The Issue The issues concern the question of Petitioner's responsibility to pay additional insurance premiums related to Family I coverage in the State Employees' Group Health Insurance program for the period February 1981 through April 1982, based upon alleged underpayments of required premiums. See Section 110.123, Florida Statutes and Rule 22K-1.20, Florida Administrative Code.
Findings Of Fact According to the Florida law which has application in this dispute, when a husband and wife were employed by separate agencies of the State of Florida, cost of the Family I coverage under the State Group Health Insurance Plan was defrayed by those state agencies. This is as contrasted with the circumstance in which one spouse would be responsible for contributing to the cost of the Family I coverage under the State Group Health Insurance Plan, should the second spouse cease to be employed by the second state agency. The State of Florida, Department of Administration, has she responsibility for administering the State Group Health Insurance Plan, to include collection of necessary premium payments. Both Petitioner and his wife had been reported in the records of the Department of Administration as employed by the Department of Corrections and Department of Health and Rehabilitative Services respectively, as employees entitled to participate in the spouse program for payment of health care, i.e., the program in which no contribution is made by the employees toward payment of health insurance premiums. On October 28, 1982, the Petitioner informed the Department of Administration on a form provided by the Bureau of Insurance of the Department of Administration that his wife, Caroline Wilson, had terminated her employment with Health and Rehabilitative Services effective March 23, 1982. This form was executed in cooperation with the Petitioner's employing agency. The second part of the form related to information to be provided by the wife and her employing agency on the question of her employment was not completed by the spouse nor signed off by her employing agency. A copy of this item or form may be found as Respondent's Exhibit No. 3, admitted into evidence. As a result of information he provided, Petitioner was informed of an underpayment of premiums for the period May 1982 through November 1982, related to his wife's lack of eligibility for contribution from her employing agency and the responsibility of the Petitioner to substitute as payor of those premiums. This referred to the point of departure identified by the Petitioner allowing for a grace month of April 1982, thereby making the period of underpayment May 1982 through November 1982. The amount of nonpayment was $280.06, which was eventually reimbursed by the Petitioner. Subsequently, in January 1984, Respondent, Bureau of Insurance, in an attempt to ascertain why Health and Rehabilitative Services had not contributed the full amount of its share to the insurance related to Caroline P. Wilson in times before March 23, 1982, discovered that the wife, Caroline P. Wilson, had terminated her employment some time before March 23, 1982. As was revealed in the final hearing, the last day of employment with Health and Rehabilitative Services was January 3, 1981. After that date, Mrs. Wilson did not return to her job at the Florida State Hospital in Chattahoochee, Florida, and was eventually considered to have abandoned that job. (It was the first impression of the Department of Administration that she had last been employed in December 1980 and as a consequence this case pertains to the claim of the Department of Administration that there is an underpayment related to the family coverage which starts on February 1, 1981 and runs until April 1, 1982, allowing for a credit of overpayment in the amount of $48.46 for the month of September 1983, leaving a total claimed of $382.64. It is this amount that Petitioner took issue with and requested a timely formal Section 120.57(1), Florida Statutes' hearing to resolve.) Based upon the evidence adduced at the hearing, the date from which the responsibility of the husband to contribute the premiums share no longer being provided by Health and Rehabilitative Services would be January 1981, as opposed to December 1980. Allowing for the grace month of February 1981, the payments would be due for March 1, 1981, through April 1, 1982, allowing credit again for the $48.46 for the month of September 1983, leaving a total due and owing in the way of underpayment of $353.90.
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
Findings Of Fact Petitioner is an employee of the State of Florida, and was at all times pertinent, a member of the State Group Health Insurance Program administered by Blue Cross and Blue Shield of Florida, Inc. In March of 1984, Petitioner was hospitalized due to severe indigestion and abdominal pain. Petitioner was discharged from the hospital and informed by his physician that if his condition worsened, surgery would be necessary. Petitioner's condition worsened and on May 28, 1984, his physician, R. Klein Bowen, M.D., admitted him to the hospital with a pre-operative diagnosis of chronic acalculus cholecystitis which is chronic inflammation of the gallbladder. On May 29, 1984, said physician operated upon petitioner and his operative report listed the following under the title "Operation": Cholescystectomy. Attempted operative cholangiogram. Incidental appendectomy. The description of the operative procedure stated in the operative report (Respondent's Exhibit 1) establishes that the appendectomy which was performed was accomplished through the same incision which was made for performing the cholescystectomy (gallbladder removal). The operative report stated that the appendix was not acutely inflamed. Subsequent to the operative procedures the Petitioner filed a claim with the State Group Health Insurance Plan administrator, seeking payment for the following charges: May 28, 1984, $90.00 for consultation and case history preparation prior to surgery; May 29, 1984, $1,350.00 Cholescystectomy; May 29, 1984, $375.00 Appendectomy. All of said services were performed by R. Klein Bowen, M.D. The State Group Health Self-Insurance Plan paid the charge for the cholescystectomy and denied the claims for consultation and case history preparation prior to the surgery and for the appendectomy. The State Self- Insurance Plan justified its denial of Petitioner's claim for the above benefits based upon limitations it alleged were contained in the State of Florida Employees' Group Health Self-Insurance Plan Benefit Document (Respondent's Exhibit 2). Section VIII entitled "Limitations" in paragraph I. specifies that payment may be made for in-patient medical care physician visits in addition to payment for surgery only when the condition which required medical care is not related to the surgery and does not constitute a part of the pre-operative or post-operative care. Additionally, Section VIII, F. specifies that no additional payment shall be made for a surgical procedure which is an incidental procedure performed through the same incision. Petitioner did not dispute the provisions which Respondent alleged were limitations justifying denial of payment, although he asserted that the provisions contained within the Group Health Self-Insurance Plan Benefit Document were not cost effective and would result in additional expenses and lost time from work and were worthy of reconsideration. However, Petitioner did not present any competent evidence to support his claim or refute the limitations relied upon by Respondent.
Recommendation Based on the foregoing, it is RECOMMENDED that Respondent enter a Final Order denying the Petition. DONE and ENTERED this 14th day of May, 1985, in Tallahassee, Florida. R. T. CARPENTER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of May, 1985. COPIES FURNISHED: Gerald B. Richardson 2909-198 South Semoran Boulevard Orlando, Florida 32822 Richard L. Kopel, Esquire Deputy General Counsel Department of Administration 435 Carlton Building Tallahassee, Florida 32301 Gilda Lambert, Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32301
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: Prior to the institution of this proceeding, Petitioner had undergone surgical sterilization through a procedure known as a vasectomy. Subsequent to the Petitioner having the vasectomy, Petitioner made a decision to have the procedure surgically reversed. At all times material to this proceeding, Petitioner was a member of the State of Florida Employees Group Health Self Insurance Plan (Plan). At some time prior to having the vasectomy surgically reversed the Petitioner obtained and reviewed the Brochure from the Plan (Petitioner's Exhibit 1). Page 1 of the Brochure advises the members of the Plan (members) that the Brochure is "not a contract since it does not include all of the provisions, definitions, benefits, exclusions, and limitations" of the Plan and that its purpose is to furnish members a summary of the benefits available under the Plan and provides a regular telephone number and a SunCom telephone number for the Office of State Employees Insurance (OSEI) in Tallahassee, Florida for the members to call if there are any questions. Page 4 of the Brochure contains a paragraph entitled "Benefit Inquiries" and provides a regular telephone number and a SunCom telephone number for members to call the OSEI on questions concerning benefits. Page 12 of the Brochure contains a paragraph entitled "Claims Inquiries" and provides a TOLL FREE WATS LINE number for the Jacksonville Office of Blue Cross and Blue Shield for members to use when calling that office on questions concerning claims or claims problems. OSEI interprets "Claims Inquiries" to mean inquiries concerning payment, nonpayment or timeliness of claims as distinguished from whether certain services are covered under the Plan which would be "Benefit Inquiry". Page 9 of the Brochure contains a paragraph entitled "Limitations and Exclusions" wherein surgery to reverse surgical sterilization is listed as one of those procedures that the Plan finds necessary to limit or exclude payment. Immediately above the paragraph entitled "Limitations and Exclusions" on page 9 the Brochure advises the member that exclusions and limitations are contained in the Benefit Document on file in the individual's personnel office and the OSEI in Tallahassee, Florida. The Benefit Document is defined on page 2 of the Brochure as the document containing "the provisions, benefits, definitions, exclusions and limitations of the" Plan. Section VII, EXCLUSIONS, subparagraph P. of the State Employees Group Health Insurance Benefit Document (Document) (Respondent's Exhibit 3) specifically excludes surgery to reverse surgical sterilization procedures from coverage under the Plan. The Department of Administration has been designated by the Florida Legislature as the State agency responsible for the administration of the Plan and to make the final determination as what benefits are covered under the Plan in accordance with the Document. There was no evidence presented to show that this responsibility had been delegated to Blue Cross and Blue Shield of Florida, Inc. (Administrator) who was selected by the competitive bid process to provide claims payment services, actuarial and printing services, and medical underwriting of late enrollee applications. Before having surgery to reverse surgical sterilization, the Petitioner contacted the Jacksonville Office of the Administrator and was advised by an unidentified person in that office that the Plan would cover the hospital costs for reverse surgical sterilization but would not cover the doctor's fee. The Petitioner did not at any time material to this proceeding contact the OSEI in Tallahassee or the local personnel office concerning the Plan's coverage of surgery to reverse surgical sterilization. Petitioner acted on the advice of the unidentified person in the Jacksonville Office of Blue Cross and Blue Shield, plus his reading of the Brochure, to come to the conclusion that there was a limitation on the benefits available under the Plan for surgery to reverse surgical sterilization rather than an exclusion of benefits for that procedure; the limitation being that the Plan would pay for hospital costs but not the doctor's fees. Prior to entering the hospital, the Petitioner's admission, being elective, was certified under the Plan's Preadmission Certification Program. However, the Petitioner was advised that the admission being certified did not mean that the services requested were covered under the Plan and that the services rendered would be subject to the limitations and exclusions listed in the Plan. On or about July 30, 1986, Petitioner was admitted to Fish Memorial Hospital where Dr. Youngman performed surgery to reverse surgical sterilization and was discharged on July 31, 1986. After surgery was performed, claims were made under the Plan and, the State of Florida, through the Administrator, made the following payments in connection with the surgery: (a) Fish Memorial Hospital - $935.10; (b) Southeast Volusia Radiology Associates - $19.10; (c) Clifford Chu, M.D. - $742.00 and; (d) Robert Charles Youngman, M.D. - 742.00 Although claims made by the different health care providers (providers) for the services rendered to the Petitioner indicated a diagnosis of Azoospermia which is defined as the absence of live spermatozoa in the semen, there was insufficient evidence to show that this diagnosis was the primary reason for payments being made in error to the providers by the Administra- tor for the services rendered in connection with Petitioner's surgery to reverse surgical sterilization. Subsequent to the health care providers being paid by the Administrator for services rendered to Petitioner under the Plan, the OSEI made a determination that none of the services rendered to the Petitioner to reverse surgical sterilization were covered under the Plan, and demanded reimbursement from the providers. All of the providers, with the exception of Dr. Youngman, reimbursed the Plan but, since the Petitioner had paid Dr. Youngman prior to the claim being made, the Petitioner had received Dr. Youngman's claim and subsequently reimbursed the Plan. Petitioner made a demand on the State to pay the providers since he had been informed by the Administrator that the services, at least the hospital costs, were covered under the Plan. Respondent, at Petitioner's request, reviewed its denial of coverage and determined that costs incurred for surgery to reverse surgical sterilization was not covered under the Plan. By letter dated September 25, 1987, received by Petitioner on October 1, 1987, Respondent advised Petitioner of that decision and of his right to a hearing should he desire one. Petitioner was also advised that he had twenty-one (21) days to file a petition and failure to timely comply would result in the action contemplated in the letter becoming final. A Petition For Formal Proceedings and Notice of Appearance was received by the Respondent on October 26, 1987 bearing a certificate of service dated October 23, 1987. The petition was mailed by Petitioner and received by the Respondent more than 21 days after receipt of the letter by the Petitioner on October 1, 1987. Respondent's ore tenus Motion For Remand Or, In The Alternative, To Dismiss The Petition citing Petitioner's failure to timely file his petition was filed at the hearing on May 12, 1988 some five and half (5 1/2) months after Respondent's receipt of the petition. Upon the Respondent determining that the Petitioner's surgery to reverse surgical sterilization was not covered under the Plan, Petitioner became responsible for all costs incurred for the surgery rather than just Dr. Youngman's fee which resulted in Petitioner being responsible for $3,057.70, in addition to Dr. Youngman's fee. Had the surgery been covered under the Plan, the Petitioner would have only been responsible for $91.90, plus Dr. Youngman's fee.
Recommendation HAVING considered the foregoing Findings of Fact and Conclusions of Law, the evidence of record and the candor and demeanor of the witnesses, it is, therefore, RECOMMENDED that the Department of Administration enter a Final Order DENYING Petitioner payment for the costs incurred for the surgery to reverse surgical sterilization requested in his Petition for Formal Proceedings. RESPECTFULLY SUBMITTED and ENTERED this 20th day of July, 1988, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 July, 1988. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 88-1452 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner Petitioner's Proposed Findings of Fact were submitted in unnumbered paragraphs but, for clarity, I have numbered them 1 through 18. The first two sentences of paragraph one are rejected as not being supported by substantial competent evidence in the record. Although an employee of the Administrator represented to Petitioner that the procedure was covered, there was no approval in that the Administrator did not have that authority. The last two sentences of paragraph one are adopted in Findings of Fact 15, 16, and 17. The first two sentences of paragraph 2 are adopted in Finding of Fact 19 but clarified. The last two sentences in paragraph two are adopted in Finding of Fact 20. Adopted in Finding of Fact 20 but clarified. (4-7) Rejected as immaterial to irrelevant except the last sentence of paragraph 7 which is adopted in Finding of Fact 11 but clarified to show the 800 number being provided under "Claims Inquiries". Adopted in Finding of Fact 11. Adopted in Finding of Fact 11 but clarified. Adopted in Findings of Fact 11 and 14 but clarified. Adopted in Finding of Fact 16. Rejected as immaterial or irrelevant. Adopted in Finding of Fact 18. Adopted in Finding of Fact 24 but clarified. Rejected as not supported by substantial competent evidence in the record. Adopted in Findings of Fact 9 and 13 but clarified. The first sentence of paragraph 17 is adopted in Finding of Fact 8 and although there is a difference in the meaning of "limitations" and "exclusions", there was no substantial competent evidence in the record that the Brochure and Document were inconsistent in this regard, therefore the last sentence is rejected. Rejected as a restatement of a witness' testimony and not a finding of fact but additionally, rejected as not being supported by substantial competent evidence in the record. Specific Rulings on Proposed Findings of Fact Submitted by Respondent (1-6) Adopted in Findings of Fact 1 through 6, respectively. (7-8) Adopted in Finding of Fact 8. (9-10) Adopted in Finding of Fact 7. (11-14) Adopted in Findings of Fact 15, 12, 11 and 13, respectively. (15-16) Adopted in Finding of Fact 17. (17) Rejected as not supported by substantial competent evidence in the record. See Finding of Fact 17. (18-19) Adopted in Findings of Fact 18 and 19, respectively. (20) Rejected as a restatement of a witness' testimony and not a Finding of Fact. Also, it would be rejected as not being supported by substantial competent evidence in the record. (21-22) Adopted in Finding of Fact 20. (23) Adopted in Finding of Fact 21. (24-25) Adopted in Finding of Fact 22. (26-28) Adopted in Finding of Fact 10. Adopted in Finding of Fact 9. Rejected as a conclusion of law. COPIES FURNISHED: William A. Frieder, Esquire Department of Administration 440 Carlton Building Tallahassee, Florida 32399-1550 Lester A. Lewis, Esquire P. O. Drawer 9670 Daytona Beach, Florida 32020 Adis Vila, Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
The Issue The issue presented for decision in this case is whether the Department of Management Services properly denied medical insurance reimbursement to Marianne Fahle for EDTA chelation therapy services provided to her husband, John Fahle.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing, and the entire record in this proceeding, the following findings of fact are made: Marianne Fahle is a retired employee of the State of Florida. At all times pertinent to this case, Marianne Fahle was a participant in the State of Florida group health insurance plan. Her husband, John Fahle, is a covered dependent. The state group insurance program is a self-insured health insurance plan administered for the State of Florida for its employees by Blue Cross Blue Shield of Florida ("BCBSF"). In August 2000, John Fahle was hospitalized after he collapsed at his home. Medical tests revealed that Mr. Fahle suffered from arteriosclerosis with an estimated 60-80% stenosis, or blockage, of his carotid artery. Rather than undergo surgery to relieve the blockage, Mr. Fahle chose a course of treatment commonly called EDTA chelation therapy. Chelation therapy involves the intravenous injection of ethylene-diamine-tetra acetic acid (edetic acid or EDTA) accompanied by nutritional supplements. After undergoing chelation therapy, Mr. Fahle's diagnostic tests were repeated, with reported results indicating some reduction of the blockage in his coronary artery and a reduction of the carotid artery blockage to 40-60 percent. The actual tests, as opposed to the physicians' reports of their results, were not offered as evidence. The weight of the evidence established that the reported improvement in Mr. Fahle's carotid artery blockage, from a 60-80 percent blockage to a 40-60 percent blockage, could be attributed to the subjectivity involved in reading the results of the diagnostic tests. In any event, the reported improvement was of little medical significance. Chelation therapy is generally accepted in the medical community as a safe and efficacious treatment for heavy metal toxicity, e.g., lead poisoning. The United States Food and Drug Administration ("FDA") approved EDTA as a lawfully marketed drug in 1953. The FDA cannot limit the manner in which a licensed physician may prescribe an approved drug, though it can place limits on the marketing representations that may be made as to the efficaciousness of a drug for certain uses. The FDA has approved the marketing of EDTA as a treatment for heavy metal poisoning. The FDA prohibits any person from representing that chelation therapy is a safe and efficacious treatment for arteriosclerosis, though a physician may lawfully treat arteriosclerosis with chelation therapy. Petitioner submitted several articles attesting to the value of chelation therapy in treating arteriosclerosis. A significant minority of physicians in the United States employs chelation therapy as an option in the treatment of arteriosclerosis. However, reliable, formal clinical trials have yet to establish the efficacy of chelation therapy as a standard treatment for arteriosclerosis. The strength of the anecdotal evidence and the persistent advocacy of physicians have led the National Institute of Health to begin clinical trials on the use of chelation therapy in the treatment of arteriosclerosis, but the results of these trials will not be available for five years. In any event, Mr. Fahle's coverage is determined by the terms of Ms. Fahle's insurance policy. The terms of coverage for the state group health insurance plan are set forth in a document titled, "State Employees' PPO Plan Group Health Insurance Plan Booklet and Benefit Document." The benefit document states, in pertinent part: Services Not Covered By The Plan The following services and supplies are excluded from coverage under this health insurance plan unless a specific exception is noted. Exceptions may be subject to certain coverage limitations. * * * 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 defines "experimental or investigational services" as follows: ny evaluation, treatment, therapy or device that: cannot be lawfully marketed without approval of the US Food and Drug Administration or the Florida Department of Health if approval for marketing has not been given at the time the service has been provided to the covered person is the subject of ongoing Phase I or II clinical investigation, or the experimental or research arm of Phase III clinical investigation-- or is under study to determine the maximum dosage, toxicity, safety or efficacy, or to determine the efficacy compared to standard treatment for the condition 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 US, 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 similar condition BCBSF and [the Department] determine whether a service or supply is experimental or investigational. The benefit document is not explicit as to whether the elements of the quoted definition are to be considered in the disjunctive, but the plain sense of the document leads to the reading that if any one of the definitional elements applies, then the service or supply must be considered experimental or investigational. Dr. William Wood, BCBSF's medical director, confirmed that if any single element of the definition applies to a service or supply, then it is considered experimental or investigational. Chelation therapy would fall under every element of the definition except, arguably, the last element dealing with regular use by practicing physicians. The FDA does not allow chelation therapy to be marketed as a treatment for arteriosclerosis, chelation therapy is currently the subject of clinical trials, and it is not accepted "in consensus" by practicing physicians as a treatment for arteriosclerosis.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Management Services enter a Final Order dismissing the petition of Marianne Fahle. DONE AND ENTERED this 2nd day of December, 2002, in Tallahassee, Leon County, Florida. LAWRENCE P. STEVENSON 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 2nd day of December, 2002. COPIES FURNISHED: Marianne Fahle 12205 North Marjory Avenue Tampa, Florida 33612 Julia Forrester, Esquire Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 John Matthews, Director Division of State Group Insurance Department of Management Services 4040 Esplanade Way, Suite 135 Tallahassee, Florida 32399-0950 Simone Marstiller, General Counsel Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950
The Issue The issue in this case is whether Respondent, Charles Steven Lieberman, committed the offenses alleged in an Administrative Complaint issued by Petitioner, the Department of Financial Services, on January 26, 2004, and, if so, what penalty should be imposed.
Findings Of Fact The Parties. Petitioner, the Department of Financial Services (hereinafter referred to as the "Department"), is the agency of the State of Florida charged with the responsibility for, among other things, the investigation and prosecution of complaints against individuals licensed to conduct insurance business in Florida. Ch. 626, Fla. Stat. (2004).1 Respondent, Charles Steven Lieberman, is currently, and was at all times pertinent to this matter, licensed in Florida as a resident Life & Variable Annuity (2-14); Life, Health & Variable Annuity (2-15); Life (2-16); Life & Health (2-18); and Health (2-40) Agent. (Stipulated Facts). The Department has jurisdiction over Mr. Lieberman's licenses and appointments pursuant to Chapter 626, Florida Statutes. (Stipulated Facts) Mr. Lieberman's license identification number is A155409. (Stipulated Facts). Mr. Lieberman graduated from Columbia University. From 1974 through 1992, Mr. Lieberman worked as a trader initially on the floor of the Chicago Board of Options Exchange, and later, the Chicago Mercantile Exchange. Mr. Lieberman has held his insurance licenses for ten years. This is the first administrative complaint issued against him. Mr. Lieberman's Business. Mr. Lieberman, at all times pertinent, served as president of Charles Lieberman, Inc. (Stipulated Facts). Mr. Lieberman, at all times pertinent, was the designated primary agent, as defined in Section 626.592, Florida Statutes, of Charles Lieberman, Inc. (Stipulated Facts). Charles Lieberman, Inc., at all times pertinent, owned and did business as "National Medical Services" and "The Insurance Center." (Stipulated Facts). Mr. Lieberman's "Medical Benefits Plan"/"Medical Savings Plan." Mr. Lieberman offers customers who are seeking medical insurance a plan which he calls a "Medical Benefits Plan" or "Medical Savings Plan" (hereinafter referred to as the "Lieberman Medical Benefits Plan"). The Lieberman Medical Benefits Plan consists of the following components (hereinafter referred collectively as the "Plan Products"): A hospital and surgery expense payment policy (hereinafter referred to as the "Hospital Insurance Plan"); A Catastrophe Major Medical Insurance Plan (hereinafter referred to as the "Major Medical Insurance Plan"); and A discount card titled "The Chamber Card" (hereinafter referred to as the "Chamber Card"), with a "Limited Product Warranty." None of the Plan Products included insurance coverage for physician office visits, a fact which Mr. Lieberman was fully aware of. The Hospital Insurance Plan. The Hospital Insurance Plan provides coverage for hospital and surgical expenses. It does not provide coverage for physician office visits. The Hospital Insurance Plan is a medical insurance plan offered by United American Insurance Company (hereinafter referred to as "United American"). Mr. Lieberman is an agent for United American. Petitioner's Exhibit 64 is a copy of the hospital and surgery expense policy that constitutes the Hospital Insurance Plan sold by Mr. Lieberman. (Stipulated Facts). Petitioner's Exhibit 65 is a copy of the Schedule of Benefits for the Hospital Insurance Plan. (Stipulated Facts). The Major Medical Insurance Plan. The Major Medical Insurance Plan provides coverage for major medical expenses in excess of $25,000.00. It does not provide coverage for physician office visits. The Major Medical Insurance Plan is also a medical insurance plan. It is offered by United States Life Insurance Company (hereinafter referred to as "U.S. Life"). In order to purchase a Major Medical Insurance Plan, customers are required to join one of many organizations which purchase Major Medical Insurance Plans through Seabury & Smith2, an organization which administers the sale of health insurance for U.S. Life. Customers, once they join such an organization, are then required to purchase the Major Medical Insurance Plan through the organization they joined. Mr. Lieberman is not an agent for U.S. Life or affiliated with Seabury & Smith. He does not, therefore, sell Major Medical Insurance Plans. Nor does he receive any compensation if any of his customers purchase a Major Medical Insurance Plan. Mr. Lieberman does, however, recommend the purchase of a Major Medical Insurance Plan as part of the Lieberman Medical Benefits Plan. In order to facilitate the purchase, Mr. Lieberman has his customers join the "American Contract Bridge League."3 His customers then purchase a Major Medical Insurance Plan directly based upon their League membership. Petitioner's Exhibit 63 is a copy of the Major Medical Insurance Plan which by Mr. Lieberman recommended that his customers purchase. (Stipulated Facts). The Chamber Card. In an effort to provide some relief for cost of physician office visits, which was not covered by the Hospital Insurance Plan or the Major Medical Insurance Plan, Mr. Lieberman sold his customers the Chamber Card. The Chamber Card, which is not insurance (Stipulated Facts), is a card which entitles the holder thereof to a discount4 for various medical services, including physician office visits. In an effort to enhance the discounts from the Chamber Card available to Mr. Lieberman's customers, Mr. Lieberman also provided what he termed a "Limited Product Warranty" which he offered through Charles Lieberman, Inc., d/b/a National Medical Services. This Limited Product Warranty is also not insurance. Pursuant to Mr. Lieberman's Limited Product Warranty, Mr. Lieberman purportedly agreed to provide reimbursement of the cost of any physician office visit in excess of $15.00, an amount which he referred to as a "copay," which was not paid for by the Chamber Card. The additional discounts were dependant, however, on Mr. Lieberman's ability to negotiate a reduction in the fees incurred by his customers directly from the physician.5 In describing the Chamber Card and the Limited Product Warranty sold by Mr. Lieberman, he used the acronyms "PPO" and "PHCS," and terms like "copay" and "claims" normally associated with the insurance industry. Customer W.E. (Count I of the Administrative Complaint). Prior to September 12, 2002, W.E. spoke with Mr. Lieberman by telephone. She explained to him that she was interested in purchasing health insurance, and before she could explain what she meant in any detail, he informed her that he could provide any health insurance she wanted as long as she did not have high blood pressure, which she did not. On September 12, 2002, W.E. met with Mr. Lieberman (Stipulated Facts) at his home to discuss purchasing health-care insurance. She explained to Mr. Lieberman that she wanted a health insurance plan similar to what she had had before she recently moved to Florida and that she wanted a plan with minimum co-payments. She also indicated that she wanted a basic insurance plan until she was able to find employment where her health insurance would be provided for her. W.E. did not specifically tell Mr. Lieberman that she wanted insurance that covered physician office visits.6 Rather, she reasonably assumed that by telling Mr. Lieberman that she wanted to purchase "health insurance" that, as an insurance agent, he would understand that she wanted coverage for physician office visits. Mr. Lieberman, rather than providing the insurance coverage which he knew or should have known W.E. was seeking, coverage which included physician office visits, suggested that she purchase the Lieberman Medical Benefits Plan. While Mr. Lieberman attempted to give some limited explanation of his plan to W.E., based upon the manner in which he explained his plan at hearing, it is understandable that W.E. did not understand what she was purchasing, or, more specifically, that the plan, while including some health care coverage, did not include coverage for physician office visits. On September 12, 2002, Mr. Lieberman sold or arranged for the sale of the Plan Products, as more fully described in Findings of Fact 9 through 25, to W.E.: W.E. signed an application for membership in the American Contract Bridge League (Stipulated Facts); W.E. wrote a check for her membership in the American Contract Bridge League (Stipulated Facts); W.E. signed an application and wrote checks for the Chamber Card and a United American Hospital Insurance Plan (Stipulated Facts); and W.E. signed an application for a Major Medical Insurance Plan from U.S. Life and wrote a check to Seabury & Smith. (Stipulated Facts). Mr. Lieberman knew or should have known that he was selling W.E. a product which she was not interested in purchasing and that he was not providing her with a significant part of the insurance coverage she was interested in purchasing, coverage of physician office visits. While Mr. Lieberman gave some limited explanation of what the Chamber Card was, he did not fully explain to W.E. that it was not an insurance program, plan, or policy; that it would not pay for physician office visits; or that it only provided some unspecified discount on the cost of physician office visits. W.E. did not understand what she was purchasing. She even believed incorrectly that she had not been provided any insurance at all by Mr. Lieberman. While this incorrect assumption was based in part upon comments she perceived were made by a Department investigator, her comments show that she was unknowledgeable about insurance and, therefore, placed her full reliance on upon Mr. Lieberman. Even though W.E. issued separate checks made payable to "A.C.B.L." (the American Contract Bridge League), Seabury & Smith (for the Major Medical Insurance Plan), United American (for the Hospital Insurance Plan), and National Medical Services (for the Chamber Card); signed an Acknowledgement & Disclaimer and an Acknowledgement & Disclosures (both of which are quoted, infra, in Finding of Fact 35); and signed a document titled "Medical Benefits Plan” which contained an acknowledgement (quoted, infra. In Finding of Fact 36), W.E., unlike Mr. Lieberman, did not understand that she was purchasing a product which she had not requested and did not want. The Acknowledgement & Disclaimer and Acknowledgement & Disclosures signed by W.E. provided the following: ACKNOWLEDGEMENT AND DISCLAIMER I understand that the US Life Catastrophic Insurance Policy is being purchased through the mail from Seabury & Smith (Group Insurance Plans), who are the brokers for that plan. Although I am purchasing other insurance from Charles Lieberman, I realize that Mr. Lieberman is in no way representing Seabury & Smith or US Life and that he is only making me aware that this plan is available. I acknowledge that it is my sole responsibility to review this plan and its features to determine suitability once the policy is received. Insured Date ACKNOWLEDGEMENT AND DISCLOSURES I hereby acknowledge that I am purchasing insurance that covers approximately 75% of the first $10,000 in the hospital then covers 100% hospitalization above $25,000. Although my PHCS PPO Access/Medical Savings Card (which is not insurance) will, in most cases, reduce this potential liability; through negotiated savings, it is not guaranteed to eliminate it in it [sic] entirety. INSURED DATE The foregoing Acknowledgement & Disclaimer and the Acknowledgement & Disclosures are misleading at best, and deceiving at worst. While the Acknowledgement & Disclosures includes the language "which is not insurance," that language is included after the terms "PHCS PPO Access/Medical Savings Card," terms which are not clearly identified or explained and are, along with other terminology used in the Disclosures (i.e., "PPO" and "copay") reasonably associated with health-care insurance. More importantly, the Acknowledgement & Disclaimer and the Acknowledgement & Disclosures do not explain that physician office visits are not being provided through health care insurance. Finally, W.E. was not given an opportunity by Mr. Lieberman to read the Acknowledgement & Disclaimer, the Acknowledgement & Disclosures, or any other documents shown to her by Mr. Lieberman. He simply placed most of the documents which she had to sign in front of her with only the part she was required to sign visible and told her to sign them, which she did. The following acknowledgment was also contained in a document titled "Medical Benefits Plan" which W.E. signed: By signing below, I agree that all information provided above is complete, accurate, and truthful. I recognize that because of the high cost of health insurance, National Medical Savings, plan administrator, has attempted to put together a "medical savings/benefit plan" which allows clients to purchase reasonably priced hospitalization insurance from well known a- rated insurance companies and combine it with a product which is not insurance to better suit the clients' needs. I understand that anything associated with the PPO repricing or copay rebates is part of the "medical savings plan" and is in no way to be considered as insurance, but rather as an affordable alternative to satisfy the need to reduce medical costs. Like the Acknowledgments quoted in Finding of Fact 35, this acknowledgement, which appears after a paragraph titled "Pre- Authorized Payment Plan" on the form, is misleading. It is not clear that it is referring to the Chamber Card, it contains terms normally associated with insurance coverage in spite of the disclaimer, and Mr. Lieberman gave W.E. no reasonable opportunity to read the disclaimer before having her sign it. After enrolling W.E. in the Lieberman Medical Benefits Plan, Mr. Lieberman mailed all the documents which W.E. had signed on September 12, 2002, to her. This was her first realistic opportunity to read the documents. After receiving the documents concerning the Lieberman Medical Benefits Plan, W.E. cancelled all of the Plan Products. Although there was some language in the Acknowledgement and Disclosures and the form titled "Medical Benefits Plan" signed by W.E. indicating that some part of the Lieberman Medical Benefits Plan was not insurance, due to the ambiguity of the language of the Acknowledgement and the disclaimer, the lack of opportunity that W.E. had to read the documents, the other language normally associated with insurance used in the documents, and the lack of coherent explanation provided by Mr. Lieberman, it is found that, as to W.E., Mr. Lieberman: Did not inform her that the Chamber Card was not an insurance program, plan, or policy; "Portrayed" the Chamber Card as an insurance program, plan, or policy; and Sold her products, none of which provided insurance coverage for the cost of physician office visits. Customer A.H. (Count II of the Administrative Complaint). Prior to April 11, 2003, Mr. Lieberman contacted and spoke to A.H. by telephone. A.H. told Mr. Lieberman that she was interested in purchasing health insurance, including insurance covering physician office visits, with co-pay, and hospitalization expenses, with a deductible. On April 11, 2003, A.H. met with Mr. Lieberman (Stipulated Facts) at his home to discuss purchasing health-care insurance. She again explained to Mr. Lieberman that she was interested in a policy that covered physician office visits, with a co-pay, and hospitalization expenses, with a deductible. Mr. Lieberman, rather than providing insurance coverage which he knew or should have known A.H. was seeking, coverage which included physician office visits, suggested that she purchase the Lieberman Medical Benefits Plan. While Mr. Lieberman attempted to give some limited explanation of his plan to A.H., based upon the manner in which he explained his plan at hearing, it is understandable that A.H. did not understand what she was purchasing, or, more specifically, that the plan, while including some health care coverage, did not include coverage for physician office visits. On April 11, 2003, Mr. Lieberman sold or arranged for the sale of the same Plan Products to A.H. that he had sold to W.E., described in Finding of Fact 30, supra. (Stipulated Facts). Mr. Lieberman knew or should have known that he was selling A.H. a product which she was not interested in purchasing and that he was not providing her with a significant part of the insurance coverage she was interested in purchasing, coverage of physician office visits. While Mr. Lieberman gave some limited explanation of what the Chamber Card was, he did not fully explain to A.H. that it was not an insurance program, plan, or policy; that it would not pay for physician office visits; or that it only provided some unspecified discount on the cost of physician office visits. Like W.E., A.H. signed the Acknowledgment and Disclaimer and the Acknowledgement and Disclosures quoted, supra, in Finding of Fact 35, and the disclaimer quoted, supra, in Finding of Fact 36. The Acknowledgements and the disclaimer were deficient for the same reasons described in Findings of Fact 35 and 36. Like W.E., even though A.H. issued separate checks made payable to "A.C.B.L." (the American Contract Bridge League), Seabury & Smith (for the Major Medical Insurance Plan), United American (for the Hospital Insurance Plan), and National Medical Services (for the Chamber Card); signed the Acknowledgement & Disclaimer and an Acknowledgement & Disclosures; and signed the disclaimer contained in a form titled "Medical Benefits Plan," A.H., unlike Mr. Lieberman, did not understand that she was purchasing a product which she had not requested and did not want. Having explained to Mr. Lieberman that she wanted a policy that covered physician office visits and not having been told that was not what she was purchasing, she simply relied upon Mr. Lieberman. After enrolling A.H. in the Lieberman Medical Benefits Plan, Mr. Lieberman mailed all the documents which A.H. had signed on April 11, 2003, to her. Some time after receiving the documents concerning the Lieberman Medical Benefits Plan, A.H. cancelled all of the Plan Products. Although there was some language in the Acknowledgement and Disclosures and the form titled "Medical Benefits Plan" signed by A.H. indicating that some part of the Lieberman Medical Benefits Plan was not insurance, due to the ambiguity of the language of the Acknowledgement and the Disclaimer, the other language normally associated with insurance used in the documents, and the lack of coherent explanation provided by Mr. Lieberman, it is found that, as to A.H., Mr. Lieberman: Did not inform her that the Chamber Card was not an insurance program, plan, or policy; "Portrayed" the Chamber Card as an insurance program, plan, or policy; and Sold her products, none of which provided insurance coverage for the cost of physician office visits. Customer R.G. (Count III of the Administrative Complaint). R.G. did not testify at the final hearing. The factual allegations of Count III of the Administrative Complaint were not proved. Customer J.E. (Count IV of the Administrative Complaint). Prior to January 17, 2003, J.E. spoke with Mr. Lieberman by telephone. J.E. explained to Mr. Lieberman that he was interested in purchasing health insurance to replace the Blue Cross/Blue Shield health-care insurance he currently had. On January 17, 2003, J.E. met with Mr. Lieberman (Stipulated Facts) at his home to discuss purchasing health-care insurance. He explained to Mr. Lieberman that he was interested in a policy to replace his current policy with Blue Cross/Blue Shield. J.E. specifically requested a policy that covered physician office visits. Mr. Lieberman, rather than providing insurance coverage which he knew or should have known J.E. was seeking, coverage which included physician office visits, suggested that he purchase the Lieberman Medical Benefits Plan. While Mr. Lieberman attempted to give some limited explanation of his plan to J.E., based upon the manner in which he explained his plan at hearing, it is understandable that J.E. did not understand what he was purchasing, or, more specifically, that the plan, while including some health care coverage, did not include coverage for physician office visits. On January 17, 2003, Mr. Lieberman sold or arranged for the sale to J.E. of the same Plan Products he sold to W.E. described in Finding of Fact 30, supra. (Stipulated Facts). Mr. Lieberman knew or should have known that he was selling J.E. a product which he was not interested in purchasing and that he was not providing him with a significant part of the insurance coverage he was interested in purchasing, coverage for physician office visits. While Mr. Lieberman gave some limited explanation of what the Chamber Card was, he did not fully explain to J.E. that it was not an insurance program, plan, or policy; that it would not pay for physician office visits; or that it only provided some unspecified discount on the costs of physician office visits. Like W.E. and A.H., J.E. also signed the Acknowledgment and Disclaimer and the Acknowledgement and Disclosures quoted, supra, in Finding of Fact 35, and the disclaimer quoted, supra, in Finding of Fact 36. The Acknowledgements and the disclaimer were deficient for the same reasons described in Findings of Fact 35 and 36. Like W.E. and A.H., even though J.E.. issued separate checks made payable to "A.C.B.L." (the American Contract Bridge League), Seabury & Smith (for the Major Medical Insurance Plan), United American (for the Hospital Insurance Plan), and National Medical Services (for the Chamber Card); signed the Acknowledgement & Disclaimer and an Acknowledgement & Disclosures; and signed the disclaimer contained in a form titled "Medical Benefits Plan," J.E., unlike Mr. Lieberman, did not understand that he was purchasing a product which he had not requested and did not want. Having explained to Mr. Lieberman that he wanted a policy that covered physician office visits and not having been told that was not what he was purchasing, he simply relied upon Mr. Lieberman. After enrolling J.E. in the Lieberman Medical Benefits Plan, Mr. Lieberman mailed all the documents which J.E. had signed on January 17, 2003, to him. Some time after receiving the documents concerning the Lieberman Medical Benefits Plan, J.E. cancelled all of the Plan Products. Although there was some language in the Acknowledgement and Disclosures and the form titled "Medical Benefits Plan" signed by J.E. indicating that some part of the Lieberman Medical Benefits Plan was not insurance, due to the ambiguity of the language of the Acknowledgement and the disclaimer, the lack of opportunity to read the documents before he signed them, the other language normally associated with insurance used in the documents, and the lack of coherent explanation provided by Mr. Lieberman, it is found that, as to J.E., Mr. Lieberman: Did not inform him that the Chamber Card was not an insurance program, plan, or policy; "Portrayed" the Chamber Card as an insurance program, plan, or policy; and Sold him products, none of which provided insurance coverage for the cost of physician office visits. The Administrative Complaint. On January 26, 2004, the Department issued a four- count Administrative Complaint against Mr. Lieberman. (Stipulated Facts).7 The Administrative Complaint contains four counts, one each for Mr. Lieberman's association with W.E. (Count I), A.H. (Count II), R.G. (Count III), and J.E. (Count IV). The Administrative Complaint alleges that Mr. Lieberman's conduct with all four individuals violated Section 626.611(6), (7), and (8), Florida Statutes, and Section 626.621(2), Florida Statutes. The Administrative Complaint also alleges that, as to A.H., Mr. Lieberman violated Section 626.621(6), Florida Statutes. In support of the alleged statutory violations, the Department alleged, in part, that with regard to all four individuals: Mr. Lieberman "did not inform [his customers] that The Chamber Card was not an insurance program, plan or policy"; Mr. Liberman "portrayed The Chamber Card as an insurance program, plan or policy"; and That "[n]one of the products you, CHARLES STEVEN LIEBERMAN, sold to [W.E., A.H., R.G., and J.E.] provide insurance coverage for the cost of doctors' visits."
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department finding that Charles Steven Lieberman violated Sections 626.611(7) and (8), Florida Statutes, as alleged in Counts I, II, and IV of the Administrative Code; dismissing Count III of the Administrative Code; and suspending his licenses for a period of 12 months from the date of the final order. DONE AND ENTERED this 31st day of August, 2004, in Tallahassee, Leon County, Florida. LARRY J. SARTIN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 31st day of August, 2004.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: The Department is the state agency responsible for the licensure and discipline of persons holding or those eligible to hold various insurance licenses. At all times material to this case, Respondent was licensed and eligible for licensure in this state as a health insurance agent. For all policies described below, Respondent was eligible to receive a sales commission and a bonus package which provided Respondent incentive to complete sales of insurance policies. At all times material to this case, Respondent acted as a sales agent for the following insurance companies: Diversified Health Services, National States Insurance Company, Penn Treaty, and Transport Life. Respondent sold health insurance policies, Medicare supplements, home nursing-care policies, nursing home policies, and booster plans to supplement additional coverage under Part B of Medicare. On or about April 20, 1988, Respondent went to the home of Martha and Sam Klingensmith in Port St. Lucie, Florida. Respondent's visit was in response to an information lead card that Mrs. Klingensmith had mailed to an insurance company. Mr. Klingensmith had had surgery in January, 1988, on a malignant brain tumor. Mrs. Klingensmith was anxious for her husband to receive the best care possible and hoped to obtain insurance benefits to help with the costs associated with that care. Mrs. Klingensmith told Respondent about her husband, who was too sick to be interviewed by Respondent (he was bedridden in another room). At that time Mrs. Klingensmith advised Respondent that she and her husband had Medicare supplement policies through a group policy from AARP. Respondent did not review that policy. On or about April 20, 1988, Respondent completed insurance applications for Mr. and Mrs. Klingensmith for nursing home insurance policies. The application form provided, in part, the following questions: Is the insurance being applied for intended to replace any accident or sickness insurance, health service or health maintenance contract? * * * Complete the following for each person named above who now has insurance in force or pending: * * * Does any person above have or ever had any of the following: (Underline condition) A. Tumor, cancer, malignancy or growth of any kind? * * * g. Disease of the rectum or intestine, stomach, kidney, prostate, urinary bladder, liver, gall bladder? * * * 7.a. Has any person named above consulted or been treated by any physician or practitioner in the last five years? b. Has any person named above been confined in a hospital in the last five years? * * * 9.a. List conditions for which medication has been taken or doctor consulted within the past six months: * * * 10. If any part of questions 6 or 7 was answered YES give details--otherwise--answer question by stating "NONE" On the application form for Mr. Klingensmith, Respondent wrote the following responses: as to question 4, "No" was entered; as to question 5, "NONE" was entered; as to 6.a. "Yes" was checked; as to questions 7a. and 7b., "Yes" was checked; as to question 9, only medications not conditions were listed; and under question 10, the remaining effects were indicated as "Good Health." The answers given by Respondent to questions 5, 9, and 10 were incorrect and contrary to the information Mrs. Klingensmith had given Respondent. Mrs. Klingensmith signed the application for her husband. On Mrs. Klingensmith's application form completed by Respondent on April 20, 1988, the answer to question 5 was incorrect and contrary to the information Mrs. Klingensmith had given Respondent. On or about May 17, 1988, Respondent returned to the Klingensmith home and completed an application for Mr. Klingensmith for an extended care insurance policy. The application for that policy was identical to the one described above. Respondent completed the form and gave the same responses that are indicated above. Respondent knew that Mr. Klingensmith had the National States policy from April, 1988, and he failed to include that information on the application. Further, since Mr. Klingensmith remained bedridden, the response of "good health" to question 10 continued to be false and contrary to the information supplied by Mrs. Klingensmith. On August 17, 1988, Respondent went to the Klingensmith home and completed two applications for Mr. 5 Klingensmith: one for a Medicare supplement insurance policy and one for a hospital confinement indemnity insurance policy; both to be issued by National States. On September 14, 1988, Respondent went to the Klingensmith home and completed an application for Mr. Klingensmith to receive a medical/surgical insurance policy from National States. That application did not disclose any of the prior policies sold by Respondent, was again signed by Mrs. Klingensmith (her husband continued to be gravely ill), and falsely stated that Mr. Klingensmith was in good health. At all times material to the sales of the five policies described above for Mr. Klingensmith, Respondent knew or should have known that Mr. Klingensmith was terminally ill. Respondent either did not report the information given by Mrs. Klingensmith or chose not to inquire further based upon the answers she gave him. Mr. Klingensmith died, at home, in October, 1988. In connection with the Klingensmith policies Respondent was required to complete a certification form pursuant to Rule 4-46.004, Florida Administrative Code. That form is to be signed by the insurance applicant. Without Mrs. Klingensmith's prior consent or knowledge, Respondent executed certification forms on behalf of the Klingensmiths. In August, 1988, Mrs. Klingensmith asked Respondent to examine a cancer insurance policy issued by Bankers Fidelity Life Insurance Company covering the Klingensmiths. Respondent failed to disclose that policy on the applications completed in August and September, 1988. Further, Respondent failed to accurately disclose the benefits of that policy to Mrs. Klingensmith. The cancer policy would provide additional benefits which the Respondent should have known could be helpful since Mr. Klingensmith had been diagnosed with a malignant tumor. In September, 1988, Respondent sold a medical/surgical policy to Charles Areni. Subsequently, in April, 1989, Mr. Areni asked Respondent to assist him in the completion of claims forms. Respondent went to Mr. Areni's home, helped him complete the claims forms, and sold him a National States Medicare supplement insurance policy. At that time, Respondent knew Mr. Areni had been hospitalized since a cancerous prostate problem had reoccurred, and that Mr. Areni was taking medication for pain associated with his most recent surgery. The application completed by Respondent for Mr. Areni was the same form described in paragraph 6 above. Respondent submitted the following false responses to the questions posed by that questionnaire: in response to question 5, "None" was entered; to question 6a. Respondent checked "No" when he knew or should have known (based upon Mr. Areni's answers) that the prostate condition was cancerous; and "None" to question 9. Further, Respondent provided that Mr. Areni was in good health in response to question 10. At that time Mr. Areni was not in good health, and, while his prognosis was uncertain, it was apparent that he was in poor health. On or about January 19, 1989, Respondent went to the home of Ruth Stone in Fort Pierce, Florida. That visit was 7 in response to Mrs. Stone's mailed in lead card. At that time, Mrs. Stone was insured by American Life Assurance Corporation with whom she had a Medicare supplement policy. Mrs. Stone told Respondent about her policy but did not show it to him. Without reviewing the existing policy, Respondent advised Mrs. Stone that a policy he could offer her through National States would be a better buy. Based upon Respondent's representations, Mrs. Stone elected to apply for a policy through Respondent. To that end, Respondent completed the application described in paragraph 6 for Mrs. Stone. Respondent answered question 5 incorrectly since he knew that Mrs. Stone had a current policy. Later, after speaking with her other agent, Mrs. Stone cancelled the National States policy by stopping payment on her check. She later gave a sworn statement to the Department. After Respondent found out about Mrs. Stone's complaint to the Department, he asked her to change her statement since he might lose his job. On or about February 17, 1988, Respondent went to the home of Edward and Julia Whitham in Fort Pierce, Florida. Respondent sold the Whithams Medicare supplement policies to be issued by National States. The policies sold to the Whithams did not cover dental or optical services. At the time they purchased the policies, the Whithams were under the impression that optical and dental services were covered. Respondent signed the certifications required by Rule 4-46.004, Florida Administrative Code, for the Whithams without their prior consent or approval.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Insurance, Office of the Treasurer enter a final order revoking the Respondent's health care insurance license. DONE and ENTERED this 7th day of August, 1990, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of August, 1990. COPIES FURNISHED: Hon. Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Don Dowdell General Counsel Department of Insurance The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Nancy S. Isenberg and Dennis Silverman Department of Insurance Division of Legal Services Room 412, Larson Building Tallahassee, Florida 32399-0300 Kelli Hanley Crabb Battaglia, Ross, Hastings & Dicus, P.A. 980 Tyrone Boulevard St. Petersburg, Florida 3371014 APPENDIX TO CASE NO. 89-4986 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE DEPARTMENT: Paragraphs 1 through 35 are accepted. Paragraph 36 is rejected as irrelevant. Paragraph 37 is rejected as contrary to the weight of the evidence. Paragraph 38 is accepted. Paragraphs 39 through 48 are accepted. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: Paragraph 1 is accepted. Paragraph 2 is accepted. Paragraph 3 is accepted. Paragraph 4 is rejected as contrary to the weight of credible evidence. Paragraph 5 is rejected as contrary to the weight of the evidence. Paragraph 6 is accepted as to the fact that the Whithams purchased policies from Respondent; otherwise, rejected as irrelevant. Paragraph 7 is rejected as unsupported by the record. Paragraph 8 is accepted. With regard to paragraph 9, it is accepted that the Whithams asked that their policies be reinstated; otherwise rejected as unsupported by the record or irrelevant. Paragraph 10 is rejected as unsupported by the record. The first sentence of paragraph 11 is accepted. The remainder of the paragraph is rejected as contrary to the weight of the evidence. Paragraph 12 is accepted but is irrelevant. Paragraph 13 is accepted but is irrelevant. Paragraph 14 is accepted as to their complaint against the company but is irrelevant. The first sentence of paragraph 15 is accepted. The remainder of the paragraph is accepted with the notation that Mrs. Stone did advise Respondent that she had a policy in effect. She was shopping for a cheaper policy that offered as good or better benefits. Respondent made no effort to review Mrs. Stone's policy. Paragraph 16 is rejected as irrelevant. With regard to paragraph 17, it is accepted that based upon Respondent's representations, Mrs. Stone purchased a national States policy; otherwise rejected as irrelevant. Paragraph 18 is rejected as contrary to the weight of the evidence. With regard to paragraph 19, it is accepted that Mrs. Stone spoke with her agent and decided to stop payment on the check to National States; otherwise rejected as irrelevant. Paragraph 20 is not supported by the record and is, therefore, rejected. Paragraph 21 is rejected as-irrelevant. Paragraph 22 is accepted. With regard to paragraph 23, it is accepted that the application disclosed a prostate condition; otherwise rejected as not supported by the record. Paragraph 24 is accepted. Paragraph 25 is accepted. Paragraph 26 is accepted with the notation that Respondent did not complete the application with all of the pertinent information that Mr. Areni gave him; consequently, Respondent was attempting to have the policy issued when he knew or should have known that Mr. Areni's cancer would preclude him from being eligible. Paragraph 27 is rejected as contrary to the weight of the evidence; see the notation to paragraph 26 above. Paragraph 28 is rejected as irrelevant. Paragraphs 29 through 31 are accepted. The first sentence of paragraph 32 is accepted. With regard to the second sentence, it is accepted that Respondent was not supposed to write insurance for cancer patients, however, the overwhelming evidence in this case established that Respondent did just that. The first sentence of paragraph 33 is accepted. It is further accepted that Mrs. Klingensmith executed the applications on behalf of herself and her husband; otherwise the paragraph is rejected as either unsupported by the record or contrary to the weight of the evidence. The first sentence of paragraph 34 is accepted. The remainder is rejected as contrary to the weight of the evidence since the comment was only made in relation to Mr. Klingensmith's day-to-day behavior. He undoubtedly had some good days relative to his more severe days. It is further concluded that Mr. Klingensmith was never seen by any visiting insurance person other than as a bedridden person. Mr. Bessimer's comment that Mr. Klingensmith could have been napping was not credible in light of the total circumstances known to Respondent. Paragraph 35 is accepted but is irrelevant. The second sentence of paragraph 36 is accepted. With regard to the first sentence of that paragraph, it is rejected as contrary to the weight of the evidence. Mrs. Klingensmith's account of the conversation has been deemed more credible than the Respondent's. Paragraphs 37, 38, and the first sentence of paragraph 39 are accepted. With regard to the remainder of paragraph 39, it is rejected as contrary to the weight of the credible evidence. Paragraph 40 is accepted but is irrelevant.
The Issue The basic issue in this case concerns the scope of the coverage provided by the State of Florida Employees Group Health Self Insurance Plan ("State Plan"). The Petitioner incurred extensive expenses for medical treatment, some of which have been paid by the State Plan. The Petitioner contends that under the State Plan, specifically under the "extended coverage" portion of the State Plan, she is entitled to more than has already been paid. The Respondent contends that the correct amount has already been paid.
Findings Of Fact The State of Florida makes available to its officers and employees several group insurance programs. With regard to group health insurance, the available programs include the State of Florida Employees Group Health Self Insurance Plan ("State Plan") and a number of different HMO's, depending upon the county in which an employee resides. Upon commencement of employment, State employees may elect to participate in the State Plan, may elect to join one of the HMO's in their geographical region, or may elect not to participate in any of the voluntary group insurance programs offered by the State. Employees who choose to participate in the State Plan are charged a premium which is normally deducted from their paychecks. The State also contributes regular amounts to pay a portion of the premium for each participating employee. Roberta Rubin has been an employee of the State of Florida for twelve years. She is currently employed as a judicial assistant to Circuit Court Judge George Orr. Roberta Rubin is an insured under the State of Florida Employees Group Health Self Insurance Plan ("State Plan"). The basic terms and conditions of the State Plan are set forth in a document titled State of Florida Employees Group Health Self Insurance Plan Benefit Document ("Benefit Document"). The version of the Benefit Document applicable to this case is the version amended effective July 1, 1988. The Department of Administration, Division of State Employees' Insurance, distributes a brochure titled Group Health Self Insurance Plan Benefits which describes the benefits under the State Plan and is intended to assist State employees in deciding which health insurance plan to select. The Department of Administration, Division of State Employees' Insurance, also distributes a brochure titled Group Health Self Insurance Plan Brochure ("Plan Brochure") to individuals enrolled for coverage under the State Plan. At page 1, the Plan Brochure describes the State Plan as follows: "This is a self-insured group health insurance program belonging to those State officers, employees, retirees, and their eligible dependents who elect to participate in the Plan." At the first unnumbered page inside the front cover of the Plan Brochure is a statement of the brochure's purpose, which includes the following: This brochure is not a contract since it does not include all of the provisions, definitions, benefits, exclusions and limitations of the State Self Insured Health Plan's Benefit Document, a copy of which is on file in your agency's personnel office. The purpose of this brochure is to furnish State officers and employees with a summary of the benefits available under the State Self Insured Health Plan. It is hoped that this brochure will answer any questions that might arise about the Plan. The State of Florida Employees Group Health Self Insurance Plan is administered by Blue Cross Blue Shield of Florida, Inc. In December of 1990, the Petitioner, Roberta Rubin, was diagnosed as having cervical cancer. The prognosis and recommended treatment provided by her treating physicians in Miami were not acceptable to Petitioner and she sought another opinion. Petitioner was referred to and ultimately treated by Dr. Neil Rosenshein, a gynecological oncologist at Johns Hopkins Hospital in Baltimore, Maryland. Dr. Rosenshein and Johns Hopkins Hospital are both "non-preferred patient care providers" within the meaning of the definitions in the Benefit Document. Dr. Rosenshein performed the following surgical procedures: radical abdominal hysterectomy; radical pelvic node dissection; bilateral commoniliac node dissection; and periaortic node dissection. The Physician's Procedural Terminology published by the American Medical Association ("PPT Code Book") assigns procedure codes to various surgical procedures that are utilized by billing physicians and various insurers. The PPT Code Book does not contain procedure codes that accurately reflect the latest technology or the complexity, intricacy, or radical nature of the procedures being performed in gynecological cancer surgery. Since no single or multiple procedure codes accurately characterized the surgical procedures performed by Dr. Rosenshein, his bill was submitted to Blue Cross Blue Shield of Florida, Inc., reflecting only one procedure code, 58210, with amodifier, "-22." The modifier "-22" is described in the 1986 version of the Approved Fee Schedule, of the State Plan, as follows: -22 UNUSUAL SERVICES: WHEN THE SERVICES PROVIDED ARE GREATER THAN THOSE USUALLY REQUIRED FOR THE LISTED PROCEDURE, IDENTIFY BY ADDING THIS MODIFIER -22 TO THE USUAL PROCEDURE NUMBER. LIST MODIFIED VALUE. REPORT MAY BE REQUIRED. However, the Benefit Document, as amended effective July 1, 1988, does not provide for or allow the use of the modifier "-22" in determining the amount of payment due on a claim even when the services provided are greater than those usually required for the listed procedure. The modifier "-22" is used by Blue Cross Blue Shield in the administration of other group health insurance plans. The claim form submitted by Dr. Rosenshein went through a level three review by Blue Cross Blue Shield of Florida, Inc., and in response to a request for additional information, Dr. Rosenshein submitted a letter explaining the nature of the procedures performed and a copy of the operative report. Following its review, Blue Cross Blue Shield of Florida, Inc., allowed payment only for the approved fee schedule amount for a single procedure code 58210, or $3,726.00. Dr. Rosenshein's uncontradicted testimony established that the most accurate representation of the procedures he performed would require the following three procedure codes: Code # Description 58210 limited periaortic lymphadenectomy 49201 extensive excision or destruction by any method of intra-abdominal retroperitoneal tumors or cysts or endometriomas 38780 retroperitoneal transabdominal lymphade- nectomy, extensive, including pelvic, aortic and renal nodes. The approved fee schedule for these procedure codes allows the following amounts: Code # Amounts 58210 $3,726.00 49201 2,683.00 38780 2,764.00 Petitioner has incurred the following bills in 1991 which are in excess of the applicable deductible and $1,500.00 out-of-pocket amount provided for under the Extended Coverage provisions of the benefit Document: Provider Amount JHU Department of Radiology $ 159.30 JHU Pain Management Anesthesia 698.10 JHU Anesthesiology 507.70 John Hopkins Hospital Outpatient 50.00 JHU Department of Oncology 503.50 JHU Cardiology 90.00 JHU Pathology 230.00 Dr. Neil Rosenshein 9,904.50 Total $12,143.10 The amounts reflected above are exclusive of benefits already paid by Blue Cross Blue Shield of Florida, Inc., and other insurers and do not include any charges for room and board services or ambulance services. Section I of the Benefit Document contains definitions of numerous terms, including the following: D. "AFS" means the "Approved Fee Schedule," as approved or amended by the Department of Administration. "Covered provider" shall mean a person, institution, or facility as defined herein and who furnishes a covered service or supply. "Covered service or supply" shall mean a medically necessary service or supply furnished by a covered provider and which is covered by the Plan. Q. "Deductible" shall mean the dollar amount of covered services and supplies which each insured is required to pay before benefits are payable by the Plan. BA. "Preferred Patient Care Fee Schedule" or "PPC Fee Schedule" means a list of allowances for each service which has been set and agreed to by the preferred patient care providers. BB. "Preferred Patient Care Provider" or "PPC Provider" means a physician or hospital which has an agreement with the Administrator to provide health care services at set fees to individuals insured under the Plan. A non-preferred patient care provider does not have such an agreement. BJ. "Reasonable Charge" shall mean the following: an average of the amounts charged by the non-preferred patient care hospital, skilled nursing facility, hospice facility or birth center facility for services to individuals using such hospital or facility, as determined by the Administrator; or the charge set forth in the AFS for covered medical-surgical services. BS. "Usual, Customary and Reasonable" or "UCR" means a schedule of fees for covered services in a geographical area which is determined by the Administrator based upon the normal amount charged by the provider in his/her practice, (b) the range of fees for most providers in an area for the same service, and (c) any unusual circumstances or complications requiring additional time, skills and experience by the provider which can be documented. Section II of the Benefit Document contains the provisions regarding coverage for hospital and other facility services. That section reads as follows, in pertinent part: The following services shall be covered when ordered by a physician a nd are medically necessary for the treatment of an insured as a result of a covered accident or illness. Non-Preferred Patient Care Hospital Inpatient Room and Board Services: 1. When confined to a semi-private or private room or ward, 80% of the hospital's average semi-private room rate shall be paid but not to exceed an actual payment of one- hundred and fifty-two ($152.00) per day. Other Covered Non-Preferred Patient Care Inpatient Services: 80% of the actual charge for the following services will be paid by the Plan: Use of operating room, labor room, delivery room and recovery room; All drugs and medicines used by the patient while confined in the hospital, provided such drugs and medicines are listed in "New and Non-Official Remedies" or the "United States Pharmacopoeia"; Solutions (including glucose); Dressings; Anesthesia and related supplies; Oxygen therapy; Transfusion supplies and services including blood, blood plasma and serum albumin, if not replaced; Laboratory services; Electrocardiograms; Basal metabolism examinations; X-ray, including therapy; Electroencephalograms; Diathermy and physical therapy. Covered Outpatient Hospital, Ambulatory Surgical Center or Outpatient Health Care Facility Services: Ninety percent (90%) of the reasonable charge shall be paid for covered outpatient services provided by a Non-PPC provider. When such services are provided by a PPC provider, the plan shall pay ninety percent (90%) of the charge subject to the PPC fee schedule limits. Covered Clinical Laboratory Services: Ninety percent (90%) of the charge for covered clinical laboratory services shall be paid by the Plan not to exceed the maximum amount permitted under the AFS. Section III of the Benefit Document contains the provisions regarding coverage for medical-surgical services. That section reads as follows, in pertinent part: A. Ninety percent (90%) of the charge for medically necessary inpatient/outpatient services provided to an insured by a non- preferred patient care physician, physical therapist or nurse anesthetist for the treatment of the insured as a result of a covered accident or illness shall be paid by the Plan, subject to the provisions of Section VI and Section XXIII; however, such payment shall not exceed the maximum amount permitted under the AFS. C. If a covered procedure does not have a specified fee listed in the AFS, pricing will be performed by the Administrator in accordance with its normal procedures. Section V of the Benefit Document, titled "Extended Coverage," contains the provisions regarding what is commonly known as the "stop loss" feature of the plan. That section reads as follows, in pertinent part: If under individual or family coverage, the out-of-pocket expenses of an insured for covered services under Section II., Section III., Section IV and Section XXV amount to one thousand five hundred dollars ($1500.00) during a calendar year, all further covered charges for such services incurred by the insured during the remainder of the calendar year shall be paid by the Plan at one hundred percent (100%), subject to the lifetime maximum and the maximum payments listed in paragraph C. below. If under family coverage, the out-of- pocket expenses of two or more insureds for covered services under Section II., Section III., Section IV. and Section XXV. amount to three thousand dollars ($3000.00) during a calendar year, all further covered charges for such services incurred by any insured during the remainder of the calendar year shall be paid at one hundred percent (100%), subject to the lifetime maximum and the maximum payments listed in paragraph C. below. Maximum payments subject to Subsections A. and B. above shall apply only to room and board services under Subsection II A., Subsection II E., Subsection II G., and ambulance services under Section IV, as follows: One hundred and ninety dollars ($190.00) per day for hospital room and board; Ninety-five dollars ($95.00) per day for room and board in a skilled nursing facility; Three hundred and eighty dollars ($380.00) per day for an intensive care unit; Two hundred and eighty-five dollars ($285.00) per day for a progressive care unit; One hundred and twenty-five dollars ($125.00) per use for ambulance service; One thousand dollars ($1000.00) for ambulance transportation of a newborn child; One hundred and ninety dollars ($190) per day for room and board in a specialty institution or residential facility. Charges for covered services and supplies applicable to the deductible(s) under the Plan shall not be considered an out-of-pocket expense under the provisions of Section V. The brochure titled Group Health Self Insurance Plan Brochure contains the following language at page seven regarding the stop loss feature of the plan: Maximum Out-Of-Pocket Expense If, during a calendar year, the out-of-pocket expenses for one person insured under individual or family coverage amount to $1,500, or $3,000 for two or more persons insured under family coverage, all further charges will be paid at 100%, subject to the lifetime maximum, any allowance limits for room and board while confined to Non-PPC facilities, and ambulance transportation allowance limits for newborn children. This provision applies to all covered services except Hospice services; however, charges applicable to the deductible shall not be considered an out-of-pocket expense. The language of Section V of the Benefit Document regarding "Extended Coverage" is ambiguous with regard to the scope of the coverage provided by that section of the benefit document. The language of Section V of the Benefit Document regarding "Extended Coverage" also conflicts with the language at page seven of the Plan Brochure regarding "Maximum Out-Of-Pocket Expense. /1
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the Department of Administration issue a Final Order to the following effect: (a) concluding that the "Extended Coverage" language of Section V of the Benefit Document is ambiguous; (b) concluding that the "Extended Coverage" language of Section V of the Benefit Document is in conflict with the language at page 7 of the Plan Brochure under the caption "Maximum Out-Of-Pocket Expense;" (c) concluding that after the Petitioner's out-of- pocket expenses for covered services reached $1,500, she was entitled to have "all further charges" for covered services paid at 100% of the amount of the charges except as specifically limited in paragraph C. of Section V of the Benefit Document; and (d) providing for payment in the total amount of $12,143.10 to the Petitioner or to the providers listed in paragraph 15 of the Findings of Fact. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 22 of May 1992. MICHAEL M. PARRISH, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SC 278-9675 Filed with the Clerk of the Division of Administrative Hearings this 22 day of May 1992.
The Issue Should discipline be imposed by Petitioner against Respondent's insurance agent licenses as, Life (2-16), Life and Health (2-18), and Health (2-40), held pursuant to Chapter 626, Florida Statutes?
Findings Of Fact The Parties Petitioner was created in accordance with Section 20.13, Florida Statutes. Petitioner has been conferred general power by the Legislature, to regulate the insurance industry in Florida, in accordance with Section 624.307, Florida Statutes. Chapter 626, Florida Statutes, grants Petitioner the authority to license and discipline insurance agents doing business in Florida. Petitioner issued Respondent license No. A140590. At times relevant to the inquiry, Respondent has been licensed in Florida as agent for insurance in Life (2-16), and Life and Health (2-18). On December 2, 1992, Respondent had been issued a Health (2-40) license, but that license is no longer valid having been voluntarily cancelled. The cancellation occurred at a time previous to December 18, 2003, when a license history document was prepared, Petitioner's Exhibit numbered 1. Respondent conducts business as an insurance agent under the name Business Insurance Cafeteria. The business is located at 828 Hamilton Avenue, St. Augustine, Florida. Respondent has been licensed as an insurance agent for over 50 years, 44 years of which have been in Florida. Acting as an insurance agent has been Respondent's principal occupation. During that time the emphasis in his business has been on health insurance. TRG Affiliation In April 2001, an acquaintance and insurance agent Ellen Averill introduced Respondent to Robert Trueblood, Sr. Respondent understood that Mr. Trueblood was the Managing General Agent for TRG. Mr. Trueblood, at the time, was from Hobe Sound, Florida. Mr. Trueblood gave information to Respondent about TRG pertaining to its involvement in the insurance business. Mr. Trueblood told Respondent that individuals within TRG were personal friends of Mr. Trueblood. In turn, Respondent made a call to Petitioner at the end of April or first part of May 2001. Someone that he spoke to, whose identity and position within the Petitioner's hierarchy was not established in the record, made a comment which cannot be established as fact given its hearsay nature. Nonetheless, following this conversation, Respondent became affiliated with the TRG organization which Respondent understood to be an ERISA program, not subject to Petitioner's oversight. At that time, Respondent's knowledge of what an ERISA program entailed was based upon reading he had done in the past. Respondent was of the impression that the ERISA program was under the auspices of the federal government, as opposed to the state government. Respondent had never taken specific courses concerning the ERISA program before his engagement with TRG. Respondent's involvement with TRG was his first effort to market what he considered to be ERISA program insurance. When Respondent commenced his participation with TRG, he believed that an ERISA program was instituted by a document filed with the Department of Labor outlining insurance benefits and that TRG had put up reserves associated with the ERISA program. Respondent did not obtain anything in writing from the Department of Labor concerning TRG as an ERISA program. To begin with, Respondent believed that ERISAs had to involve 51 or more lives in being before coverage could be obtained. Again, this was not a market that Respondent had worked in but he understood that ERISAs involved coverage of that number of individuals. From conversations with Mr. Trueblood and Tom Dougherty, another managing General Agent for TRG, of Cocoa Beach, Florida, Respondent became persuaded that ERISAs could be marketed to companies with a single life being insured or two to three lives in a small group market. Respondent relied on Mr. Trueblood when Mr. Trueblood told Respondent that ERISA, as a federal program did not have to be licensed by the state. Mr. Dougherty made a similar comment to Respondent. Ms. Averill also commented to Respondent concerning her impression about TRG as an ERISA program. From this record, Respondent was not officially told by persons within the Petitioner's agency, that the TRG program was an ERISA program that did not have to be licensed in Florida. TRG provided Respondent marketing material. Respondent was impressed with the "very professional" appearance of that material. Respondent's Exhibit numbered 1 admitted into evidence is constituted of material provided to Respondent by TRG. It refers to the TRG health plan under "the Redwood Group." It refers to marketing under an organization identified as Premier Financial Group USA, Inc. It describes PPO networks available with the TRG products. The document refers to the TRG/USA health plan (the Redwood Group, L.L.C./USA Services Group, Inc.) and various versions of employer health and welfare benefit plans and a client fee schedule effective May 1, 2001, for enrollees in the 80/60 plan and 90/70 plan. Participant co- pays for physician office visits are related. Those plans identified in the material describe the amount of deductibles according to age groups and participation by members and additional family participants. The TRG document speaks of benefits attributable to the 80/60 and 90/70 health plans. This information contained comments about the Redwood Companies- Corporate Overview. Respondent's Exhibit numbered 1 comments upon the ERISA program and the provision of health benefits for employees through self-funded employee health and welfare benefit plans as a means, according to the document, to exempt those plans from state insurance regulation. Respondent's Exhibit numbered 1 touts what it claims are savings to be derived compared to current health insurance plans held by prospective purchasers. Respondent's Exhibit numbered 1 contains an associate application agreement setting forth policies and procedures that Respondent would be obligated to meet as an associate with TRG acting as an independent contractor. Respondent's Exhibit numbered 1 contains an application format for prospective enrollees in the TRG preferred provider plans to execute in applying for coverage. Respondent's Exhibit numbered 1 refers to Robert W. Trueblood, Sr., as being affiliated with Premier Financial Group, USA Inc., under the TRG banner. Mr. Trueblood sent Respondent's Exhibit numbered 1 to Respondent. Respondent began his contacts with TRG in May 2001 and wrote his first enrollment contract in association with TRG in August or September 2001. Beyond that time, Respondent was notified on November 27, 2001, that effective November 30, 2001, a cease and desist order had been issued against TRG's offering its health coverage in Florida. The commissions earned by Respondent in selling the TRG health insurance product ranged from five to seven percent. Respondent earned less than $1,000.00 in total commissions when selling TRG health insurance products. The persons who participated with TRG in its preferred provider plan were referred to the claims administrator of USA Services. Participants in the TRG preferred provider plan sold by Respondent received information outlining the benefits. Participants received medical I.D. cards. This information was provided directly to the participants. Respondent was aware of the information provided to the participants. An example of this information is set out in Respondent's Exhibit numbered 2. In offering the TRG health coverage, Respondent told his customers that this plan was not under the purview of the Department of Insurance in Florida, that this was an ERISA program. Respondent told his customers that any problems experienced with the program could be addressed through resort to the federal court. Respondent did remind the customers that making the Florida Department of Insurance aware of their claims could create a record in case they went to federal court. Respondent is familiar with the prohibition against acting as an insurance agent for companies not authorized to transact business in Florida. But he held to the opinion that TRG was an ERISA program under the federal auspices and not subject to Petitioner's control. At the inception, Respondent believed that offering the TRG health insurance coverage would be an acceptable choice. That proved not to be true. When it was discovered that TRG would not pay claims related to health coverage for policies Respondent sold to his customers, Respondent made an attempt to find replacement coverage. To this end, Respondent had received information reflected in Respondent's Exhibit numbered 5. The document discussed the prospect that insurance would be provided from the Clarendon Insurance Company (Clarendon), using the provider Network Beechstreet, with Baftal/Quik Quote Insurance Brokers in Plantation, Florida, being involved in the process to substitute coverage for TRG. Baftal is the shorthand reference for Bertany Association for Travel and Leisure, Inc. Baftal is an insurance agency. Respondent made some explanation to his customers insured through TRG of the prospect of using Clarendon to take over from TRG, which had not honored any of the claims for reimbursement made by Respondent's customers. A copy of this December 28, 2001, correspondence from Respondent to TRG's insureds who had been sold policies through Respondent, is reflected in Respondent's Exhibit numbered 6. As described in Respondent's Exhibit numbered 7, Baftal sent information concerning health care coverage to business owners, to include Respondent's customers, as described in the Amended Administrative Complaint. This correspondence indicated that the benefit plan would become effective December 1, 2001, upon condition that the insured meet applicable underwriting standards. This communication was made following receipt of premiums paid by the insured. Reimbursement for claims were to be processed through Advancement Administration in Maitland, Florida. Baftal did not assume the claims that had not been honored by TRG, and Clarendon did not become the insurer for those customers. Baftal did not follow through with the offer to provide health benefits to Respondent's customers who had begun with TRG. On February 11, 2002, as evidenced by Respondent's Exhibit numbered 8, Baftal wrote the customers to advise that health benefits would not be provided. That exhibit mentions American Benefit Plans through a Mr. David Neal and some intention for Mr. Neal's organization to provide a benefits program, including insurance through Clarendon, as administered through Advanced Administration. The Baftal communication goes on to say that Baftal had learned that Clarendon was not an insurer on the program, that the only insurer on the program was an offshore insurance company about which Baftal had not received credible information. The letter remarks that premiums paid to Baftal by the customers were being returned. On April 4, 2002, as related in Respondent's Exhibit numbered 9, TRG wrote to persons who were identified as health plan participants, to include Respondent's customers who are the subject of the Amended Administrative Complaint. The letter stated that due to a problem with USA Services Group, the claims administrator on November 30, 2001, when the TRG plan ended, claims were not being paid. The correspondence remarks about difficulties with USA Services experienced by TRG, promising that TRG would fulfill obligations to the customers who were participants in the health plan. Contrary to this promise, TRG has not honored claims for those customers who are the subject of the Amended Administrative Complaint. On December 12, 2001, as reflected in Respondent's Exhibit numbered 4, Petitioner had written consumers who had enrolled in the TRG health plan to advise that the Petitioner did not consider the TRG health plan to be an ERISA program. Under the circumstances, the correspondence indicated that TRG should have sought authorization from Petitioner to sell health plans in Florida, which had not been done. The correspondence refers to some acknowledgement by TRG that it was not an ERISA program and needed to be licensed in Florida to conduct business. The correspondence advises the consumer to cease payment of any further premiums to TRG, to include the cancellation of automatic bank drafts for payment of premiums. The correspondence advises the consumer to obtain replacement insurance through Florida licensed insurance companies or HMOs. The letter goes on to remind the consumer of certain plans that were not licensed in Florida to conduct business because they were perceived to be illegitimate companies. The communication urged the consumer not to enroll in those health insurance plans. Respondent was made aware of this communication. Count I: Vicki Brown Vicki Brown has a business known as Rainbows End Ranch located in St. Johns County, Florida. This is a one-person business involving boarding and training of horses. Ms. Brown was interested in obtaining permanent health insurance, in that her COBRA policy was expiring. As a consequence, she was referred to Respondent by a friend. Respondent met Ms. Brown at her place of business. She explained to him her health insurance needs. Respondent suggested obtaining health insurance through TRG. Ms. Brown agreed. Ms. Brown paid $165.00 to TRG by check to cover the premium for September 2001. Two additional amounts of $165.00 were withdrawn from her checking account to pay premiums to TRG for the months that followed. Subsequently, Ms. Brown received Petitioner's December 12, 2001, letter informing her that TRG was not allowed to conduct business in Florida, Petitioner's Exhibit numbered Beyond that point, Ms. Brown had difficulties in her attempt to be reimbursed for her medical treatment, presumably covered by the TRG plan, by seeking reimbursement through another insurance firm other than by TRG. That process was pursued through Baftal in relation to insurance offered by Clarendon. Ms. Brown made Respondent aware that she had problems with reimbursement and of the receipt of Petitioner's letter. Respondent told her not to worry about the situation, that things were going to be taken care of by Clarendon taking over where TRG left off. Ms. Brown received Respondent's form correspondence dated December 28, 2001, explaining the switch from TRG to Clarendon, Petitioner's Exhibit numbered 6. Ms. Brown also received information from Advancement Administration concerning Clarendon as the insurance company, Beechstreet as the provider network, mentioning Baftal/Quik Quote Insurance as brokers, Petitioner's Exhibit numbered 7. Following her difficulties with TRG, on January 2, 2002, Ms. Brown wrote a check to the Baftal Escrow Account in the amount of $513.40 for premiums in relation to Clarendon. As can be seen, the payment to Clarendon represented an increase in premium compared to TRG. The check for $513.40 had been written out to LPI Clarendon and changed by Respondent to reflect the Baftal Escrow Account. In January 2002, Ms. Brown called Respondent and was told that the paperwork he was filling out was wrong and that he needed to complete new forms for Baftal "Insurance Brokers." According to Respondent, that explained why the coverage through Baftal had not gone into effect. Ms. Brown had received Petitioner's Exhibit numbered 11, the communication from Baftal calling for additional information as a prerequisite to obtaining insurance benefits effective December 1, 2001. Information provided in the document concerning issues related to her coverage was not useful to Ms. Brown when she made inquiry consistent with the instructions contained in the document. Concerning her claims for reimbursement, Ms. Brown had a health problem with her throat. In addressing the condition, she was told by her primary care doctor, that when trying to arrange for a specialist to attend her care through the Beechstreet Provider Network, which was part of the health care offered through the Baftal Agency, it was reported that Beechstreet was bankrupt. Then Ms. Brown called Respondent to ask his advice. Respondent told her he was not sure how to respond "right now things are in a haywire." Beyond that point Ms. Brown found out that Clarendon, part of the Baftal arrangement was not going to insure her business. In particular, Ms. Brown received the February 11, 2002, communication from Baftal commenting that insurance would not be provided through Baftal, remarking that Clarendon was not an insurer. This communication is Petitioner's Exhibit numbered 12. After the TRG and Baftal experiences, Ms. Brown tried to be placed on her husband's health insurance policy but had trouble getting a certificate to allow her to obtain that coverage. This was in relation to the need for the existence of continuing coverage before being placed on the husband's policy. Fortunately, Ms. Brown was eventually able to get insurance through her husband's policy. Ms. Brown was dismayed by the difficulty experienced in obtaining health insurance when she discovered that TRG and Baftal would not meet her health insurance needs. From the evidence, it has been determined that the TRG plan purchased by Ms. Brown was the 80/60 plan with the $1,000.00 deductible. Although Ms. Brown testified that her medical bills in the period in question would total close to $1,000.00, the evidence found in Petitioner's Exhibit numbered 8, constituted of medical bills around that time do not approximate than amount. Ms. Brown had received a TRG benefit handbook and membership card, Petitioner's Exhibits numbered 9 and 10, associated with her participation in the 80/60 plan with a $1000.00 deductible and co-pay of $10.00 for a physician office visit and $20.00 for a specialist office visit. In summary, none of the companies from whom Ms. Brown purchased insurance through Respondent, commencing with TRG, have paid for any of her claims for reimbursement for medical care during the relevant time period. In addition to not receiving a reimbursement for premiums paid to TRG, Ms. Brown did not receive the return of her premium paid to Baftal either. Count II: Alicia Moore Alicia Moore at one time was employed by Respondent. The position Alicia Moore held with Respondent's insurance agency was that of general office clerk. Ms. Moore has never been licensed in any capacity by Petitioner, related to the sale of insurance and has not taken courses to educate herself about the insurance business. In addition to her employment with Respondent, she purchased health insurance through Respondent with TRG around September 2001. Ms. Moore purchased the TRG health insurance policy in the interest of her husband's subchapter S corporation, small business. Her husband's name is Randy Moore. The name of the company operated by the husband is M-3 Enterprises, Inc. The husband's company has one employee, Randy Moore. The Moores resided in St. Augustine, Florida, at times relevant to the inquiry. The husband's business had been insured for health coverage by Humana, until Humana determined that it was not willing to provide health insurance for the company and the Moores decided that the individual policies offered by Humana in substitution for the group policy were too expensive. The Moores chose TRG for health insurance after Respondent had discussed several health insurance plans including individual or group policies. The reason for the choice was the premium price. On September 19, 2001, Randy Moore paid $434.00 for the health insurance premium to Redwood Group, in the interest of obtaining health insurance from TRG. On November 2, 2001, an additional $434.00 was debited from the checking account for M-3 Enterprises, to TRG for premiums related to the health insurance coverage. Ms. Moore recalls Respondent telling her that the TRG health plan was an ERISA plan but she has no knowledge about ERISA plans being regulated under federal law. In that connection, Ms. Moore commented in a statement given by affidavit, that Respondent told her that TRG was not regulated by Petitioner. Respondent explained to Ms. Moore that the premium payments to TRG were lower in costs because TRG was an ERISA program. TRG sent correspondence to the Moores as participants in the health plan. This is found as Petitioner's Exhibit numbered 15. It enclosed a membership issued to Randy Moore setting forth the $10.00 co-pay for a physician visit, $20.00 co-pay for a specialist office visit, and $50.00 co-pay for emergency room visits associated with the participation in Plan 8033. The nature of the plan that the Moores had was a member- plus family. The cover letter listed the telephone number for the claims administrator USA Services to address claims or customer services questions. Ms. Moore also received a packet from TRG explaining the process of filing claims for health care. After obtaining the TRG health coverage, Ms. Moore and her son received treatment for medical conditions contemplated under the terms in the TRG plan. Notwithstanding the submission of information for reimbursement related to the charges, the charges were not paid under the TRG plan. The total of these claims was approximately $727.00. That $727.00 was less co- payments already made for the medical services. Ms. Moore made the Respondent aware that TRG was not reimbursing her for medical bills. Respondent gave Ms. Moore the telephone number for Tom Dougherty, Managing General Agent for TRG, expecting Mr. Dougherty to be able to assist Ms. Moore in dealing with outstanding medical bills. Ms. Moore called Mr. Dougherty several times, but this did not lead to the payment of the medical bills. Ms. Moore also sent TRG a certified letter in August 2002 concerning bills outstanding since October 2001, attaching the bills and information concerning payment of premiums for the coverage. This is reflected in Petitioner's Exhibit numbered 18. Petitioner's Exhibit numbered 21 is a compilation of information concerning the outstanding medical bills, and a statement from Medical Accounts Services, Inc. (Medical Accounts) concerning a current balance on June 17, 2002, of $229.00. The Moores had to make an arrangement to repay the money which was being collected through Medical Accounts. It is not clear from the record the exact nature of the member with family plan that had been purchased by the Moores. Consequently, the deductible in force when claims were submitted for reimbursement is not readily apparent. Ms. Moore in her testimony was unable to recall the amount of the deductible for the policy issued from TRG. It does appear from a review of the fee schedule associated with the 80/60 plan and the 90/70 plan offered by TRG, that the premium payments made did not entitle the Moores to coverage associated with a $500.00 deductible or $250.00 deductible. The other possible amount for the deductible, by process of elimination is $1,000.00. The Moores received correspondence dated November 28, 2001, sent to Randy Moore as a TRG enrollee, indicating that the coverage would end effective November 30, 2001, and reminding Mr. Moore that, according to the correspondence, he would have to find other health coverage as of December 1, 2001. This correspondence, as with other similar correspondence that has been discussed, promised to continue to process claims for covered services incurred before the coverage ended. The TRG letter terminating coverage for the Moores was received by the Moores five days after the date upon which the correspondence indicated that the coverage would no longer be in effect. This circumstance was very disquieting to Ms. Moore. The claims by Ms. Moore and her child were within the covered period for the TRG policy as to their dates. The letter received from TRG is Petitioner's Exhibit numbered 17. Ms. Moore spoke to Respondent about obtaining coverage when TRG discontinued its coverage. Respondent suggested that the Moores affiliate with Baftal. The Moores made a premium payment to Baftal but within a week of being accepted for coverage, Baftal wrote to advise that coverage had been declined. Beyond that time, the Moores obtained coverage from Medical Savings Insurance, a company that they still use for health insurance. Concerning Baftal, by correspondence dated February 11, 2002, Baftal wrote the Moores as a member, the form letter that has already been described, in which the Moores were told that they would not be provided health benefits. Given the problem described with Clarendon Insurance Company, the letter noted the return of the premium paid for coverage through Baftal. A copy of the letter sent to the Moores is Petitioner's Exhibit numbered 19. Baftal did not reimburse the Moores for the outstanding claims totaling approximately $727.00. Count III: Bruce Chambers Bruce Chambers was another customer who bought TRG health insurance from Respondent. Mr. Chambers was a Florida resident at the time he purchased the TRG coverage. Mr. Chambers and his wife moved to Florida from Georgia earlier in 2001. When they moved, the prior health insurance coverage that the Chambers held carried a high premium given Ms. Chambers diabetic condition. Moving from one state to the next also increased that premium. Under the circumstances, the Chambers agreed to purchase the TRG Health Plan. At one time related to the transaction promoted by Respondent, Mr. Chambers believed that TRG was licensed in Florida. He held this belief even in the instance where Respondent had commented that TRG was an ERISA program. Mr. Chambers also executed a coverage disclaimer in November 2001, upon a form from Respondent's agency noting that the health, welfare program applied for was not under the auspices of the Florida Department of Insurance. This is found as Petitioner's Exhibit numbered 36. After purchasing the TRG policy, the wife developed an illness, and costs were incurred for services by the family's personal physician and for hospitalization. In addition Mr. Chambers had medical expenses. Exclusive of co-pays and the deductibles that are applicable, Mr. Chambers paid $7,478.46 for the health care he and his wife received. None of that amount has been reimbursed through TRG as expected under the terms of the TRG coverage. Mr. Chambers paid $487.00 a month, plus $18.00 in other fees, for two months related to coverage effective October 1, 2001, extending into November 2001, a total of $1,010.00 in premiums and fees paid to TRG. No premiums and fees paid to TRG have been reimbursed. The amount of premium paid by Mr. Chambers corresponds under the client fee schedule in effect May 1, 2001, associated with the TRG Health Plan, as pertaining to an 80/60 plan for a member and family with a $1,000.00 deductible. Petitioner's Exhibit numbered 26 is constituted of the calculation of the expenses, $7,478.46 and attaches billing information, some of which is for services and care received prior to December 1, 2001, and some of which is for services and care beyond that date. When Mr. Chambers discovered that TRG was not reimbursing the costs which it was obligated to pay for health care received by the Chambers, he contacted the Respondent and TRG to gain satisfaction. He also contacted Petitioner. When Mr. Chambers enrolled in the TRG plan he received the transmittal letter enclosing his benefits card, Petitioner's Exhibit numbered 23. The membership card identified his participation in plan 8033, with a co-pay for physician office visits of $10.00, specialty office visits of $20.00, and emergency room visits of $50.00. Mr. Chambers received notice from the Petitioner, presumably the December 12, 2001, notification concerning the lack of authority for TRG to business in Florida and the advice that CHEA (Consumer Health Education Association) was not authorized to do business in Florida either. On December 20, 2001, the Chambers wrote Respondent concerning the unavailability of insurance through TRG and CHEA. The Chambers asked Respondent to give them advice about a list of "small group market carriers" they understood to offer health plans. This letter to Respondent is found within Petitioner's Exhibit numbered 25. Also, within Petitioner's Exhibit numbered 25 was a copy of the letter from Respondent to TRG insureds dated December 28, 2001, which made mention of Clarendon as an alternative to TRG. Within that same exhibit is correspondence dated January 21, 2002, from the Respondent to enrollees in the TRG plan, to include the Chambers, discussing Baftal and the prospect that the latter company might honor TRG claims. Finally, Petitioner's Exhibit numbered 25 contains an August 21, 2002, letter from Mr. Chambers to TRG asking TRG to pay for its portion of the medical expenses as reimbursement. Petitioner's Exhibit numbered 27 is the December 1, 2001, application by Mr. Chambers to obtain medical benefits through CHEA. The application also refers to EOS Health Services. This predates Petitioner's warning about CHEA and EOS being licensed to do business in Florida. On December 1, 2001, Mr. Chambers paid $487.00 for premium payments to EOS Health Services and provided a voided check for future payments for premiums by automatic withdrawal from his account. This effort was made as a follow on to obtain health coverage when TRG no longer provided health insurance to the Chambers. To obtain health coverage, Mr. Chambers paid $1,465.88 to the Baftal Escrow Account. This payment was made by a check dated January 14, 2002. That money was refunded by Baftal on January 12, 2002, and no coverage was offered through that company for health insurance. Mr. Chambers had been provided information about the opportunity to obtain insurance from Baftal as reflected in Petitioner's Exhibit numbered 31. Respondent had also suggested that Mr. Chambers apply for health insurance from American Benefit Plan, following the discontinuance of the TRG coverage. Mr. Chambers applied for that coverage by documents dated February 18, 2002, in the interest of his company, Bruce A. Cambers, CFP. Information concerning that application is found in Petitioner's Exhibit numbered 32. American Benefit Plans was listed by Petitioner as an entity not allowed to conduct business in Florida in the December 12, 2001, letter of advice to insurance consumers following the problem with TRG. Mr. Chambers wrote two checks, one in the amount of $628.60 to Independent Managers Association and one for $799.68 to the Association of Independent Managers, Petitioner's Exhibits numbered 35 and 33 respectively. The two checks were written on February 18, 2002. Those checks were voided in relation to payment for monthly insurance premiums and association dues. The effect was to not accept those checks for premium payments to obtain health insurance. On March 5, 2002, ACH Corporation of America wrote Mr. Chambers stating that because of incorrect procedures, or untimely submission, health coverage would not be extended, pertaining to an application for Ultra Med Choice EPO. Ultra Med was another health insurance business which Petitioner in its December 12, 2001, correspondence to health care consumers had been identified as unlicensed to conduct health insurance business in Florida. The letter declining coverage from ACH and application information for a policy sought to become effective December 1, 2001, is found within Petitioner's Exhibit numbered This application was in relation to Bruce Chambers, CFP as employer. Mr. Chambers remains out of pocket for payments he had to make for health care extended, principally to his wife, for which TRG was obligated to provide reimbursement in part. None of the other policies that Mr. Chambers attempted to obtain worked out to substitute for the TRG obligation for reimbursement for health care claims. Eventually the Chambers were able to obtain health insurance. At present the Chambers have a two-man group policy through Mr. Chambers' business to provide health coverage. Because of the problem with health insurance coverage, Ms. Chambers was required to return to work. Her employment was outside Mr. Chambers' company, as well as within his company. As a result of Ms. Chambers' failure to make payments to Flagler Hospital, where Ms. Chambers had received care, under terms that should have involved TRG providing reimbursement for costs, the bills were turned over to a collection agency compromising the credit standing of the Chambers. For the most part, the credit problems have been resolved. Due Diligence As established by testimony from Linda Davis, Analyst II in Petitioner's Jacksonville Office, there is a means to determine whether an insurance company has the necessary certificate of authority to conduct insurance business in Florida. This is accomplished by resort to the electronic data base maintained by Petitioner. A certificate of authority is an indication that the insurance company has completed the necessary requirements to be licensed or authorized to sell insurance in Florida. As established through Petitioner's Exhibit numbered 39, TRG/USA Health Plans, TRG Marketing L.L.C. was not authorized to do business in Florida. An insurance agent licensed in Florida, to include the time frame envisioned by the Amended Administrative Complaint, would have had access to the data base identifying whether an insurance company had the necessary certificate of authority to conduct insurance business in Florida and could properly have been expected to seek this information before engaging in the sale of products from a company such as TRG. Rather than avail himself of that opportunity, Respondent made some form of inquiry to Petitioner on the subject of TRG, while apparently ignoring the more fundamental consideration of whether TRG had been granted a certificate of authority to conduct its business in Florida, which should have been pursued. Ascertaining the existence or nonexistence of a certificate of authority, constitutes "due diligence" incumbent upon an agent before engaging in the sale of insurance from a prospective insurance company. Respondent's Disciplinary History Petitioner has not taken disciplinary action against Respondent before this case.
Recommendation Upon the consideration of the facts found and the conclusions of law reached, it is RECOMMENDED: That a Final Order be entered finding Respondent in violation of Sections 624.11, 626.611(7) and (8), 626.621(2) and (6), 626.901(1), Florida Statutes (2001); suspending his licenses for nine months; placing Respondent on two-years probation; and requiring attendance at such continuing education classes as deemed appropriate. DONE AND ENTERED this 2nd day of April, 2004, in Tallahassee, Leon County, Florida. S CHARLES C. ADAMS 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 2nd day of April, 2004. COPIES FURNISHED: David J. Busch, Esquire Department of Financial Services Division of Legal Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Joseph O. Stroud, Jr., Esquire Rogers Towers, P.A. 1301 Riverplace Boulevard, Suite 1500 Jacksonville, Florida 32207 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
