Findings Of Fact 1. For a period of time prior to June, 1985, Petitioner, Lydia Mendez, had been providing care in her home for her father, Leoncio Hernandez, age 90, and her husband, Carmelo Mendez, age Because of this, she was enrolled in and receiving case subsidies monthly under DHRS' Home Care for the Elderly Subsidy Segment program outlined in Section 410.03-410.06, Florida Statutes, and Chapter 10A-9, F.A.C. Under this program, recipients of benefits are to be visited periodically on an unannounced basis in order to insure that the requirements of the program were being met. Records of District VII reflect that on November 20, 1984, a visit of Petitioner was conducted for the normal six months review and at the time the counselor arrived at the premises, Mrs. Mendez was not at home. Mr. Mendez, Petitioner's husband, called his wife at a neighbor's residence and she arrived at home shortly thereafter. Mrs. Mendez, who had been absent from the home on two previous visits when the counselor arrived was advised again of the requirement to provide supervision and of the DHRS guidelines regarding provider absences from the home. At that point, Mrs. Mendez advised the counselor that when she was gone, it was to run brief errands and never for more than an hour or two. Most of the time when she was gone, she was visiting her daughter in the immediate neighborhood. Nonetheless, the counselor advised Mrs. Mendez, on November 20, that if she were not present on the next visit, steps would be taken to close the file and terminate the payments. When a follow-up visit was made on December 21, 1984, a month later, Mrs. Mendez was present and there was no irregularity. When the nine month review was conducted on February 28, 1985, Mrs. Mendez was not at home and the counselor was told by Mr. Mendez that she had gone to the store. The counselor at this time, Annie Wilson, returned to the premises on March 8, approximately one week later, and at that time, Mrs. Mendez was properly at home. The records also reflect that on May 15, 1985, when the yearly review visit was made, Mrs. Mendez was again not at home but at her daughter's house around the corner. When called by her husband, by phone, she returned within a few minutes. When this was reported to Mr. Brown, he determined that a formal investigation was required and consistent with this determination, he directed Henry McLaulin to investigate. Mr. McLaulin went to the Mendez home at approximately 2:00 p.m. on May 20, 1985. When he arrived, Mr. Mendez and Mr. Hernandez were alone at the house which was found to be in good condition and quite clean. Mr. Mendez also appeared clean and adequately groomed. Through an interpreter, he contended that he was in good health and had no physical complaints. Mr. Mendez appeared to be oriented as to time, place and person. His intellectual functioning and insight were adequate and when questioned by the investigator as to what actions he would take in the case of fire, Mr. Mendez indicated he would get Mr. Hernandez out of the house and request the neighbors to call the fire department because of his language problems. Mr. Hernandez, Mrs. Mendez' father was also clean and adequately groomed and was fully ambulatory. He, however, was totally disoriented as to time, place, and person, and his memory and intellectual functioning were greatly impaired, and it was clear that he needs supervision since he is unable to make decisions regarding his safety and wellbeing. After Mr. McLaulin had talked with Mr. Mendez for about 35 to 40 minutes, Mrs. Mendez returned to the house. In the case summary on his May 20th home visit, Mr. McLaulin indicated that the case plan was to assess both Mr. Mendez and Mr. Hernandez for possible neglect. He concluded that there was no evidence of neglect of Mr. Hernandez or Mr. Mendez, and no follow-up visit was required. A review of the DHRS records kept on this case reflects an entry on May 16, 1985, four days before the home visit, which reads: Mrs. Mendez was contacted by this counselor's supervisor, B. Brown. Mr. Brown explained the program requirements regarding supervision to the client in this program. He further stated that this case would be terminated due to a lack of adequate supervision to the client. Provider expressed the desire to appeal this case and may request a hearing after she receives formal notification of case closure. A letter will be written to provider regarding cancellation of the subsidy grant. In fact, even though Mr. McLaulin's report dated subsequent to this entry clearly revealed there was no evidence of neglect on May 21, 1985, Mr. Brown and Ms. Messing sent Mrs. Mendez a letter which, based on the May 16, 1985 telephone conversation, notified her that the subsidy payments she had been receiving would be cancelled effective June, 1985 on the basis of non-compliance with the Home Care for the Elderly regulations relative to providing supervision. From the above, it is clear that Mr. Brown had made up his mind to cancel the subsidy payments that Mrs. Mendez was receiving before he ever received his investigator's report and that when he did receive it, he ignored it even though it clearly indicated that the purpose and intent of the program were being fulfilled by Mrs. Mendez. Mrs. Mendez, who speaks limited English and who testified through an interpreter, indicated that she takes care of both her 88 year old husband and her 90 year old father on an income which is made up of the social security payments of the three individuals exclusively, alieunde the subsidy payment in issue here. Her father was in a nursing home for two and a half years prior to the death of her mother and during that time, she worked harder to take care of him than when he is with her. As a result, she does not want to put him in a nursing home again and does not feel that it is necessary. Mrs. Mendez was receiving $95.00 per month in subsidy payments for both her husband and her father. The three of them live alone in the house and there are times when it is necessary for her to get out of the house to buy food and run other errands such as going to the bank or post office. Admittedly, on several occasions, when the counselor came to conduct the home visits, she was not at home. Regardless, she never left the house for more than an hour or two and on most occasions when she was not present, she was visiting her daughter who lives around the corner and Mr. Mendez was able to reach her by telephone and have her home within a few moments. In fact, both Ms. Davis and Mr. McLaulin indicated that of the visits they made wherein they found Ms. Mendez absent, she always returned within a few minutes of their arrival. As was stated by Mr. McLaulin, neither Mr. Hernandez nor Mr. Mendez showed any evidence of neglect. The home kept by Mrs. Mendez was clean and in good repair and both individuals were well fed and in good health as far as Mrs. Mendez could provide.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore RECOMMENDED that subsidy payments on behalf of Mr. Hernandez and Mr. Mendez be immediately restored to Mrs. Mendez and that Mrs. Mendez be reimbursed for the payments that were not received due to the improper cancellation in June, 1985. RECOMMENDED in Tallahassee, Florida this 6th day of January, 1986. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of January, 1986. COPIES FURNISHED: Mrs. Lydia Mendez 645 West 14th Street Apopka, Florida 32703 David Pingree, Secretary Department of Health and Rehabilitative Services Tallahassee, Florida 32301 1323 Winewood Boulevard Douglas Whitney, Esquire General Counsel HRS District Seven 400 West Robinson Street Orlando, Florida 32801
Findings Of Fact In 1968, Petitioner's marriage to Judith Marie Youmans was dissolved by the Circuit Court in Duval County, Jacksonville, Florida. One child, D. R. Y. was born of the marriage. Custody of D. R. Y. was given to Petitioner's ex- wife. However, except for a few months, D. R. Y. was in the actual custody of her father until she reached the age of majority in 1982. Petitioner's ex-wife never paid any child support to Respondent for his custody of D. R. Y. Petitioner never had the final divorce decree modified to reflect D. R. Y.'s custody arrangement or to seek an award of child support for his custody of D. R. Y. The Department of Health and Rehabilitative Services is not seeking child support enforcement in reference to D. R. Y. From 1968 until about 1977, Petitioner maintained an on again-off again relationship with his ex-wife. They never remarried. However, by 1977, Petitioner had fathered two children with his ex-wife, who are the subject of this action. C. D. Y., Jr., was born July 29, 1971, and M. S. Y. was born August 15, 1973. In 1977, Petitioner's ex-wife filed a paternity action against Petitioner alleging that the two boys were his children. Petitioner made an appearance in the paternity action and reached an agreement with his ex-wife regarding the paternity of the two boys and how much child support he would pay until they reached the age of majority. A final judgment incorporating the agreement between the parties was entered by the Circuit Court in Duval County, Jacksonville, Florida, on January 28, 1977. Petitioner states that he was never served with the 1977 paternity suit papers or the final judgment entered in the action. Petitioner testified that he was not aware that a final judgment had been entered awarding his ex-wife $15.00 per week per child until a few months before HRS became involved in the tax intercept under consideration here. However, Petitioner made two of the agreed to child support payments in February, 1977, after his attorney had advised him to do so. After the first two payments, Petitioner ceased making the $15.00 per child per week payments and has not made any child support payments to his ex-wife or to the Clerk's Office since February 4, 1977. Petitioner has, therefore, accumulated an alleged arrearage of child support for C. D. Y. and M. S. Y. in the amount of $16,35.00 through July 1987. Prior to HRS's involvement in the case in 1986, Petitioner's ex-wife neither asked for nor received any child support from Petitioner, except for the few payments made in 1977. She did not try to enforce the paternity settlement agreement until September 12, 1986, when she asked for HRS's help. Apparently, the reason she went to HRS was to attempt to collect the child support. She has not received any "public assistance" such as AFDC money from HRS and apparently is not asking for such aid. HRS has not obtained a court order finding Petitioner to be delinquent and no such order has been previously entered. Petitioner has, therefore, never been afforded an opportunity to raise his defenses to any alleged arrearage or non payment of support before the circuit court. Petitioner felt very strongly that he should not have to pay child support since his ex-wife did not perform her part of the agreement regarding her visitation. He testified that he attempted to visit the two boys on several occasions, but was usually frustrated in his attempts. The last time he attempted to visit the two boys was several years ago when he was met at the door by his ex-father-in-law who was pointing a shot gun at Petitioner and told him to leave. After the shot gun incident, Petitioner did not feel it to be in his best interest to attempt to see the boys anymore. Petitioner also maintained that he should not have to pay child support because she would not raise the boys correctly throughout the time period involved in this case. In essence, he left her because she would not give up certain drugs and he did not want to be living in such an environment nor did he want his boys to be living in such an environment. However, his ex-wife felt otherwise and didn't mind her children being raised around drugs. Petitioner felt that his ex-wife's involvement of HRS to collect child support was simply a tactic on her part to harass him and otherwise be mean. Petitioner also felt that he should have been paid child support for his custody of D. R. Y. who had refused to live with her mother. Petitioner felt that he should at least receive recognition of the fact that he did not receive any such support and be credited with the amount he should have been paid, i.e. $15.00 per week.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED: That the Department of Health and Rehabilitative Services enter a Final Order in this case to the effect that the Department is not entitled to intercept Charles D. Youmans' federal tax refund unless and until Youmans is adjudicated delinquent by a circuit court in the periodic court ordered payment, and to the further effect that any federal tax refund which may already have been intercepted shall be returned to Youmans. DONE and ENTERED this 29th day of August, 1988, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of August, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-2365 Petitioner's factual allegations contained in paragraph 1 of his letter are immaterial. Petitioner factual allegations contained in paragraph 2 are irrelevant. The factual allegation in the 1st sentence of paragraph 3 was not shown by the evidence. The rest of paragraph 3 is adopted. Paragraph 4, 5 and 7 are subordinate. Paragraph 6 is not shown by the evidence. Paragraph 8 discusses evidence not presented at the final hearing and is inadmissible. Paragraph 9 is irrelevant. COPIES FURNISHED: Charles D. Youmans, pro se Route 5, Box 44 Brunswick, Georgia 31520 Warren J. Schulman SCHULMAN, HOWARD & HEMPHILL, P.A. 331 East Union Street, Suite 1 Jacksonville, Florida 32202 Sam Power, HRS Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Tom Batchelor Staff Attorney House HRS Committee The Capitol Tallahassee, Florida 32399-1300 =================================================================
Conclusions Having reviewed the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaint and Election of Rights form to the Respondent. (Ex. 1) The Election of Rights form advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Respondent shall pay the Agency $12,000.00. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 30 days of the Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 1 Filed June 19, 2012 8:35 AM Division of Administrative Hearings ORDERED at Tallahassee, Florida, on this wi day of Sterne , 2012. Elizabeth Dudek)Secretary Agency for Healtfi Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct copy of this Final Order was served on the below-named persons by the method designated on this / yoniny of Joe , 2012. Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Finance & Accounting Facilities Intake Unit Revenue Management Unit (Electronic Mail) (Electronic Mail) Andrea M. Lang, Senior Attorney JoAnne K. Little, General Counsel Office of the General Counsel SunCrest Healthcare Agency for Health Care Administration 510 Hospital Drive, Suite 100 (Electronic Mail) Madison, Tennessee 37115 (U.S. Mail) Elizabeth W. McArthur Administrative Law Judge Division of Administrative Hearings (Electronic Mail)
Conclusions Having reviewed the administrative complaint dated May 21, 2009, attached hereto and incorporated herein (Exhibit 1), and all other matters of record, the Agency for Health Care Administration (“Agency”) has entered into a Settlement Agreement (Exhibit 2) with the other party to these proceedings, and being otherwise well-advised in the premises, finds and concludes as follows: ORDERED: 1. The attached Settlement Agreement is approved and adopted as part of this Final Order, and the parties are directed to comply with the terms of the Settlement Agreement. 2. Respondent shall pay an administrative fine in the amount of $17,500.00, of which $3,038.29 constitutes the reimbursement of costs for actual litigation expenses. The administrative fine is due and payable within thirty (30) days of the date of rendition of this Order. The payment shall not be considered an administrative sanction under Section 400.471(10), Florida Statutes (2009). 3. A check should be made payable to the “Agency for Health Care Administration.” The check, along with a reference to this case number, should be sent directly to: Agency for Health Care Administration Office of Finance and Accounting Revenue Management Unit 2727 Mahan Drive, MS #14 Tallahassee, Florida 32308 4. Unpaid amounts pursuant to this Order will be subject to statutory interest and may be collected by all methods legally available. 5. Each party shall! bear its own costs and attorney’s fees. 6. The above-styled case is hereby closed. DONE and ORDERED this Y day of MOLLY, 2010, in Tallahassee, Leon County, Florida. Agency for Health Care Administration A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW OF PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED. Copies furnished to: Christopher Parrella, ].D., CHC, CPC | Lourdes A. Naranjo, Esq. The Health Law Offices of Assistant General Counsel Anthony C. Vitale, P.A. Agency for Health Care 2333 Brickell Avenue Administration Suite A-1 8350 N. W. 52 Terrace — Suite 103 Miami, Florida 33129 : Miami, Florida 33166 (U. S. Mail) (Interoffice Mail) Finance & Accounting . Stuart M. Lerner Agency for Health Care Administrative Law Judge Administration Division of Administrative Hearings 2727 Mahan Drive, MS #14 1230 Apalachee Parkway Tallahassee, Florida 32308 Tallahassee, Florida 32399 (Interoffice Mail) (U.S. Mail) Jan Mills Agency for Health Care Administration 2727 Mahan Drive, Bldg #3, MS #3 Tallahassee, Florida 32308 | (interoffice Mail) CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of this Final Order was served on the above-named person(s) and entities by U.S. Mail, or the method designated, on this the _{f ” day of Petcas ye , 2010. Richard J. Shoop Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Building #3 Tallahassee, Florida 32308 (850) 922-5873
The Issue Whether Petitioner should continue to receive services of incontinence supplies from Respondent.
Findings Of Fact William suffers from Spina Bifida (SB), having been born with SB, and is confined to a wheelchair. Among other things, SB affects his bladder and urinary tract system. William is now 17 years of age. William must catheterize each day. If he does not, bladder infections will occur, which in turn will lead to kidney problems. William is in need of diapers, which assist in preventing infections. As a result of SB, William also suffers from incontinence. He is in need of diapers. In addition to helping his medical condition, the diapers help to maintain William’s self-esteem when he is around his classmates and others. There is no dispute that William has a disability, that he needs diapers, and that he is eligible for the service. As of November 1, 2001, the Department terminated the services of providing diapers to William because there were “insufficient funds with which to continue funding the service,” with such service being “funded solely through the Department’s Individual Family Supports [IFS] or General Revenue.” The Department provided written notification of the termination by letter dated March 15, 2002. Ms. St. Pierre was orally notified by William's Support Coordinator on November 15, 2001; shortly thereafter, a letter was to be sent to Ms. St. Pierre from the Department explaining the reason for the termination. No evidence was presented to show that the letter was sent. IFS is funded by general revenue dollars. The providing of William's service--providing diapers-- is through general revenue. William is continuing to receive the service pending the outcome of the instant case. Only recently, in or around July 2002, Ms. St. Pierre became re-employed after having been unemployed for approximately three months. The focus of the instant matter is not on William’s eligibility for services but on the Department’s limited funds and on the spending-prioritization policies adopted by the Department and approved by the Florida Legislature. One of the documents that the Department relies upon for the termination of William’s service is the “Developmental Disabilities Home and Community Based Services Waiver Fiscal Year 2001-2002 Spending Plan Instructions” (Spending Plan). The Spending Plan states in pertinent part: By June 30, 2001, the Department of Children and Families expects to serve 25,002 persons through the Developmental Disabilities Home and Community Based Services Waiver (Waiver). . . . In order to be able to serve the greatest number of persons possible within the legislative appropriation for Waiver services, the Department will implement a number of strategies to ensure that appropriate Waiver services are provided in the most cost-effective manner. . . . * * * Spending Plan priority for FY 01-02: Remaining persons from July 1, 1999 waiting list--350 persons who will be served during July and August 2001. Cramer v. Bush class members--estimated 20 persons who will be served upon request, throughout the fiscal year. Persons who are determined to be [in] crisis who were not on the original waiting list--estimated at 10 persons per month and to be served throughout the fiscal year. Persons discharged from the Mentally Retarded Defendant Program. Persons who have become clients since July 1, 1999, in date order (new waiting list)--projected to be approximately 6,284 persons remaining to be phased in between March 2002 and June 2002, subject to vacancies on the Waiver and available funding. The list of such individuals will be developed at the central office; persons will be served in date order, based on the date the individual became a client. In order to serve the estimated 6,774 individuals who are projected to want and need Waiver services during FY 01-02, enrollment on the Waiver will be phased in as described above. Compliance with the Spending Plan Compliance with the approved Spending Plan for FY 2001-2002 is required of all Department employees. The Central Office will monitor all enrollment activity and notify districts when an individual has been enrolled on the Waiver, and to proceed with the provision of services. The Central Office of the Developmental Disabilities Program will review and process District requests for assignment of a Waiver slot, based on the District's "crisis" determination. Upon completion of the Central Office review, where the Central Office has confirmed a determination of "crisis", the District will be notified when the individual is enrolled on the Waiver, and to proceed with the provision of services. The use of non-Waiver funds (Individual and Family Supports (IFS) budget category) to fund services for additional persons who are awaiting enrollment on the Waiver is prohibited. Personal Care Assistance Services As required by Medicaid regulations, the Department must require the use of regular Medicaid State Plan services when the individual is eligible to receive the services through the Medicaid State Plan. Provision of Waiver services must also comply with federally approved service definitions. Developmental Disabilities currently provides personal care assistance services to 1,232 children. Some of these children may be eligible under regular Medicaid EPSDT (Early, Periodic Screening, Diagnosis & Treatment) coverage. Medicaid state plan covers Personal Care Assistance for children who are eligible to receive nursing services. Children eligible for personal care assistance under Medicaid state plan must receive the service through this funding. [The ensuing five paragraphs continue to discuss children, the Medicaid state plan, and the Waiver.] New requests for personal care assistance will be assessed first to determine whether [the] Medicaid state plan is appropriate. If this is not appropriate, the need for coverage under the Waiver will be made according to the federally approved service description. * * * Require Use of Waiver Funding, where available Because of limited funding and the need to maximize the use of General Revenue funds by obtaining federally matching funds wherever possible, Individual and Family Supports (IFS) funding is no longer available for persons who are eligible to receive Waiver-funded services, but who have refused services funded through the Waiver. Some people who are eligible have rejected services funded through the Waiver. The Department will offer Waiver services to those individuals. For those who continue to refuse services funded through the Waiver, IFS expenditures will be discontinued due to lack of funding, with appropriate due process notice. Maximize Federal Funding Similarly, effective immediately, all covered Waiver services must be provided through Waiver funding. The purchase of Waiver billable services through the IFS budget category is no longer allowable, unless the Central Office has approved an exception. As to the Spending Plan, as it relates to spending at the local level, the Department's local districts submit their needs to the Department and the Department determines the allocations. The Department determines how the dollars will be spent. The Department also relies upon the following document: "Developmental Disabilities Program Fiscal Year 2001-2002 Spending Plan, Interim Notice To Individuals Seeking Services From The Florida Developmental Disabilities Program"--Revised September 2001--hereinafter, Interim Notice. The Interim Notice addresses the Waiver program and provides in pertinent part: The Agency for Health Care Administration, the State Medicaid Agency, and the Department of Children and Family Services have requested permission from the Department of Health and Human Services, Health Care Financing Administration (HCFA), to add 450 additional persons to the Florida Developmental Services Home and Community- Based Services Waiver (Waiver) between now and March 1, 2002. At this point, with the funding appropriated by the Florida Legislature for fiscal year 2001-2002, the Department anticipates that it will enroll no more than 450 persons on the Waiver before March 1, 2002. The persons who will be enrolled on the Waiver out of these available slots or vacancies are as follows: No more than 350 persons who became clients of the Developmental Disabilities Program prior to July 1, 1999, and who wish to be enrolled on the Waiver. No more than 80 persons who have become clients of the Developmental Disabilities Program after July 1, 1999, who are determined to be in a life-threatening crisis. . . . All individuals currently residing in private ICF/DDs who, after choice counseling, request community-based placement and are determined by the state's treatment professionals to be appropriate for community-based placement. You may have heard that the Florida Legislature appropriated $78,000,000 in additional funding to community-based services individuals with developmental disabilities. However, only about $20,000,000 of this appropriation will be available to enroll new individuals on the Waiver. About $58,000,000 of the appropriated amount for community-based services for fiscal year 2001-2002 is needed to continue funding services for individuals who were enrolled on the Waiver last year. . . . William's mother did not receive a copy of the Interim Notice. Additionally, the Department relies upon the following document: "Developmental Services Home and Community-Based Services Waiver Services Directory." This document too addresses the Waiver program. Further, the Department relies upon two legislative conference reports for fiscal year 1999-2000 and 2000-2001. The two conference reports are instructive. The "Conference Report on Senate Bill 2500: General Appropriations for 1999-2000" provides in pertinent part: From the funds in Specific Appropriation 381, $20,000,000 in recurring Tobacco Settlement Trust Fund and $25,259,108 in Operations and Maintenance Trust Funds are provided to meet the needs of developmental services participants based on the individuals' most recent support plans. This lump sum is a continuation of the 1998-99 appropriation based on a redesigned system. Priorities for this funding, in order, are as follows: 1) Transitions for those requesting transfers from Intermediate Care Facilities for the Developmentally Disabled (ECF/DD) institutional placements into Home and Community Based Waiver residential placements, and 2) Meeting the needs of identified under-served participants in the Home and Community Based Waiver Services . . . A budget amendment for the release of all or a portion of this lump sum is contingent upon accurately reporting the needs of those persons who are under-served waiver participants to the legislature. The "Conference Report on House Bill 2500: General Appropriations Act FY 2000-2001" provides in pertinent part: Funds in Specific Appropriation 344 and 339 are provided to meet the needs of developmental services Medicaid Waiver participants based on the individuals' most recent support plans. Priorities for this funding, in order, are as follows: 1) Transitions for those requesting transfers from Intermediate Care Facilities for the Developmentally Disabled (ECF/DD) institutional placements into Home and Community Based Waiver residential placements or other community waiver services, and 2) Meeting the needs of identified under served participants in the Home and Community Based Waiver Services . . . The Medicaid waiver services mix must be fully met for all eligible participants before funds are transferred to non-Medicaid covered services with the exception of room and board payment. . . . No conference report for the fiscal year 2001-2002 was presented by the Department. The Department relies upon several other documents that pertain to the Developmental Services Home and Community-Based Services waiver. The testimony of the Department's witness, as to the Department's funding, focused primarily on the Waiver program, not general revenue. The focus of Department's documents is the Waiver program, not general revenue. The Department's evidence of lack of general revenue funds is insufficient.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Children and Family Services enter a final order reinstating the providing of diaper services to William Alaire. DONE AND ENTERED this 26th day of November, 2002, in Tallahassee, Leon County, Florida. ERROL H. POWELL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of November, 2002. COPIES FURNISHED: Wendy St. Pierre Qualified Representative 1295 Savoyard Way Royal Palm Beach, Florida 33411 Colleen Farnsworth, Esquire Department of Children and Family Services 111 South Sapodilla Avenue, Suite 201 West Palm Beach, Florida 33401 Paul F. Flounlacker, Jr., Agency Clerk Department of Children and Family Services 1317 Winewood Boulevard Building 2, Room 204B Tallahassee, Florida 32399-0700 Josie Tomayo, General Counsel Department of Children and Family Services 1317 Winewood Boulevard Building 2, Room 204 Tallahassee, Florida 32399-0700
The Issue The issue is whether proposed rule 25-14.031 of the Public Service Commission constitutes an invalid exercise of delegated legislative authority.
Findings Of Fact Background The Public Service Commission (Commission) proposed rule 25-14.102, Florida Administrative Code, governing accounting for other postretirement benefits (OPEBs), by publication in the Florida Administrative Weekly. The Citizens of the State of Florida (Citizens) filed a timely challenge to that proposed rule, and they have standing to bring the challenge. The proposed rule applies to utilities regulated by the Commission under Chapters 364, 366 and 367, Florida Statutes (1991), which include telecommunications companies, investor-owned electric and gas utilities, and water and wastewater utilities. No specific statute requires that a regulated utility use the accrual accounting method for OPEBs. Section (1) of the proposed rule defines postretirement benefits other than pensions, and prescribes the sole acceptable method for measuring and recognizing the employer's accumulated postretirement benefit obligation.1 Under Section (2), utilities must account for the cost of such benefits in the manner required by Statement of Financial Accounting Standards No. 106, entitled "Employers' Accounting For Postretirement Benefits Other Than Pensions" published by the Financial Accounting Standards Board in December 1990, and they are prohibited from using deferral accounting under Statement of Financial Accounting Standards No. 71 (Accounting for the Effects of Certain Types of Regulation) for these benefits unless the utility obtains prior approval from the Commission. Section (3) specifies that unfunded accumulated postretirement benefit obligations will be treated as a reduction to rate base in Commission rate proceedings. This means a utility is not entitled to earn a return on an amount equal to the accumulated postretirement benefit obligation recognized on its financial statement which the utility has not actually funded. This can be done by treating the unfunded obligation as a reduction to the utility's working capital by adding it to current liabilities. Section (3) also makes explicit that if the Commission disallows a specific OPEB expense, the cost of that disallowed expense does not reduce the utility's rate base. The Board and its Standards The Financial Accounting Standards Board is the authoritative body which promulgates standards of financial accounting for the accounting profession. It was organized in 1972 as the successor to the Accounting Principles Board. The Board derives its authority through Rule 203 of the Code of Professional Ethics of the American Institute of Certified Public Accountants. Its pronouncements are an important source of what are known as "generally accepted accounting principles." These principles are concerned with both measurement and disclosure. Measurement principles determine the timing and amounts of items which enter the accounting cycle and have an impact on financial statements. They are quantitative standards which require numerically precise answers to problems and activities which may be subject to substantial uncertainty. Disclosure principles deal with factors which may not be numerical. They compliment measurement standards by explaining the standards and giving other information on accounting policies, contingencies and uncertainties which are essential ingredients in the analytical process of accounting. Generally accepted accounting principles thus include the measurement of economic activity, the time when such measurements are made and recorded, disclosures surrounding these activities, and the preparation and presentation of summarized economic activities found in financial statements. Complicated business activities often give rise to complex accounting principles. The Board has issued 110 Statements on Financial Accounting Standards to date, issued Interpretations and Technical Bulletins, and devoted substantial time and resources to development of a Conceptual Framework for Financial Accounting. Once adopted by the Financial Accounting Standards Board, the text of numbered financial accounting standards are not amended. If, for some reason, the Board wished to change the accounting treatment required by a Financial Accounting Standard, a new standard bearing a new number would be adopted. Under current practice of the Financial Accounting Standard Board, the Commission's adoption of FAS 106 is not an attempt to currently adopt future changes to FAS 106, for there will be none. Moreover, the language of section (1) of the proposed rule adopts the Standard as promulgated in December 1990. Standard 106, which the proposed rule would adopt, is not solely applicable to utilities, but is part of generally accepted accounting principles applicable to all business enterprises. Standard 106 sets measurement and disclosure standards for the manner in which postretirement benefits other than pensions are treated in external financial statements. Standard 106 itself consists of 38 pages of black letter text, and is supplemented with appendices which include a comparison of accounting for other postemployment benefits with accounting for pensions; illustrations; background information concerning considerations which were the basis for the conclusions reached in Standard 106 which are an integral part of the Standard; and a glossary (Commission composite Exhibit 1, at tab 2). The Standard treats OPEBs as a form of deferred compensation and requires accrual accounting. Expected postretirement costs are to be attributed to the period when an employee renders services. The Standard prescribes a uniform methodology for measuring and recognizing the employer's accumulated postretirement benefit obligation. The Standard applies to all postretirement benefits, and benefits payable to disabled workers. The benefits encompassed include tuition assistance, legal services, day care, housing subsidies, and other benefits. The most significant one is postretirement health care. Benefits most often depend on a formula established by the employer, using factors such as years of service, or compensation before retirement. These benefits may be available to current employees, former employees, beneficiaries such as spouses and to persons dependent on the retiree. The Standard focuses on the substantive benefit plan--the one employees understand based on past practice or by the employer's communication of intended plan changes. This is usually the same as the employer's current benefit plan, but if the written plan and practice differ, practice controls. Using the substantive benefit plan, the Standard attempts to account for the exchange between employers who provide OPEBs and employees whose services are provided at least in part to obtain these OPEBs. Standard 106 requires that the employer's liability be fully accrued when the employee is fully eligible for all expected benefits, even if the employee continues to work, since the employee has already provided the service which has earned the benefits. The costs are attributed in equal amounts (unless the plan text loads a disproportionate share of benefits in early years of employment) over the period from initial employment until the employee attains full eligibility for all benefits. The basic tenet of FAS 106 is that while it requires the use of some variables that are difficult to measure, recognition and measurement of the overall liability of the employer to provide OPEBs is best done through accrual accounting. The use of estimates is superior to implying, by failure to accrue, that no cost or obligation exists prior to the actual cash payment of benefits to retirees. The Financial Accounting Standards Board began work on accounting for OPEBs in 1979, as part of an ongoing project on accounting for pensions. By 1984, the Board decided to separate out accounting for OPEBs as a separate project. In April 1987 the Board issued, as an interim measure, its Technical Bulletin No. 87-1, Accounting For A Change In Method Of Accounting For Certain Postretirement Benefits. Standard 106 amends another, older source of generally accepted accounting principles, Opinion 12 of the Accounting Principles Board of the American Institute of Certified Public Accountants, a predecessor to the Financial Accounting Standards Board. The amendment is effective for fiscal years beginning after March 15, 1991. Portions of Standard 106, which are wholly new and not an amendment to APB 12, are effective for fiscal years beginning after December 15, 1992. Standard 106 shares with other accounting standards a salient characteristic of pension accounting--delayed recognition. Changes are not made immediately, but are recognized in a gradual and systematic way. This is why there is a transition obligation in Standard 106. The employer's accumulated postretirement benefit obligation for benefits attributable to the period before Standard 106 became effective is recognized on a delayed basis. The recognition period used must result in recognition of the accumulated obligation at least as rapidly as it would be recognized on a "pay- as-you-go" or cash basis. Until a utility actually recognizes a portion of its accumulated postretirement benefit obligation, that portion of the obligation plays no part in setting the utility's rates. The Standard requires the use of some assumptions, i.e., the estimates about the occurrence of future events, such as plan continuity. Continuity of the substantive plan for OPEBs is presumed in the absence of evidence to the contrary. Actuarial assumptions are also required, such as retirement age, salary progression in pay-related benefit plans, the probability of payment based on employee turnover, mortality and dependency status. When discount rates are used in present value calculations required by the Standard, they are to be based on current interest rates, as of the measurement date, for high quality fixed income investments with similar face amounts and maturities at which the postretirement benefit obligations could be settled. Present value factors for health care benefits require consideration of cost trend rates, medicare reimbursement rates and per capita claims cost by age. Standard 106 requires companies to recognize and account for the cost of OPEBs during the time period in which employees earn those benefits. Companies have generally recognized the expense of OPEBs on their financial statements only as those benefits were paid out to retired employees rather than accruing a liability for those future payments as they were earned by employees (the "accrual method"). The pay-as-you-go method was acceptable when OPEB expenses were small, but those expenses are now so significant that the Financial Accounting Standards Board has determined that the pay-as-you-go method of accounting distorts financial statements and is inappropriate. The utility rate payers pay the cost of OPEBs and other expenses in their utility rates. Recognition of OPEB expenses under the pay-as-you-go method causes current utility rate payers to fund benefits paid to retired utility employees. After the transition period, the implementation of accrual accounting for OPEBs will match employees' OPEB expenses solely with the group of rate payers who actually benefit from service from those employees. The accrual accounting method also contributes to containment of health care costs, since utilities must currently measure the value of the benefits promised in the future and also book a liability for those future health care costs attributable to all employees, not just retired employees. Other accrual requirements of the Commission The Commission already requires utilities to use accrual accounting for other significant expenses. Utilities accrue depreciation expenses after their initial cash outlay for plant so that the cost of construction is paid over the useful life of the plant by rate payers who receive service from that plant, rather than from rate payers who happened to be using the system during the period in which the plant was constructed and the construction cost incurred. These expenses do not represent actual cash outlays. As is typical of depreciation, these non-cash expenses are not matched with deposits in internal or external accounts to provide a fund out of which to build new plants as current plants are retired. Rather, depreciation expenses recovered in utility rates become an additional source of cash, which is matched by a corresponding decrease in the value of plant on which a utility earns a rate of return. Utilities accrue nuclear decommissioning expenses before those expenses actually become current cash outlays. Through this method, rate payers who have received the benefit of power produced at a nuclear plant pay an estimated portion of the eventual dismantlement cost of the plant in each of the years during which the plant is actually in service. Unlike depreciation, the Commission requires that these expenses be funded currently, because the cost of closure of nuclear plants will be large--perhaps hundreds of millions of dollars in a one-year period. It could be difficult or impossible for a utility to raise such amounts in the capital markets at the time they are needed. Requiring accrual accounting treatment for OPEB expenses is consistent with existing Commission policy for the treatment of these other large expenses. Commission policy development Before this rule was proposed, the Commission was developing a policy on proper accounting for OPEB expenses in utility rate hearings conducted under Section 120.57, Florida Statutes. In rate cases for Centel and Gulf Power Corporation, the Commission required the use of accrual accounting for OPEBs. In the latest rate case for Florida Power Corporation, Final Order PSC-92-1197- FOF-EI entered October 22, 1992, the Commission ordered the utility to adopt accrual accounting for OPEB expenses under FAS 106 (Commission Exhibit 2 at 67, paragraph Z). In the latest rate case for United Telephone Company of Florida, Final Order PSC-92-0708-FOF-TL, the Commission also ordered that utility to adopt accrual accounting for OPEBs under FAS 106 (Commission Exhibit 3 at 34, paragraph VII.C.1.) In none of these cases did the Commission take the position that the use of accrual accounting under FAS 106 automatically required Commission approval of all expenses shown by the utilities as OPEB expenses in their rate filings with the Commission. The proposed rule instructs utilities how to prepare their accounting information for Commission review. The rule's text does not require the Commission to allow recovery of all costs presented for review in each rate case. A utility recovers accrued OPEB expenses through rates only when the Commission takes action to change rates, and that action always takes place in the context of a rate case which is subject to a Section 120.57(1) evidentiary hearing. In a rate case, the Commission will review the utility's accrual for OPEB expenses, and has the authority to disallow any expense which the Commission finds imprudently incurred, unreasonable in amount, or not related to providing utility service. Adoption of FAS 106 does not limit the Commission's ability to adjust expenses claimed by utilities. The Commission has recognized in the Economic Impact Statement for the proposed rule that intervenors can challenge a utility's actuarial assumptions, discount rates, benefit levels, cost containment efforts, or other accruals in rate hearings (Commission Composite Exhibit 1, tab 3, EIS at page 5). The proposed rule represents a policy decision made by the Commission, which is consistent with the conclusion reached by the Financial Accounting Standards Board, that accrual accounting under FAS 106 is the most appropriate method to account for OPEB expenses. Impermissible Assumptions? Citizens object that the rule provides vague guidance to utilities about what should be included in the calculation of OPEB expenses, but sets no specific formula for expense calculations so that two companies would apply a formula and arrive at the same result if they were providing similar benefits. Under FAS 106 the utilities must make estimates and assumptions, and the manner in which they are used can affect the final benefit cost used in rate setting. Under the proposed rule, the utilities are not required to fund the accumulated postretirement benefit obligation, which is an expense, with an internal or external account. Just as depreciation expenses result in a write- down of the value of the depreciated asset, so that the utility earns a rate of return only on the depreciated asset value, any unfunded accumulated postretirement benefit expense allowed by the Commission reduces the utility's rate base so no return is earned on that amount. This can be done as a reduction to the utility's working capital, by treating any portion of the accumulated postretirement benefit obligation which has been allowed but not actually funded by the utility as a current liability. For some utilities, such as water and sewer utilities, the regulatory accounting derives working capital in an unusual way--i.e., by computing one eighth of the operation and maintenance expense rather than subtracting current liabilities from current assets (Tr. 118). For these utilities, the reduction to rate base will have to be accomplished in some other way. If a specific OPEB expense for retirees is disallowed by the Commission (e.g., dental coverage for retirees) the utility does not recover that expense in its rate base. Concomitantly the disallowed expense does not become a reduction to rate base [Tr. 151, proposed rule section (3)]. 1. The Substantive Benefit Plan. 25. The first assumption a utility must make concerns the substantive content of the future benefit plan. Standard 106 requires a utility to assume that its current written benefit plan will be the plan in effect throughout the time used to calculate benefits for employees who will retire in the future. The utility may deviate from this written plan if it has communicated to its employees that their postretirement benefits will be something other than what is found in its current plan. Standard 106 requires the utility to decide whether it has communicated something other than its current plan to its employees and if so, what that plan is. The substantive plan must be disclosed in the utility's filings with the Commission [Standard 106, paragraph 74(a)]. The witness for the Citizens has reviewed benefit plans for nine utilities, and found that although they are quite detailed, all contain language which permits the utility to modify, amend, withdraw, or terminate benefits. This does not invalidate the proposed rule. Assumptions must necessarily be made today about benefits payable in the future. The Commission retains the authority to review the explicit assumptions the utility makes about the future content of its benefit plans when evaluating a utility's current OPEB expense. The disclosure requirement will draw attention to the utility's choices, which the Commission can review. Significant matters which must be disclosed include any changes in cost-sharing provisions between the utility and retirees in the form of co- payments or deductibles, changes in monetary benefits, changes in employees covered or types of benefits provided, or the utility's funding policy for its allowed OPEB expenses. 2. Transition obligation and amortization period. 26. Standard 106 also permits utilities to make assumptions and requires disclosures about their transition obligation and amortization period. The transition obligation is one of six cost components that a utility may include in the calculation of postemployment benefits under FAS 106. The transition obligation attempts to quantify and recognize the employer's liability for benefits that employees accrued or earned before accruals for OPEB expenses became mandatory. It attempts to recognize prior period costs, and to include those costs on the utilities' financial statements. The amortization period for the transition obligation is not a set number of years, FAS 106 allows the utilities a range of choices. Prior period costs can be immediately recognized in the first year FAS 106 is effective, or amortized over the average service life of employees, or over some set number of years. The amortization period may be anywhere from one to twenty years for a particular utility, but cannot be slower than the recognition of the obligation on a pay-as-you-go or cash basis. The shorter the amortization period, the higher the annual cost that will be recognized currently. Rate payers in those years covered by the amortization period will pay for a portion of the prior period costs in each of those years. Thus, if a ten-year period is used, the rate payers for the next ten years will be charged currently for benefits to be paid in the future to employees, which benefits were earned before the accrual method of accounting for OPEBs was required by FAS 106, in addition to accruals for current employees. Standard 106, paragraph 74 (b) includes required disclosures about amortization of unrecognized transition obligations. 3. Attribution period. 27. The Standard also requires the utilities to compute an attribution period, which measures the timing of an employee's eligibility for benefits, and attributes the benefit earned by the employee to that period. For example, if the utility's substantive plan promises employees that they will receive OPEB benefits once they reach the age of 55 if they also have five years of service with the utility, then the utility must accrue the full liability associated with the total cost of that employee's OPEBs by the time the employee reaches age 55 and has five years of service, even though the employee may continue to work beyond that time. Standard 106 does not require the utility's substantive plan to contain any specific attribution period. This permits utilities with otherwise similar circumstances but different substantive plans to have an attribution period of "55 years old with ten years of service" while another may select a period of "55 years old and five years of service." Because the second utility promises the employees benefits in a shorter period of time, the annual cost, which is recovered from the rate payers, will be greater under FAS 106 for the second utility than for the first. The terms of the substantive plan control because it is the best evidence of the exchange transaction between employer and employee. 4. Marital and Dependent Status. 28. The Standard also directs the utility to develop an explicit assumption about its employees' marital status and number of covered dependents on retirement. This is important because substantive plan provisions which entitle a spouse or dependents to health care or other welfare benefits substantially increase the employer's cost and obligation for postretirement benefits. Utilities historically have used differing assumptions about these matters. These factors can be determined based on the actual experience of each utility, and may vary from utility to utility. 5. Discount Rate. 29. A discount rate is applied to a company's calculated future postretirement benefit liability in order to discount that amount back to a present value. The liability for OPEB expenses for the period prior to the adoption of FAS 106 is amortized. In other words, the discount rate is used to calculate a present value of the utility's transition obligation. The selection of a discount rate is initially left to the utility. The discount rates used by business enterprises have varied. Since a difference in the discount rate selected could result in approximately a ten percent difference in the utilities' annual expense for OPEBs, two different utilities, in similar circumstances and with similar customer bases in geographic proximity to one another could use different discount rates, and generate different expenses for similar OPEBs. Discount rates are, however, to be chosen based on the interest rates paid, as of the measurement date, on high grade investment securities that have cash flows matching the timing and amount of benefit payments due to employees. The variability should be minor from utility to utility if the measurement dates involved are similar and the timing and amounts of benefits due are similar. The weighted-average of assumed discount rates used to measure the accumulated postretirement benefit obligation must be disclosed. Standard 106, paragraph 74(e). 6. Future Medical Expenses. Standard 106 requires utilities to measure expected postretirement benefit obligations for health care benefits by making explicit assumptions about the timing and amount of these benefits payable to plan participants in the future. Recent medical claims costs in the geographic area are useful in making estimates of assumed per capita claims cost by age from the earliest date benefits could be due to a participant through the longest life expectancy of participants. Utilities must also calculate their best estimate of the projected medical inflation trend far into the future. The FAS 106 does not require or even suggest a specific time frame that the utilities' estimated trend rate is to encompass. There are a number of indices currently used to evaluate medical inflation which could be used, such as the National Hospital Input Price Index, or a utility could develop a Florida hospital input price index. Some indices show medical inflation trend rates as high as 21 percent, others are as low as 13 percent. The effect of a one percent change in the medical inflation trend can result in a change of 15 to 19 percent in the utilities' current expense level, to be charged to current rate payers. Over time it should be possible to use claims cost data specific to each utility, based on 1) current medical care utilization and delivery patterns, 2) evidence of the health status of covered employees, and 3) the location of employees, to project costs specifically for the Florida markets where retirees reside. More art than science is inherent in factoring in assumptions about changes in health care utilization patterns based on technological advances. This is the stock-in-trade of consulting actuaries, and such estimates can be made. These estimates are more easily evaluated because a sensitivity analysis of the effect of a 1% increase in assumed health care cost trend rates on the accumulated postretirement benefit obligation for health benefits, and on the aggregate of the service and interest cost components of net periodic postretirement health care benefit costs are required to be presented by the utility. Standard 106, paragraph 74(f). The short answer to the problem of variability arising from the use of permissible assumptions under FAS 106, is that the rule is not invalid because acceptable choices are not etched in stone. All choices available under FAS 106 are subject to review by the Commission. Important ones must be highlighted by disclosures and, in some cases, sensitivity analyses. Unreasonable assumptions could be rejected by the Commission, even though the rule does not state this in haec verba as to each of the estimates or assumptions available to utilities under the proposed rule. The simplest example would be the utilities' selection of a discount rate. The Commission has modified the discount rate selected by a utility in the past. If the rate selected is unreasonable, based on the market interest rate being paid on high quality fixed income investments as of the measurement date, the Commission could disallow the utilities' assumption, and use instead another rate which the Commission determined from evidence more closely reflected the market rate for analogous investment vehicles providing necessary cash flows for expected benefit payouts. The text of FAS 106 requires the utility to use the assumption that "individually represents the best estimate of a particular future event, to measure the expected postretirement benefit obligation." FAS 106, paragraph 29. The utility is not free to make whatever assumption it believes will result in the highest charge to its customers. The test is whether the assumption made reflects the utility's "best estimate of the plan's future experience solely with respect to that assumption" (FAS 106, Glossary, definition of Explicit Assumptions, at page 197, Commission Composite Exhibit 1, tab 2 [emphasis added]). The Commission retains authority to question whether an assumption is the best estimate of future experience, which is a fact specific inquiry into the circumstances of each utility, its employee cohort and its substantive plan. The Commission has authority in the text of FAS 106 to make a searching inquiry into each explicit assumption to insure that the best estimate, given the utility's unique circumstances, has been used. If not the Commission can disallow the expense the assumption generates.
The Issue The issue is whether Petitioner and her family are entitled to services on account of her developmental disability.
Findings Of Fact Petitioner was born on September 8, 1981. Seven years ago, she suffered a severe brain injury as a result of five hours of diabetes-induced seizures resulting from low blood sugar. The incident left Petitioner in an entirely dependent state. Presently, at 20 years old, Petitioner has the intellectual development of a two-year-old and requires constant care, seven days a week, 24 hours a day. Petitioner's present condition actually represents a marked improvement from her condition immediately after the seizures and brain injury. Declining to institutionalize Petitioner, her parents have provided the care that Petitioner has needed to regain her abilities to walk and talk (with considerable difficulty) and to use her arms and hands. Despite these dramatic developments, Petitioner still requires as much care as she required immediately after the injury; she cannot, for example, feed herself or maintain continence. Behaviorally, Petitioner presents a considerable challenge due to her nonexistent impulse control and tendency toward explosive outbursts. At 5 feet, seven inches tall and 200 pounds, Petitioner is strong, and she is capable of attacking with unmediated force. Petitioner's father, who is 48 years old, is six feet, one inch tall and weighs 350 pounds. Her mother, who is 42 years old, is at least the size of Petitioner. When infuriated, Petitioner can physically overpower her parents, as well as her 18-year-old and 22-year- old siblings--all of whom have suffered injuries from Petitioner's attacks. Petitioner's father has suffered cellulitis at the site of an injury that he sustained from one of his daughter's attacks. Petitioner has a very limited attention span and frustrates easily. She does not like being closed in, and, when upset, she strikes out. In addition to attacking her caregivers, Petitioner has damaged property in her outbursts. Her father estimates that Petitioner has broken seven motor vehicle windshields--sometimes while the vehicle was in operation. Several times a day Petitioner becomes agitated and engages in physical outbursts. Managing Petitioner's unpredictable and dangerous behavior has placed considerable demands on her parents. Petitioner's father is the senior pastor of North Palm Baptist Church in Miami. Petitioner's mother is an administrative assistant to the Director of Missions of the Miami Baptist Association. Each weekday during the school year, Petitioner leaves home at 6:00 a.m. to ride a bus to her special school, and she returns by bus at 3:30 p.m. Her father must cut short his workday to meet the school bus each afternoon. For respite care, Petitioner's parents seek the assistance of a person capable medically of supervising Petitioner's severe diabetes, such as administering her injections, and capable physically of handling Petitioner's disruptive behavior. Petitioner's father normally sleeps near Petitioner, who wakes up every time her covers come off, which may happen 75 times a night. The intensive, unending care that Petitioner's parents have had to provide their daughter has caused them great stress. For speech therapy, Petitioner's parents seek assistance to remediate Petitioner's extensive verbal deficits. For two years after the incident, Petitioner was nonverbal. Her ability to articulate has slowly improved, but she remains nonverbal at school. For personal services, Petitioner's parents seek the assistance of a person to meet Petitioner when she gets off the bus from school, give her a snack, bathe her, and attend her until her parents come home from work. This person must have the physical capability of ensuring that Petitioner does not injure herself or others during one of her frequent and unpredictable outbursts. Petitioner and her parents moved to Florida from South Carolina in July 2000. Within a month, Petitioner had applied for developmental disability services. However, Petitioner has not been able to obtain general revenue-funded services or Home and Community-Based Waiver services funded by Medicaid. In rejecting Petitioner's request for services, Respondent has relied on two documents: "Developmental Disabilities Home and Community Based Services Waiver Fiscal Year 2001-2002 Spending Plan Instructions" (Spending Plan) and "Developmental Disabilities Program Crisis Identification Tool-- revised 9/2001" (Crisis Identification Tool). Respondent also relies on testimony that Petitioner lacks the funds to provide developmental disability services to all applicants. Although Respondent does not dispute that Petitioner otherwise qualifies for the developmental disability services that she seeks--from both programs--Respondent contends that she does not qualify under the Spending Plan and related documents, which Respondent contends it must apply due to the lack of funds. The Spending Plan states in part: By June 30, 2001, [Respondent] expects to serve 25,002 persons through the Developmental Disabilities Home and Community Based Services Waiver (Waiver). . . . In order to be able to serve the greatest number of persons possible within the legislative appropriation for Waiver services, [Respondent] will implement a number of strategies to ensure that appropriate Waiver services are provided in the most cost-effective manner. . . . * * * Spending Plan priority for FY 01-02: Remaining persons from July 1, 1999 waiting list--350 persons who will be served during July and August 2001. Cramer v. Bush class members--estimated 20 persons who will be served upon request, throughout the fiscal year. Persons who are determined to be [in] crisis who were not on the original waiting list--estimated at 10 persons per month and to be served throughout the fiscal year. Persons discharged from the Mentally Retarded Defendant Program. Persons who have become clients since July 1, 1999, in date order (new waiting list)--projected to be approximately 6,284 persons remaining to be phased in between March 2002 and June 2002, subject to vacancies on the Waiver and available funding. The list of such individuals will be developed at the central office; persons will be served in date order, based on the date the individual became a client. In order to serve the estimated 6,774 individuals who are projected to want and need Waiver serves during FY 01-02, enrollment on the Waiver will be phased in as described above. Compliance with the Spending Plan Compliance with the approved Spending Plan for FY 2001-2002 is required of all Department employees. The Central Office will monitor all enrollment activity and notify districts when an individual has been enrolled on the Waiver, and to proceed with the provision of services. The Central Office of the Developmental Disabilities Program will review and process District requests for assignment of a Waiver slot, based on the District's "crisis" determination. Upon completion of the Central Office review, where the Central Office has confirmed a determination of "crisis", the District will be notified when the individual is enrolled on the Waiver, and to proceed with the provision of services. The use of non-Waiver funds (Individual and Family Supports (IFS) budget category) to fund services for additional persons who are awaiting enrollment on the Waiver is prohibited. Personal Care Assistance Services As required by Medicaid regulations, [Respondent] must require the use of regular Medicaid State Plan services when the individual is eligible to receive the services through the Medicaid State Plan. Provision of Waiver services must also comply with federally approved service definitions. Developmental Disabilities currently provides personal care assistance services to 1,232 children. Some of these children may be eligible under regular Medicaid EPSDT (Early, Periodic Screening, Diagnosis & Treatment) coverage. Medicaid state plan covers Personal Care Assistance for children who are eligible to receive nursing services. Children eligible for personal care assistance under Medicaid state plan must receive the service through this funding. [The ensuing five paragraphs continue to discuss children, the Medicaid state plan, and the Waiver.] New requests for personal care assistance will be assessed first to determine whether Medicaid state plan is appropriate. If this is not appropriate, the need for coverage under the Waiver will be made according to the federally approved service description. * * * Require Use of Waiver Funding, where available Because of limited funding and the need to maximize the use of General Revenue funds by obtaining federally matching funds wherever possible, Individual and Family Supports (IFS) funding is no longer available for persons who are eligible to receive Waiver- funded services, but who have refused services funded through the Waiver. Some people who are eligible have rejected services funded through the Waiver. [Respondent] will offer Waiver services to those individuals. For those who continue to refuse services funded through the Waiver, IFS expenditures will be discontinued due to lack of funding, with appropriate due process notice. Maximize Federal Funding Similarly, effective immediately, all covered Waiver services must be provided through Waiver funding. The purchase of Waiver billable services through the IFS budget category is no longer allowable, unless the Central Office has approved an exception. * * * The legislative proviso language supplied after the hearing by Respondent consists of selections of "Conference Report on SB 2000: General Appropriations for 2001-02--May 1, 2001." The relevant portion states: Funds in Specific Appropriations 374 and 377 are intended to provide Home and Community-Based Services Waiver Services in accordance with a spending plan developed by [Respondent] and submitted to the Executive Office of the Governor for approval by November 1, 2001. Such plan shall include a financially feasible timeframe for providing services to persons who are on waiting lists for fiscal years 1999-2000 and 2000-2001 and those eligible persons who apply for services during fiscal year 2001-2002. Such persons shall be enrolled in the waiver in accordance with [Respondent's] policy for serving persons on the waiting list. Two other, related documents are relevant. The Crisis Identification Tool identifies several categories of crisis. The first category is a criminal court order. The second category is a danger to self or others, which requires a current exhibition of "behaviors that": result in harm to the person or others that, in turn, creates a life-threatening situation for the person or others or will result in bodily harm to the person or others that will require emergency medical care from a physician if services are not provided immediately. The other categories are "confirmed abuse/neglect," "homeless[ness]," "caregiver unable to give care," and "health issues." Under the unable-caregiver category, the Crisis Identification Tool adds: The individual's current caregiver is expressing extreme duress, is no longer safely able to provide care for the individual due to advanced age, illness or injury and the individual is in immediate need of services in order to remain living with the caregiver or to locate an alternative living arrangement. . . . The remainder of the Crisis Identification Tool warns applicants that there is a waiting list for services in the Waiver program, even for those applicants classified as in crisis. Developmental Disabilities Program Policy Directive PD#01-07, issued September 25, 2001 (Policy Directive), confirms this warning when it warns: With 2001-02 appropriations and the Spending Plan, "[Respondent] will have funding to enroll up to a total of ten persons per month statewide on the Waiver, who are in crisis." Noting that the Crisis Identification Tool will remain in effect until June 30, 2002, the Policy Directive emphasizes that "[t]his policy will clarify the procedures used in determining the ten crisis cases per month statewide in accordance with the 2001-2002 Spending Plan." The Policy Directive describes the procedures for completing and examining a Crisis Identification Tool. The Policy Directive notes that, for applicants posing a danger to self or others, the District's behavioral analyst, local review committee chair, or other appropriate behavior analysis professional must review the Crisis Identification Tool and make a recommendation. After completing its tasks, the District committee sends the Crisis Identification Tool to the Developmental Disabilities central office in Tallahassee. The central office meets one week monthly, through June 2002, to "determine individuals in most critical need." The Policy Directive adds that the "[i]ndividuals who were not selected . . . will be carried forward and reconsidered each month until they are determined to be one of the ten crisis cases for a month or they are served in accordance with the spending plan." In the alternative, the central office may also find that the individual is "not . . . in need of immediate waiver services" and inform the individual of its finding. As noted in the Preliminary Statement, Petitioner seeks developmental disability services in DOAH Case No. 02-1238 and in DOAH Case No. 02-1241. The Developmental Disabilities Hearing Request described in the Preliminary Statement distinguishes between two programs based on funding sources: Medicaid waiver and general revenue. DOAH Case No. 02-1241 requests services under the Home and Community-Based Services Waiver program, in which the federal government has provided Florida with funds, under a waiver of institutionalization requirements, for certain developmental disability services to eligible persons. DOAH Case No. 02-1238 requests services under a state program in which Respondent uses largely, if not exclusively, general revenue funds to purchase certain developmental disability services for eligible persons. The focus of both these cases has not been on Petitioner's general eligibility, but on Respondent's limited funds and Petitioner's eligibility based on spending-prioritization policies that Respondent has adopted and the Legislature has approved. The Spending Plan, Crisis Identification Tool and legislative proviso language approving the Spending Plan all expressly pertain to the Waiver program. The Spending Plan addresses the relationship between the Waiver program with the general revenue-funded program, which is identified at least partly as Individual and Family Supports funding, by warning that persons who have refused Medicaid Waiver-funded services or who are even "awaiting enrollment" in the Waiver program may no longer obtain general revenue-funded services. Under the Spending Plan, Crisis Identification Tool and legislative proviso language, Petitioner is properly denied developmental disability services under the Medicaid Waiver-funded program. In addition to confirming the insufficiency of funds in the Waiver program, these documents demonstrate that Petitioner fails to satisfy a prioritization criterion that could gain her earlier funding. Arguably, Petitioner was entitled to classification as an individual in crisis, either due to her posing a danger to her self or others or due to the "extreme duress" suffered by her parents as caregivers. However, the record permits no basis to overturn the decision of Respondent's central office that, for each month, other crisis applications posed greater urgency. Although the central office should have maintained Petitioner's Crisis Identification Tool for reconsideration each month, the record permits no basis to revisit any of the central office's decisions during the ensuing months, and the term of the procedures governing the use of the Crisis Identification Tool expired at the end of last month. However, the Spending Plan, Crisis Identification Tool, and legislative proviso language do not address the general revenue-funded program. Petitioner is eligible for developmental disability services covered by this program. Respondent's proof of lack of funds in this program is itself insufficient, unsupported by the documentation that accompanies Respondent's same claim as to Medicaid Waiver-funded services.
Recommendation It is RECOMMENDED that the Department of Children and Family Services enter a final order granting Petitioner's application for covered developmental disability services in DOAH Case No. 02-1238 and denying Petitioner's application for developmental disability services in DOAH Case No. 02-1241. DONE AND ENTERED this 10th day of July, 2002, in Tallahassee, Leon County, Florida. ROBERT E. MEALE 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 10th day of July, 2002. COPIES FURNISHED: Paul F. Flounlacker, Jr., Agency Clerk Department of Children and Family Services 1317 Winewood Boulevard Building 2, Room 204B Tallahassee, Florida 32399-0700 Josie Tomayo, General Counsel Department of Children and Family Services 1317 Winewood Boulevard Building 2, Room 204 Tallahassee, Florida 32399-0700 Reverend Ronald Satterwhite Qualified Representative 8260 Northwest 172nd Street Hialeah, Florida 33015 Hilda Fluriach District 11 Legal Counsel Department of Children and Family Services 401 Northwest Second Avenue Suite N-1020 Miami, Florida 33128
