The Issue The Department of Health and Rehabilitative Services (HRS) seeks an administrative fine of $100 from the Wesley Child Development Center (Wesley) for violation of rules related to child supervision. The issues are whether the violation occurred and whether the fine is appropriate.
Findings Of Fact Wesley Child Development Center II is a child care facility licensed by the Department of Health and Rehabilitative Services (HRS) for operation at 42 East Jackson Street, Orlando, Florida. It is a pre-school facility associated with First United Methodist Church. On January 31, 1995, some time between 3:50 and 4:50 p.m., there were approximately seventeen (17) children and four (4) staff on the playground. The playground is confined with a sturdy, four-foot chain link fence. A.N. was a two-year old toddler on the playground; his teacher was Pat Vetter. A.N. had been playing with buckets and cars by himself near the fence and Ms. Vetter could see him through a play tunnel where two other children were playing. After he played alone for about 10-15 minutes, Ms. Vetter needed to start picking up toys. A.N. gave her his bucket. She turned from him and had taken about five steps when she heard him cry out with an angry cry. She turned back and saw him sitting on the ground with his legs out in front; he had been standing at the fence looking out at the parking lot. Ms. Vetter picked up A.N. and he stopped the angry cry, but continued whimpering. She consoled and held him until his mother arrived. There were no visible signs of any injury: no bruises, blood, scratches or swelling. When his mother picked him up, A.N. did not want to walk. She took him to a restaurant for supper, but later took him to the doctor for an examination. X-rays detected a spiral fracture of the child's femur bone. The cause of the injury remains a mystery to the child care facility staff, who were appropriately dismayed, and to the HRS staff who thoroughly investigated the incident. Dr. Seibel, the child protection team physician, conjectured that A.N. must have attempted to climb the fence, hooked his foot and fell, twisting his leg. No one observed the fall. Ms. Vetter was responsible for A.N.'s supervision and that of three other children on the playground. She was near him and aware of what he was doing. The accident occurred in the brief instant that she turned away to put up some toys; she did not leave the playground. The direct supervision staff to child ratio at the facility and on the playground was better than the 1:6 or 1:11 required by HRS' rules. There is no evidence that the staff were gossiping or engaged in any non-supervisory activity. There has never been a problem with supervision at this facility before, according to the HRS inspectors. No one contests that the child was injured at the facility. Ms. Vetter believes that he could not have had the fracture when he came to school that morning. Although other children have climbed on the fence, she has never observed A.N. trying to climb it. Still, the fence is the only plausible explanation for the injury.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Department of Health and Rehabilitative Services enter its final order dismissing the administrative complaint. RECOMMENDED in Tallahassee, Leon County, Florida, this 27th day of October, 1995. MARY W. CLARK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of October, 1995. COPIES FURNISHED: James A. Sawyer, Jr., Esquire District Legal Counsel Department of Health and Rehabilitative Services Suite S-827 400 West Robinson Street Orlando, Florida 32801 Elizabeth Jenkins Director Wesley Child Development Center II 142 East Jackson Street Orlando, Florida 32801
The Issue Whether Respondent committed an unlawful employment practice by failing to hire Petitioner on the basis of his gender, male.
Findings Of Fact Respondent is the Putnam-Clay-Flagler Economic Opportunity Council, Inc. (Council), a Florida non-profit corporation established pursuant to the federal Equal Economic Opportunity Act. The Council received grants from the United States Department of Health and Human Services, Administration for Children and Families (ACF) to sponsor the Head Start Child Development Program (Head Start) in the tri-county area of Clay, Flagler, and Putnam counties from 1965 until October 1996. After October 1, 1996, the Council acted as an interim overseer. Head Start is a comprehensive child development program which provides education, health and social services to pre- school (three- to five-year old) children and their families. Pursuant to the terms of their grants, the Council and Head Start were subject to guidelines formulated by ACF. On May 17, 1996, ACF issued a "Teacher Qualifications Mandate Memorandum to all Head Start Grantees and Delegate Agencies." As a Head Start grantee, the Council received a copy of this memorandum and was required to comply with its mandate, which outlined the qualifications that Head Start classroom teachers of children three-five years of age must possess by September 30, 1996. After September 30, 1996, Head Start classroom teachers would be required to possess the following qualifications: a Child Development Associate (CDA) credential that is appropriate to the age of the children being served in center-based programs [an optional bi- lingual specialization is available to candidates]; a State-awarded certificate for preschool teachers that meets or exceeds the requirements for a Child Development Associate credential (CDA); an associate, baccalaureate, or advanced degree in early childhood education; or A degree in a field related to early childhood education with experience teaching preschool children and a State- awarded certificate to teach in a preschool program. (Emphasis supplied) The May 17, 1996, Memorandum further emphasized that a "Child Development Associate" (CDA) credential is awarded to preschool caregivers who work with children ages three-five in a center-based setting. An optional bilingual specialization is available to candidates. All teachers hired by the tri-county Council for its Head Start program before October 1, 1996, who did not already meet the minimum qualification requirements were "grandfathered- in," and Head Start provided the necessary on-the-job, center- based training for those "grandfathered" teachers to receive their CDA by the date the federal requirements were to go into effect. Head Start never provided CDA training to new applicants for employment. After reviewing the May 17, 1996, Memorandum, the Council/Head Start sought to hire only persons who already met the new federal mandate. Petitioner argued that he had "heard" that this was not so. However, he presented no direct evidence, oral or documentary, to that effect. Effective July 1, 1996, the Council also revised its "Teacher I" job description to conform to the new ACF requirements. Specifically, the new Council/Head Start job description required that in order to be hired, any job applicant for a Teacher I position after July 1, 1996, had to possess, at a minimum, a CDA (or a bilingual specialization); a State-awarded certificate for preschool teachers that met or exceeded the requirements for a CDA; an associate, baccalaureate, or advanced degree in early childhood education; or a degree in a field related to early childhood education with experience teaching preschool children and a State-awarded certificate to teach in a preschool program. In September or October 1996, Petitioner began seeking employment as a teacher with Head Start. He had several telephone contacts with Susan Klaver, Head Start Education Coordinator. Petitioner believes that he told Ms. Klaver all of his qualifications in these telephone conversations and further told her that he was actively pursuing a CDA certificate by current enrollment at Florida Community College of Jacksonville. The Council has had a policy against discrimination in effect since November 1, 1995. Ms. Klaver established an opportunity for Petitioner to apply and interview for a Teacher I position. Ms. Klaver was aware of Petitioner's male gender upon setting up the interview. On or about October 15, 1996, Petitioner formally applied for a Teacher I position, which previously had been known as a "Teacher's Assistant" position, with Head Start. The Teacher I job description which had gone into effect July 1, 1996, was available to applicants applying for Teacher I positions in October 1996. At the time Petitioner applied for a Teacher I position, there were two available Teacher I positions. One available Teacher I position was located at the Ponoma Park Head Start Center. The program at that center was not in compliance with the bilingual teacher requirements of the ACF rules and regulations, and Head Start was seeking a bilingual (English/Spanish-speaking) person to work as a Teacher I at Ponoma Park. The other available Teacher I position was located at the Orange Park Head Start Center. During the hiring process, Kathleen Pater, Head Start Director, and Susan Klaver reviewed applications and interviewed applicants. At the time Petitioner applied for a Teacher I position with the Council/Head Start in October 1996, he submitted an application for employment; a certificate of attendance at a ten- hour course in Professionalism from Florida Community College of Jacksonville, dated April 23, 1996; a twenty-hour HRS certificate from St. Augustine Technical Center, dated May 8, 1995; a ten-hour HRS certificate from Bradford Vocational Center, dated July 11, 1995; a First Aid certificate; a CPR certificate; a two- page "thesis" on child development which he had written; and his college transcripts. All of these items, except Petitioner's application and college transcripts were admitted in evidence at hearing. In October 1996, Petitioner was pursuing CDA certification by taking classes at Florida Community College of Jacksonville. However, Petitioner admitted at hearing that he was not yet certified as a CDA when he sought employment with Head Start in October 1996. At formal hearing, witnesses discussed several certificates of completion for ten-hour educational units/courses toward a CDA, which units/courses Petitioner completed in May, June, or July of 1997. Petitioner testified that he completed his CDA training in July of 1998 (TR- 100), but he was unable to submit a copy of a CDA certificate at the hearing. Clearly, at the time Petitioner applied for a Teacher I position with Head Start in October 1996, he did not possess a CDA credential. At the time Petitioner applied for a Teacher I position with Head Start in October 1996, he also did not have a bilingual specialization. When Petitioner applied for a Teacher I position with Head Start in October 1996, he did not have a State-awarded certificate for preschool teachers that met or exceeded the requirements for a CDA. When Petitioner applied for a Teacher I position with Head Start in October 1996, he did not possess an associate, baccalaureate, or advanced degree in early childhood education. When Petitioner applied for a Teacher I position with Head Start in October 1996, he did not possess a college degree in a field related to early childhood education with experience teaching preschool children and a State-awarded certificate to teach in a preschool program. Petitioner testified at one point that in October 1996 he had a degree which met or exceeded the CDA credential, but the documentation admitted in evidence at hearing did not bear out this assertion. Petitioner offered no college degree and no college transcript. Accordingly, it is found that when Petitioner applied for a Teacher I position with Head Start on October 15, 1996, he did not possess any of the minimum teacher qualifications mandated by the ACF in its Teacher Qualifications Mandate Memorandum dated May 17, 1996, or any of the minimum teacher qualifications outlined in the Council's new Teacher I job description. On October 29, 1996, ACF issued a "Teacher Qualifications Mandate: Waiver Process Memorandum to all Head Start Grantees and Delegate Agencies," which provided that, in order to receive waivers, grantees (in this case the Council/Head Start) "should make every effort to hire teachers who meet the qualifications" specified in the May 17, 1996, Memorandum. (See Finding of Fact 6) The October 29, 1996, Memorandum went on to specify that, if grantees' efforts to hire teachers who already met the qualification requirements were not successful, and if the most viable applicant did not meet any of the teacher qualification requirements, a 180-day waiver could be applied for by the grantee and granted by ACF with respect to an applicant who: is first employed after September 30, 1996, by Head Start agency as a teacher for a Head Start classroom; is enrolled in a program that grants any credential, certificate or degree specified above in paragraph (A), (B), (C), (D); and Will receive such credential under the terms of such program no later than 180 days after beginning employment as a teacher with such agency. (Emphasis supplied) The October 29, 1996, Memorandum further stated that persons already employed by Head Start prior to October 1, 1996, were not eligible for waivers and that a waiver could only be granted once per applicant (new hire). That meant that if a waiver were granted and the new employee did not receive one of the specified degrees or credentials within 180-days, that employee would have to be terminated and the hiring process would begin again. At the time Petitioner applied for a Teacher I position with the Council/Head Start program on October 15, 1996, he was not already hired, obviously. Without the college transcripts (See Finding of Fact 21), the evidence is not persuasive that Petitioner made his then-current efforts toward attaining CDA certification or any college degrees known to either Ms. Pater or Ms. Klaver in October 1996, but even if he had clearly made such a representation to them, it is not significant. First, it is not significant because, contrary to Petitioner's contentions, the Council/Head Start was not required to waive any of the May 17, 1996, requirements. Second, it is not significant because, upon all the credible, competent evidence of record, it is not possible to infer that Petitioner's enrollment at Florida Community College of Jacksonville in October 1996 would have certainly resulted in a CDA or a specified degree within 180-days (6 months), i.e. by March 1997. Apparently, Petitioner assumed that because of his phone conversations with Ms. Klaver (see Findings of Fact 11-12) and because he had submitted one certificate showing that he had completed ten hours of Professionalism training, one course toward a CDA (see Finding of Fact 21), the interviewers would be informed that he was currently enrolled in a program that would certainly grant him a CDA certificate within 180-days after initial employment. In fact, Petitioner did not earn his CDA until nearly two years later. Although Petitioner testified that he could have earned a CDA within 180-days and that the Council's failure to hire and train him in a center-based environment resulted in his being delayed in receiving his CDA until July 1998, his assumption is purely speculative. Even if Petitioner had been likely to earn a CDA or other specified college degree or certificate within 180-days of October 15, 1996, Head Start was not obligated to request a waiver of ACF requirements for Petitioner if it could hire a person already qualified. The Council/Head Start ultimately was able to hire two applicants who already met the qualifications specified in the May 17, 1996, Teacher Qualifications Memorandum. Ms. Klaver reviewed Petitioner's job application for the Teacher I position. Both Mesdames Pater and Klaver interviewed Petitioner. After reviewing the applications and interviewing the applicants, Mesdames Pater and Klaver only made hiring recommendations to the Council. They neither jointly nor severally had ultimate hiring authority. All new hires had to be approved by the Council. The Council is comprised of approximately six members from each center. The members of the Council are elected by the parents of the respective centers. Although Ms. Klaver deposed that she did not recommend Petitioner at least in part because he was not hired, possibly misreading (A) of the October 29, 1996, Memorandum (see Finding of Fact 31), she also clearly stated that she reviewed Petitioner's documentation and found he did not qualify under the May 17, 1996, Memorandum. In a letter dated November 20, 1996, Ms. Klaver notified the male Petitioner as well as two female applicants of the decision not to hire them (Exhibit R-15 and exhibits thereto). Her letter stated that "[o]n Monday, November 18, 1996, the Head Start Policy Council voted to approve hiring two new teachers," not that two new teachers were, in fact, hired on that date. Unfortunately, additional language in this letter told the three applicants that they were not hired "at this time," leading Petitioner to the erroneous conclusion that the two positions had been filled as of November 18, 1996. The letter further misled Petitioner concerning his chances of employment by stating that the applications would be kept on file for at least 30 days and considered for future openings. Interviewers Pater and Klaver did not recommend that the Council hire Petitioner for one of the vacant Teacher I positions with Head Start because he did not satisfy the minimum qualifications mandated by ACF, and the Council did not hire him for the same reason. Ultimately, the Council hired Tammy Hudson (female) for the Orange Park Center and Mary Martin (female) for the Ponoma Park Center. Ms. Hudson's application, in evidence, was dated October 23, 1996, approximately the same time as Petitioner's application. Ms. Martin's application, in evidence, was dated March 3, 1997, but stated that she also had previously applied to Head Start in October 1996, as had Petitioner. Precisely when each woman was hired is not clear, but both were on the Head Start payroll by May 1997. Tammy Hudson possessed the mandatory teacher qualification requirements for the Teacher I position. The Council approved hiring her because she possessed the minimum teacher qualification requirement of a CDA awarded November 1, 1995, and had significant work experience in dealing with preschoolers. Tammy Hudson was more qualified for the Teacher I position than was Petitioner in October 1996. The Council approved hiring Mary Martin because she possessed the minimum teacher qualification requirements (a bilingual specialization) and a four-year college degree in "early childhood"; because she met the mandated qualifications of the Ponoma Park Center, which was not in compliance and which was required to hire a bilingual teacher; and because she had significant work experience in dealing with pre-schoolers. Mary Martin was more qualified, and more specifically qualified, for the Teacher I position with the Council/Head Start than Petitioner, at least as early as her March 3, 1997, application. On December 3, 1996, Petitioner wrote a letter to Mevlyn Ryles, Executive Director of the Council, concerning the decision not to hire him for a teaching position. On December 11, 1996, Ms. Ryles wrote to Petitioner, acknowledging receipt of his letter dated December 3, 1996, and informing him that she would transmit the information to the Council. She then forwarded his letter to the Council. On March 7, 1997, David Sauce, Council Vice-Chairman, wrote to Petitioner in response to Petitioner's letter of December 3, 1996, stating that the Council had reviewed all of the information on file concerning his application, and explaining that the Council still supported the recommendation not to hire him because he "lack[ed] the necessary requirements and related job experience needed for the position." While it is possible that the Council did not have Petitioner's application in March 1997, which was more than 30 days after he had applied, this is insignificant because Petitioner still did not qualify for hire under the May 17, 1996, Memorandum until July 1998 when he received his CDA, if at all (See Finding of Fact 22). Petitioner views his male gender as an employment "plus" because of a perceived need of male role models in early childhood education. Likewise, he considered it discriminatory that he was not hired when females were hired. The evidence, however, supports a finding that the Council/Head Start did not consider Petitioner's gender as either a "plus" or a "minus" in its decision not to hire him. After rejecting unqualified male and female applicants, the Council continued to try to get the most qualified persons who would meet the new federal requirements until it was actually able to hire such persons. All Council/Head Start personnel were, if anything, preoccupied with federal compliance, especially with regard to getting a Spanish-speaking teacher.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Florida Commission on Human Relations enter a Final Order dismissing Petitioner's October 27, 1997, complaint against Respondent for gender discrimination in violation of the Florida Civil Rights Act arising from his October 15, 1996, job application. DONE AND ENTERED this 17th day of March, 1999, in Tallahassee, Leon County, Florida. ELLA JANE P. DAVIS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of March, 1999. COPIES FURNISHED: Kimberly Cannon, Esquire Corbin & Duvall Post Office Box 41566 Jacksonville, Florida 32203 Billy Boston Apartment B 2739 College Street Jacksonville, Florida 32205 Sharon Moultry, Clerk Human Relations Commission Building F, Suite 240 325 John Knox Road Tallahassee, Florida 32303-4149 Dana Baird, General Counsel Building F, Suite 240 325 John Knox Road Tallahassee, Florida 32303-4149
The Issue The issues are: Whether children who were adopted through a private adoption agency are entitled to tuition waiver; and Whether Petitioner timely requested a final hearing.
Findings Of Fact Based upon the stipulations of the parties and the evidence presented at hearing, the following relevant Findings of Fact are made. Petitioner adopted four children (“the children”), who are siblings, after the biological parent’s parental rights were terminated. The parental rights were terminated on June 27, 2016. Petitioner seeks a college tuition waiver for the children. The Department is the state agency responsible for reviewing and approving requests for adoption assistance. Community Based Care of Central Florida (“CBC”) is the licensed child-placing agency that has been designated as the agency to facilitate such requests. The children were removed from the custody of their biological mother (L.H.) due to her inability to provide food, clothing, medical care, and other material needs for the children during a shelter hearing in 2014. The children were temporarily placed in two separate homes. On January 13, 2014, three of the children were placed with Petitioner. On June 14, 2014, one child was placed with a different caretaker. Petitioner desired to adopt the children so they could remain together. Jennifer Peterson, adoption manager with CBC, testified at hearing that CBC reviews requests for adoption subsidies, conducts home studies, and ensures compliance with adoption procedures. Ms. Peterson explained the process for adoption from the Department if two families are interested in adopting the same children. An adoption review committee (“adoption committee”) determines whether a person is appropriate to adopt children. An adoption committee convened to determine whether Petitioner would be eligible to adopt the children. At the time, the Department’s Petition for Termination of Parental Rights was pending. Due to Petitioner’s desire that the children remain together, she retained Florida Home Study LLC (“Florida Home Study”) to assist with the adoption process. Florida Home Study is a private, Florida- licensed, child-placing agency and holds the same license as CBC. Florida Home Study filed a Motion to Intervene in Seminole County, Circuit Court, Seventh Judicial Circuit, Case Number 13-DP-0123 (dependency case) on Petitioner’s behalf. The court granted the intervention on November 3, 2015. The judge entered an order which states in pertinent part: That jurisdiction will be maintained by this Court and the Department of Children and Families will abate the current Termination of Parental Rights while the private termination of parental rights and adoption case is completed in family court. Abatement of the petition to terminate parental rights before the adoption committee made a final determination. That Florida [Home Study] will assume responsibility of the adoption case. That Florida [Home Study] will file a report with all parties and the Court every 90 days until the completion of the case. A home study was completed by Florida Home Study on March 6, 2016. Florida Home Study filed a Petition to Terminate the Parent's Parental Rights, which was granted on June 28, 2016. The order terminating parental rights in pertinent part states: Under section §39.811(4), Florida Statutes, the Children [N.W., A.H., K.H., and A.W.] are permanently committed to Florida Home Study LLC for the purposes of subsequent adoption. Under section §39.811(2), Florida Statutes, the Children [N.W., A.H., K.H., and A.W.] are placed in the temporary legal custody of Florida Home Study LLC, under the protective supervision of the State for the purposes of subsequent adoption. The adoption took place on or about December 16, 2016. Adoption assistance is available to prospective adoptive parents and adopted children to provide financial assistance and services including a college tuition waiver. In September 2016, Petitioner submitted an application for adoption assistance. The children were classified as “special needs” as they were adopted as a sibling group and as a result of that classification, were eligible for adoption assistance.1/ Ms. Peterson reviewed the adoption assistance request for Petitioner. She reviewed the case history and actions of the case manager. Respondent approved the request and granted Petitioner a maintenance subsidy until the children turn 18, an attorney fee credit, and Medicaid until age 18. While Respondent granted a portion of Petitioner’s request for assistance, it denied the request for tuition waiver. The Department issued a formal notice of its decision to deny (“Notice”) on December 21, 2016, and served it on Petitioner by Certified U.S. Mail. Respondent provided notice to Petitioner of the procedural requirements to challenge the agency action. The Notice stated: RIGHT TO ADMINISTRATIVE PROCEEDING IF YOU BELIEVE THIS DECISION IS IN ERROR, YOU MAY REQUEST AN ADMINISTRATIVE HEARING IN ACCORDANCE WITH THE BELOW "NOTIFICATION OF RIGHTS UNDER CHAPTER 120, FLORIDA STATUTES" NOTIFICATION OF RIGHTS UNDER CHAPTER 120, FLORIDA STATUTES IF YOU BELIEVE THE DEPARTMENT'S DECISION IS IN ERROR, YOU MAY REQUEST AN ADMINISTRATIVE HEARING UNDER SECTIONS 120.569 AND 120.57, FLORIDA STATUTES, TO CONTEST THE DECISION. YOUR REQUEST FOR AN ADMINISTRATIVE HEARING MUST BE RECEIVED BY THE DEPARTMENT BY 5:00 P.M., NO LATER THAN 21 CALENDAR DAYS AFTER YOU RECEIVED NOTICE OF THE DEPARTMENT'S DECISION. You must submit your request for an administrative hearing to the Department at the following addresses: Brian Meola, Assistant Regional Counsel Department of Children & Families 400 W. Robinson Street, 1129 Orlando, FL 32801 IF YOUR REQUEST FOR AN ADMINISTRATIVE HEARING IS NOT RECEIVED BY THE DEPARTMENT BY THE ABOVE DEADLINE, YOU WILL HAVE WAIVED YOUR RIGHTS TO A HEARING AND THE DEPARTMENT'S PROPOSED ACTION WILL BE FINAL. Petitioner received the Notice on December 24, 2016. Twenty-one days from the date of receipt of the Notice was January 16, 2017. Petitioner submitted a written request for a final hearing by email through her attorney, on January 23, 2017. The letter indicated in the first sentence, “Please be advised that this office has been retained to appeal the above decision [Denial of Request for Tuition Waiver] rendered on December 21, 2016.” The record contains no additional evidence regarding a written notice of appearance related to denial of the tuition waiver.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Children and Families enter a final order dismissing Petitioner’s request for an administrative hearing as untimely filed. DONE AND ENTERED this 7th day of July, 2017, in Tallahassee, Leon County, Florida. S YOLONDA Y. GREEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 7th day of July, 2017.
Findings Of Fact The Petitioner is a not-for-profit Florida corporation, licensed by the Florida Department of Insurance to do business as a Health Maintenance Organization (HMO). It enrolls members and provides them with direct medical care. Petitioner was acquired by the Halifax Hospital Taxing District, a special taxing district and political sub-division of the State of Florida, in 1994. Respondent is the state agency authorized to implement the collection and enforcement of Florida tax laws. Petitioner is a staff model HMO which enrolls people who become members and provides direct medical aid to these members. This medical aid is provided by physicians employed by Petitioner, as well as some outside physicians who have contracted with Petitioner. Membership consists of these major groups: Medicare subscribers, school children enrolled in the Florida Healthy Kids Programs and private employers. Petitioner enrolls two classes of members that would fall into the category of "persons unable to pay", i. e. Medicare beneficiaries and Healthy Kids participants. Petitioner has two Medicare Programs for Medicare beneficiaries. One in which the member pays nothing and receives medical aid and a reduced prescription benefit, and another in which the member pays $15.50 per month and receives medical aid and additional benefits such as a prescription benefit, hearing aid benefit, and optometry benefit with small co-pays. Petitioner provides this comprehensive medical aid under a contract with the Health Care Financing Administration at a HCFA-approved capitation rate. Prescription benefits provided to Petitioner's Medicare members cost Petitioner $36.18 per member, per month, approximately fifty percent of average wholesale price. Non-members of Petitioner seeking their Medicare benefits through traditional Medicare, would pay an average of $70.00 per month for their prescription benefit. Approximately eight percent of the Medicare population in Petitioner's service area fall below Federal Poverty Guidelines. The economic make-up of Petitioner's Medicare membership is inferred to be reflected in its Medicare membership. Petitioner infers that eight percent of its membership falls below Federal Poverty Guidelines and are persons unable to pay. Petitioner's total expenses for the nine-month period ending March 31, 1995, were $64,675,533.32. The Medicare costs for that period were $37,421,480.36. Eight percent or $2,993,718.40, were spent for persons who were unable to pay. Petitioner provides comprehensive medical aid to children in its Healthy Kids Program. The Healthy Kids Program is a state-subsidized program in which children, who were not eligible for medicaid but whose parents do not have health insurance for them, could obtain health coverage. Petitioner was the HMO selected by the Healthy Kids Corporation, the corporation created by the Florida Legislature to operate the Healthy Kids Program, to provide this comprehensive medical aid under a monthly capitation. Petitioner operates its Healthy Kids Program at a loss ratio of approximately 101 percent, i. e. over one hundred cents of every dollar collected goes to direct medical aid to Healthy Kids participants. HMO's traditionally operate with a loss ratio of eighty percent, i. e. eighty cents of every dollar collected goes to the provision of medical care and the other twenty percent would go into administrative expenses. Eighty two point two (82.2) percent of participants in Petitioner's service area fall below Federal Proverty Guidelines and are persons unable to pay. The Healthy Kids' costs for the period ending March 31, 1995 were $3,890,964.65; 82.2 percent, or $3,198,372.90, was spent for persons who were unable to pay. For the nine-month period ending March 31, 1995, a total of $6,192,091.30, or 9.6 percent, was spent on persons who were unable to pay. Any surplus generated from the activities of Petitioner, other than through its participation in the Healthy Kids Program, is turned over to the Halifax Hospital Taxing District. Any surplus generated from participation in the Healthy Kids Program contract is returned to the Healthy Kids Corporation. Petitioner spends in excess of fifty percent of its expenditures on medical aid for the relief of disease, injury, or disability. Medicare is a federally sponsored program available to people sixty- five and over who do not receive medical benefits through an employer. It is available without regard to the person's income level. Medicare is also available to persons under sixty-five who are totally disabled for two months or longer. Medicare subscribers accounted for 12,917 of Petitioner's total of 45,759 subscribers during the relevant nine month period. Petitioner is reimbursed by the federal government at the fixed capitation rate of $365 per month for each Medicare subscriber enrolled as a member of the HMO. Thus, for a nine month period corresponding to Petitioner's financial data, the Petitioner received $42,432,345 from the federal government attributable to Medicare subscribers. Medicare expenses for a nine month period were $37,421,000. Petitioner's federal Medicare revenue exceeded its total Medicare cost by $5,011,345 for the relevant nine month period. This figure is understated because it does not reflect revenue received from the $15.50 supplemental premium for additional benefits. There are two competitors for Medicare subscribers in the Petitioner's market area. Each provider receives the same capitation rate from the federal government. The competitors offer Medicare recipients different programs in which they may enroll. The competitors offer a slightly different product at a higher premium. No testimony was introduced to compare the premium charged and the plans offered by other providers with that offered by other providers with that offered by Petitioner. Prescription medicine is not being provided free of charge or at a substantially reduced cost to those unable to pay. It is not Petitioner's policy to waive the supplemental premium based upon the subscriber's income level, although some Medicare subscribers who get behind on the co-payment are not terminated for that reason. Petitioner's prescription benefit plan is part of a marketing strategy intended to attract Medicare subscribers. Petitioner subsidizes the prescription benefit to attract subscribers. Without the necessary subscriber base, Petitioner would be forced to lay off a portion of its physician employee workforce. Another portion of the Petitioner's subscriber base consists of school age children enrolled in the Healthy Kids Program (the Program). During the nine month period reflected in Petitioner's financial data, 7,130 children were enrolled in the Program. Enrollment in the program is open to all Volusia County school children who do not have health insurance and are not eligible for federal Medicaid health coverage. Approximately 80 percent of those enrolled fell below 135 percent of the federal poverty guideline. The Florida Healthy Kids Corporation is empowered to enter into contracts with health care providers to provide health care benefits to participants. The idea is to provide children who would not otherwise receive coverage with regular health care. Petitioner entered into a competitive bidding process to act as the Volusia area provider for the Healthy Kids Program. Participation in the Program requires the Petitioner to provide health care services to those children who qualify for admission into the program. The Petitioner receives a monthly premium payment per child based upon enrollment. This rate is set by the competitive bidding process. For the period of time reflected in the Petitioner's nine month financial data, the rate was $46.50 per month. This rate generated a surplus. The rate is presently $43 per month. The Program is funded by a combination of state and local tax dollars and premium contributions from parents. Parental contributions are based on a sliding scale which adjusts for income. Parents with incomes below federal poverty guidelines do not have to contribute towards the premium payment; any difference is made up by state and local tax dollars. That a percentage of children live at or below a federal poverty guideline has no demonstrated affect on the cost of Petitioner's services to those children. Petitioner does not establish the economic guidelines used to fix a parent's share of the premium. Petitioner does not receive more or less revenue based upon the income status of a parent or child. Petitioner is not aware of the particular economic status of individual children enrolled in the Program. Petitioner does not provide children in the Program with medical services for free or at a substantially reduced cost to those unable to pay. The Healthy Kids Corporation, in cooperation with state and local governments, provides the subsidy for enrollment of children in families with an income at or below the federal poverty guidelines.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Revenue enter a Final Order denying a consumer's certificate of exemption to Petitioner. DONE and ORDERED this 26th day of November, 1996, in Tallahassee, Florida. DANIEL M. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 26th day of November, 1996. COPIES FURNISHED: Pamela J. Thomas, Esquire Florida Health Care Plans 1340 Ridgewood Avenue Holly Hill, Florida 32117 Kevin J. O'Donnell, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Linda Lettera Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
