicked on the tab labeled "Health & Insurance," which took her to the "Health & Insurance Home Page." At that point, Petitioner was presented with eight icons from which to choose: General Benefits Information Go to the MyBenefits website for your insurance options. Your Benefits Review your benefits and Flexible Spending Accounts. Insurance Companies See contact information. Your Dependents' Information View and update dependents' information. Benefits Choices Enroll or change your benefits. Benefit Premium History Review your insurance. Required Documentation Review status of your documentation. Benefits Materials View and request insurance forms and booklets. Of the foregoing options, Petitioner correctly selected "Benefits Choices," at which point she was navigated to a page that offered her the ability to register any eligible dependents. Not wishing to add any dependents, Petitioner selected the "Go to Next Step" button, which, in turn, took her to a page that listed "Current Plans." (As Petitioner had not previously made any elections, no health, vision, or dental plans were listed below the tab labeled "Current Plans"). Immediately adjacent to "Current Plans" were eleven other tabs: Health; Flex Spend Acct; Basic Life; Optional Life; Dental; Vision; Accident; Cancer; Disability; Intensive Care; and Hospitalization. From these options, Petitioner first selected "Health," which brought up a list of available health insurance plans. At that point, Petitioner chose the box next to the Coventry Health Care individual health insurance plan. Significantly, however, this action did not finalize Petitioner's selection (as explained shortly, no choices are processed until an employee clicks, on a subsequent web page, the "complete enrollment" button). After choosing——but not finalizing——her health insurance coverage, Petitioner clicked on the "Dental" tab. Although the undersigned credits Petitioner's testimony that she selected the box next to one of the available options, there is an absence of evidence concerning the identity of the plan in which she sought to enroll.2/ Next, Petitioner chose the "Vision" tab, which, similar to the "Health" and "Dental" screens, produced a list of available plans. Of the various choices, Petitioner clicked on the box next to the Coventry Health Care individual vision plan. Significantly, and as alluded to above, benefit elections are not finalized in the People First system until two actions are taken: first, the rectangle labeled "Summary/Last Step" must be selected, which leads to a screen titled "Process Benefit Elections"; and, once taken to the "Benefits Elections Page," the employee must click the shaded rectangle titled "Complete Enrollment." Upon the completion of these steps, a confirmation page appears that lists the employee's name and People First identification number; the page also reads, in pertinent part, "Please save or print for your records . . . This is your confirmation of benefits through the State Group Insurance Program." Notably, the record is devoid of evidence that such a confirmation page was ever generated. While Petitioner's testimony that she "checked the boxes" next to her desired benefits plans has been credited, the undersigned is not persuaded by the greater weight of the evidence that Petitioner completed the process' final two steps on December 13, 2011,3/ or on any other occasion prior to the expiration of the 60-day deadline.4/ On or about January 26, 2012, Petitioner became concerned that she had not received any materials concerning the insurance plans in which she thought she had enrolled. On that date, Petitioner telephoned the People First hotline and, at some point during the conversation that ensued, was informed that there was no record of any benefit elections having been made.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of State Group Insurance, enter a final order denying Petitioner's request to enroll in the State Group Insurance Program. DONE AND ENTERED this 4th day of October, 2012, in Tallahassee, Leon County, Florida. S EDWARD T. BAUER 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 4th day of October, 2012.
The Issue The issues are whether Petitioner, Daniel O. Cobb, is entitled to payment of claims for surgery performed on Ms. Cobb, Susan Catherine Cobb, his spouse, on November 11, 1985, and whether Respondent, the State, is estopped from denying coverage. A prehearing stipulation was filed limiting the facts, issues, exhibits and witnesses. The stipulated facts were incorporated into the Recommended Order and are in the Final Order as well. Petitioner presented the testimony of himself and his spouse. Petitioner's exhibits 2 through 6 were accepted into evidence. Exhibits 3 and 4 constituted hearsay. The Department presented the testimony of Hazel Rosser and Joseph F. Wellman. Four exhibits by the Department were offered into evidence and were accepted. Neither party ordered a transcript. Only the Department filed a proposed recommended order and findings of fact. The Findings of Fact and the Conclusions of Law in the Recommended Order are hereby adopted, except in Findings of Fact Nos. 16, 17, and 18, Mrs. Scott is changed to Mrs. Cobb and in Findings of Fact No. 18, Mr. Scott is changed to Mr. Cobb.
Findings Of Fact Daniel O. Cobb was an employee of the Florida Department of Transportation during 1985. Mr. Cobb and his spouse, Susan Cobb, had family coverage under the State of Florida Employees Group Health Self Insurance Plan (hereinafter referred to as the "State Plan"), until November 1, 1985. The State Plan is administered by Blue Cross/Blue Shield. Pursuant to the agreement between the State of Florida and Blue Cross/Blue Shield benefits which are payable under the State Plan are governed by a "Benefit Document." Each year, State employees are given an opportunity change the form of health insurance coverage they wish to have. During this "open enrollment period" an employee covered by the State Plan can elect to participate in a Health Maintenance Organization and an employee covered by a Health Maintenance Organization can elect to participate in the State Plan. During 1985, there was an open enrollment period between September 9, 1985, and September 20, 1985. During the 1985 open enrollment period State employees, including Mr. Cobb, were provided a Notice to Employees in which they were advised to carefully review information contained in a Benefit Comparison Brochure, a Rate Comparison Chart and a Health Care Plan Selection Form. These documents were provided to all State employees. The Selection Form instructed employees to "Please read the employee notice about HMO service areas and effective date of coverage before completing this section." State employees were also advised that any change in coverage would be effective November 1, 1985. On September 19, 1985, Mr. Cobb signed a State of Florida Employes Group Health Self Insurance Plan, Change of Information Form. Pursuant to this Change of Information Form, Mr. Cobb elected to terminate his health insurance coverage with the State Plan. On the Change of Information Form it was indicated that Mr. Cobb's election to terminate his coverage under the State Plan was to be effective November 1, 1985. Therefore, Mr. Cobb was informed and should have known that he was no longer eligible for medical cost payment for himself or his family pursuant to the State Plan after October 31, 1985. Mr. Cobb also signed a Member Enrollment (Group) and Physician Selection Form on September 19, 1985. Pursuant to this Form, Mr. Cobb enrolled himself, his Spouse and their children, in Health Options, Inc., a health maintenance organization. Mr. Cobb's participation in Health Options, Inc., began November 1, 1985. On September 19, 1985, Mr. Cobb was provided a list of Health Options, Inc., approved physicians which were available for use by Mr. Cobb and his family. Mr. Cobb designated Gerald A. Giurato, M.D., as his primary care physician on the Physician Enrollment Form which he signed on September 19, 1985. On October 28, 1985, Mr. Cobb was mailed a copy of the Health Options Member Handbook which, among other things, describes the grievance procedure to be followed when medical expenses were not paid by Health Options Inc., and the manner in which physicians were to be used in order to be entitled to payment, of their charges. The Handbook informed Mr. Cobb that all care had to be arranged through a primary care physician and that only services provided or approved by the primary care physician were covered. The Handbook also indicated that treatment by physicians who were not approved by the primary care physician would be the responsibility of the patient. During 1985 Mrs. Cobb was under the care of Alexander Rosin, M.D. Dr. Rosin performed surgery for the removal of a cyst on Mrs. Cobb, on November 11, 1985. Dr. Rosin was not a physician approved by Health Options, Inc., or Mr. Cobb's primary care physician. Nor was the surgery approved. Claims attributable to the November 11, 1985, surgery were submitted to the State Plan. Claims, for the charges of Dr. Rosin, Scott Blonder, M.D., and a Pathologist were submitted. The expenses for the November 11, 1985, surgery were incurred after coverage of Mr. and Mrs. Cobb under the State Plan ended. The type of surgery performed on Mrs. Cobb was also not authorized by the Benefit Document. No claims were submitted to Health Options, Inc., for medical expenses incurred for Mrs. Cobb's operation on November 11, 1985. None of the medical expense attributable to Mrs. Cobb's November 11, 1985, surgery were incurred with physicians or facilities approved by Health Options, Inc. By letter dated August 27, 1986, the Department denied the claims submitted to the State Plan attributable to Mrs. Cobb's November 11, 1985, surgery. Mr. Cobb filed a request for an administrative hearing to contest the Department's proposed denial.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is RECOMMEDED that a final order be issued by the Department denying payment of claimed expenses attributable to Mrs. Cobb's surgery of November 11, 1985. DONE and ENTERED this 15th day of July, 1988, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of July, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 864109 The Department has submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Department's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number, of Acceptance or Reason for Rejection 1 18. The letter denying payment was dated August 27, 1986, and not September 4, 1986. See DOA exhibit 1. 2 7. 3 Hereby accepted. 4 7. 5 3. 6 4 and 5. 7-9 6. 10-12 11. Summary of testimony and irrelevant. Summary of testimony argument. Concerning the weight to be given evidence and cumulative. 15 7. 16 Hearsay. 17-18 Conclusion of law. 19-20 16. 21 Not supported by the weight of the evidence. 22 15. COPIES FURNISHED: O. C. Beakes, Esquire Lindner Smith, Jr., Esquire 836 Riverside Avenue Jacksonville, Florida 32205 Andrea R. Bateman, Esquire Department of Administration Room 438, Carlton Building Tallahassee, Florida 32399-1550 Adis Vila, Secretary 435 Carlton Building Tallahassee, Florida 32399-1550 Augustus D. Aikens, Jr. General Counsel 435 Carlton Building Tallahassee, Florida 32399-1550 =================================================================
The Issue Whether Respondent violated various provisions of Chapter 641, Florida Statutes, as more specifically alleged in Order to Show Cause dated September 29, 1989.
Findings Of Fact Amerimed Insurance Plan, Inc. (Amerimed), is a licensed health care services plan, domiciled in the State of Florida and subject to the jurisdiction and regulation of the Florida Department of Insurance (Department) pursuant to Chapter 461, Part I, Florida Statutes. The Notice to Show Cause was initiated following the filing of Amerimed's Annual Statement, the March 31, 1989 quarterly statement and other information. Section 641.01, Florida Statutes, states five or more persons may form a corporation for the purpose of establishing, maintaining and operating a nonprofit health care services plan in the State of Florida. Although Amerimed was incorporated on November 22, 1977, its annual statements since that date indicate the plan has never written a policy or contract of health care services and, therefore, has never commenced business within the meaning of s. 641.01, Florida Statutes. In fact, the plan has never written a policy or contract to provide health services. The majority of the existing directors of Amerimed are not representatives of the general public as required by s. 641.02, Florida Statutes. Amerimed has, over the past twelve years, amended its Articles of Incorporation without first having submitted these amendments to the Department for approval as required by s. 641.05, Florida Statutes. Amerimed has on file with the Department a Certificate of Deposit for $125,000, in trust, held by the Department for the protection of policy holders and/or subscribers which deposit may not be used as working capital to operate the plan. The only income reported by Amerimed is the interest on the Certificate of Deposit in the approximate amount of $1000 per month. Amerimed has no salaried employees, and such records as are maintained by Amerimed are maintained at the offices of Melvin S. Jacobson who is the beneficial owner of the Certificate of Deposit held by the Department. Although s. 641.01, Florida Statutes, authorizes the formation of a nonprofit corporation to sell health insurance plans, and Jacobson testified the corporation is owned by the Board of Directors, it is clear that Jacobson, as President, Chairman of the Board and the source of the $125,000 Certificate of Deposit, controls Amerimed with his power to appoint and dismiss directors. As a nonprofit corporation, Amerimed was incorporated in 1977 as Sunshine State Health Care, changed its name to Medical Centers in 1981, and in 1984 the name was changed to Amerimed Insurance Plan, Inc. Amerimed Health Centers, Inc., a corporation formed to operate walk-in medical facilities, had common directors with Amerimed until 1986 when the former commenced liquidation. Jacobson was President and Chairman of the Board of Amerimed Health Centers at the time of its liquidation and the sale of its assets which were completed in 1988 when Amerimed Health Centers, Inc., was involuntarily dissolved. From this dissolution, Amerimed remained with Jacobson as President and Chairman of the Board and other directors named by Jacobson. A former shareholder of Amerimed Health Plans, Inc., contended that he owned a part of Amerimed; in correspondence to the Department in 1984 it was alleged that Amerimed was a wholly owned subsidiary of Amerimed Health Plans, Inc.; and the issuance of 100 shares of stock to Jacobson clearly raised the question of the ownership of Amerimed. Amerimed is the only health insurance plan incorporated in Florida under Part 1 of Chapter 641, Florida Statutes. In 1985, the Legislature abolished the authority of the Department to issue a certificate of authority to operate a nonprofit health care services plan pursuant to this part. (s. 641.155, Florida Statutes 1989). In 1986, the Department brought charges similar, if not identical, to the charges brought in these proceedings. Department officials thereafter conferred with Jacobson in an attempt to settle the dispute. Pursuant to those negotiations, the Department agreed to allow Jacobson several months to locate a buyer of this "nonprofit" corporation who could meet the Department's financial requirements. Jacobson, on the other hand, agreed to surrender his certificate on its expiration date, if he could not find a qualified buyer (Exhibit 7). No qualified buyer was found, yet Jacobson filed his application for renewal of Amerimed's certificate in 1987 and, since the issuing of a renewal certificate is a ministerial act, the Department renewed Amerimed's certification. In 1988, Amerimed located a prospective buyer and issued 100 shares of stock to Jacobson with which to transfer ownership of Amerimed. This buyer could not meet the Department's requirements for qualification, and Amerimed now contends the stock was never delivered to Jacobson, and Amerimed remains a nonstock, nonprofit corporation. Nevertheless, Jacobson is still looking for a purchaser of Amerimed to whom he can sell the certificate for $50,000-$75,000 to recompense him for the time and expense he has incurred in Amerimed. Respondent contends that it has sufficient working capital to cover acquisition costs and operating expenses for at least three months. The only capital available for this purpose is the interest on the Certificate of Deposit which Respondent contends is adequate since there are presently no operating expenses or acquisition costs. However, the sale of one policy would result in Respondent not meeting the financial requirements for health insurance plans and put Amerimed in further violation of statutory provisions.
Recommendation It is recommended that the certificate of Amerimed Insurance Plan, Inc., to operate a nonprofit health service plan pursuant to Chapter 641, Part I, Florida Statutes, be revoked. ENTERED this 23rd day of March 1990, in Tallahassee, Florida. K. N. AYERS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 23rd day of March 1990. APPENDIX Treatment Accorded Respondent's Proposed Findings: Included in H.O. #1. Included in H.O. #13. Accepted. Included in H.O. #10. Included in H.O. #6. Accepted. Included in H.O. #10 and #15. Accepted in part only. So far as this record shows (Tr. p. 97), three proffered members of the board of directors consist of a man owning a video training company, a realtor, and a man who was in real estate, but is now buying a clothing business. No evidence was submitted that the board included "physicians contracting with the plan, and administrators or trustees of hospitals contracting with the plan. No evidence was presented that Amerimed ever entered into such contracts so as to qualify the physicians and/or hospital administrators presently on the board of directors as board members. Accepted only insofar as consistent with H.O. #7-#11 and #16, otherwise rejected. Rejected insofar as reissuance of the certificate is classified as giving Amerimed a "clean bill of health." Accepted insofar as included in H.O. #7 and #8. Accepted insofar as finding the Department withheld disciplinary proceedings to allow Jacobson to find a qualified transferee. Accepted. The Department renewed Amerimed's certificate as a ministerial act which they could refuse to do only upon showing grounds for revocation. Rejected insofar as in conflict with H.O. #14. Rejected insofar as inconsistent with H.O. #15, otherwise accepted. Treatment Accorded petitioner's Proposed Findings: Included in H.O. #1. Included in H.O. #2. Rejected as opinion. Potentially Amerimed constituted a danger to the public because its certificate authorized the sale of health insurance policies to the public. Included in H.O. #4. Accepted. Included in H.O. #6. 7-8. Included in H.O. #12. 9. Included in H.O. #7. 10-11. Included in H.O. #8. 12. Accepted COPIES FURNISHED: Michael C. Godwin, Esquire Department of Insurance 412 Larson Building Tallahassee, Florida 32399-0300 Bruce Culpepper, Esquire Post Office Box 10095 Tallahassee, Florida 32302 Don Dowdell General Counsel Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300
Findings Of Fact Petitioner, Mr. Thomas P. O'Connell, at times pertinent hereto, was an employee of the Florida Atlantic University. From 1974 until January 1978, he and his wife were enrollees in the State of Florida Group Health Insurance Plan under the category of "family coverage." The Petitioner's wife had a health condition which resulted in her becoming eligible for social security disability benefits in 1976. In January 1978, she had to begin undergoing kidney dialysis treatments. She also became eligible for Medicare benefits at about this time. Petitioner's wife was 55 years of age at the time. In January 1978, Petitioner called the personnel office at the university to find out if, since she had become enrolled in the Medicare system due to her kidney ailment, if she was entitled to the State Group Health Insurance Plan Medicare supplement coverage, that is an increment of benefits which pays for the approximate twenty percent of medical and hospitalization bills which Medicare does not cover for Medicare eligible recipients. The Petitioner inquired in this regard of Mrs. Ethel Worthington of the Florida Atlantic University's Personnel Department. He was told that, because she was only 55 years of age, she could not be covered by the State Group Health Plan's Medicare supplement coverage. Mrs. Worthington or another employee of the university's personnel office told him, according to his understanding, that his wife could still be covered under the family plan but that he or they could not collect benefits both from Medicare and from the family plan. Mr. O'Connell thus believed that the family plan coverage for his wife was redundant and that Medicare would provide her needed benefits. He therefore canceled his State family plan coverage, opting instead for single individual health insurance coverage. The Petitioner had been aware prior to this, however, that Medicare did not pay the final twenty percent of a given bill. The employee he conversed with about this in the personnel office told him he was free to remain on family plan coverage. He mistook their advice that both benefits could not be collected to mean that the family plan would not pay for her at all if she were eligible for Medicare and that the State health plan would not provide a coordination of benefits with her Medicare coverage since she was under 65 years of age and thus not entitled to the State Medicare supplement coverage. Indeed, that was the case and the State's plan, both before and after the adoption of the self-insurance plan in May of 1978, provided for coordination of benefits between its own coverage and Medicare coverage such that the State plan would pay for an eligible family member who was under 65 years of age and eligible for Medicare up to, on a coordination basis with Medicare, a hundred percent of the charges. In other words, under the coordination of benefits concept in effect before and after May of 1978, the State plan would pay for that portion of hospital bills or other medical expenses which Medicare did not pay for, provided the Petitioner's wife was covered under the "family plan." Based upon this misunderstanding that no coordination of benefits was available for family members eligible for Medicare benefits until they reached age 65, the Petitioner elected to cancel his family coverage and opt for individual coverage under the State's plan in January 1978. On April 13, 1978, an open meeting was held to explain the new State Employee's Group Health Self-Insurance Plan, which Petitioner attended. This plan was ultimately adopted in May of 1978, and as stated above, included the coordination of benefits provision for family members eligible for Medicare who were not yet 65, provided family coverage was obtained by the eligible employees. On April 12, 1978, the Petitioner had enrolled in the new group health self-insurance plan for "individual I coverage"; thus, for purposes of this inquiry, continuing the individual coverage he had had since January of that year. At the meeting, it was explained that indeed the family plan coverage would provide coordination of benefits with Medicare or Medicare- eligible dependents of employees and thus pay for expenses not covered by Medicare. Mr. John Wallace, the Director of Personnel for Florida Atlantic University, was at that meeting assisting and explaining the new program and its benefits and provisions to employees. He does not recall the Petitioner asking questions, but also does not recall telling anyone present that a wife could not be covered under the State family plan if she was under age 65 and eligible for Medicare. Mr. O'Connell believes that at this meeting, he talked with Mrs. Ethel Worthington, a secretary at the university's Office of Personnel concerning his wife's coverage. Mrs. Worthington, however, did not attend any of those meetings. She does not recall conversing with the Petitioner at any time about his family coverage or other matter. An information packet (Respondent's exhibits) explaining the self- insurance plan including its family coverage aspect had been distributed to employees by mailing in March, 1978. Thus, the Petitioner elected to sign up for single or individual coverage (on April 12) after receiving the packet of explanatory materials and, thus, he did not have available to him only information from his telephone conversation with an employee of the personnel office in January, 1978 to consider when electing which coverage to apply for. Rather, he had an accurate explanation of the provisions of the new plan in March or early April, 1978, before he exercised his option to retain individual coverage on April 12, 1978. Further, the Petitioner did not rely on information supplied him at the April 13th meeting because he had already signed up for individual coverage the day before. The brochure contained in Exhibit 5 clearly shows that the family plan coordinates benefits with medicare coverage for dependents under that plan. The Petitioner may have been informed by unknown employees of the university's personnel office that single or individual coverage was substantially cheaper than family plan coverage, but it was not established that a representation was made to the effect that the State's family plan coverage and the Medicare coverage applicable to the Petitioner's wife's situation was redundant. In any event, under the new self-insurance plan, the Petitioner had until April 20, 1978, to enroll. As stated above, the Petitioner voluntarily enrolled in individual I coverage again on April 12, 1978, similar to the individual coverage he had elected to obtain when he dropped his family coverage in January, 1978. Because he had been an employee for longer than 31 days and because his wife had been a dependent for longer than 31 days (see below cited rule), the Petitioner was required to furnish medical proof of insurability for himself and all dependents (his wife). Because the kidney ailment had to be revealed on the medical forms submitted with the application for family-plan coverage, the carrier, Blue Cross/Blue Shield, exercised its right to refuse to assume that risk and would not provide coverage for the Petitioner's wife.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence in this record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, thereupon RECOMMENDED that the Petitioner by Thomas P. O'Connell to be allowed to enroll in the State of Florida's group health self-insurance plan family coverage without being required to furnish medical proof of insurability for himself and his dependent be DENIED. DONE AND ORDERED this 13th day of October, 1983, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of October, 1983. COPIES FURNISHED: No names or addresses were attached
The Issue The issue in this case is whether Respondent properly rejected Petitioner's insurance Policy Form No. SL-94.
Findings Of Fact Petitioner submitted Policy Form No. SL-94 (hereinafter referred to as "the Policy") to Respondent for approval as a stop loss policy pursuant to Section 627.410, Florida Statutes, on or about August 15, 1995. The Policy, standing alone, meets all applicable requirements for approval as a stop loss policy under Section 627.410, Florida Statutes. The Policy obligates Petitioner to pay benefits to an employer, or the trust established by or for the employer, which employer is responsible for the payment of benefits to its employees or their dependents under a self-funded employee welfare benefit plan (hereinafter referred to as "the Plan") qualified under the Employee Retirement Income Security Act of 1974, as amended (ERISA). The Policy purports to provide insurance only to the employer. On its face, the Policy does not assume any of the employer's obligations under the Plan to provide insurance directly to the employer's employees. Under the Policy, Petitioner is obligated to reimburse the employer only after the employer pays a limited amount of benefits under the Plan to any person who is covered under the Plan, i.e. employees or their dependents. The amount of Plan benefits that an employer must pay before Petitioner is obligated to begin reimbursement is determined by specific and aggregate attachment points or deductibles as defined in the Policy's Schedule of Insurance. The specific attachment point is the Plan benefit amount which is wholly retained by the employer for all claims incurred by each covered person during each contract year. The Plan benefit amount does not include deductibles, coinsurance amounts or any other expense or claims which are not reimbursable under the terms of the Plan nor does it include expenses which are reimbursable from any other source. The aggregate attachment point or deductible is the Plan benefit amount which is wholly retained by the employer for all covered persons during a contract year. The Policy's Schedule of Insurance does not specify what the specific and aggregate attachment points will be. However, record evidence indicates that Petitioner intends to market the policy with a specific attachment point as low as $500. Therefore, if the Plan has a deductible of $250 and the Policy has a specific attachment point of $500, the employee would pay the first $250 of eligible expenses, the employer would pay the next $500 of eligible expenses, and Petitioner would reimburse the employer for 100 percent of any excess eligible expenses, for each covered person during a contract year. The Policy's eligible expenses are the covered charges or expenses which are incurred by a covered person while covered under the Plan in the course of treatment for an injury or illness and paid under the Plan subject to the terms, conditions and limitations of the Plan document. In other words, the eligible expenses under the Policy will mirror the eligible expenses of the Plan. Record evidence indicates that Petitioner intends to market the Policy to employers with less than fifty (50) employees. The Policy does not contain provisions related to the following protections: guaranteed availability for any small group employer regardless of whether its employees are sick or have preexisting conditions; guaranteed renewability unless the policyholder fails to pay the premium or commits fraud; limitations on exclusions for pre- existing conditions; portability which allows employees to move from one employer to another regard- less of preexisting conditions; community rated premiums; and, periods of open enrollment. ERISA self-funded benefit plans are not regulated by the state regardless of their terms and conditions. They are not required to include the above referenced protections. If the Plan excludes specific health risks or preexisting conditions such as AIDS, emphysema, heart disease, or cancer, neither the employer nor the Petitioner would be obligated to pay benefits for those risks. Additionally, the Plan is subject to whatever deductible limits the small employer wishes to set. Respondent disapproved the Policy by letter dated August 21, 1995. Respondent correctly rejected the Policy as being inappropriate for the small group health insurance market. The Policy is inappropriate because Petitioner intends to market it to self-insured small group employers with attachment points so low ($500) that it becomes a de facto health insurance policy instead of a stop loss policy. Respondent would not approve a stop loss policy for a small group employer's Plan with specific attachment points at $5,000 or less. Respondent would approve a stop loss policy for a small group employer's Plan with specific attachment points as low as $9,000 or $10,000, regardless of the terms and conditions of that Plan. In that instance, the employer assumes significant risk of loss as a self-funded insurer and the stop loss policy operates to limit that loss. However, an ERISA benefit plan combined with a stop loss policy having specific attachment points as low as $500, such as the one at issue here, substantially limits the self-insured employer's risk of loss to a nominal amount and substitutes Petitioner as a small group health insurer with none of the protections required by Section 627.6699, Florida Statutes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore recommended that Respondent enter a Final Order disapproving Petitioner's Policy Form No. SL-94, for use in Florida's small group health insurance market. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 15th day of March, 1996. SUZANNE F. HOOD, Hearing Officer 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 15th day of March, 1996. APPENDIX The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. Petitioner's Proposed Findings of Fact Accepted in Findings of Fact 3. Accepted in substance as restated in Findings of Fact 4. Accepted in substance as restated in Findings of Fact 4. Accepted in substance as restated in Findings of Fact 4. Accepted in Findings of Fact 5-7. Accepted as restated in Findings of Fact 4. Not a finding of fact. More like a conclusion of law. Reject the first sentence as contrary to more persuasive evidence. Second sentence accepted as restated in Conclusions of Law 19-21 and 26-27. Rejected. It is a question of fact whether the Policy is a stop loss policy or a health insurance policy regardless of its denomination. Specifically reject Petitioner's finding that the Policy does not violate public policy as expressed in Section 627.6699, Florida Statutes. See Conclusions of Law 24-27. Accepted in Conclusion of Law 23. Accepted in part as restated in Findings of Fact 15-16. See also Conclusions of Law 22, 24-27. Not a finding of fact. More like a conclusion of law and legal argument which is not persuasive as applied to the facts of this case. Not a finding of fact. More like a conclusion of law. Not a finding of fact. More like a conclusion of law. First sentence rejected as contrary to more persuasive evidence. Next five sentences are not findings of fact. Specifically reject any implication that the Policy is a stop loss policy. See Findings of Fact 15-16 and Conclusions of Law 24-27. First two sentences are not findings of fact. Reject any implication that there is no public policy "relating to the issuance of a stop loss policy in the State of Florida to a Florida employer employing 50 or fewer employees." Accept that the state does not regulate employer self-funded medical benefit programs. See Finding of Fact 12. Accept the last sentence as restated in Finding of Fact 15 and Conclusion of Law 24. Rejected. Petitioner's Exhibit 3 shows the legislature was aware that "the bill could increase the likelihood that an employer would choose to self- insure and due to ERISA would be able to avoid state regulation of the insurance product provided to employees." However, the referenced exhibit is rejected as evidence of legislative intent to exclude "related insurance products" from "the statute's regulatory or public policy purview." Rejected for the reasons set forth in the ruling above. Rejected. See Conclusions of Law 24. Substance accepted as restated in Findings of Facts 12 and Conclusions of Law 24. Substance accepted as restated in Findings of Facts 16. First sentence not a finding of fact. Second sentence rejected as contrary to more persuasive evidence; See Findings of Fact 15-16 and Conclusions of Law 24-27. Accept in part as restated in Findings of Fact 15-16 and Conclusions of Law 24-27. A recitation of the testimony is not a finding of fact; substance accepted as restated in Finding of Fact 16. Accept that the state has no specific statutes or rules regulating attachment points in stop loss insurance policies. See Conclusions of Law 19. However, Section 627.6699(2), Florida Statutes, is applicable here because the Policy is a de facto health insurance policy. See Findings of Fact 15-16 and Conclusions of Law 24-27. First sentence rejected as contrary to more persuasive evidence. See Findings of Fact 15-16 and Conclusions of Law 19. First sentence rejected; More like a conclusion of law or legal argument the substance of which is not persuasive. Second sentence irrelevant. Irrelevant. Accepted but subordinate to Findings of Fact 15-16. NAIC's stop loss model act supports the proposition that the Policy is not a stop loss insurance policy but rather a health insurance policy. Accepted in part as restated in Conclusions of Law 19. Accepted but subordinate to Findings of Fact 15-16. Accepted but subordinate to Findings of Fact 15-16. Irrelevant. Rejected as contrary to more persuasive evidence. Respondent's Proposed Findings of Fact Accepted in Findings of Fact 1. Accepted in Findings of Fact 15. Not a finding of fact. Not a finding of fact. More like a conclusion of law. Accepted in Findings of Fact 1. Accepted as restated in Findings of Fact 2. Accepted as restated in Findings of Fact 11, 15-16. Accepted as restated in Findings of Fact 10, 15-16, and Conclusions of Law 22, 24-27. Accepted as restated in Findings of Fact 4. Accepted as restated in Findings of Fact 4-8 and 10. Accepted in Findings of Fact 10 and Conclusions of Law 22. Accept that the Policy provides for a specific attachment point of not less than $500; See Findings of Fact 8, 15 and 16. There is no evidence that the Policy's specific attachment point can be no more than $1,000. Accepted as restated in Findings of Fact 5-8. Accepted as restated in Findings of Fact 8. Accepted as restated in Conclusions of Law 22. Accepted as restated in Findings of Fact 9, 11-13 and Conclusions of Law 22, 24-27. Accepted as restated in Findings of Fact 9-13. Accepted as restated in Findings of Fact 11. Accepted in part in Findings of Fact 14. Reject that Petitioner could totally avoid the coverage responsibilities otherwise imposed by Section 627.6699, Florida Statutes, merely by setting the Policy's attachment points at the same level as the deductible in the Plan. If the Plan's deductible was $500 and the Policy's specific attachment point was $500, the employee would pay the first $500 of expenses, the employer would be responsible for the next $500 of expenses, and Petitioner would reimburse the employer for 100 percent of any excess eligible expenses for that employee during the contract year. However, Petitioner can totally avoid paying for state mandated protections because the Policy will mirror any prohibited exclusions or provisions in the Plan. Substance accepted in part; See Findings of Fact 15-16. There is no evidence that the Policy's specific attachment point can be as high as $2,000. Accepted as restated in Findings of Fact 16; See Conclusions of Law 24-27. COPIES FURNISHED: Michael H. Davidson, Esquire Department of Insurance Division of Legal Services 200 E. Gaines Street Tallahassee, Florida 32399-0333 Frank J. Santry, Esquire Granger, Santry, et al. Post Office Box 14129 Tallahassee, Florida 32308 Bill Nelson, State Treasurer Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Dan Sumner, Esquire Department of Insurance and Treasurer The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
Conclusions Having reviewed the administrative complaint dated August 9, 2010, attached hereto and incorporated herein, Exhibit 1, and all other matters of record, the Agency for Health Care Administration (hereinafter “Agency”) has entered into a Settlement Agreement, Exhibit 2, with the parties to these proceedings, and being otherwise well-advised in the premises, finds and concludes as follows: It is ORDERED: 1. The attached Settlement Agreement is approved and adopted as part of this Final Order, and the parties are directed to comply with the terms of the Settlement Agreement. 2. The Respondent shall pay, within thirty (30) days of the date of this Order, an administrative assessment of $16,000.00. 3. Checks should be made payable to the “Agency for Health Care Administration.” The check, along with a reference to this case number, Filed January 18, 2011 2:17 PM Division of Administrative Hearings should be sent directly to: Agency for Health Care Administration Office of Finance and Accounting Revenue Management Unit 2727 Mahan Drive, MS #14 Tallahassee, Florida 32308 4. Unpaid amounts pursuant to this Order will be subject to statutory interest and may be collected by all methods legally available. 5. The licensure status of the Respondent is hereby determined to be Conditional commencing June 29, 2010, and ending July 1, 2010. 6. The Respondent’s request for an administrative proceeding is hereby withdrawn. 7. Each party shall bear its own costs and attorney’s fees. 8. The above-styled case is hereby closed. DONE and ORDERED this _/4_ day aaa , 2011, in Tallahassee, Leon County, Florida. ey, Elizab DudekWIntérim Secretary Agency for Health Care Administration A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW OF PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED. Copies furnished to: R. Davis Thomas, Jr., Esq. Health Care Navigator, LLC 2 North Palafox Street Pensacola, FL 32502 Suzanne Suarez Hurley Senior Attorney Agency for Health Care Administration 525 Mirror Lake Drive N. #330H Agency for Health Care Admin. 2727 Mahan Drive, Bldg #3, MS #3 Tallahassee, Florida 32308 (Interoffice Mail) (U.S. Mail) St. Petersburg, Florida 33701 |_ (Interoffice Mail) Jan Mills Agency for Health Care Administration Office of Finance and Accounting Revenue Management Unit 2727 Mahan Drive, MS #14 Tallahassee, Florida 32308 (Interoffice Mail) Elizabeth W. McArthur Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (Interoffice Mail) | | CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of this Final Order was served on the above-named person(s) and entities by U.S. Mail, or the Richard Shoop, Agency | Agency for Health Care Administration 2727 Mahan Drive, Building #3 Tallahassee, Florida 32308-5403 (850) 412-3630
The Issue Whether Mr. Wills is entitled to reimbursement from the State Group Health Insurance Plan for health services provided by an otolaryngologist and a speech pathologist for vocal therapy.
Findings Of Fact The State of Florida makes available to employees several health insurance programs. One of the options available to employees is the State of Florida Employees Group Health Self Insurance Plan. Employees may also enroll in a number of different health maintenance organizations depending upon the county in which the employee resides. The Employees Group Health Self Insurance Plan was established by the Legislature, and its benefits are described in the Benefit Document. The Plan as a whole is administered by Blue Cross-Blue Shield, which did not write the terms of the Plan. When an employee chooses to participate in the Plan, the State contributes to the employee's insurance cost by paying a portion of the premium for the employee in order to be covered by the Plan. Mr. Wills is employed by the State of Florida as the Chief Assistant Public Defender for the Seventeenth Judicial Circuit in Broward County, Florida. Mr. Wills is a Senior Trial Attorney in the Public Defender's Office and a senior administrator who needs his voice to carry on his professional duties. He was a member of the Plan at all times relevant to this proceeding. The case revolves around whether Mr. Wills is entitled to reimbursement for expenses he incurred when he was diagnosed in June 1990 as having a vocal chord lesion, also known as a contact ulcer or granuloma of the vocal fold, and participated in a course of medical treatment for this condition. For example, Mr. Wills would attempt to speak, but portions of words could not be heard. Mr. Wills ultimately was treated by Dr. W. Jarrard Goodwin. Dr. Goodwin is a specialist in diseases of the ear, nose and throat (i.e., an otolaryngologist), and teaches at the University of Miami School of Medicine. Dr. Goodwin was of the view that the lesion was caused by the mechanical banging together of the vocal chords, and that surgery was not an appropriate treatment for him. Instead, he prescribed an antibiotic and three weeks vocal rest. He had a second consultation with Mr. Wills on August 14, 1990, at which time Dr. Goodwin referred Mr. Wills to Donna S. Lundy, a speech pathologist in the Department of Otolaryngology at the University of Miami Medical School, for voice therapy. A contact ulcer or granuloma can result from the pitch of the voice being too high or too low, from speaking too loudly, or from not breathing from the diaphragm. All of these can be treated with behavioral voice therapy through exercises, either to raise or lower the pitch of the voice, or to breathe from the diaphragm and relax the vocal chords in order to decrease effort and strain near the lesion. Mr. Wills saw Ms. Lundy for sessions of vocal therapy at Dr. Goodwin's office on August 11, September 13, October 5, November 11, and December 27, 1990, and Mr. Willis practiced the exercises he was given between appointments. Even if Mr. Wills had had surgery, i.e., a stripping of the vocal chords, an alternative treatment for the contact granuloma, he still would have had vocal therapy following that surgery to modify his vocal habits to prevent a recurrence of the lesion. As a result of the vocal therapy, Mr. Wills' condition has improved, and he no longer suffers from the contact granuloma. Speech therapy treats abnormalities of speech production, language formulation and processing, such as articulation disorders, stuttering, language delay, and disorders of neuromuscular control. It is not the same as voice therapy. Five claims for health services were submitted on behalf of Mr. Wills by Donna S. Lundy, under procedure code 92507. Code 92507 on the approved fee schedule covers "Speech, Language or Hearing Therapy, with Continuing Medical Supervision, Individual." Dr. Goodwin, also submitted one claim under procedure code 92507 for services provided to Mr. Wills on August 14, 1990. All such claims were rejected by the Department. The State of Florida, Employees' Group Health Self Insurance Plan benefit document contains exclusions. The applicable exclusion, according to the Department, is Section VII(Q): VII. Exclusions The following exclusions shall apply under the plan: * * * * Q. Occupational, recreational, edu-cational, or speech therapy, orthoptics, biofeedback, contra-ceptives, telephone consultation, cardiac rehabilitation exercise programs, or visits for the purpose of exercise by bicycle, ergometer or treadmill. Benefit Document, page 46. There is no further explanation of the term "speech therapy" found in exclusion VII(Q) in any other portion of the Benefit Document. The approved fee schedule for the Group Health Self-Insurance Plan has a procedure code for "speech, language or hearing therapy, with continuing medical supervision, individual." That the approved fee schedule has such an entry at all is an indication that there are circumstances where speech language or hearing therapy is covered. Otherwise, the entry would be wholly inconsistent with the Department's position that Section VII(Q) flatly prohibits any payment for "speech therapy". Ms. Lundy is licensed speech-language pathologist in the State of Florida. Unless a person qualifies for licensure as a speech-language pathologist, a person may not describe him or herself using a number of terms. Among these forbidden terms are "speech pathologist", "speech therapist", "language pathologist", "voice therapist" and "voice pathologist". Section 468.1285(1)(b), Florida Statutes, (1990 Supp.). The Department relies upon the definition for the practice of speech-language pathology in the Professional Practice Act, Chapter 468, Part I, Florida Statutes (1990 Supp.), to argue that any services provided by a licensed speech-language pathologist must necessarily fall within the exclusion found in Section VII(Q) of the Benefit Document. The Department's argument that because the term "speech therapy" is not defined in the Benefit Document, it should determine the meaning of the term by looking to see how the term "speech-language pathology" is defined in Section 468.1125(7)(a), Florida Statutes (1990 Supp.), the professional practice act for speech-language pathology, is unpersuasive. There was no testimony that the Benefit Document was written with all definitions found in various professional practice acts in mind. There is certainly no proof that the Legislature crafted the miscellaneous professional practice acts in Chapter 468 with an eye towards using the definitions in those acts for determinations under the Employees' Group Health Self Insurance Plan. The Benefit Document and the professional practice acts have little or nothing to do with each other, and neither shed light upon terms used in the other.
Recommendation It is recommended that the Secretary of the Department of Administration enter a Final Order requiring the Division of Employees' State Insurance to pay all claims submitted by Donna S. Lundy and the claim of Dr. Goodwin which have been denied. The Benefit Document does not clearly exclude voice therapy for a contact granuloma, and in the absence of a clear exclusion, the law requires that those claims be paid. RECOMMENDED this 24th day of December, 1991, in Tallahassee, Florida. WILLIAM R. DORSEY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of December, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-5324 Rulings on findings proposed by the Department: Adopted in Finding 1. Adopted in Findings 2 and 3. Rejected as unnecessary. Adopted in Finding 3. Adopted in Finding 4. Discussed in Finding 5. Rejected as unnecessary. See, Conclusions of Law. Adopted in Finding 9. Adopted in Finding 10. Rejected. See, Conclusions of Law. Adopted in Finding 5. Rulings on findings proposed by Mr. Wills, treated as if the paragraphs had been numbered: Adopted in Finding 3. Adopted in Findings 3 and 4. Adopted in Finding 5. Adopted in Finding 7. Generally adopted in Finding 9. Generally adopted in Finding 5. Adopted in Findings 5 and 9. COPIES FURNISHED: Steven Michaelson, Esquire 9326 Northwest 18th Drive Plantation, FL 33322 John M. Carlson, Esquire Department of Administration 438 Carlton Building Tallahassee, FL 32399-1550 John A. Pieno Secretary Department of Administration 435 Carlton Building Tallahassee, FL 32399-1550 Augustus D. Aikens, Jr. General Counsel Department of Administration 435 Carlton Building Tallahassee, FL 32399-1550
The Issue Whether Petitioner's claim against her state group health insurance company for services related to a Magnetic Resonance Imaging examination (MRI) should be granted or denied.
Findings Of Fact At all times material hereto, Petitioner was employed by the State of Florida and was a participant in the State of Florida group health insurance plan, which is a self-insured plan administered by the State of Florida in conjunction with the plan's third party administrator, Blue Cross Blue Shield of Florida (BCBSF). This plan is frequently referred to as the PPO Plan, an acronym for preferred provider organization. Prior to April 26, 2002, Petitioner's physician detected a lump in Petitioner's right breast. Petitioner's physician ordered mammography and ultrasound examinations to be performed on Petitioner's right breast. Those examinations were performed on April 1, 2002. Following those tests, Petitioner's physician ordered an MRI examination of the right breast, which was performed on April 26, 2002, and is the procedure at issue in this proceeding. Following that MRI, Petitioner had another mammography and ultrasound for the diagnosis and treatment of breast cancer. Respondent has paid Petitioner's claims for coverage of the mammography and ultrasound examinations. Respondent has denied payment for the professional fee associated with the MRI in the amount of $215.00. Respondent has paid the facility fee associated with the MRI in the amount of $1,705.00. Respondent asserts that the payment of that fee was in error and intends to seek reimbursement for that payment if it prevails in this proceeding. The terms of coverage of the state group health insurance plan are set forth in a document entitled "State Employees' PPO Plan Group Health Insurance Plan Booklet and Benefit Document" (Benefit Document). The Benefit Document (at page 31, paragraph 47 of the section entitled "Services Not Covered By The Plan") specifically excludes the following from coverage: 47. Services and procedures considered by BCBSF to be experimental or investigational, or services and procedures not in accordance with generally accepted professional medical standards, including complications resulting from these non-covered services. The Benefit Document has a section entitled "Definitions of Selected Terms Used By The Plan" beginning at page 49. The definition of the phrase "experimental or investigational services", found at page 51, includes, in pertinent part, the following: . . . any evaluation, treatment, therapy, or device that: * * * is generally regarded by experts as requiring more study to determine maximum dosage, toxicity, safety or efficacy, or to determine the efficacy compared to standard treatment for the condition has not been proven safe and effective for treatment of the condition based on the most recently published medical literature of the U.S., Canada or Great Britain using generally accepted scientific, medical or public health methodologies or statistical practices is not accepted in consensus by practicing doctors as safe and effective for the condition is not regularly used by practicing doctors to treat patients with the same or a similar condition The Benefit Document provides at page 51 that BCBSF and the Division of State Group Insurance determine whether a service is experimental or investigational. The testimony of Dr. Wood established that an MRI of the breast is experimental or investigational within the meaning of the Benefit Document. 2/ MRI examinations of the breast are not reliable diagnostic tools because such examinations result in an unacceptable number of cases where an MRI produces false negative findings that reflect the absence of cancer where cancer is, in fact, present in the breast. According to Dr. Wood, an MRI cannot be relied upon and should not be used to avoid a biopsy of a suspicious mass because a patient would run an unacceptable risk that the detection of cancer may be delayed or missed. Dr. Wood also testified that radiologists in Florida performing services for the state group insurance health plan have been informed of BCBSF's position. Petitioner's doctors did not inform her prior to the examination that the MRI examination would not be covered by her insurance plan.
Recommendation Based on the foregoing, it is RECOMMENDED that Respondent enter a final order denying coverage for the MRI claims submitted by Petitioner. DONE AND ENTERED this 17th day of February, 2003, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 17th day of February, 2003.
The Issue The issue for disposition in this proceeding is whether Petitioner, Florida Insurance Management Group, Inc. (FIMG), is entitled to authorization from Respondent (Agency) to act as a service company in the State of Florida. Ancillary issues are whether the Agency is estopped from asserting new grounds for denial in an Amended Notice of Intent to Deny and whether the Agency participated in the proceeding for an improper purpose pursuant to Section 120.595(1), Florida Statutes (Supp. 1996), so as to entitle FIMG to an award of attorney’s fees and costs.
Findings Of Fact Petitioner, FIMG, is a Florida corporation, incorporated in the State of Florida on March 29, 1994. FIMG is a wholly owned subsidiary of Interstate Insurance Services Group, Inc. (IISG), a Delaware corporation registered to do business in Florida. Allen Brooks, president of FIMG, is the principal owner of IISG. Bruce Gilbert, Terry Borgland, Mike Francine, and Lou Gutierrez are also owners. FIMG is licensed by the Florida Department of Insurance as a managing general agency. Under that license it is authorized to represent licensed insurance companies by handling various administrative aspects of their insurance programs. In this capacity, FIMG represents Claredon National Insurance Company and offers to the general public policies of workers’ compensation insurance under the Claredon name and under one of Claredon’s subsidiaries, Farmer’s Specialty Insurance Company. On May 13, 1996, FIMG submitted to the Agency its application for authorization to act as a workers’ compensation service company. A service company regulated by the Agency performs essentially the same functions for a self-insured employer that it performs for an insurance company as a managing general agency. The functions are regulated by separate state agencies. Allen Brooks resides in Lake Wales, Florida, and is president of other companies that are subsidiaries of IISG that are corporations operating as third party administrators or providing other insurance-related services in states other than Florida. Brooks filed the application for FIMG to operate as a service company after he was approached by Citrus World, a large juice-processor in Lake Wales, regarding submitting a proposal to work as a service company for that employer’s self-insured workers’ compensation company. FIMG’s application to the Agency reveals on its face the connection between FIMG and its parent, IISG. It also reveals that the directors and officers of IISG have also been officers of Associated Risk Management Services, Inc. (ARMS), an Oklahoma corporation which was registered to do business in Florida on February 12, 1990. The physical location of the three corporations, FIMG, IISG, and ARMS is 250 East Park Avenue, Lake Wales, Florida. Prior to August 22, 1994, ARMS was a service company, authorized by the Agency to serve as a third party administrator (service company) for the Florida Transportation Insurance Self- Insurance Trust Fund. In 1993, ARMS applied for its annual re- certification. The Agency denied that application and in 1994 initiated proceedings to revoke the service company authorization. When ARMS petitioned for administrative formal hearings, the Agency referred the two cases to the Division of Administrative Hearings (DOAH) where they were consolidated as DOAH Cases 93-5537 and 94-2565. These cases never proceeded to hearing. Instead, in a letter dated July 8, 1994, ARMS notified the Agency of its intent to “immediately and unconditionally surrender its authorization to act as a service company in Florida.” After DOAH relinquished jurisdiction, the Agency entered its Final Order dismissing the ARMS’ proceeding as moot. Neither DOAH nor the Agency issued an order finding any violations by ARMS, and the Agency never revoked ARMS service company authorization, as the authorization was voluntarily surrendered. When the Agency received the FIMG service company application, it did not request any additional information from FIMG in order to process the application. The Agency’s standard procedure in reviewing service company applications is to accept at face value the information provided by the applicant and the information received through background investigation reports submitted as required by the Agency. The Agency does not conduct its own investigation. On May 16 1996, the Agency received background investigation reports from Equifax, the company selected by FIMG from a list of approved companies provided by the Agency. The Equifax reports on Allen Brooks, Terry Borgland, Bruce Gilbert, and Deana Smith, officers of FIMG, reflect that each was previously employed by ARMS, and that “...[ARMS] underwent new structuring with a change in management, and the name was changed to Interstate Insurance Group, Inc. [sic], subject’s present employer as shown above.” (Petitioner’s Exhibit 2) The Agency stopped processing FIMG’s application, and on June 26, 1996, issued its Notice of Intent to Deny FIMG’s application. The notice alleged that FIMG failed to meet the criteria of Rule 38F-5.040(3)(a), Florida Administrative Code, for the following reasons: That the persons in ownership, control, and management of Florida Insurance Management Group, Inc. are the same as they were for the Association Risk Management Service Company (ARMS). The recertification of this prior company was up for revocation due to the violation of Rule 38F-5.040(3)(a) and (c), F.A.C. On July 8, 1994, ARMS notified the Division that it intended to immediately and unconditionally relinquish its authorization to act as a service company in the State of Florida and to no [sic] seek further recertification as a service company in the State of Florida, because it was not economically viable. This application is for a subsidiary of the reorganized ARMS now known as Interstate Insurance Services Group, Inc. (Joint Exhibit 2) On July 16, 1996, pursuant to a procedure established by the Agency, FIMG submitted its request for reconsideration of the intent to deny. The request included corporate documents for IISG and FIMG. It also included a letter from Allen Brooks stating that ownership and control of ARMS was not the same as FIMG, even though many of the management personnel formerly associated with ARMS were now employees of the applicant. The letter stated that ARMS is owned 100 percent by Colette C. Rumfelt and is not related to FIMG, nor was FIMG a “reorganized ARMS.” Ms. Rumfelt has no ownership interests in FIMG or IISG. The letter also clarified that, while ARMS operated as a third party administrator for group self insurance funds, FIMG’s operations would be limited to servicing individual self-insurers in Florida. The Agency still did not conduct any investigation into FIMG’s application or request for reconsideration. Instead, on September 11, 1996, the Agency denied FIMG’s request for reconsideration for the same reasons given in the notice of intent to deny, stating that “. . .the same group of people will be in control of the new service company, and for this reason we cannot approve this application.” (Joint Exhibit 4) On October 28, 1996, after the reconsideration was denied and after FIMG petitioned for a formal administrative hearing, Deana Smith wrote to Equifax and asked to have corrected the erroneous statements about FIMG or its parent company being a “reorganized” ARMS. In response, Equifax issued its “Corrected Report,” stating this under sections addressing ARMS’ former employment of Allen Brooks, Terry Borgland, Bruce Gilbert, and Deana Smith: Association Risk Management Service company is a service company to employee benefits trusts and is doing business in Florida and North Carolina. This company also holds interest in telecommunication companies. Subject [each of the four individuals] continues as an officer with the company but his active employment was for the dates shown. The company has four employees. (Petitioner’s Exhibit 4) Equifax made its changes based on the information it received from Deana Smith, but it would not have issued the revised report if it had not concluded that its original report was incorrect. Equifax’s practice in obtaining information for its reports is to interview the subjects of the reports. If the subject requests a copy of the report, someone from Equifax will read it over the telephone before sending a copy. The Equifax field representative thinks she read the original report to Deana Smith before sending her a copy. In the course of its investigation of the four officers, Equifax found no adverse information concerning their business or personal activities. On April 23, 1997, the Agency issued an Amended Notice of Intent to Deny FIMG’s service company application, adding as reason for denial the allegation that FIMG materially misrepresented that it had employees when in fact it did not, thus it did not meet the requirements of Rule 38F- 5.040(3)(b),(c), and (d), Florida Administrative Code. This amended notice is based on FIMG’s response to the Agency’s interrogatories stating that “FIMG has no employees; it relies on and uses the employees of its parent corporation, Interstate Insurance Services Group, Inc. (IISG).” FIMG has employees in the areas of claims adjusting and loss control, as represented in its application to the Agency. The non-officer personnel whose résume’s are included in the application have positions with FIMG and are performing services for FIMG pursuant to its managing general agent’s license. They are on the payroll of IISG, the parent corporation, a common business practice. In addition to the non-officer personnel, the officers of FIMG, whom the Agency concedes are employees of FIMG, are amply qualified to satisfy the requirements of the rule with regard to underwriting, claims management, and safety and loss control. Since FIMG is not yet approved as a service company it appropriately has no service contract with a self-insurer. FIMG has employees available through its parent corporation sufficient to meet the needs of a self insurer when such contract or contracts are secured. As confirmed in the Equifax report, IISG has an estimated one hundred employees. The Agency’s denial of FIMG’s application is based solely on the grounds alleged in its amended notice. As it stipulated, it did not retry in this proceeding any of the allegations or alleged violations at issue in the prior administrative proceeding related to ARMS. There is no evidence in this proceeding as to what those alleged violations were, other than Allen Brooks’ understanding that they had something to do with the fact that ARMS’ owner, Ms. Rumfelt, was related to the chairman of the Florida Transportation and Industry Self- Insurer’s Fund’s sponsoring association. In this proceeding, FIMG presented affirmative competent evidence that it is not a restructured or reorganized ARMS and that in spite of the co-location of the corporate offices in Florida and much the same officers, they do not share the same ownership and control. In its contention that ARMS agreed to never again seek certification as a services company, the Agency relies on two documents: a July 8, 1994, letter from ARMS counsel to Assistant Attorney General, Paul Martin; and the Agency’s Final Order in DOAH Cases 93-5537 and 94-2565. The July 8, 1994, letter states, in full: Dear Paul: The unjustified action of the state in pursuing revocation of the authorizations of the Florida Transportation and Industry Self- Insurers Fund and ARMS has made it economically unfeasible for the Fund to be successful or for ARMS to continue to act as service company. Accordingly, at the last meeting of the Fund’s Trustees, ARMS notified the Trustees that ARMS intended to immediately withdraw as the service company for the Fund, but would continue to work with the Fund to assure an orderly transition or closure of the Fund, in accordance with the provisions of Rule 38F-5.041(2). Because continued operation as a service company in Florida is no longer justifiable from a business standpoint, ARMS intends to unconditionally surrender its authorization to act as a service company in Florida immediately upon concluding or being relieved of its obligations to the Fund, or at such earlier time as the state may sanction. ARMS does not intend or desire to be “recertified” as a service company in Florida. The surrender of ARMS’ authorization to act as a service company will give the state all of the relief it is seeking in the pending administrative actions, and so those actions will be rendered moot. Thus, we should stipulate to a dismissal of the pending actions in order to finally resolve these cases and move on to other matters. I stand ready to draft the necessary papers upon receipt of word from you as to the form of stipulation. Sincerely, Paul R. Ezatoff (Petitioner’s Exhibit 18) The Final Order entered August 22, 1996, provides, in pertinent part: On July 8, 1994, ARMS notified the DIVISION that it intended to immediately and unconditionally relinquish its authorization to act as a service company in the State of Florida and to not seek further recertification as a service company in the State of Florida, because it was not economically viable. On July 25, 1994, the DIVISION and ARMS entered into a Joint Motion to Cancel hearing and Relinquish Jurisdiction on the basis that the administrative actions which are the subject matter of DOAH Case Nos. 93- 5537 and 94-2565 is moot. On August 4, 1994, Hearing Officer Robert Meale entered an order relinquishing jurisdiction to the DIVISION and closing the DOAH case files for these cases.
Recommendation It is hereby RECOMMENDED: that the Department of Labor and Employment Security enter its Final Order approving Florida Insurance Management Group, Inc., as a service company and denying attorney’s fees and costs. DONE AND ENTERED this 31st day of July, 1997, in Tallahassee, Leon County, Florida. MARY CLARK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 31st day of July, 1997.
