The Issue The issues in this case are whether Respondent, Leonard Louis Zanello, committed the offenses alleged in an Administrative Complaint issued by Petitioner, the Department of Financial Services on October 16, 2008, 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. Respondent Leonard Louis Zanello is currently and was at the times relevant, licensed in Florida as a health agent (02-40), and a life and health agent (02-18). Mr. Zanello’s license number is A293282. Count I: Failure to Submit Florida Office of Financial Regulation Order to the Department. On June 12, 2003, the Florida Office of Financial Regulation (hereinafter referred to as the “OFR”), f/k/a the Florida Office of Financial Institutions and Securities Regulation, entered a Final Order against Mr. Zanello in a case styled In Re Leonard Zanello, Administrative Proceeding No. 0663-I-3/02 (the OFR Order). The OFR Order related to alleged violations by Mr. Zanello of Florida securities laws. No copy of the OFR Order was submitted to the Department by Mr. Zanello within 30 days after it was entered as required by Section 626.536, Florida Statutes. Nor has a copy of the OFR Order ever been submitted by Mr. Zanello to the Department. Mr. Zanello’s claim that he provided a copy of the OFR Order to Carl Morstadt, Esquire, an attorney at the time with the OFR, was unconvincing and has not been credited. Some of the reasons for rejecting Mr. Zanello’s testimony on this issue have been more fully described in paragraphs 8(2) through (4) of the Department’s Proposed Recommended Order. Those proposed findings are incorporated into this Recommended Order by this reference. Count II: Failure to Submit Securities and Exchange Commission Order to the Department. On January 7, 2004, the United States Securities and Exchange Commission (hereinafter referred to as the “SEC”), entered an Order against Mr. Zanello in a case styled In the Matter of Louis L. Zanello, Sr., Admin. Proceeding File No. 3- 11370 (hereinafter referred to as the “SEC Order”). The SEC Order involves violations by Mr. Zanello of Federal securities laws. As admitted by Mr. Zanello, no copy of the SEC Order was submitted to the Department by him within 30 days after it was entered as required by Section 626.536, Florida Statutes. Nor has a copy of the SEC Order ever been submitted by Mr. Zanello to the Department. Mr. Zanello’s claim that he was unaware of the SEC Order was unconvincing and has not been credited. Some of the reasons for rejecting Mr. Zanello’s testimony on this issue have been more fully described in paragraph 15 of the Department’s Proposed Recommended Order. Those proposed findings are incorporated into this Recommended Order by this reference. Count III: Misstatement in the Sale of an Insurance Policy and Twisting. On January 3, 2004, Mr. Zanello met with Ms. Anne Paul of Coconut Creek, Florida. Ms. Paul was 80 years of age at the time she met with Mr. Zanello. At the January 3, 2004, meeting with Ms. Paul, Mr. Zanello sold her a long-term care insurance policy with AF&L Insurance Company (hereinafter referred to as “AF&L”). When she purchased the AF&L insurance policy (hereinafter referred to as the “AF&L Policy”), Ms. Paul already had a long-term care insurance policy. That policy was with Kanawha Insurance Company (hereinafter referred to as “Kanawha”)(the long-term care insurance policy from Kanawha will hereinafter be referred to as the “Kanawha Policy”). Shortly after her meeting with Mr. Zanello, Ms. Paul informed Rita Baskin, whom Ms. Paul then regarded as her “financial advisor,” of her purchase of the AF&L Policy. Ms. Baskin convinced Ms. Paul that the AF&L Policy was not as beneficial as her Kanawha Policy and that she should immediately cancel the AF&L Policy. Why Ms. Baskin, who is now deceased, told Ms. Paul that the Kanawha Policy was a better product and, more importantly, why Ms. Paul believed that the Kanawha Policy was a better long-term care insurance policy than the AF&L Policy were not proven at hearing. Regardless of the specific reasons why, in reliance on Ms. Baskin’s advice, Ms. Paul cancelled the AF&L Policy. Ms. Paul testified by telephone during the hearing of this matter. Ms. Paul testified that she had informed Mr. Zanello about her Kanawha Policy at the time she purchased the AF&L Policy. She also testified that she agreed to purchase the AF&L Policy in complete reliance upon Mr. Zanello’s representation to her that the AF&L Policy was a better product than the Kanawha Policy. Ms. Paul’s testimony came more than five years after she had purchased the AF&L Policy (she was more than 85 years of age at the time of the hearing), and she had suffered a broken wrist the Friday before the hearing. Her arm was in a cast, she was taking no pain medication, and she indicated that she was in distress from pain during her testimony. In light of these facts and others, Ms. Paul’s testimony concerning what she told Mr. Zanello and her reliance upon representations from him concerning which policy was better was not clear and convincing. Ms. Paul’s testimony in this regard has, therefore, been rejected. Based upon the totality of the evidence in this case, the evidence simply failed to prove clearly and convincingly what transpired on January 3, 2004, when Mr. Zanello sold Ms. Paul the AF&L Policy, other than the fact that Ms. Paul purchased the AF&L Policy. D. Count IV: Misstatement on Insurance Application. Question 2 of Part IV of the AF&L Policy application signed by Ms. Paul, asks the following: Do you now or within the last 12 months had [sic] another Long-term Care, Nursing Home, or Home Health Care Insurance policy in force (including health care service or health maintenance organization contracts)? Question 3 of Part IV of the AF&L Policy application asks the following: Will this policy replace any of your medical, health or long-term care insurance? Mr. Zanello completed Part IV of the application for the AF&L Policy, asking Ms. Paul the questions and recording her answers. The answer to Questions 2 and 3 of Part IV of the application recorded by Mr. Zanello is “No.” Because the evidence failed to prove clearly and convincingly that Ms. Paul informed Mr. Zanello of the Kanawha Policy, the evidence failed to prove that incorrect answers to Questions 2 and 3 of Part IV of the application for the AF&L Policy were knowingly filled in by Mr. Zanello. If Mr. Zanello had been aware that Ms. Paul was replacing her Kanawha Policy with the AF&L Policy, which the evidence failed to prove, he was required to provide her with a “Notice to Applicant Regarding Replacement.” See Fla. Admin. Code R. 69O-157.016(2). While Ms. Paul was not provided a copy of a Notice to Applicant Regarding Replacement by Mr. Zanello, the evidence failed to prove that Mr. Zanello knowingly failed to provide the Notice to her.
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 Leonard Louis Zanello violated the provisions of Chapter 626, Florida Statutes, as alleged in Counts I and II of the Administrative Complaint and described, supra; dismissing Counts III and IV of the Administrative Complaint; and suspending his licenses for a period of six months. DONE AND ENTERED this 1st day of December, 2009, 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 1st day of December, 2009. COPIES FURNISHED: Robert Alan Fox, Senior Attorney Division of Legal Services Department of Financial Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Leonard Louis Zanello, Sr. 1074 Northwest 121st Lane Coral Springs, Florida 33071-5005 Tracey Beal, Agency Clerk Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0390 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Benjamin Diamond, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0307
The Issue Whether the State of Florida Employees Group Health Self Insurance Plan is responsible for paying medical expenses incurred by Petitioner's newborn child where Petitioner had only individual coverage in effect at the time of the child's birth.
Findings Of Fact The State of Florida makes available to its employees several group insurance programs. In the area of health insurance, employees may choose to participate in the State of Florida Employees Group Health Self Insurance Plan (State Group Plan), or they may enroll in other plans, such as HMOs. The State Group Plan is a plan of self insurance established by the State and administered by Blue Cross/Blue Shield. This plan is described in general terms by a Plan Brochure and is described in more detail by the contract of insurance contained in the State Self Insured Health Plan's Benefit Document (Plan Document). The State Group Plan is regulated by those rules contained in Chapter 22K, Florida Administrative Code. At the time employees begin their employment with the State, they may select which, if any, of the optional health insurance programs offered by the State they desire. Thereafter, employees may only join one of the insurance programs or switch between programs during an annual open enrollment period. An employee who elects coverage from the State Group Plan may purchase either individual coverage or family coverage. Individual coverage provides health insurance coverage for only the individual employee. Family coverage provides health insurance coverage for the individual employee and the employee's eligible dependents for whom the employee has elected coverage. Family coverage does not begin until after the application for coverage is processed and the premium for family coverage is paid. The monthly premium for family coverage is paid one month in advance. An employee can, but he does not have to, wait for an open enrollment period to switch from individual coverage to family coverage. An employee having individual coverage may change to family coverage at any time during the year prior to the acquisition of an eligible dependent or at a time that is within 31 days of the date of acquisition of any eligible dependent. If family coverage is requested after the acquisition of the dependent, there is a gap in the coverage of the dependent between the date of acquisition and the date coverage begins. There is no retroactive coverage. An employee who completes the pertinent application for family coverage, who submits the application, and who pays the first month's premium for family coverage prior to the acquisition of the dependent has family coverage in place at the time the dependent is acquired through birth, adoption, or other means. Consequently, there is no gap in coverage between the date of acquisition and the effective date of coverage for that dependent. Petitioner is an associate professor of management and Director of the Doctoral Studies Program in the College of Business Administration at Florida International University (FIU). Petitioner teaches courses in a variety of areas including business administration, wage and salary administration, and insurance benefits. Petitioner enrolled in the State Group Plan in 1982. Petitioner was knowledgeable about the State Group Plan and had, from time to time, compared its benefits to those of other plans. At the time of their marriage, Petitioner and his wife reviewed their insurance coverage and decided not to convert their individual policies to one policy with family coverage. From the date of his initial enrollment until April 1989, Petitioner had individual coverage. On March 8, 1989, Petitioner executed the forms that were necessary to change his individual coverage to family coverage. Petitioner's family coverage went into effect on April 1, 1989, after the application was processed and the premium was collected. In March 1988 Petitioner married Annette Wellinghoff. Petitioner and his wife retained their respective individual insurance policies after their marriage. Mrs. Kroeck was not a state employee so the insurance coverage she had was independent of her husband's coverage. In August 1988 Petitioner and his wife learned that Mrs. Kroeck was pregnant with an expectant due date in February 1989. In August 1988, Petitioner telephoned the personnel office at FIU to inquire as to obtaining coverage for the expected child. The general information given Petitioner in response to his questions was accurate. He was told that he could convert his individual coverage to family coverage, if he so desired, during the open enrollment period scheduled for December 1, 1988, through January 31, 1989. There was no evidence that Petitioner specifically inquired as to when he should begin family coverage in order to have the child's birth expenses covered. Likewise, there was no evidence that Petitioner was specifically told that he could convert his coverage to family coverage after the birth of his child and have the medical expenses covered from the time of birth. Petitioner did not request any written information about the conversion process, nor did he request an application form to effectuate the conversion. Petitioner did not know the name of the person with whom he was speaking, only that she was a representative of the personnel office. Petitioner did not contact the FIU Personnel Office again until after the birth of his son. Instead, Petitioner relied upon his wife to take care of securing health insurance. Petitioner delegated this responsibility to his wife because she was also experienced and knowledgeable in matters concerning employee benefits and health insurance plans. Mrs. Kroeck has had at least 3 years experience in health insurance benefits administration. In December 1988 general information relating to the open enrollment program was mailed to all state employees, including Petitioner. Included in the information package were a Plan Brochure for the State Group Plan and an enrollment form for the various insurance options offered to State employees. Mrs. Kroeck read the application form and a portion of the Plan Brochure. Neither Petitioner nor his wife read, prior to the birth of their child, the section of the Plan Brochure entitled "Purpose of This Brochure". That section states that the Plan Brochure is not intended to be a contract document, that it is intended to give a summary of available benefits, and that an employee should contact either his personnel office or the office of the Division of State Employees' Insurance for the answer to questions. The employee is told that the contract document is the Plan Document and that a copy of the Plan Document is on file at the employee's personnel office. That section also contains the following admonition: The agency personnel office will provide needed assistance to State officers and employees enrolling in the Plan; however, such officers or employees should take care to assure that they receive the coverage applied for and that proper deductions are made. On January 9, 1989, Mrs. Kroeck telephoned the personnel office at FIU with questions relating to listing the unborn child as a dependent on the application form that had been mailed to Petitioner in December. Her questioning centered on how to complete the name, date of birth and social security number for an unborn dependent. Clara Martinez, the employee in the personnel office to whom Mrs. Kroeck spoke, does not recall talking to Mrs. Kroeck on January 8, 1989. At the time of this conversation, Ms. Martinez knew that family coverage had to be in place prior to the acquisition of a dependent for the dependent to be covered as of the date of acquisition. If Ms. Kroeck had asked Ms. Martinez a question to which Ms. Martinez did not know the answer, Ms. Martinez would have contacted the office of the Division of State Employees Insurance in Tallahassee for the answer. The evidence fails to establish that Mrs. Kroeck was misinformed by Ms. Martinez or that she specifically inquired as to the effective date of the family coverage. On February 19, 1989, Mrs. Kroeck had her baby. The baby was admitted to the hospital in his own name and incurred, in his own name, expenses in the amount of $4,274.95, for which Petitioner and his wife were responsible. On March 8, 1989, Petitioner signed an application to change his individual coverage to family coverage. Family coverage became effective on April 1, 1989, after the application was processed and the premium for family coverage was collected. At the time of the birth of his son, Petitioner had individual coverage issued through the State Group Plan. Petitioner's son was not a beneficiary under the State Group Plan at the time the medical expenses which are at issue were incurred. Petitioner's request for payment of the medical expenses incurred by his son at birth was denied by Respondent and this proceeding followed.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent, Department of Administration enter a final order which denies the claim for payment of the medical expenses incurred by Petitioner's son prior to the effective date of family coverage. DONE AND ENTERED this , 27th day of December, 1989, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 27th day of December, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-4929 The following rulings are made on the proposed findings of fact submitted on behalf of Respondent. 1. The proposed findings of fact in paragraph 1 are adopted in material part by paragraph 7 of the Recommended Order. 2. The proposed findings of fact in paragraph 2 are adopted in material part by paragraph 7 of the Recommended Order. 3. The proposed findings of fact in paragraph 3 are adopted in material part by paragraph 8 of the Recommended Order. 4. The proposed findings of fact in paragraph 4 are adopted in material part by paragraph 9 of the Recommended Order. 5. The proposed findings of fact in paragraph 5 are adopted in material part by paragraph 9 of the Recommended Order. 6. The proposed findings of fact in paragraph 6 are adopted in material part by paragraph 9 of the Recommended Order. 7. The proposed findings of fact in paragraph 7 are adopted in material part by paragraph 11 of the Recommended Order. The proposed findings of fact in paragraph 8 are adopted in material part by paragraph 13 of the Recommended Order. The proposed findings of fact in paragraph 9 are rejected as being subordinate to the findings made. The proposed findings of fact in paragraph 10 are adopted in material part by paragraph 12 of the Recommended Order. The proposed findings of fact in paragraph 11 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 12 are adopted in material part by paragraph 12 of the Recommended Order. The proposed findings of fact in paragraph 13 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 14 are adopted in material part by paragraph 10 of the Recommended Order. The proposed findings of fact in paragraph 15 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 16 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 17 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 18 are rejected as being unsubstantiated by the evidence as to Ms. Alam and as being unnecessary to the conclusions reached as to Ms. Martinez. The proposed findings of fact in paragraph 19 are rejected as being subordinate to the findings made. The proposed findings of fact in paragraph 20 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 21 are adopted in material part by paragraph 13 of the Recommended Order. The proposed findings of fact in paragraph 22 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 23 are adopted in material part by paragraph 8 of the Recommended Order. The proposed findings of fact in paragraph 24 are adopted in material part by paragraph 18 of the Recommended Order. The proposed findings of fact in paragraph 25 are adopted in material part by paragraph 16 of the Recommended Order. The proposed findings of fact in paragraph 26 are adopted in material part by paragraph 5 of the Recommended Order. The proposed findings of fact in paragraph 27 are adopted in material part by paragraph 4 of the Recommended Order. COPIES FURNISHED: Augustus Aikens, Jr., Esquire Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Kark G. Kroeck 9853 Costa del Sol Boulevard Miami, Florida 33178 Alette A. Lhutes, Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 William A. Grieder, Esquire Office of the General Counsel Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
The Issue Whether or not the Petitioner is entitled to be issued a Certificate of Need to establish a home health agency to serve Putnam County, Florida.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received, post-hearing memoranda and the entire record compiled herein, the following relevant facts are found. Family Center Home Health Care, Inc. (Petitioner), filed an application seeking to establish a home health agency to serve Putnam County, Florida. Ms. Felice M. Knotts, R.N., M.S.N., is the person who completed the application for the issuance of a Certificate of Need on behalf of Petitioner. Ms. Knotts has been a registered nurse since approximately 1966, and is a Doctoral candidate for a degree in Health Services Administration. The application was referred to the North Central Florida Health Planning Council, Inc., pursuant to Sections 381.493-.499, Florida Statutes, for review and comments. The Health Systems Agency (HSA) staff, its project review committee and its Board of Directors each recommended denial to the Department of Health and Rehabilitative Services of a Certificate of Need with the Board recommending denial by a vote of 23 to 0. Need for the proposed project is to be measured against standards found in the Local Health System's plan and Chapter 10-5, Florida Administrative Code, pursuant to Section 381.494, Florida Statutes (1979). By letter dated October 27, 1981, Petitioner was advised by the Respondent that her proposal to establish a home health agency in Putnam County had been reviewed by the North Central Florida Health Planning Council, Inc., and was denied on the basis that the proposed project was inconsistent with the HSA's health system plan and Chapter 10-5.11 (14), Florida Administrative Code. In addition, the two (2) current home health agencies operating in Putnam County, even if combined, do not reach the average daily census maximum of three hundred (300) which is required for the establishment of another home health agency. As stated, currently there are two (2) home health agencies licensed to serve Putnam County, Upjohn Health Services and Central Florida Home Health Services. During 1980, Upjohn served six (6) patients and Central Florida Home Health Services served one hundred sixty-two (162) patients. Upjohn found demand insufficient in Putnam County to establish a sub-unit. At the time that Petitioner's application was reviewed by the Department of Health and Rehabilitative Services, Upjohn had a case load of five (5) patients while Central Florida had a case load of ninety-five (95). During the hearing herein, representatives of each agency indicated that it had sufficient capacity to meet future demands. Standard 1-1 in the Health System's plan requires that the need for new home health agencies be based on home health use rates, projected population and a minimum volume of 1,200 patients per year per agency. Based on current regional use rates of six (6) patients per 1,000 population and the projected population in 1985 of some 56,800 people in Putnam County, 341 Putnam County residents would need home health care during 1985. By use of this standard, the need could exist for less than one-third (1/3) of a single home health agency. Petitioner sought to introduce into evidence a chart which would purportedly show the need as required pursuant to Chapter 10-5, Florida Administrative Code. The chart was based on Ms. Knotts' contact with numerous physicians who practice in the subject area and purportedly recorded their responses in a document designated as Petitioner's Composite Exhibit No. 3. Based on the fact that none of the physicians who purportedly relayed information to Petitioner was present to testify during the course of this hearing, information contained in petitioner's survey is hearsay. As such, that information is not, standing alone, reliable or sufficient to support a basis for which a finding of fact can be made. Chapter 120.58(1)(a), Florida Statutes. Rule 10-5.11(14)(b), Florida Administrative Code, provides that a Certificate of Need for a proposed new home health agency shall not be issued until the daily census of each of the existing home health agencies or sub-units providing services within the health service area of the proposed new home health agency has reached an average of three hundred (300) patients for the immediate preceeding calendar quarter. That rule also allows for need to be shown for a proposed new home health agency by demonstrating mitigating and extenuating circumstances as follows: That the population of a proposed service area is being denied access to home health care services because existing agencies are unable to provide service for all persons in need of home health care or that approval of the new home health agency would foster cost contain ment for all providers in the health service area. Based on the above, it is concluded that the two (2) currently licensed home health agencies in Putnam County have not obtained the average daily census of three hundred (300) patients. Likewise, there was no substantial competent evidence that the population of Putnam County is being denied home health services or that creation of Petitioner's home health agency would foster cost containment for all providers in the health service area. In this regard, officials from the existing two (2) currently licensed home health agencies testified to the extensive under-utilization of existing services which would likely have the effect of increasing charges because of the duplication of under-utilized services which cannot be demonstrated to be cost-effective. Based thereon, I shall recommend that the Petitioner's application to create a home health care agency be denied.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Respondent, State of Florida, Department of Health and Rehabilitative Services, enter a final order denying Petitioner's application for the issuance of a Certificate of Need to establish a home health agency to serve Putnam County, Florida. RECOMMENDED this 20th day of August, 1982, in Tallahassee, Florida. JAMES E. BRADWELL, 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 20th day of August, 1982.
The Issue The issue in this case is whether the expenses incurred by Petitioner incident to admission to Town & Country Hospital on December 11, 1999, resulted from an intentional self-inflicted injury, to wit: attempted suicide, and are therefore excluded from coverage under the State of Florida Employees Group Health Self Insurance Plan.
Findings Of Fact At all times pertinent hereto, Petitioner, Sarah Nuding, was employed by the University of South Florida and was a participant in the State of Florida Employees Group Health Self Insurance Plan (PPO). Respondent, Department of Management Services, Division of State Group Insurance (DSGI), administers the state's self- funded group insurance plan for employees and has secured the services of BCBS as its third party administrator. On December 11, 1999, Petitioner called the Hillsborough County Sheriff's office after ingesting a handful of Wellbutrin and four tablets of Neurontin. Deputy Sheriff Midarst initiated involuntary examination pursuant to Section 394.463, Florida Statutes, (Baker Act), and Petitioner was admitted through the emergency room to Town & Country Hospital, Tampa, Florida. Petitioner was placed in the Hospital's Intensive Care Unit for observation of her seizure activity and remained there under observation and treatment until her release on December 13, 1999. Upon admission and after examinations, Petitioner was diagnosed with chronic anemia by the admitting physician who ordered consultation with the treating physician before medical services and treatment were provided. The admitting and treating physician, after review of Petitioner's hematocrit and hemoglobin levels which were above that normally requiring hospitalization, determined that Petitioner should be treated for the anemia condition before her discharge on December 13, 1999. Petitioner's State of Florida Employees Group Health Self Insurance Plan Booklet and Benefit Document excludes coverage for services rendered for treatment of self-inflicted wounds, in pertinent part provides: The following are not Covered Services and Supplies under the Plan. The Participant is solely responsible for the payment of charges for all such services, supplies or equipment excluded in this Section. 5. Any services and supplies received due to the following circumstances: (b) Resulting from an intentional self- inflicted injury whether the Participant was sane or insane. An injury is intentionally self-inflicted if the Participant intended to perform the act that caused the injury regardless of whether the Participant intended to cause the injury. On or about July 31, 2000, BCBS notified DSGI that of the Hospital's statement totaling $8,244.00 for services and supplies rendered December 11-13, 1999, only $1,030.25 were directly related to a diagnosis of "anemia"; the remaining charges are for the diagnosis of "drug overdose" and are not covered expenses under the State PPO Plan. The decision by both BCBS and DSGI, to pay those charges related to Petitioner's diagnosis and treatment for anemia and to not pay those charges related to the suicide attempt, including two days intensive care unit cost of $1,150.00 per day, are supported by preponderance of the evidence, and is in accord with the terms and conditions of the insurance plan exclusion provision. Petitioner's position is that her prolonged hospital stay, medical treatment and supplies were: (a) not at her request and consent, (b) that her anemia condition was a pre- existing, and therefore, a covered condition, and (c) intensive care placement ($1,500.00 per day for two days) was not necessary to treat her pre-existing anemic condition, therefore, only her first day hospitalization expenses should have been excluded. However, Petitioner's position ignores the fact that her hospital admission was for a suicide attempt, and her stay resulted from the requirements of the Section 394.463, Florida Statutes, to wit: mandatory involuntary placement for 72 hours.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of State Group Insurance, issue a final order dismissing with prejudice the petition for administrative review. DONE AND ENTERED this 14th day of August, 2001, in Tallahassee, Leon County, Florida. FRED L. BUCKINE 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 14th day of August, 2001. COPIES FURNISHED: Julia P. Forrester, Esquire Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 Sarah C. Nuding 15501 Bruce B. Downs Boulevard Apartment 3705 Tampa, Florida 33647 Cynthia Henderson, Secretary Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 Mallory Roberts, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
The Issue Does the Prescription Drug Services Plan administered by the Division of State Group Insurance provide coverage for the drug Xenical as prescribed to the Petitioner?
Findings Of Fact The Plan The Division of State Group Insurance is authorized to provide health insurance coverage to employees of the State of Florida through a fully insured plan or a self-insured plan. The decision to offer a self-insured plan is explained in the State of Florida Employees Group Health Self Insurance Plan Booklet and Benefits Document (the "Plan Booklet and Benefits Document"): As is the case with many major employers, the State of Florida determined that a self- insured plan would result in significant savings to the participating members, and, therefore, implemented the current self- insured program in 1978. Being self-insured means that Claims are paid directly from funds belonging to the State of Florida, with the State earning interest on all fund balances. In addition, the Plan avoids charges normally charged by insurance companies such as retentions, reinsurance, risk factors, and other insurance related charges. (Petitioner's Ex. 7, p. 2.) Denominated the State of Florida Employees' Group Health Insurance Plan, the Plan has both a Servicing Agent and a Prescription Drug Program Administrator. At the time the events leading to this case arose, the Servicing Agent was Blue Cross/ Blue Shield of Florida, Inc., and the Prescription Drug Program Administrator was Eckerd Health Services ("EHS"). By designation of the Florida Legislature, however, the Division is responsible for the administration of the Plan. In the capacity of Plan Administrator, "the Division . . . has full and final decision-making authority concerning eligibility, coverage, benefits, claims, or interpretation of the Benefit Document." (Id.) Mr. Magee, Diabetes and Hypercholesteremia Dennis J. Magee is an employee of the Department of Corrections. He has been covered by State Health Insurance since he commenced his employment with the state in 1971. Mr. Magee has participated in numerous health insurance plans over the course of his employment. For the past three or four years, at least, he has participated in the State of Florida Group Health Self-Insurance Plan administered by the Division. Approximately twelve years ago, Mr. Magee was diagnosed with diabetes. Since the initial diagnosis, his diabetes mellitus type 2 has become complicated by microangiopathy, nephropathy, retinopathy, hypercholesterolemia (elevated serum cholesterol) and obesity. With regard to obesity, Mr. Magee was determined near the time of hearing to have a body mass index of 32.25, an index beyond the threshold for obesity. Dr. Croom and Xenical Mr. Magee's physician is William P. Croom, M.D. Dr. Croom is an endocrinologist specializing in the treatment of types 1 and 2 diabetes mellitus. On July 22, 1999, Dr. Croom prescribed Xenical, a drug used in the control of obesity, at a dosage of 150 milligrams for Mr. Magee. The prescription was medically necessary in Dr. Croom's view because Mr. Magee "has been unsuccessful in managing his obesity with diet and exercise" (Petitioner's Ex. 2) and because "his diabetes and hyperlipidemia [elevated cholesterol] are driven by his obesity . . . ." (Petitioner's Ex. 3). Attempt to Fill the Prescription Mr. Magee presented the prescription to Express Pharmacy Services. It was not honored. On August 3, 1999, Express Pharmacy Services wrote to Mr. Magee that "[t]his item is not covered by your insurance. Please contact your benefits rep. if you have questions." Petitioner's Ex. 4. Appeal to the Division Eckerd Health Services, the Prescription Drug Program Administrator, affirmed the denial of the prescription. Mr. Magee appealed the decision to the Division. The Department of Management Services has an appeals committee, which reviews all denials of coverage by EHS. The appeals committee is composed of three members within the Division: the director, the assistant director and the Policy and Development Bureau Chief. The Director, at the time Mr. Magee's appeal was considered, Mr. Slavin, is a diabetic. The appeals committee looked into Xenical as a treatment for diabetes. It obtained information through literature and internet research and from consultation with physicians at Blue Cross/Blue Shield. On the basis of the research, the committee concluded that Xenical is used only for the treatment of obesity and not for the treatment of diabetes. The appeal resulted in the letter from Director Slavin (referenced in the Preliminary Statement of this order) in which the Director wrote, "I am writing in response to your appeal of the decision by Eckerd Health Services (EHS) to deny coverage for Xenical [and] [r]egrettably, we must concur with EHS' determination." The Plan Booklet and Benefits Document Basis for the Denial The Division's concurrence with EHS that coverage for Xenical should be denied was based on the Prescription Drug Program Section of the Plan Booklet and Benefits Document. The program is described in Part XXVIII, Section W. Subsection 1., Covered Drugs, on p. 57 lists "(a) [f]ederal legend drugs" and "(b) [s]tate restricted drugs" as among those drugs covered. Among the list under Subsection 5., entitled "Exclusions," however, is "(c) [a]nti-obesity drugs." The listing of anti- obesity drugs under Part XXVIII, Section W., Subsection 5, the "Exclusions" subsection, ultimately, is the basis for the Division's denial of coverage of Xenical as prescribed for Mr. Magee. The Plan Booklet and Benefits Document is prepared on an annual basis by the Division. Typically, the Plan Booklet and Benefits Document is "enacted by the Legislature every year through the appropriation[] process of Section 8 of the Appropriations Act." (Tr. 54). For example, the Conference Report on Senate Bill 2500, General Appropriations for 1999- 2000, under Specific Appropriation states: 9) All State Group Health Insurance Plan benefits as provided in the State of Florida Employees Group Health Insurance Plan Booklet and Benefit Document effective January 1, 1998, . . . shall remain in effect. Changes to the benefits provided by the Plan Booklet and Benefits Document are normally initiated by submission of the Governor in his Legislative Budget Request. Benefit changes must be approved by the Legislature. The Plan Booklet and Benefit Document provides, among many, the following definitions: "Covered Services and Supplies" shall mean those health care services, treatments, therapies, devices, procedures, techniques, equipment, supplies, products, remedies, vaccines, biological products, drugs, pharmaceutical and chemical compounds which expenses are covered under the terms of the Benefit Document. The Administrator has final authority to determine if a service or supply is covered or limited by the Plan. * * * "Medical Supplies or Equipment" means supplies or equipment that must be: ordered by a Physician; of no further use when medical need ends; usable only by the Participant patient; not primarily for the Participant patient's comfort or hygiene; not for environmental control; not for exercise; manufactured specifically for medical use. (Petitioner's Ex. 7, Definitions 21 and 50, pgs. 17 and 23, respectively.) Drugs are services as defined by the Plan Booklet and Benefits Documents. But drugs that are excluded from coverage, such as anti-obesity drugs, are not "covered services" as defined by the Plan Booklet and Benefits Document since by definition, an exclusion prevents them from being "covered." As a "service," moreover, Xenical is not covered by virtue of Section G. of the Benefits Document, also entitled "Exclusions." Petitioner's Ex. 7., p. 38. With regard to services "related to obesity and weight reduction," the Benefits Document states the following: G. EXCLUSIONS The following are not Covered Services and Supplies under the Plan. * * * All services and supplies related to obesity or weight reduction except: Medically Necessary intestinal or stomach by-pass surgery; or medically related services provided as part of a weight loss program when weight loss of a Participant is required by the surgeon prior to performing a Medically Necessary surgical procedure. (Petitioner's Ex. 7, pgs. 38, 41.) Xenical and Section 627.65745, Florida Statutes Subsection 627.65745(1), Florida Statutes, states: A health insurance policy or group health insurance policy sold in this state, including a health benefit plan issued pursuant to 727.6699, must provide coverage for all medically appropriate and necessary equipment, supplies and diabetes outpatient self management training and educational services used to treat diabetes, if the patient's treating physician or a physician who specializes in the treatment of diabetes certifies such services are necessary. Xenical, a drug, is obviously not "equipment." Nor would it fall under the category of "self management training and educational services used to treat diabetes." It does not fall under the category of "supplies" either. Under the coding system developed by the Health Care Financing Administration of the United States Department of Health and Human Services, the standard coding system for the payment of health claims, drugs are not supplies. Examples of supplies include prosthetics, testing supplies, artificial limbs, ventilators, needles, and insulin pumps. Update of the Basis for the Prescription In a letter dated June 13, 2000, Dr. Croom more fully explained the basis for the prescription. Xenical is medically necessary for the treatment of diabetes and is not for cosmetic purposes. Xenical is a part of Mr. Magee's outpatient management program which consists of other medications and education. Despite these medications, his most recent hemoglobin A1C is 9.1 significantly higher than the recommended target of 7.0. The use of Xenical would be instrumental in reducing this parameter. In my opinion, Xenical is medically appropriate and necessary. (Petitioner's Ex. 3). The appeals committee did not have the benefit of Dr. Croom's June 13, 2000, letter in which Dr. Croom opined that in the case of Mr. Magee, "Xenical is medically necessary for the treatment of diabetes and is not being used for cosmetic purposes." Other Purpose for the Prescription That a drug's effectiveness is primarily for the treatment of an excluded purpose may not necessarily exclude it from coverage if it were prescribed for some other purpose. This point was elicited during testimony of the Division's witness, C. Merrill Moody, the Division's Assistant Director: (Tr. 81). MR. MOODY: If [Xenical] was being prescribed for obesity, it would be excluded; if it was not, it would not. And I'll give you an example. We have a direct exclusion for contraceptives for contraceptive use . . . [b]ut contraceptives can be used for other purposes. . . . [P]articipants are required to provide us with a letter from the doctor describing what the contraceptive is being used for. We then cover that contraceptive. Mr. Moody went on to explain that oral contraceptives, because of certain properties, are used also in the management of conditions not related to prevention of contraception. For example, oral contraceptives are prescribed in the treatment of menopause because of their ability to maintain the levels of certain hormones. If prescribed for that purpose, then, despite the fact that they are oral contraceptives and normally excluded from coverage, they are covered because of the non-contraceptive basis for the prescription. The Division's position with regard to oral contraceptives is consistent with the exclusion contained in Section W.5. of the Plan Booklet and Benefits Document. There the "Exclusions List" states "(a) Oral contraceptives for contraception." Petitioner's Ex. 6, p. 59. In other words, it is not some policy of the Division that provides coverage for oral contraceptives when the prescription is for a purpose other than contraception. The coverage is provided by the Plan Booklet and Benefits Document, itself. If oral contraceptives are prescribed "for contraception" then they are excluded from coverage. If prescribed for some other medical purpose, then the exclusion contained in Section W, 5(a) does not prevent coverage of oral contraceptives.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is recommended that: the Division of State Group Insurance in the Department of Management Services enter a final order denying coverage of Dennis J. Magee's prescription for Xenical; and, the Division present to the Legislature the Plan Booklet and Benefits Document amended so as to allow coverage of anti-obesity drugs for diabetics if such drugs are prescribed as medically necessary for management of the subscriber's diabetes. DONE AND ENTERED this 28th day of July, 2000, in Tallahassee, Leon County, Florida. DAVID M. MALONEY 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 28th day of July, 2000. COPIES FURNISHED: Dennis J. Magee Post Office Box 636 Safety Harbor, Florida 34695 Cindy Horne, Esquire Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 Thomas D. McGurk, Secretary Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 J. Bruce Hoffmann, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
The Issue Whether Petitioner is entitled to change from individual to family coverage under the State of Florida Employees' Group Insurance Plan more that thirty-one calendar days after the birth of her son and outside the open enrollment period.
Findings Of Fact Petitioner was employed by Department of Health and Rehabilitative Services (HRS) District IV in 1986. For the past 18 months she has worked in her present position with HRS District IV in Deland, Florida. She presently resides with her husband in Deltona, Florida. HRS District IV personnel office is located at 5920 Arlington Expressway in Jacksonville, Florida. Linda Boutwell is employed as the Insurance Coordinator for HRS District IV. Petitioner gave birth to a son on January 6, 1990. On January 8, 1990, Petitioner called Linda Boutwell concerning the addition of her son to her State Health Insurance which would require a change from individual to family coverage. Mrs. Boutwell advised Petitioner that she could change from individual coverage to family coverage, but that the child would not be covered until the form was returned and approved. Boutwell indicated she would send her the necessary paperwork to add her son as a dependent. Mrs. Boutwell prepared and mailed the paperwork on January 8, 1990. It was received by Petitioner on January 10, 1990. Although Petitioner received the required enrollment papers on January 10, 1990, she did not return them to her personnel office. Petitioner states she did not return the papers to her personnel office because she understood from conversation with Linda Boutwell that her son's hospital bills would not be paid by the State Plan, since the child was not enrolled in the State Plan prior to that date. Instead, Petitioner elected to enroll in family coverage under her husband's employer's carrier. On March 15, 1990, Petitioner again called Linda Boutwell to request her son to be added to her insurance. Boutwell explained that Petitioner's request could not be honored since the request was beyond 31 days of the birth of the child. Therefore, Petitioner had to wait until the annual open enrollment period to obtain insurance coverage for the child. Petitioner's March 15, 1990 request was prompted by her discovery that the hospital bill related to the birth of her son was covered under the State Plan, even though she had not yet converted to the family coverage provision of the State Plan. Petitioner never asked Boutwell whether her individual hospital bill was covered or not. Petitioner's conclusion that her son's hospital birth would not be covered was based partly on the statement of a close friend who called Petitioner on January 7, 1990, to warn her to "expect problems" with her State Plan coverage. Petitioner has received a copy of the Amended State of Florida Employees Group Health Self Insurance Plan, Benefit Document, dated July 1, 1988. However, she did not examine it during the period January-March, 1990. Section II of the Employees Group Health Self Insurance Plan states in pertinent part: II. Covered Hospital and Other Facility Services: The following services shall be covered when ordered by a physician and are medically necessary for the treatment of an insured as a result of a covered accident or illness. Inpatient hospital services under Subsections A., B., and H., are in connection with the pregnancy of only the employee . . . shall also include nursery charges of the child during the hospital stay of the mother. Petitioner does not offer any credible explanation why she did not convert to family coverage prior to or at the time of the birth of her son or during the 1989 open enrollment period which occurred during Petitioner's seventh month of pregnancy.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the petition be DENIED. DONE AND ENTERED this 26th day of October, 1990, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE 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 26th day of October, 1990. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner did not file proposed findings of fact. Respondent's proposed findings of fact. Accepted in substance: paragraphs 1 through 11. COPIES FURNISHED: Susan Millard, pro se 2391 Montano Street Deltona, FL 32725 Augustus D. Aikens, Jr., Esquire General Counsel Department of Administration 435 Carlton Building Tallahassee, FL 32399-1550 Aletta Shutes Secretary Department of Administration 435 Carlton Building Tallahassee, FL 32399-1550
