The Issue The issues are whether Respondent was substantially justified in issuing an initial Stop Work Order and Order of Penalty Assessment against Petitioner for failing to comply with a Business Records Request, followed by an Amended Stop-Work Order and an Amended Order of Penalty Assessment to Petitioner for alleged noncompliance with workers’ compensation coverage requirements, and if so, is an award of attorneys’ fees and costs appropriate.
Findings Of Fact Respondent is the state agency charged with enforcing the requirements of Section 440.107, Florida Statutes, requiring that employers in Florida secure the payment of workers’ compensation insurance coverage for their employees. Petitioner is a Florida corporation that conducts business in Florida, with headquarters in Pensacola, Florida. Petitioner’s business involves the transportation of vehicles, utilizing a fleet of approximately 61 tractor-trailers and accompanying auto transport trailers. Michelle Newcomer is a compliance investigator for Respondent. Her duties focus on conducting inspections/investigations of Florida businesses to ensure compliance with Florida’s workers’ compensation coverage requirements. She also issues Stop Work Orders (SWOs) and Orders of Penalty Assessment (OPAs) when Respondent believes a business is non-compliant with Florida’s workers’ compensation law. Ms. Newcomer and her supervisors are familiar with the definition of "independent contractor" set forth in Sections 440.02(15)(d)1a and 440.02(15)(d)1b, Florida Statutes. However, they never tested Petitioner’s claim that its truck drivers were independent contractors and not employees against the criteria in that definition. On March 16, 2009, Ms. Newcomer received information from an anonymous source that Petitioner was not in compliance with the workers’ compensation laws in Florida. The anonymous source asserted that Petitioner’s drivers were being misclassified as independent contractors. Ms. Newcomer performed a search of Respondent’s database. She learned that Tracie Hedges and George Hedges, as corporate officers, were exempt from having workers’ compensation insurance. She found that Petitioner had no workers’ compensation coverage for any employees. On March 18, 2009, Ms. Newcomer visited Petitioner’s office. Upon arrival, she met Ms. Hedges. During the meeting, Ms. Newcomer inquired about the company, its operations, and its truck drivers. Ms. Hedges told Ms. Newcomer that Petitioner had about 50 to 60 truck drivers who were independent contractors. Seeing only one other employee, Ms. Newcomer left and terminated her investigation. On April 8, 2009, Ms. Newcomer received a referral from Respondent’s Employee Assistance Office. The referral indicated that one of Petitioner’s former drivers, Mike Borders, had suffered an injury while working for Petitioner, but was not receiving workers’ compensation benefits. The referral included a copy of one of Mr. Borders’ pay stubs. Upon reviewing Mr. Borders’ pay stub, Ms. Newcomer noticed that federal income tax withholding was deducted along with various deductions for Social Security and Medicare. The federal payroll deductions were identical to those any employer would deduct from an employee’s wages. Ms. Newcomer performed another search of Respondent’s database, finding that Petitioner had workers’ compensation insurance through Allstates Employer Services, effective March 17, 2009. Ms. Newcomer then contacted Allstates Employer Services and requested a copy of Petitioner’s employee roster. When she received the roster, Mr. Borders’ name was not on the roster. Ms. Newcomer next interviewed Mr. Borders, inquiring about Mr. Borders’ relationship with Petitioner. She wanted to know the following: (a) whether he drove Petitioner’s vehicle; (b) whether he signed any employment contracts; and (b) whether he considered himself Petitioner’s employee. Mr. Borders responded as follows: (a) he considered himself an employee of Petitioner; (b) he had signed an employment application; (c) he drove Petitioner’s truck; and (d) he took orders from Petitioner as to when and where to pick up the cars that needed to be transported. After speaking with Mr. Borders, Ms. Newcomer conducted further review via various state databases. She researched the database maintained by the Florida Department of State, Division of Corporations, to determine the relationship of Petitioner to Transport TK 131, LLC, another company listed on Mr. Borders’ pay stub. This search revealed 21 limited- liability companies using the Transport TK name. Ms. Newcomer learned that Transport TK 131’s managing member was Gary Hedge. Ms. Newcomer believed that Mr. Hedge also was a principal of Petitioner. Ms. Newcomer also reviewed the database maintained by the Florida Department of Revenue to determine who was paying the unemployment compensation tax for Petitioner’s drivers. She learned that Transport TK 131, LLC, listed two to three employees for purposes of unemployment withholdings. The same was true for all of the other Transport TK companies. Ms. Newcomer believed her investigation presented numerous inconsistencies with statements made by Ms. Hedge. Ms. Newcomer presented her findings to her supervisors. They gave her approval to investigate Petitioner. Ms. Newcomer prepared a Business Records Request Form 1 (BRR#1) for Petitioner and Transport TK 131, LLC. Both BRRs requested the companies to provide payroll information for employees and any forms of workers’ compensation coverage for its employees for the period January 21, 2009, through April 21, 2009. The BRRs also made the following request: Record Category #12--For each independent contractor who performs any service with regard to the completion of a contractual obligation of the employer listed above, at any time during the period specified above: all contracts for work, licenses, invoices, ledgers, payments made pursuant to that contract, and any other documents that support the status of an independent contractor under section 440.02(15)(d), F.S. The request for records did not give the companies the option of creating and providing affidavits or other documents to support the status of independent contractors if no written contracts for work existed. The BRRs were sent to Petitioner and Transport TK 131, LLC, by certified mail on April 22, 2009. Petitioner failed to provide all of the requested records within the required five-day time period. Accordingly, Respondent issued a SWO and an OPA to Petitioner. Ms. Newcomer posted the SWO and OPA at the worksite on May 5, 2009. While Ms. Newcomer was at Petitioner’s headquarters, Ms. Hedges provided her with some records, including Petitioner’s QuickBooks registry, showing all checks written for a three-month period. Ms. Hedges also answered Ms. Newcomer’s questions about the records, including questions about DTS, LLC, a company described by Ms. Hedges as a payroll account. Ms. Hedges explained that before August 2008, Petitioner paid DTS, LLC, for work performed by “employees” of the Transport TK companies. DTS, LLC, would then pay the truck drivers. However, when DTS, LLC, ran out of checks in August 2008, Petitioner began paying the Transport TK employees directly. The documentation and information provided by Ms. Hedges, resulted in the SWO being revoked for Transport TK 131, LLC. The revocation was based on a showing that Transport TK 131, LLC, and other Transport TK companies did not have bank accounts. The SWO against Petitioner, for failing to produce sufficient records, remained in place, pending further review. Ms. Newcomer continued to have discussions with Ms. Hedges relative to Petitioner’s business. Ms. Newcomer discussed the case again with one of her supervisors. She explained that Petitioner was paying individuals that were reported as employees of the Transport TK companies. She also stated that Petitioner pays its corporate officers, Bradley Hedges, Gregory Hedges and Teri Forret, who did not have workers’ compensation exemptions and were not covered by Allstates Employer Services workers’ compensation coverage. Ms. Newcomer and her supervisor decided to amend the SWO to add the charge of failure to provide workers’ compensation coverage for employees. On May 6, 2009, Respondent sent the SWO, the Amended Stop Work Order (ASWO,) and a Business Records Request Form 2 (BBR#2) to Petitioner by certified mail. Petitioner received the documents the next day. Ms. Newcomer had a meeting with Ms. Hedges on May 8, 2009. During the meeting, Ms. Hedges explained that DTS, LLC, is just a bank account, used to pay the employees of the Transport TK companies. Ms. Hedges also stated that Petitioner has full control of its customer contracts and directs the drivers where to go for work. On May 11, 2009, Ms. Newcomer received Petitioner’s Quickbook report for the period of the BBR#2 records request. On May 13, 2009, Ms. Newcomer staffed the case with Respondent’s legal counsel. On May 14, 2009, Ms. Newcomer received some contracts between Petitioner and truck drivers who owned and operated their own trucks. Respondent calculated Petitioner’s penalty using the Quickbooks report, in conjunction with W-2 documents provided for tax years 2007 and 2008. As of May 18, 2009, Petitioner’s penalty was $1,496,680.40. Ms. Newcomer requested and received approval to issue an Amended Order of Penalty Assessment (AOPA) for that amount. The AOPA was served on Petitioner by hand delivery on May 19, 2009. Ms. Newcomer did not include Petitioner’s office staff/dispatchers, including Ms. Hedges, in calculating Petitioner’s penalty. Ms. Newcomer was able to confirm that those individuals had workers’ compensation coverage through the employee leasing company. Ms. Newcomer did not include the owner/operator truck drivers in calculating Petitioner’s penalty. Ms. Newcomer had copies of contracts indicating that they were independent contractors. Ms. Newcomer did include the 50 to 60 truck drivers who drove Petitioner’s trucks in calculating the penalty. Ms. Newcomer knew that Petitioner was paying those individuals by check and that their pay-stubs showed various deductions, including withholdings for federal income taxes, Social Security, Medicare, and even deduction options for various forms of Individual Retirement Accounts, both standard and “Roth” versions. For some of the drivers, Petitioner deducted child support payments. If Ms. Newcomer had asked more questions or talked to more drivers, she would have learned that Petitioner made the deductions from the checks of drivers who drove Petitioner’s trucks at their request and in exchange for a smaller commission. Petitioner did not make the deductions as an employer. Ms. Newcomer also learned that all individuals driving Petitioner’s trucks signed employment applications. Apparently, Ms. Newcomer did not believe Ms. Hedges when she explained that the employment applications were used as forms to comply with the Federal Motor Vehicle Carrier Safety Act for drivers of trucks with Petitioner’s name. Ms. Newcomer never attempted to find out whether the drivers of Petitioner’s trucks were independent contractors pursuant to oral contracts. She did not ask Ms. Hedges questions that track the definition of “independent contractor” status in Sections 440.02(15)(d)1a and 440.02(15)(d)1b, Florida Statutes. In other words, Ms. Newcomer did not try to ascertain whether and/or to what extent Petitioner or the truck drivers controlled or directed the manner in which the work was done. Ms. Hedges told Ms. Newcomer that Petitioner’s corporate officers had filed for workers’ compensation exempt status by delivering exemption application forms to one of Respondent’s offices in 2005. Ms. Hedges did not have a receipt showing delivery of the forms. Ms. Newcomer could not find the names of two of these officers in the state’s database of corporate officers electing exempt status. Therefore, Ms. Newcomer included the two corporate officers in the penalty calculation. Apparently, Ms. Newcomer never considered that Ms. Hedges was telling the truth about the exemption forms and that, pursuant to statute, the exemptions became effective 30 days after Ms. Hedges delivered them to Respondent even though Respondent never processed them. Ms. Newcomer also did not go back to Mr. Borders to question him about his claim of being Petitioner’s employee as opposed to an independent contractor, using the definition of independent contractor set forth in Sections 440.02(15)(d)1a and 440.02(15)(d)1b, Florida Statutes. Additionally, Ms. Newcomer did not attempt to interview any other individuals that drove Petitioner’s vehicles to determine whether they considered themselves employees or independent contractors. On or about June 5, 2009, Petitioner requested an administrative hearing to challenge the ASWO and AOPA. The hearing was held on November 3, 2009. On January 29, 2010, Administrative Law Judge P. Michael Ruff issued a Recommended Order, finding that Petitioner was compliant with Florida’s workers’ compensation coverage and recommending that a final order be entered dismissing the ASWO and AOPA. On April 28, 2010, Respondent entered a Final Order adopting Judge Ruff’s legal and factual findings. The parties stipulate as follows: (a) Petitioner is the prevailing party in the underlying case; (b) Petitioner was a small business at the time the ASWO and AOPA were served; and (c) The reasonableness of the amount of attorney’s fees and costs claimed by Petitioner, namely $50,000, is not in dispute.
The Issue The issue in this case is whether, in evaluating the proposals submitted and awarding the contract for medical laboratory services, the Department of Health and Rehabilitative Services acted according to the requirements of law.
Findings Of Fact On July 15, 1991, the Department of Health and Rehabilitative Services (DHRS) issued a request for proposals (RFP) to provide commercial medical testing lab services for the seven county public health units in DHRS District Eight. Proposals were to be submitted not later than August 30, 1991. The RFP sought proposals for the 1991-92, 1992-93, and 1993-94 contract years. The anticipated date for contract commencement was October 1, 1991. According to the RFP, the purpose of seeking proposals for lab services on a District-wide basis was to obtain more favorable prices, for the seven County Public Health Unit (CPHU) in District Eight. The RFP's Statement of Need provides as follows: Currently in the State of Florida District Eight, the provision of commercial laboratory services for HRS Public Health Units is a varied mix of vendors with numerous costs attached. As a result, similar laboratory services are charged differently based on such factors as volume of services to be done in a given year, past practices, location of Public Health Unit, aggressiveness of contractual negotiations. To help resolve such issues and to better serve our clients, the State of Florida, Department of Health and Rehabilita- tive Services, District Eight Health Program Office, will appropriate funds to purchase laboratory services for the District to better meet the demands of the Public Health Units as well as to reduce the overall costs of labora- tory services. The RFP's Statement of Purpose provides: The Department of Health and Rehabilitative Services is requesting a proposal for a purchase-of-service rate agreement to purchase medical laboratory services. The overall goal in this agreement is to demonstrate the feasi- bility of serving the seven County Public Health Units in District Eight (Charlotte, Collier, DeSoto, Glades, Hendry, Lee, and Sarasota) at a minimum cost for laboratory services. Despite the apparent focus of the RFP on minimizing the costs of purchasing commercial medical laboratory services, the proposal evaluation form which was included with and a part of the RFP provided a maximum of 60 points (from a total of more than 300) which could be awarded on the basis of cost. Responders to the RFP were required to submit a detailed laboratory services guide indicating the tests what can be performed by the laboratory and a detailed laboratory services cost guide indicating the costs of each test that can be performed. The RFP provided that the DHRS "reserves the right to reject any and all proposals, or waive any minor irregularity which does not affect overall competition and to award the rate agreement in the best interests of the State of Florida." Paragraph A.3. of the "Special Instructions" section of the RFP provides as follows: It is the responsibility of the bidder to develop the proposal as clearly as possible to avoid misinterpretation of the information presented. Proposals will be reviewed and evaluated solely on the basis of the informa- tion contained therein. Paragraph A.4. of the "Special Instructions" section of the RFP provides as follows: The criteria by which the responses to the Request for Proposal will be selected are included as Section V (Proposed Rating Sheet). The general evaluation criteria assess the potential provider's understanding of the project, the service provision methodology or work plan, the organizational capability and staff qualifications, and the proposed budget and rate. Paragraph A.5. of the "Special Instructions" section of the RFP, in part, provides as follows: ...To be considered, all proposals must be straight forward and concise, describing the vendor's ability to meet the RFP requirements. Paragraph B. of the "Special Instructions" section of the RFP, in part, provides as follows: Each potential provider will submit a straightforward and concise description of its ability to meet the requirements set forth in this document. The proposal must clearly demonstrate the expertise of the bidder and the rationale for the bidder's proposed approach to the project....To be considered, all proposals must be straight- forward and concise, describing the vendor's ability to meet the RFP requirements. SmithKline Beecham Clinical Laboratories, Inc., (SBCL) and National Health Laboratories, Inc., (NHL), along with other parties not involved in this proceeding, timely provided the DHRS with notices of intent to submit proposals in response to the RFP. All inquiries concerning the RFP were to be submitted in writing by August 2, 1991. Responses were to be issued in writing, with copies provided to all potential responders to the RFP. There is no evidence that SBCL submitted any written inquiry related to the RFP or to the review and evaluation process. On August 5, 1991, the DHRS issued a written response to Mark Johnson, a representative of Diagnostic Services Inc. Mr. Johnson had apparently requested that DHRS supply potential responders with the monthly volume of medical lab tests designated by type of test and location. The DHRS response included an attached list of 67 medical tests and the District Eight CPHU utilization rates for said tests for the period of October 1, 1989 to July 31, 1990. The response provided that the attached list was a guide which "should provide a reasonable assessment of the range of 'typical' tests being requested by County Public Health Units within the District." The response further stated that other tests could be requested by various physicians at each CPHU, and that each lab would be expected to be able to provide all tests listed within each lab's directory. The letter noted that, "[t]o the best of our analysis, the tests noted are most likely similar among laboratories". The written response was provided to both SBCL and NHL as well as to other parties not involved in this proceeding. The 67 tests identified were derived from a statewide DHRS survey, the results of which were issued in July 1989. Prior to the release of the RFP, the DeSoto County Public Health Unit Administrator, Don Toews, had reviewed statewide survey data and noted all tests which had been utilized by a District Eight CPHU. Mr. Toews then submitted the list to each CPHU to obtain specifics regarding utilization rates and prices paid. Upon receipt of the information, Mr. Toews identified the wide variations in price being paid by each District Eight CPHU for like services. At that point, District officials decided to attempt to reduce and standardize labs test costs and seek proposals for services on a district-wide basis. Thereafter, the DHRS prepared and issued the RFP 15-11-91. As to the list of 67 tests, SBCL asserts that the response to Mr. Johnson indicates that such tests are not the only ones which the evaluation committee will consider. The clear language of the letter does not support the assertion. The letter does no more than state that CPHU physicians may request other tests and that each lab must be able to provide all tests listed in the laboratory directory, not merely the 67 tests on the list. On or before July 30, 1991, SBCL, NHL and others timely submitted proposals in response to the RFP. On September 3, 1991, the senior DHRS official responsible for the evaluation process sent to each member of the evaluation committee, a copy of the RFP, a copy of the RFP Evaluation Instructions, a copy of each proposal and a rating sheet for each proposal. The transmittal letter instructs each member to "complete an RFP Rating Sheet for each proposal prior (to) the Evaluation Committee Meeting of September 17, 1991. " The DHRS evaluation committee included Don Toews, Don Davis, and Jack Freeman. The committee was composed by District officials to include one CPHU administrator (Toews), one CPHU business manager (Davis) and a district program office contract administrator (Freeman). The composition of the evaluation committee has been challenged by SBCL, which alleges in it's "Formal Written Notice of Protest" that the committee included no medical personnel, and that two of the committee's three members were from counties receiving NHL's services (which apparently was assumed to favor NHL). SBCL further asserts that the committee is required, and failed, to contain persons with experience and knowledge in the program area and service requirements. As to the allegation that no medical personnel were included in the panel, there is no evidence that DHRS represented that such personnel would be a part of the panel. The RFP repeatedly required that responses be straight forward, concise, and presented as clearly as possible to avoid misinterpretation of the information. The evidence does not suggest that the DHRS was under any obligation to include medical personnel on the evaluation committee. As to the allegation that the committee was weighted with SBCL- supporters, Mr. Toews' county receives services from NHL, Mr. Davis' county receives services from SBCL, and Mr. Freeman has no responsibilities in such matters. The evidence provides no support for the allegation. The committee was formed in accordance with DHRS's standard practice. The agency officials specifically excluded appointing members who were believed to have an opinion related to the responding service providers. The members of the committee had reasonable experience and knowledge in the program area and service requirements which were the subject of the RFP. On September 17, 1991, the bid evaluation committee met and determined that proposals from SBCL, NHL and Damon Clinical Laboratories 1/ were responsive to the RFP. The committee determined that the contract should be awarded to NHL. Contrary to the instructions in the September 3, 1991 transmittal letter to the evaluation committee members, none of the three members of the committee completed the proposal evaluation forms prior to the meeting, but all had reviewed the proposals by the time the meeting was held. The committee met for approximately 2-3 hours to discuss the proposals. The committee did not proceed through the evaluation forms line-by-line, and they did not complete the forms as the meeting progressed, although as they discussed the proposals, they addressed the criteria set forth in the evaluation forms. Although the committee members were requested to have completed the evaluation forms prior to the meeting, and although that may be the preferable method of evaluating responses, there is no requirement that they do so. There is no requirement that the committee members proceed through the evaluation forms on a line-byline basis. However, the committee was required to consider the proposals according to the evaluation criteria set forth on the proposal rating sheet which was included with, and a part of, the RFP. The responses to the RFP were jointly scored by the three members of the evaluation committee. The committee members arrived at a group score through discussion of the proposals. The group score is not the result of averaging the evaluation committee member's individual scores, but is a consensus score reached through the group's discussion. Subsequent to the evaluation committee's meeting, Mr. Freeman, who took some notes related to scores during the meeting, returned to his office and completed one evaluation form for each proposal which allegedly reflects the committee's decision on points awarded. Although it might have been preferable to have the evaluation committee perform independent evaluations of each proposal, a consensus decision-making process is acceptable. The proposal evaluation form identified factors for which the committee could award points in evaluating the various proposals. Points were available for "Response to Introduction" (12 points available), "Statement of Work" (150 points available), "Organizational Capability" (112 points available), and "Budget/Rate Analysis" (60 points available), for a total available of 334 points. 2/ A total of 293 points were awarded to NHL and 265 points were awarded to SBCL, a difference of 28 points. Given the budgetary constraints under which the District Eight CPHUs are currently operating, committee members (and other agency officials) believed cost to be of primary importance, and viewed the cost projections as being worth 60-65% of the proposals. The majority of the time spent evaluating the proposals was focused on the costs of various lab tests. However, according to the proposal rating sheet, fiscal factors were not the most important consideration in awarding the contract for services. The evaluation committee adhered to the point values set forth in the rating sheets, which provide that non-cost factors form the majority of points which could be awarded to responses. As to non-fiscal factors, the committee members determined that SBCL was superior to NHL, awarding SBCL 255 points and NHL 233 points. There is no evidence which establishes that the award of such points was inappropriate. As to the cost analysis of the proposals, the committee relied on price calculations supplied to other committee members by Mr. Toews. Mr. Toews calculated prices for 45 of the tests from the list of 67. 3/ Based upon Mr. Toews' calculations, the SBCL price was $198,932 and NHL's price was $127,627, a difference of $71,305. The rating sheet provided a scale of 0-6 (ranging from "not addressed" to "excellent") for the award of points related to cost proposals, with a weighting factor of 10. Otherwise stated, the points awarded on the scale were multiplied by 10 for the total cost score. The committee members awarded NHL 60 points (of 60 available) and awarded SBCL 10 points. The rating sheet completed by Mr. Freeman indicates that the committee determined that NHL's cost proposal was "excellent" (6 points x 10 weighting factor = 60 points total) and that the SBCL cost proposal was "poor" (1 point x 10 weighting factor = 10 points total). The evidence establishes that the committee's assignment of points on a cost basis was not quantified but, other than to generally reflect the dollar cost and relative difference between the NHL and SBCL proposals, was based on little more than the committee members perception that the NHL cost proposal was "excellent" and the SBCL cost proposal was "poor". As such, the committee's assignment of points to the cost proposals was arbitrary. SBCL asserts that the committee's price comparison worksheet erroneously represents that NHL offers lower costs, but that in fact, the SBCL cost proposal is "more advantageous". SBCL asserts that committee miscalculated SBCL's discounted prices at 58% of the price listed on the SBCL schedule of fees, rather than deducting SBCL's 58% discount from list (which would result in an actual cost of 42% of the list) and that the DHRS failed to consider "special prices" offered on some tests and failed to consider the costs of some tests which are allegedly "high utilization tests" in District Eight, but which did not appear on the list of tests relied upon by the DHRS in evaluating the proposals. The evidence establishes that the DHRS failed to appropriately calculate the SBCL discount from the schedule of fees and that the DHRS failed to consider a "special price" offered by SBCL for a "CBC" test. The evidence establishes that the agency acted illogically and arbitrarily in both instances. As to the erroneously calculated discount, the cost proposal submitted by SBCL sets forth, on page 26, a percentage of discount from the SBCL schedule of fees. Page 26, in relevant part, provides as follows: Enclosed are the contract budgets for the initial contract year (1991-1992), and the two renewal years (1992-1993, 1993-1994). All test pricing not shown on the enclosed list will reflect the following discount from the current SBCL schedule of fees dated January 1, 1991. 1st Year 58% 2nd Year 58% 3rd Year 53% The third year contract budget will reflect a 5% increase from the previous year, or an increase equal to Consumer Price Index for that year, whichever is less. Upon acceptance of the proposal by HRS, SBCL will provide a net fee schedule for each year of the contract. Mr. Toews, who calculated the price comparison utilized by the evaluation committee members, apparently misunderstood the information on page 26 to mean that the DHRS would be charged 58% of the SBCL schedule of fees for the first two years of the contract and that the DHRS would pay 53% of the SBCL schedule of fees for the third year of the contract. Such interpretation is contrary to the discount schedule set forth in the proposal which sets forth a 5% increase in the third year of the contract, rather then a 5% decrease as Mr. Toews analysis would suggest. Subsequent to the award to NHL and SBCL's protest, Mr. Toews, at the request of DHRS officials, reviewed his cost analysis. In a memo dated October 4, 1991, Mr. Toews writes, "[i]f I understand their (SBCL) concern it is that we are to take the noted percentage noted for each year off of the prices noted in their schedule of fees....A re-reading of (the discount proposal) still does not say what they apparently want to convey to the reader." Mr. Toews calculation is contrary to the language of page 26 of SBCL proposal, which states that "[a]ll test pricing not shown on the enclosed list will reflect the following discount from the current SBCL schedule of fees. " The paragraph identifies a 58% discount from the schedule of fees for the first two years, and a 53% discount from the schedule of fees for the last year (an increase of 5% which is clearly identified in the next sentence). As Mr. Toews wrote, the SBCL proposal was "to take the noted percentage noted for each year off of the prices noted in their schedule of fees". The DHRS application of the SBCL discount factor, based solely upon Mr. Toews misunderstanding of the discount offered by SBCL, was illogical and arbitrary. Given the correct application of the SBCL's discount factor to the schedule of fees, the SBCL cost proposal is $184,932, still $57,305 in excess of NHL's cost proposal of $127,627. The original calculation demonstrated a difference of $71,305, accordingly correctly applying the discount results in a reduction of the difference between the SBCL and NHL proposals of $14,000. This calculation is applicable only for the first two years of the contract period, because SBCL had an automatic reduction of %5 in the discount offered during the third year, whereas the NHL discount remained constant through out the three year period. SBCL asserts that, in calculating the SBCL cost proposal, Mr. Toews did not consider several "special test profiles" which were included in the SBCL response at significantly discounted prices. He did not include the SBCL "special prices" for tests including "maternity screens", "CBC", "GC", "therapeutic drugs" (including Dilantin, Digoxin, Lithium, Phenobarbital, Clonapin and Mysoline), "herpes simplex culture" and "chlamydia". SBCL asserts that, had the "special test profiles" and significantly discounted prices been considered by the committee, the SBCL prices would have been "for all practical purposes. equal". The cost information related to "special test profiles" submitted by SBCL was confusing. The SBCL proposal did not identify the tests utilizing the nomenclature set forth in the DHRS list of 67 tests, and did not permit Mr. Toews to determine whether the SBCL tests were comparable to the tests for which DHRS sought specific pricing. The SBCL proposal did not include test codes to facilitate the identification of tests and related prices. As to "CBC", the evidence does indicate that the DHRS failed to utilize the SBCL's special price for "CBC with Diff./Plat." although the DHRS utilized NHL's special price for "CBC, Diff., Platelet". The failure to utilize both NHL and SBCL proposal's special pricing related to "CBC" is illogical and arbitrary. As to "maternity screens", the SBCL special price quotation referred to two different tests in the SBCL catalogue of available tests. Mr. Toews was unable to ascertain which of the two tests included the components sought by the DHRS. As to "GC" testing, SBCL asserts that the correct price which should have been applied is $8.00 per test for "culture neisseria". There are, however, other tests listed as available by SBCL which test for "GC", one of which Mr. Toews did include in his calculations, although the price exceeded $8.00. As to "therapeutic drugs", the SBCL proposal did not designate which available drugs were included in this category and the DHRS was therefore unable to determine the drugs which were included in the "special pricing". Even SBCL has been inconsistent in it's interpretation of which drugs were considered "therapeutic". There is insufficient evidence to establish that the DHRS failed to consider information related to the "herpes simplex culture" and "chlamydia" tests to the extent the evaluation committee was able to glean the information from the SBCL proposal. SBCL also asserts that the DHRS "erred" in failing to consider a number of alleged "high volume" tests which SBCL offered at discounted prices in performing cost analyses of the RFP proposals. However, the evidence fails to establish that DHRS should have considered the alleged "high volume" tests in addition to or as an alternative to the tests considered by the DHRS in performing cost analysis. The evidence, in fact, fails to establish that such tests are performed in high volume throughout the DHRS District Eight. On September 23, 1991, the DHRS mailed a letters to NHL, copied to SBCL (and others) stating that the contract would be awarded to NHL. The letter was not sent to SBCL by certified mail and did not provide notice of the right to challenge the agency determination as required by Section 120.53(5)(a)(3), Florida Statutes. In the formal notice of protest, SBCL alleges that it received only a copy of the letter awarding the contract to NHL and that it did not receive formal notice of the DHRS award. SBCL also alleges that it did not receive formal notice of it's right to protect the decision. The allegations are factually correct, however, there is no evidence that the DHRS's failure to provide to formal notice of the contract award or that the failure to the DHRS to give SBCL notice of it's right to protest the decision, has resulted in injury to SBCL. SBCL received the DHRS letter of September 23, 1991 on September 26. On September 27, 1991, SBCL delivered a handwritten notice of intent to protest to the DHRS. On October 3, 1991, SBCL filed a formal written protest with a $5,000 bond. The Petitioner has timely filed it's written notice of protest and this proceeding has been conducted within the time deadlines set forth by statute. In the formal notice of protest, SBCL alleges that the award to NHL jeopardizes lab reference business in counties presently served by SBCL and prevents SBCL from serving other counties. To the extent that the award to NHL precludes SBCL from providing commercial medical lab services to the county public health units within District Eight, the award to NHL does transfer business from SBCL to NHL and prevent SBCL from obtaining business in District Eight CPHUs. The purpose of the RFP process was to obtain favorable pricing on a District-wide basis for the CPHU's within District Eight. Although the allegation, as noted above is correct, there is no evidence that such is improper given the purpose of the RFP process. SBCL challenges the award to NHL on grounds that the NHL response contained prices handwritten within the typed schedule of fees without initialing or dating of said handwritten entries. The evidence fails to establish that such handwritten entries were not acceptable or appropriate. There is no prohibition against handwritten materials, other than where such writings are price corrections, in which case the corrections must be initialed. There is no evidence that the handwritten materials were not timely submitted or that they were improperly submitted. SBCL also notes that NHL did not provide a code number ("320") on the evaluation committee's copies of the NHL discounted price sheet, but that the number now appears on the document. The evidence fails to establish that there has been improper activity related to the discount price sheet which would have affected the outcome of the committee's deliberations. SBCL complains that it's initial request for copies of NHL's proposal and the committee's evaluation worksheet was denied, until obtained through the "Freedom of Information Act." The evidence fails to establish that this allegation is correct or that it is material to the case. SBCL asserts that the NHL proposal does not adequately address the RFP service requirements, however, the evidence establishes that the NHL proposal does adequately address the minimum requirements of the RFP. There is no evidence that DHRS employees acted fraudulently, illegally or dishonestly. However, the agency acted contrary to logic and arbitrarily in applying the SBCL discount factor to the schedule of fees and in failing to utilize the special pricing offered by both NHL and SBCL for "CBC" testing. Further, the committee's assignment of points on a cost basis was not quantified, is not supported by logic and is arbitrary.
Recommendation Based on the foregoing, it is hereby recommended that the Department of Health and Rehabilitative Services enter a Final Order rejecting all proposals submitted in response to RFP 15-11-91. It is further recommended that given the Department's intention to contract for commercial medical lab testing services in DHRS District Eight in order to reduce the overall costs of said services, the Department revise the RFP to provide a proposal evaluation system that more accurately reflects the intention of the Department. Finally, it is recommended that the Department provide additional assistance and training to evaluation committee members in order to permit the committee to appropriately evaluate the responses to the RFP. RECOMMENDED this 12th day of December, 1991, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of December, 1991.
Conclusions THE PARTIES resolved all disputed issues and executed a settlement agreement, which is attached and incorporated by reference. The parties are directed to comply with the terms of the attached settlement agreement. Based on the foregoing, this file is hereby CLOSED. DONE AND ORDERED on this ASK day of _Aepteba 2012. in Tallahassee, Florida. Bon kl ’ fo Elizabeth Didek, Secretary Agency for Health Care Administration Agency for Health Care Administration v. San Martin de Porras ALF, Inc. C1. No.: 12-2196-000; Case No.: 12-002037MPI Final Order — Page 1 of 3 Filed September 27, 2012 10:56 AM Division of Administrative Hearings A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A 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 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: Alejandro A. Zamora, Esquire Law Offices of Alejandro A. Zamora, P.A. 1401 Northwest 17th Avenue Miami, FL 33125 Telephone: (305) 324-4512 Facsimile: (305) 326-1609 Email: aazamora@bellsouth.net (Via Electronic Mail and Facsimile Transmission) Tracie L. Hardin, Esquire Agency for Health Care Administration 2727 Mahan Drive Building 3, Mail Station 3 Tallahassee, Florida 32308 (Interoffice Mail) Agency for Health Care Administration Bureau of Finance and Accounting 2727 Mahan Drive Building 2, Mail Station 14 Tallahassee, Florida 32308 (Interoffice Mail) Bureau of Health Quality Assurance 2727 Mahan Drive, Mail Stop 9 Tallahassee, Florida 32308 (nteroffice Mail) Mike Blackburn, Bureau Chief Medicaid Program Integrity 2727 Mahan Drive Building 2, Mail Station 6 Tallahassee, Florida 32308 (Interoffice Mail) Eric W. Miller, Inspector General Medicaid Program Integrity 2727 Mahan Drive Building 2, Mail Station 6 Tallahassee, Florida 32308 (Interoffice Mail) Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (Via U.S. Mail) Agency for Health Care Administration v. San Martin de Porras ALF, Inc. C.L. No.: 12-2196-000; Case No.: 12-002037MP1 Final Order — Page 2 of 3 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished to the above named addressees by U.S. Mail, or the method designated, on this the pray of Sx eho , 2012. Richard Shoop, Esquire Agency Clerk State of Florida Agency for Health Care Administration 2727 Mahan Drive, Building #3 Tallahassee, Florida 32308-5403 (850) 412-3630 Agency for Health Care Administration v. San Martin de Porras ALF, Inc. CLL. No.: 12-2196-000; Case No.: 12-002037MPI Final Order — Page 3 of 3
Recommendation Based upon the foregoing, Intervenor's Motion for a Summary Recommended Order is granted. Accordingly, it is RECOMMENDED: That the Agency for Health Care Administration enter a final order denying Petitioner's request for relief and dismissing its bid protest. DONE AND ENTERED this 8th day of November, 2000, in Tallahassee, Leon County, Florida. HARRY L. HOOPER 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 8th day of November, 2000. COPIES FURNISHED: Martha Harrell Chumbler, Esquire Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A. Post Office Box 190 Tallahassee, Florida 32302 James G. Council, Esquire First Health Services Corporation 4300 Cox Road Glen Allen, Virginia 23060 Barrett G. Johnson, Esquire Johnson & Associates, P.A. Post Office Box 1308 Tallahassee, Florida 32303 J. Stephen Menton, Esquire Rutledge, Ecenia, Purnell & Hoffman, P.A. 215 South Monroe Street, Suite 420 Post Office Box 551 Tallahassee, Florida 32302-0551 William Roberts, Esquire Steven Grigas, Esquire Agency for Health Care Administration 2727 Mahan Drive Building Three, Suite 3431 Tallahassee, Florida 32308 Lloyd M. Weineman, Esquire Crowell & Moring LLP 1001 Pennsylvania Avenue, Northwest Washington, DC 20004-2595 Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308 Julie Gallagher, General Counsel Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308 Ruben J. King-Shaw, Jr., Director Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3116 Tallahassee, Florida 32308
The Issue The issue is whether Respondent properly denied payment of certain charges related to out-of-network surgical procedures pursuant to the State Employees’ PPO Group Health Insurance Plan.
Findings Of Fact At all times pertinent to this proceeding, Petitioner, who is now 29 years old, was an employee of the University of West Florida, and was enrolled as a member of the State Employees PPO Plan (Plan). She started employment with the University on December 1, 2007, and became enrolled in the Plan. Respondent was provided with the State Employees’ PPO Plan Group Health Insurance Plan Booklet and Benefits Document, effective January 1, 2007 (Plan Booklet). The Department of Management Services is responsible for all aspects of the purchase of health care for state employees, including those services provided under the Plan. Respondent is responsible for the administration of the state group insurance program. As authorized by law, Respondent has contracted with Blue Cross & Blue Shield of Florida (now known as Florida Blue) as its third-party medical claim administrator of employee health insurance benefits. The Plan Booklet contains the terms and conditions of the state group insurance program applicable to this proceeding. The booklet provides, as part of its Summary of Benefits, that: When you go to non-network providers, this Plan pays benefits based on the non-network allowance. If your provider charges more than the non-network allowance, you are responsible for any amounts above the non- network allowance. In addition, because the Plan pays a lower benefit level for non- network care, you pay more out-of-pocket for non-network care. In selecting BCBSF as the Medical Claim Administrator for the state Employees’ PPO Plan, DSGI agreed to accept the non-network allowance schedule used by BCBSF to make payment for specific healthcare services submitted by non-network providers. Keep in mind that you will receive benefits at the non-network level whenever you use non-network providers, even if a network provider is unavailable. (Emphasis added). The booklet provides, in section 6, entitled About the Provider Network, that: In an effort to contain healthcare costs and keep premiums down, BCBSF has negotiated with PPCSM network healthcare providers to provide services to health Plan participants at reduced amounts. PPCSM network providers have agreed to accept as payment a set amount for covered services . . . . Non-network providers will bill you their regular charges. You will be responsible for a larger coinsurance and/or copayment, and you will be responsible for paying the difference between the provider’s charges and the amount established as the non- network allowance for the service. The non- network allowance may be considerably less than the amount the non-network provider charges. * * * An Important Note About Using Non-Network Providers To make sure you receive the highest level of benefits from the Plan, it’s important to understand when non-network benefits are paid. When you use non-network providers, you receive non-network benefits. Here are some examples. In some situations, your network provider may use, or recommend that you receive care from, a non-network provider. For example, your network family doctor says you need to see another doctor and recommends a non-network doctor. It is your choice; you decide whether to go to the recommended non-network doctor or to ask your doctor for another recommendation to a network doctor. In this example, even though your family doctor is a network doctor, you will receive non-network benefits if you go to the recommended non- network doctor. Sometimes the health care professional you need to see is not in the network. You receive non-network benefits when you use non-network providers, even if no network provider is available. From an early age, Petitioner was plagued with symptoms of temporomandibular joint (TMJ) disorder. When she was seven or eight years old, Petitioner began to experience clicking in her jaw, and her jaw would occasionally lock. The symptoms soon abated. While she was in sixth grade, Petitioner was fitted for orthodontic braces. The braces were removed when she was 12 or 13 years old. When Petitioner was in her early teens, the clicking in her jaw reappeared. The clicking was now accompanied by pain in her jaw muscles, which was likened to that experienced from a migraine headache. Petitioner was referred to an oral surgeon regarding her jaw symptoms. The surgeon recommended a course of physical therapy for her jaw, and placed her on a diet that eliminated foods that were “chewy.” Despite those measures, Petitioner’s jaw began to periodically lock open. At the age of 16, Petitioner had her wisdom teeth removed. While that procedure resulted in a cessation of the locking, Petitioner could only open her mouth about one-quarter of the way. She was also prescribed Tylenol #3, which contained codeine, for pain. At the age of 16 or 17, Petitioner was given splints to keep her jaw in alignment. Petitioner was clenching her teeth so hard in response to the pain, that she broke several splints during the first year that she had them. By the time she was 19 years old, Petitioner’s headaches were “out of control.” She was referred to the facial pain center at the University of Florida, where she was fitted with custom-made splints. She was provided with a course of physical therapy, and was prescribed muscle relaxers. When she returned home from college for the summer, she did the recommended physical therapy, which was effective in relieving her symptoms for a few months. Petitioner was subsequently referred to Dr. Widmer, a physician at the University of Florida. Dr. Widmer performed an arthrocentesis, by which a steroid solution was injected into Petitioner’s temporomandibular joints. The procedure was ineffective. By 2006, when Petitioner was 23 years old, the opening of her mouth began to be accompanied by a “squishing” noise. Dr. Widmer referred Petitioner to Dr. Margaret Dennis. Dr. Dennis ordered an MRI of Petitioner’s jaw to determine if there was any bone damage. The MRI revealed that the bones of the temporomandibular joint were degraded, and that the disk material was calcified. Dr. Dennis increased the dosage of Petitioner’s pain medications to handle the pain associated with her condition. After a period of time, and with Petitioner having little relief from her symptoms, Dr. Dennis referred her to Dr. Mark Piper, a physician who is board-certified in oral and maxillo-facial surgery. Dr. Piper maintains his office in Tampa, Florida. Petitioner had her first appointment with Dr. Piper in August 2009. Dr. Piper ordered a level 3 MRI, which produced a clearer picture than her earlier MRI, as well as a CAT scan. He took imprints of Petitioner’s teeth, and performed a physical examination of the bones of Petitioner’s jaw. The results of the imaging and the physical exam showed severe and active degeneration of Petitioner’s temporomandibular joints, especially the right joint. To remedy Petitioner’s physical condition, Dr. Piper recommended a bilateral arthroplasty of Petitioner’s jaw, consisting of a fat graft to the right temporomandibular joint, and a procedure involving the disk tissue to the left temporomandibular joint. Given the exhaustion of more conservative forms of treatment, arthroplasty was, by this point, appropriate and medically necessary for the resolution of Petitioner’s condition. On August 25, 2009, Dr. Piper provided Petitioner with a statement summarizing his diagnosis, and providing an explanation of his recommended course of action. Petitioner provided Dr. Piper’s statement to BCBSF to explain the necessity for her proposed out-of-network treatment. The evidence suggests that Petitioner provided the CPT codes for the recommended procedures at issue. CPT codes are a system by which medical services are assigned numbers to describe those services, and are used by insurers to establish a uniform schedule of reimbursement. On a case-by-case basis, the numbers are provided by medical service providers to describe the services they have rendered. Respondent maintains a business record of all communications between it and its customers. On August 27, 2009, those records reflect that a telephonic request for information was received either from or regarding Petitioner. The notation regarding the request for information stated, in pertinent part: PRICING FOR PROC CODES 21240 AND 69990 RELATED TO TREATMENT OF TMJ NEEDED, PROV IS 62468....ALLOWANCES ARE 1168.09 AND 252.53 Petitioner acknowledged that she received the information regarding the rates, but understood the rates to be estimated amounts, and not official because the person with whom she spoke could not give final figures over the telephone. Later on August 27, 2009, Respondent’s records reflect that a second telephonic request for information was received either from or regarding Petitioner. The notation regarding the request for information stated, in pertinent part: MEMBER S REQUESTING TO SPK WITH THE VPCR [Voluntary Pre-coverage Review] AREA AS SHE WANTS PRIOR APPROVAL OF CODES 21240 AND 69990 FOR THE TREATMENT OF TMJ....I ADVISED HER OF THE PROCESS AND TO GO AHEAD AND SUBMIT THE LMN [Letter of Medical Necessity] AND SUPPORTING DOCS IF THE NON PAR PROV IS UNWILLING TO CALL OUR OFFICE..I EXPLAINED THAT THE DET WOULD BE MADE AND IF ADDTLS DOCS ARE REQD, THIS WOULD BE ADVISED ALSO, ADV MEMBER SHE CAN WITH FAX OR MAIL TO AD ON THE BACK OF INS CARD. Respondent’s records reflect no further telephonic inquiries regarding Petitioner until October 19, 2009. Petitioner scheduled her surgery with Dr. Piper for September 16, 2009. Petitioner testified that approximately one week prior to the scheduled surgery, BCBSF sent an e-mail to Petitioner providing her with the name of a network provider in Jacksonville who could perform the surgery necessary to resolve her TMJ issues. She further testified that she contacted the network provider’s office, and was advised by a Dr. Milton that the medical group could not perform the surgery. Petitioner testified that she advised BCBSF of that information, and advised BCBSF that there was no one in-network that could perform the surgery. A copy of the e-mail was not provided, nor was there evidence to otherwise corroborate the described events. Therefore, no finding can be made as to that alleged series of communications. Respondent maintains a list of network health care providers by specialty type and location. The list is available on-line. The list includes a number of oral and maxillofacial surgeons located in the Jacksonville area. However, one cannot determine from the list whether a provider is capable of performing a particular procedure under the specialty. The evidence demonstrates that Dr. Piper is an accomplished oral and maxillofacial surgeon, with particular expertise in disc removal and fat graft placement surgery for the temporomandibular joint. However, even if Dr. Piper is the surgeon most qualified to perform the procedure, that does not mean he is the surgeon singularly qualified to perform the procedure. Dr. Imray testified that he has referred patients for bilateral arthroplastic procedures on many occasions. His referrals were generally to oral and maxillofacial surgeons practicing at teaching centers in Jacksonville and Gainesville. Although he could not testify whether such surgeons were in the State Employees’ PPO network without consulting his PPO reference book, he could recall no instance of having had to refer a patient to an out-of-network provider, “because most of the teaching centers take most of the plans.” The evidence in this case failed to demonstrate that there were no network providers capable of performing the procedures medically necessary for the resolution of Petitioner’s TMJ issues. Having concluded that Dr. Piper afforded her with the greatest likelihood for a successful outcome, Petitioner proceeded with the surgery as scheduled. After a recovery period of two years, which included braces to adjust her teeth to fit her repaired and aligned temporomandibular joints, the surgery has proven to be a complete success. Petitioner testified convincingly that the surgery was a life-changing event. The total cost to Petitioner for the surgical and immediate post-operative procedures was $30,005.00. In November, 2009, Petitioner began the process of filing her claim with BCBSF. After some difficulties, the submission of the claim was completed in January, 2010. The amount billed to BCBSF was $29,976.00. The bulk of the charge, in the amount of $24,650.00, was for the procedure identified by Dr. Piper as CPT Code 21240. The documentation submitted clearly indicated -- both by the description of the CPT Code 21240 procedure as “Bilateral TMJ Arthroplasty” and by the listing of the modifier code “50”, which was the code assigned for procedures that were bilateral -- that the arthroplasty procedure was bilateral. On March 11, 2010, BCBSF notified Petitioner that it would reimburse her medical expenses related to the surgery in the amount of $1,526.57. That amount included $1,168.09 for the arthroplasty (CPT Code 21240), and $358.48 for the surgical splint (CPT Code 21085). BCBSF indicated that it would not pay the $1,650.00 charge for the operating microscope (CPT Code 69990) on the basis that the charge was incidental to the primary arthroplasty procedure, and therefore included in the $1,168.09 allowance for that procedure. BCBSF also denied payment for a ZZ Therabite (CPT Code 99070). The reimbursement amount was calculated by applying the CPT Codes provided by Dr. Piper to the BCBSF fee schedule. The amount was then further adjusted by the non-network payment allowance to reach the final reimbursable amount. The process is mechanical, and involves no exercise of discretion. In that regard, the reimbursement for the arthroplasty was identical to the estimate provided to Petitioner on August 27, 2009. The evidence demonstrates that the amounts paid to Petitioner for CPT Code 21240 procedures and the CPT Code 21085 surgical splint were accurately derived through application of the BCBSF fee schedule allowance to the procedure codes provided by Dr. Piper. However, as to the arthroplasty procedure, the evidence further demonstrates that the amount paid was based on a single procedure. The arthroplasty performed by Dr. Piper was a bilateral procedure, which was clearly disclosed on the claim form. According to Kevin Tincher, BCBSF’s senior manager of coding and professional payment, Petitioner is entitled to reimbursement for both procedures, with the reason given for not paying for both being Dr. Piper’s failure to bill each part of the bilateral procedure on separate lines of the claim form. Given the lack of any instruction requiring that the two sides of a single bilateral procedure be billed on separate lines, especially given the application of the modifier code “50” to indicate a bilateral procedure, the information provided on the claim form was neither deficient nor in error. When two procedures of the same type are performed on the same day, the BCBSF fee schedule calls for reimbursement for the second procedure at a rate of 50 percent of the allowance for the first procedure. Under that schedule, Petitioner should have been reimbursed an additional $584.05, i.e., 50 percent of the $1,168.09 allowance for the first CPT Code 21240 procedure. The evidence demonstrates that the Therabite device (CPT Code 99070) was “appropriate and acceptable” in Petitioner’s case. Thus, the device was medically necessary under the circumstances. Petitioner should have been reimbursed, at the non-network rate, for that device. During the hearing, Jessica Bonin, BCBSF’s Critical Inquiry Analyst, admitted that the post-operative CT scan -- CPT Code 70486 -- in the amount of $301.93, should have been paid, but that the claim had not been reprocessed by BCBSF. Respondent further admitted in its Proposed Recommended Order that payment in the amount of $301.93 should be made for the post-operative CT scan. It is so found. Petitioner initiated a Level I appeal with BCBSF. She provided BCBSF with as much of her medical history as she could locate, a list of medications, and all of the records, photographs, and X-rays that she could access. She also provided a letter from Dr. Piper, dated March 18, 2010, in which he detailed the services provided to Petitioner. Dr. Piper’s description suggests that the services provided to Petitioner were extensive, but did not suggest that the procedure itself varied from the procedure described in CPT Code 21240. However, Dr. Piper did reaffirm that the surgery was a bilateral procedure involving both of Petitioner’s temporomandibular joints. BCBSF did not change its decision as a result of the Level I Appeal. On May 14, 2010, Petitioner filed a Level II Appeal with Respondent. On June 16, 2010, the Level II Appeal was denied.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Management Services enter a final order finding that Petitioner is entitled to additional reimbursement for her medical expenses as set forth herein.1/ DONE AND ENTERED this 23rd day of August, 2012, in Tallahassee, Leon County, Florida. S E. GARY EARLY 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 23rd day of August, 2012.
The Issue The central issue in this case is whether B&L is the lowest responsive bidder to HRS Medicaid transportation services RFP for fiscal year 1988-89.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact: On March 18, 1988, HRS issued a request for proposal (RFP) for contractual services, the Medicaid transportation services for fiscal year 1988- The proposals were to be opened April 15, 1988. The contract manager for the Medicaid Program Office was identified as Vera Sharitt. All questions pertaining to the provisions of the RFP were to be in writing addressed to Ms. Sharitt. The RFP identified seven categories of transportation which required response. In the instant case, NEMT, AAA, and B&L all submitted proposals for each of the categories. All proposals were first reviewed to determine whether or not they met the requirements set forth in the fatal items checklist. This review was performed by Vera Sharitt. All bid responses were deemed in compliance with the fatal items and were, therefore, submitted to the five member evaluation committee for further review. Committee members then used a ating sheet to determine which proposal was the most advantageous to the state. The evaluation committee weighed each proposal on the basis of five criteria: proposal requirements; response to statement of purpose/need project understanding; method of service provision; references; and rate analysis. The proposal receiving the highest total of points was deemed the most advantageous to the state. In each of the seven transportation categories, B&L received the highest total of points from the evaluation committee members. The evaluation committee met on May 16, 1988. Present at this meeting were: Kent Rice, Connie Klein, Magna Salas, Susan Pippitt, Urban Myers, Vera Sharitt, and Cathy N. D'Heron. In response to a suggestion made by Vera Sharitt, the committee members agreed to assign set points to the rate analysis portion of the rating sheet. Accordingly, the lowest rate was given 10 of the possible 10 points, the second lowest was given 5 of the possible 10 points, and the third lowest was given 1 of the possible 10 points. In the event of a tie, both proposals received the same points. The RFP had included a sample rating sheet which had specified that the rating analysis would be computed on a 0-10 scale. The committee determined that the proposed assignment of 10-5-1 was within the published range but that it would be unfair to give the highest rate 0 points. At no time during the evaluation committee meeting did Vera Sharitt improperly influence or attempt to influence the members' scoring of points. Ms. Sharitt did not interfere with the evaluation process nor did she attempt to favor one proposal over another. Further, there is no evidence which suggests that Ms. Sharitt improperly influenced or attempted to influence evaluation committee members outside of the meeting conducted on May 18, 1988. The fatal items checklist for the RFP asked six cuestions which related to information required to complete a proposal. The absence of any one of the required items would have resulted in the disqualification of the proposal. At issue in this case are the following provisions of the fatal items: Was the fatal items envelope received by the time and date specified in the RFP? Ambulatory Services: Did the proposer submit a copy(ies) of taxi and/or limousine permits? Did the proposer submit proof of registration from the Florida Division of Motor Vehicles? Wheelchair/Stretcher Van Services: Did the proposer submit a copy of county licensure? Did the proposer submit proof of vehicle liability insurance which included insurer name, address and phone number, policy number, vehicles covered as identified by vehicle identification number, liability limits and policy effective/expiration dates? Did the proposer submit a statement that the proposer agrees to all contract terms and conditions? Did the proposer submit the statement regarding no involvement? In reviewing the information submitted under the fatal items checklist, Vera Sharitt determined that if the information sought could be found in any of submitted materials, the proposer would be deemed qualified. Thus, in the case of B&L, Ms. Sharitt found that the insurance coverage for the vehicles, which named B&L as the insured, corresponded to the vehicles identified on the vehicle registrations submitted. Having made the connection to relate proposer to insurance and vehicles, the actual ownership of the vehicles (in this case in the name of a third or fourth entity) Ms. Sharitt deemed to be unimportant. The same approach was applied to the submittals made by AAA and NEMT. The RFP did not require that vehicles identified in a proposal be titled in the name of the proposer. No proposer challenged the terms of the RFP or the fatal items checklist. All three proposers, NEMT, AAA and B&L, complied with the fatal items requirements as consistently reviewed by Ms. Sharitt. Based upon the terms of the RFP and the fatal items checklist, Ms. Sharitt's review and finding that all proposers were qualified was reasonable.
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 awarding the contract for Medicaid transportation services, fiscal year 1988-89, to B & L Services, Inc. DONE and RECOMMENDED this 16th day of September, 1988, in Tallahassee, Florida. JOYOUS D. PARRISH 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 16th day of September, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NOS. 88-3157BID, 88-3158BID Rulings on Proposed Findings of Fact submitted by Petitioner, NEMT: Paragraph 1 is rejected as contrary to the weight of the evidence submitted, argumentative and a conclusion of law erroneous to the facts of this case. Paragraph 2 is rejected as contrary to the weight of the evidence submitted. Paragraph 3 is rejected as contrary to the weight of the evidence submitted. Paragraph 4 is rejected as irrelevant, immaterial or contrary to the relevant evidence submitted. Paragraph 5 is rejected as irrelevant, immaterial or contrary to the relevant evidence submitted. Paragraphs 6,7,8 and 9 (including all subportions therein) are rejected as irrelevant or contrary to the weight of the credible evidence submitted. Paragraph 10 is rejected as argument or conclusion of law erroneous to the facts of this case. Paragraph 11 is rejected. There is no evidence which would suggest B&L acted as a "front" for another entity or entities. Paragraph 12 is rejected as argument unsupported by the record in this cause. Paragraph 13 is rejected All parties waived any contest of the rating criteria by not timely challenging the terms of the RFP. Further, the terms as applied in this instance have not been arbitrarily or capriciously used to prejudice any proposer. Paragraph 14 is rejected as contrary to the weight of the evidence presented. Paragraph 15 is rejected as argument or a conclusion of law which, although correctly stated, is not applicable to the facts of this case. Paragraphs 16 and 17 are rejected as argument. Paragraph 18 is accepted to the extent it states Robert J. Siedlecki/NEMT Corp. was a qualified bidder; however, to the extent such paragraph concludes the bidder qualified was NEMT, the paragraph is rejected as contrary to the weight of the evidence presented. Rulings on NEMT's findings as to AAA: 1. Paragraphs 1-5 are rejected as contrary to the weight of the relevant and material evidence submitted. It should be further noted that NEMT does not have standing to contest the award to B&L given the finding that AAA did, in fact, comply with the fatal items checklist. Being a qualified proposer, AAA stood next in line to receive the contract not NEMT. The submissions made by NEMT with the proposed findings of fact have not been considered as evidence in this case. Rulings on the proposed findings of fact submitted by AAA: Inasmuch as this petitioner's proposed findings were not in numbered paragraphs, ruling has been made based upon the order of presentation. The first paragraph being considered paragraph 1. Paragraph is accepted as the applicable rule governing the fatal items checklist. Paragraph 2 is rejected as contrary to the weight of the evidence. Paragraph 3 is rejected as irrelevant, immaterial or contrary to the weight of the credible, relevant evidence. Paragraph 4 is rejected as irrelevant, immaterial or contrary to the weight of the evidence; additionally, such conclusion falls outside of the scope of this petitioner's contest. Paragraph 5 is rejected as contrary to the weight of the evidence. Ms. Sharitt also testified that the connection between B&L and the other entities was based upon insurance documentation submitted with the proposal. Paragraph 6 is rejected as a conclusion of law which, while correctly stately, is not a finding of fact and which has been erroneously applied. Paragraph 7 is rejected as irrelevant, immaterial or contrary to the evidence presented. The first five sentences of paragraph 8 are accepted. The balance of the paragraph is rejected as contrary to the weight of the credible evidence submitted. Paragraph 9 is rejected as unsupported by the record or contrary to the evidence submitted. Rulings on the proposed findings of fact submitted by HRS: Paragraphs 1-10 are accepted. To the extent paragraph 11 conforms with the findings made in paragraphs 5, 6, & 7 they are accepted. Otherwise the paragraph is rejected as contrary to the evidence presented. Paragraphs 12-14 are accepted. Rulings on the proposed findings of fact submitted by B&L: It is presumed the submittal reviewed below was from B&L; however, no identifying statement was included in the text of the proposal itself. The presumption is based on the fact that all other submittals were clearly identified by party name. Paragraphs 1-5 are accepted. Paragraph 6 is accepted see findings made in paragraph 8 as to the exact language of the fatal items checklist. Paragraph 7 is accepted. Paragraphs 8, 9, and 10 are accepted. The first two sentences of paragraph 11 are accepted; the balance of the paragraph is rejected as irrelevant or immaterial to the issues framed in this cause. COPIES FURNISHED: Robert J. Siedlecki 5890 Rodman Street Hollywood, Florida 33023 Brian M. Berman 2310 Hollywood Boulevard Hollywood, Florida 33020 Lawrence F. Kranert, Jr. Department of Health and Rehabilitative Services 201 West Broward Boulevard Fort Lauderdale, Florida 33301 John M. Camillo 301 Southeast 10th Court Fort Lauderdale, Florida 33316 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
