Conclusions THE PARTIES resolved all disputed issues and executed a Settlement Agreement. The parties are directed to comply with the terms of the attached settlement agreement, attached as Exhibit “1.” Based on the foregoing, this file is CLOSED. DONE and ORDERED on this the /S Hay of Kfar . 2014, in Tallahassee, Florida. XN eth A fe. Agency for Health Care Administration Filed April 16, 2014 10:25 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 PROCEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHING 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED. Copies furnished to: Horace Dozier Field Office Manager 2727 Mahan Drive, MS 6 Tallahassee, Florida 32308 (Via Interoffice Mail) Julie Gallagher, Esquire Akerman Senterfitt 106 East College Avenue Suite 1200 Tallahassee, Florida 32301 (Via US Mail) Shena Grantham, Esquire Agency for Health Care Administration 2727 Mahan Drive, MS 3 Tallahassee, Florida 32308 (Via Interoffice Mail) Eric Miller, Inspector General Agency for Health Care Administration 2727 Mahan Drive Building 2, MS 4 Tallahassee, Florida 32308 (Via Interoffice Mail) Katherine B. Heyward, Esquire Agency for Health Care Administration 2727 Mahan Drive, MS 3 Tallahassee, Florida 32308 (Via Interoffice Mail) Agency for Health Care Administration Bureau of Finance and Accounting 2727 Mahan Drive Building 2, MS 14 Tallahassee, Florida 32308 (Via Interoffice Mail) Rick Zenuch, Chief Medicaid Program Integrity 2727 Mahan Drive Building 2, MS 6 Tallahassee, Florida 32308 (Via Interoffice Mail) Bureau of Health Quality Assurance 2727 Mahan Drive, MS 9 Tallahassee, Florida 32308 (Via Interoffice Mail) Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (Via US Mail) Shawn McCauley, Medicaid Contract Manager Agency for Health Care Administration 2727 Mahan Drive, MS 22 Tallahassee, Florida 32308 (Via Interoffice Mail) iS) CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished to Richard Shoop, Esqu ire Agency Clerk State of Florida Agency for Health Care Administration 2727 Mahan Drive, Building #3 Tallahassee, Florida 32308-5403 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, Case No.: 12-193PH A Provider No.: 049207800 Cl. No.: 12-1060-000 DAVID M. KENTON, Respondent. / SETTLEMENT AGREEMENT. The STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION (hereinafter “AHCA” or “the Agency”), and DAVID M. KENTON (hereinafter “Dr. Kenton”), by and through the undersigned, hereby stipulate and agree as follows: RECITALS A. These Recitals are true and correct to the best knowledge of the parties. B, AHCA is the single state agency responsible for Medicaid in the state of Florida. c. A Medicaid provider must enter into an agreement with AHCA in order to receive payments for services rendered under the Medicaid program. D. DAVID M, KENTON is a Medicaid provider in the State of Florida, provider number 049207800, E, On August 20, 2010, Dr. Kenton entered a plea of guilty to one count of conspiracy in violation of 18 U.S.C. Sec. 371; and on November 10, 2010, Dr. Kenton was found guilty of the charge in the United States District Court, Southern District of Florida, Case No. 09-60344-CR-MARRA, (26803191;1}Page 1 of 6 ea {2680319151} On November 30, 2011, AHCA sent Dr. Kenton a letter notifying him of AHCA’s intent to terminate for cause, pursuant to Florida Statute 409.913(13) and Rule 59G-9,070 Florida Administrative Code, his participation in the Medicaid program as a result of his conviction in the federal court action described above. On June 13, 2012, the State of Florida Board of Medicine (hereinafter “the Board”) entered a Final Order in DOH Case No, 2010-22219, Department of Health v. David Mitchell Kenton, M.D. pursuant to a Settlement Agreement. The Settlement Agreement provides, inter alia, that Dr. Kenton would be permitted to continue to practice medicine under certain terms and conditions; the Board allowed Dr. Kenton to renew his Florida medical license; and the Board recognized that Dr, Kenton was placed on the List of Excluded Individuals and Entities (LEIE) maintained by the Office of Inspector General with the Federal Department of Health and Human Services before that law, which would disqualify him from license renewal, became effective. On June 21, 2012, Dr. Kenton filed a request for hearing in this matter. The Parties have agreed to settle the matter addressed in the recitals, By execution of this Settlement Agreement, the parties affirm, warrant and represent that they have full and complete authority to enter into this Settlement Agreement and settle the matters addressed herein. AGREEMENT In consideration of the mutual promises and agreements set forth herein, the Parties agree as follows 1. {26803191,1} The parties agree that Dr. Kenton shall be immediately terminated from the Florida Medicaid program and that the termination shall be for “no cause.” Dr, Kenton agrees that the thirty (30) day notice period from the date of the November 30, 2011 termination letter has run. Dr, Kenton agrees that he will never again apply to the Florida Medicaid program regardless of his status with the Office of the Inspector General with the Federal Department of Health and Human Services. Dr. Kenton agrees that, regardless of his status with the Office of the Inspector Genera! with the Federal Department of Health and Human Services, AHCA has full discretion to deny any application Dr. Kenton submits to the Florida Medicaid program regardless of the reason for such denial. Dr. Kenton agrees to reimburse AHCA five thousand ($5,000.00) dollars for costs incurred in this matter. Dr, Kenton agrees to pay the costs within sixty (60) days of the date of the Final Order herein, This Agreement is expressly contingent upon the condition that neither Dr. Kenton nor anyone in his immediate family (to include any spouse, child, or parent of Dr. Kenton) shall own a health care facility within the State of Florida. Payment shall be made to: AGENCY FOR IIEALTH CARE ADMINISTRATION Medicaid Accounts Receivable 2727 Mahan Drive, M.S. #14 Tallahassee, Florida 32308-5403 9. Failure to pay the costs within the said sixty (60) days shall result in this Settlement Agreement being nul! and void and the case shall return to is pre- settlement status, 9. AHCA reserves the right to enforce this Agreement under the laws of the State of Florida, the rules of the Medicaid Program, and all other applicable rules and regulations. 10. Other than the cost reimbursement provided for herein, each party shal! bear its own attorney's fees and costs. IL. This settlement docs not constitute an admission of wrongdoing or error by either party with respect to this case or any other matter, The costs reimbursed by Dr. Kenton are not a sanction or penalty. 12, The signatories to this Agreement, acting in a representative capacity, represent that they are duly authorized to enter into this Agreement on behalf of the respective parties. 13. This Agreement shall be construed in accordance with the provisions of the laws of Florida. Venue for any action arising from this Agreement shall be the Circuit Court located in Leon County, Florida. 14, This Agreement constitutes the entire agreement between Dr. Kenton and AHCA, including anyone acting for, associated with or employed by them, concerning all matters, and this Agreement supersedes any prior discussions, agreements of understandings; there are no promises, representations or agreements between Dr. Kenton {2680319151} and AHCA other than as set forth herein. No modification or waiver of any provision shall be valid unless a written amendment to the Agreement is completed and properly executed by the parties, 15. This is an Agreement of Settlement and Compromise, made in recognition that the parties may have different or incorrect understandings, information, and contentions as to facts and law, and with each party compromising and settling any potential correctness or incorrectness of its understandings, information and contentions as to facts and law, so that no misunderstanding or misinformation shall be a ground for rescission hereof. 16. Dr. Kenton expressly waives in this matter his right to any hearing pursuant to Sections 120.569 or 120.57, Florida Statutes, any making of findings of fact and conclusions of law by the Agency, and all further and other proceedings to which he may be otherwise entitled to under the law or the rules of the Agency regarding this proceeding and the issues raised herein. Dr. Kenton further agrees that he shall not challenge or contest any Final Order entered in this matter which is adopts the terms of this Settlement Agreement in any forum available to it now or in the future, including its right to any administrative proceeding, circuit or federal court action, or any appeal. 17. This Agreement is and shall be deemed jointly drafted and written by all parties to it, and shall not be construed or interpreted against the party originating or preparing it. 18, To the extent that any provision of this Agreement is prohibited by law for any reason, such provision shall be effective to the extent not so prohibited, and such prohibition shall not affect any other provision of this Agreement. (26803191;1} fl { 19, Ths Agreement shall inure to the benefit of and be binding on each party's successors, assigns, heirs, administrators, representatives and trustees. 20. All times stated herein ate of the essence in this Agreement. 21, This Agreement shall be in full force and effect upon execution by the respective parties, Dated: Oetemhat 37 2013 Dated: Wy 2013 106 East College Avenne, Ste. 1200 Tallahassee, FL 32301 Attorney for Respondent AGENCY FOR HEALTH CARE , ; ; ADMINISTRATION a 2727 Mahan Drive, Bldg. 3, Mail Stop #3 seg, FL 32308-54 - ; ye ‘ Dated: 4, Sy ‘Lr a ies, ’ / . . , Erle Miller oS Inspector Gprietgl a oa o> en y freA 6m ee Dated: Stuart Williams, Esq. 0 Dated: Al & af fof General Counsel Chief Medicaid ounsel ; ave a nae oats Fyesl Y, _e oe ~ : ‘ oy Shena L. Grant Esq. oo , {26800911} -,
Conclusions THE PARTIES resolved all disputed issues and executed a Settlement Agreement. The parties are directed to comply with the terms of the attached settlement agreement. Based on the foregoing, this file is CLOSED. DONE and ORDERED on this the QIhay of Qucenater > 201\, in Tallahassee, Florida. bd WM fer ELIZABETH DUDEK, SECRETARY Agency for Health Care Administration 1 Filed January 5, 2012 11:44 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: L. William Porter Assistant General Counsel Agency for Health Care Administration Office of the General Counsel (Interoffice) Carlos Muniz Deputy Attorney General/Chief of Staff Office of the Attorney General Department of Legal Affairs (electronic mail) Michael Verbitsky, President 2024 Hollywood Boulevard Hollywood, Florida 33020 (U.S. Mail) Eleanor M. Hunter Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 Mike Blackburn, Bureau Chief, Medicaid Program Integrity Finance and Accounting Health Quality Assurance Department of Health 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, Laserfiche or electronic mail on this the fay of denne 2012. Agency Clerk State of Florida Agency for Health Care Administration 2727 Mahan Drive, MS #3 Tallahassee, Florida 32308-5403 (850) 412-3630/FAX (850) 921-0158 SETTLEMENT AGREEMENT THIS SETTLEMENT AGREEMENT (hereinafter referred to as “ Agreement”) is entered between the STATE OF FLORIDA, acting through its MEDICAID FRAUD CONTROL UNIT (hereinafter referred to as “MFCU”) of the OFFICE OF THE ATTORNEY GENERAL (hereinafter referred to as “OAG”) and WELLSCRIPTS, LLC (hereinafter referred to as “WELLSCRIPTS”) and MICHAEL VERBITSKY (bereinafter referred to as “VERBITSKY”), acting through its authorized representative. As a preamble to this Agreement, the MFCU, WELLSCRIPTS, and VERBITSKY agree to the following: A. “WELLSCRIPTS,” “VERBITSKY,” and “Parties” Defined: As used in this Agreement, the term “WELLSCRIPTS” is defined as WELLSCRIPTS, LLC, an inactive Florida for Limited Liability Company, its current and former parent entities, predecessors, successors, and assigns, including the agents, employees, officers, and directors, and independent contractors of WELLSCRIPTS, their successors and assigns, to the extent such agerits and independent contractors were acting for or on behalf of WELLSCRIPTS. WELLSCRIPTS was dissolved on September 26, 2008. VERBITSKY was the president and owner of WELLSCRIPTS during the Covered Conduct. Collectively, WELLSCRIPTS, VERBITSKY, and MFCU are the “Parties,” as used herein. B. “Investigation” of the “Covered Conduct”: The MFCU conducted an investigation of WELLSCRIPTS concerning WELLSCRIPTS’ alleged improper claims for and receipt of Medicaid payments from Florida’s Agency for Health Care Administration (hereinafter Page 1 of 11 referred to as “AHCA”). As used herein, the term “Investigation” shall mean MFCU’s investigation into WELLSCRIPTS. As a result of this investigation, the MFCU alleges that WELLSCRIPTS improperly billed the Florida Medicaid program $346,887.88 for certain drugs. This calculation was based on an audit of the top seven (7) drugs billed by Wellscripts. Also, the MFCU alleges that WELLSCRIPTS was improperly reimbursed for medications billed to two assisted living facilities totaling $17,139.16. WELLSCRIPTS submitted these claims through Medicaid Provider Number 0268208-00. The MFCU alleges that the total amount improperly billed by WELLSCRIPTS to Florida’s Medicaid program is $364,027.04. This MFCU-investigated conduct is the “Covered Conduct,” as used hereafter. The “Covered Conduct” does not include any conduct or potential claims that WELLSCRIPTS may have administratively against AHCA or any other entity for billed services which have not yet been paid that are outside the scope and/or time frame of the conduct detailed above. . MFCU’s Claims: MFCU contends it has certain statutory and common-law civil claims against WELLSCRIPTS as a result of the Covered Conduct. . Motivation to Resolve Claims: The Parties desire to conclude the aforementioned Investigation into the Covered Conduct and to settle and compromise on all claims, including, but not limited to, any claims pursuant to Sections 68.081 through 68.092 Florida Statutes, against WELLSCRIPTS arising out of the Investigation that the MFCU either asserted or maintained against WELLSCRIPTS or could have asserted or maintained against WELLSCRIPTS. The Parties enter into this full and final Agreement Page 2 of 11 to avoid the delay, uncertainty, inconvenience, and expense of protracted litigation of these claims. NOW, THEREFORE, in consideration of the premises and the mutual promises, agreements, obligations, and covenants set forth, and for good and valuable consideration as stated herein, the Parties agree as follows: 1, Settlement Terms: a. Settlement Amount: WELLSCRIPTS’ relinquishment of all rights and interests in the monies previously seized from Bank of America Account Number 003738055311 totaling $219,193.66 plus interest. The monies previously seized are currently being held in the OAG’s Trust Account. b. Return of Funds Seized: The OAG agrees to abandon the claim for forfeiture of the seized currency from Bank of America Account Numbers 003671024535 and 003672757995 in the names of Michael Verbitsky and Ricki R. Kaneti totaling $22,253.27 and will return the funds to Michael Verbitsky and Ricki R. Kaneti. The funds will be returned to Michael Verbitsky and Ricki R. Kaneti’s counsel via check to Nason, Yeager, Gerson, White & Lioce P.A.’s trust account at Sabadell United Bank, Account Number 0215000258. c, Upon the signing of this Agreement by both parties, the MFCU will transfer to AHCA, $219,193.66 plus interest to satisfy the Medicaid program loss. d. Upon the signing of this Agreement by both parties, OAG agrees to voluntarily dismiss the Civil Action case number 2010 CA 015157 (09), which was filed in the Seventeenth Judicial Circuit of Broward County, FL on April 6, 2010. OAG also agrees to voluntarily dismiss the Civil Forfeiture Action case number 2007 Page 3 of 11 CA 000765 (14), which was filed in the Seventeenth Judicial Circuit of Broward County, FL on January 11, 2007. 2. MFCU’s Release: Subject to the exceptions in Paragraph 3 (“Scope of Release”) and Paragraph 4 (“Bankruptcy Provisions”), upon full execution of this Agreement by all Parties and WELLSCRIPTS’ simultaneous remittance to the MFCU of the settlement amount as provided in Paragraph 1, the MFCU agrees to release WELLSCRIPTS from any and all civil and administrative actions, causes of action, obligations, liabilities, claims, or demands for compensatory, special, punitive, exemplary, or treble damages, or demand whatsoever in law or in equity, which were asserted or maintained or could have been asserted or maintained, against WELLSCRIPTS based upon or arising out of the Investigation of the Covered Conduct specifically as defined in Preamble Paragraph B. However, the Agreement will have no actual or intended effect until executed by MFCU’s authorized representative. In the event WELLSCRIPTS makes payment of the Settlement Amount prior to full execution of this Agreement, MFCU may deposit the Settlement Amount in an escrow account pending execution and such deposit shall not be construed as acceptance of the terms of this Agreement. 3. Scope of Release: Notwithstanding any term of this Agreement, the following are specifically reserved and excluded from the scope and terms of this Agreement as to any entity or person, including WELLSCRIPTS: a. MFCU, AHCA, or other appropriate law enforcement or regulatory agency or private party suit against WELLSCRIPTS or any predecessor, successor, director, officer, employee, assign or agent of WELLSCRIPTS for: Page 4 of 11 i. Any administrative or civil cause of action for any violation of law arising out of the covered conduct and not encompassed within the Investigation as defined in Preamble Paragraph B; or ii. Any criminal liability. Accordingly, WELLSCRIPTS agrees not to assert the defenses of res judicata, collateral estoppel, excessive fines, or double jeopardy as to actions described in subparagraphs (a)(1) and (a)(2) of this Paragraph 3. b. Any actions or matters involving the exclusion of WELLSCRIPTS or other entities or persons from Federal or State, including Florida, health care programs; c. Any administrative action(s) relating to professional licensure or adjudication of claims by persons or entities who are not parties to this Agreement; d. Any claims based upon such obligations as are created by this Agreement, e. Any liability to the State of Florida, including MFCU and OAG, for any conduct other than the Covered Conduct; f. Any express or implied warranty claims or other claims for defective or deficient products or services, including quality of goods and services, provided by WELLSCRIPTS; g. Any claims for personal injury or property damage or for other consequential | damages arising from the Covered Conduct; ! h. Any claims based on a failure to deliver items or services due; and i. Any action against a healthcare professional, including WELLSCRIPTS and any of its employees or agents, for practicing without the necessary license or certification. Page S$ of 11 . Bankruptcy Provisions: The Parties warrant and agree to the following bankruptcy provisions: a. WELLSCRIPTS warran ts that it has reviewed its own financial position and WELLSCRIPTS is solvent within the meaning of Title 11 of the United States Code §§547(b)(3) and 548 (a)(1)(B)Gi)@, and will remain solvent following its payment to the MFCU of the Settlement Amount. _ No Admission of Fault: This Agreement, any exhibit or document referenced herein, any action taken to reach, effectuate, or further this Agreement, and the terms set forth herein, shall not be construed as, or used as, an admission by or against any of the Parties of any fault, wrongdoing, or liability whatsoever. Entering into or carrying out this Agreement, or any negotiations or proceedings related thereto, shall not in any event be construed as, or deemed to be evidence of, an admission or concession by any of the Parties, or to be a waiver of any applicable defense. However, with the exception of certain bankruptcy provisions in Paragraph 4, nothing in this Agreement, including this Paragraph 5, shall be construed to limit or to restrict WELLSCRIPTS’ right to utilize this Agreement, or payments made hereunder, to assert and maintain the defenses of res judicata, collateral estoppel, payment, compromise and settlement, accord and satisfaction, or any legal or equitable defenses in any pending or future legal or administrative action or proceeding arising out of the specific subject matter of the Investigation, as defined in Preamble Paragraph B. WELLSCRIPTS does not admit MFCU’s contentions that arise from its Investigation of the Covered Conduct, set forth in Preamble Paragraph B, and specifically denies WELLSCRIPTS knowingly submitted any claims in Page 6 of 11 violation of state or federal law. This Agreement, and the payment, promises, and release provided hereunder, are not and shall not be construed to be an admission of liability or any acknowledgment of the validity of any of the claims that were or that could have been asserted by the MFCU against WELLSCRIPTS, arising out of the: Investigation, which liability or validity is hereby expressly denied by WELLSCRIPTS. . Denied Medical Claims: The Settlement Amount shall not be decreased as a result of the denial of claims for payment now being withheld from payment by AHCA or its intermediary agents related to the Covered Conduct. WELLSCRIPTS agrees not to resubmit to Medicare, Medicaid, or any State or Federal payer any previously denied claims related to the Covered Conduct and agrees not to appeal any such denials of claims. However, WELLSCRIPTS reserves the right to appeal and/or resubmit previously denied claims or seek administrative remedies with AHCA of those claims which are outside the scope of the Covered Conduct. . Complete Resolution: The Parties have agreed that the terms of this Agreement constitute a complete resolution and settlement of the claims asserted against WELLSCRIPTS by the MFCU, as well as the claims that could have been asserted against WELLSCRIPTS by the MFCU arising out of or as a result of the Investigation described in Preamble Paragraph B. Upon WELLSCRIPTS’ continued fulfillment of its obligations under this Agreement, and relinquishment of all rights and interests in the monies seized provided in Paragraph 1, the Investigation, as defined in Preamble Paragraph B, shall be concluded. Page 7 of 11 10. il. 12. 13, 14, Survival: This Agreement shal! be binding upon and inure to the benefit of the Parties and their successors, transferees, heirs, and assigns. Merger: This Agreement constitutes the entire agreement between the Parties with regard to the subject matter contained herein and all prior negotiations and understandings between the Parties shall be deemed merged into this Agreement. No External Representations: No representations, warranties, or inducements have been made by the MFCU concerning this Agreement other than those representations, warranties, and covenants contained in this Agreement. No Oral Modifications or Waivers: No waiver, modification, or amendment of the terms of this Agreement shall be valid or binding unless in writing, signed by the Party to be charged, and then only to the extent set forth in such written waiver, modification, or amendment. Failure of Strict Performance: Any failure by any Party to the Agreement to insist upon the strict performance by any other Party of any of the provisions of this Agreement shall not be deemed a waiver of any of the provisions of this Agreement, and such Party, notwithstanding such failure, shall have the right thereafter to insist upon the specific performance of any and all of the provisions of this Agreement. Choice of Law: This Agreement shall be governed by, and construed and enforced in accordance with the laws of the State of Florida, without regard to its conflict of law principles. Release of Florida; WELLSCRIPTS fully and finally releases the MFCU, the OAG, and the State of Florida, its agencies, employees, servants, and agents from any claims (including attorney’s fees and costs of any kind) that WELLSCRIPTS has Page 8 of 11 15. 16. 17. 18. asserted, could have asserted, or may assert in the future against the MEFCU, the OAG, or the State of Florida, its agencies, employees, and agents arising out of or resulting from the Investigation as defined in Preamble Paragraph B. Contract Beneficiaries: This Agreement is intended to be for the benefit of the Parties only and by this instrument the Parties do not release any claims against any other person or entity, except to the extent provided in the immediately preceding Paragraph 14. Contribution from Medical Beneficiaries: WELLSCRIPTS waives and shall not seek payment for any of the health care billings covered by this Agreement from any health care beneficiaries or their parents, sponsors, legally responsible individuals, or third party payers based upon the claims defined as Covered Conduct. Litigation Costs: With exception of investigative costs and litigation costs, which may be specifically provided for in Paragraph 1, each party to this Agreement shall bear its own legal and other costs incurred in connection with this matter, including the preparation and performance of this Agreement. Unenforceable Clause: Neither Party shall challenge the legality or enforceability of this Agreement. If any clause, provision, or section of this Agreement shall, for any reason, be held illegal, invalid, or unenforceable, such illegality, invalidity, or unenforceability shall not affect any other clause, provision, or section of this Agreement, and this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable clause, section, or other provision had not been contained herein. Page 9 of 11 19. 20. 21. 22. 23. 24. 25. Arm’s Length Negotiations: The Parties executed this Agreement after arm’s length negotiations and it reflects the conclusion of the Parties that this Agreement is in the best interest of all the Parties. Each Party is satisfied with the Agreement’s language and construction, and therefore the interpretation of the terms of this Agreement shall not be construed against any of the Parties. Each Party represents that this Agreement is freely and voluntarily entered into without any degree of duress or compulsion whatsoever. Authority to Execute Agreement: The undersigned individuals signing this Agreement on behalf of WELLSCRIPTS represent and warrant that they are authorized to execute this Agreement. The undersigned MFCU signatories represent that they are signing this Agreement in their official capacities and that they are authorized to execute this Agreement. Effective Date: This Agreement is effective on the date of signature of the last signatory to the Agreement (hereinafter referred to as the “Effective Date”). Non-Punitive Effect: The Parties agree that this Settlement is not punitive in purpose or effect. IRS Characterization: Nothing in this Agreement constitutes an agreement or representation characterizing the Settlement Amount for the purposes of the Internal Revenue Code, Title 26 of the United States Code. Public Disclosure: All Parties consent to the MFCU’s disclosure of this Agreement, and information about this Agreement, to the public. Introductory Signals: The introductory paragraph signals are for subject identification only and do not affect the meaning or become part of the Agreement. Page 10 of 11 WELLSCRIPTS, LLC FOR FLORIDA'S OFFICE OF THE ATTORNEY GENERAL, DEPARTMENT OF LEGAL AFFAIRS PAM BONDI ATTORNEY GENERAL AY C. A oa * 3 ™ Carlos Muniz “ ie . J f- Deputy Attorney General/Chief of Staff Position: f , eal 4h vali Date: Date: Page 1! of Il (Page 1 of 48) POROA AGENCY FOR HESLIA CARE ADMINSTRATION: JEB BUSH, GOVERNOR CHRISTA CALAMAS, SECRETARY CERTIFIED MAIL. — 91 7108 2133 3932 8581 4299 September 7, 2006 Provider No: 026820800 License No: PH20057 Mr. Michael Verbitsky Wellscripts LLC 2024 Hollywood Boulevard Hollywood, Florida 33020 In Reply Refer to FINAL AUDIT REPORT CL No. 06-4308-000/P/AAE Dear Mr. Verbitsky: The Agency for Health Care Administration (the Agency), Bureau of Medicaid Program Integrity, has completed a review of claims for Medicaid reimbursement for dates of service during the period of December 1, 2004 through November 30, 2005. A preliminary audit report dated July 25, 2006 was sent to you indicating that we had determined you were overpaid $347,963.94. Based upon a review of all documentation submitted, we have determined that you were overpaid $347,963.94 for services that in whole or in part are not covered by Medicaid. A fine of $5,000.00 has been applied. The total amount due is $352,963.94. . Be advised of the following: (1) Pursuant to Section 409.913(23)(a), Florida Statutes (F.S.), the Agency is entitled to recover all investigative, legal, and expert witness costs. (2) In accordance with Sections 409.913(15), (16), and (17), F.S., and Rule 59G-9.070, Florida Administrative Code (F.A.C.), the Agency shall apply sanctions for violations of federal and state laws, including Medicaid policy. This letter shall serve as notice of the following sanction(s): ° A fine of $5,000.00 for violation of Rule Section 59G-9.070(7)(n), F.A.C. 2727 Mahan Drive « Mail Stop #4 Vallahassee, FL 32308 Visit AHCA online at www fdhe. state flus APPENDIX A (Page 2 of 48) Wellseripts LLC Page 2 of 4 This review and the determination of Overpayment were made in accordance with the provisions of Section 409.913, F.S. In determining the appropriateness of Medicaid payment pursuant to Medicaid policy, the Medicaid program utilizes procedure codes, descriptions, policies, limitations and requirements found in the Medicaid provider handbooks and Section 409.913, F.S, In applying for Medicaid reimbursement, providers are required to follow the guidelines set forth in the applicable tules and Medicaid fee schedules, as promulgated in the Medicaid policy handbooks, billing bulletins, and the Medicaid provider agreement. Medicaid cannot pay for services that do not meet these guidelines. Below is a discussion of the particular guidelines related to the review of your claims, and an explanation of why these claims do not meet Medicaid requirements. The audit work Papers are attached, listing the claims that are affected by this determination. REVIEW DETERMINATION(S) The audit included a comparison of your lawful documented product acquisitions with your paid Medicaid claims. Only product acquisitions from Florida licensed wholesalers were included in the review. The audit period for this review was from December 1, 2004 through November 30, 2005. The drug quantity paid for by Medicaid, in some instances, exceeded the quantity available to dispense to Medicaid recipients. This review identified an overpayment of $347,963.94. Enclosed for this revicw are the overpayment calculations which include the summary sheet(s), the paid claims data, and acquisition data. If you are currently involved in a bankruptcy, you should notify your attorney immediately and provide a copy of this letter for them. Please advise your attorney that we nced the following information immediately: (1) the date of filing of the bankruptcy petition; (2) the case number; (3) the court name and the division in which the petition was filed (e.g., Northern District of Florida, Tallahassee Division). If you are not in bankruptcy and you concur with our findings, remit by certified check in the amount of $352,963.94, which includes the Overpayment amount as well as any fines imposed. The check must be payable to the Florida Agency for Health Care Administration. Questions regarding procedures for submitting payment should be directed to Medicaid Accounts Receivable, (850) 488- 5869. ‘To ensure proper credit, be certain you legibly record on your check your Medicaid provider number and the C.I. number listed on the first page of this audit report. Please mail payment to: Agency for Health Care Administration Medicaid Accounts Receivable P.O. Box 13749 Tallahassee, Florida 32317-3749 If payment is not received, or arranged for, within 30 days of receipt of this letter, the Agency may withhold Medicaid payments in accordance with the provisions of Chapter 409.913(27), F.S. Furthermore, pursuant to Sections 409.913(25) and 409.913(15), F.S., failure to pay in full, or enter into and abide by the terms of any repayment schedule set forth by the Agency may result in termination from the Medicaid Program. Likewise, failure to comply with all sanctions applied or due dates may result in additional sanctions being imposed. (Page 3 of 48) Wellscripts LLC Page 3 of 4 You have the right to request a formal or informal hearing pursuant to Section 120.569, F.S. Ifa request for a formal hearing is made, the petition must be made in compliance with Section 28- 106.201, F.A.C. and mediation may be available. Ifa request for an informal hearing is made, the petition must be made in compliance with rule Section 28-106.301, F.A.C. Additionally, you are hereby informed that if'a request for a hearing is made, the petition must be received by the Agency within twenty-one (21) days of receipt of this letter. For more information regarding your hearing and mediation rights, please see the attached Notice of Administrative Hearing and Mediation Rights. Any questions you may have about this matter should be directed to: Arlenc Elliott, Senior Pharmacist, Agency for Health Care Administration, Medicaid Program Integrity, 2727 Mahan Drive, Mail Stop #6, Tallahassee, Florida 32308-5403, telephone (850) 921-1802, facsimile (850) 410-1972, Sincerely, @. katy D. Kenneth Yon AHCA Administrator aae Enclosure(s) cc: Christopher Parrella, J.D., CHC Health Law Offices of Anthony C. Vitale, P.A. 799 Brickell Plaza Suite 700 Miami, Florida 33131 Medicaid Accounts Receivable Arlene Elliott (Page 4 of 48) Wellsenpts 110 Page suf NOTICE OF ADMINISTRATIVE HEARING AND MEDIATION RIGHTS You have the tight to request an administrative hearing pursuant to Sections 120.569 and 120.57, Florida Statutes. If you disagree with the facts stated in the foregoing Final Audit Report (hereinafter FAR), you may request a formal administrative hearing pursuant to Section 120.57{L), Florida Statutes. If you do not dispute the facts stated in the FAR, but believe there are additional .feasons to grant the relief you seek, you may request an informal administrative hearing pursuant to Section 120.57(2), Florida Statutes. Additionally, pursuant to Section 120.573, Florida Statutes, mediation may be available if you have chosen a formal administrative hearing, as discussed more fully below. The wnitten request for an administrative hearing must conform to the requirements of either Rule 28-106.201(2) or Rule 28-106.301(2), Florida Administrative Code, and must be received by the Assistant Bureau Chief by 5:00 P.M. no later than 21 days after you received the FAR. The address for filing the written request for an administrative hearing is: Assistant Bureau Chief Medicaid Program Integrity Agency for Health Care Administration 2727 Mahan Drive, Mail Stop #6 Tallahassee, Florida 32308 The request must be legible, on 8 % by 11-inch white paper, and contain: 1. Your name, address, telephone number, any Agency identifying number on the FAR, if known, and name, address, and telephone number of your representative, if any; 2. An explanation of how your substantial intcrests will be affected by the action described in the FAR; 3. A statement of when and how you received the F. AR; 4. Fora request for formal hearing, a statement of all disputed issues of material fact; 5. Fora request for formal hearing, a concise statement of the ultimate facts alleged, as well as the rules and statutes which entitle you to Telief; : 6. Fora request for formal hearing, whether you request mediation, if it is available; 7. For a request for informal hearing, what bases support an adjustment to the amount owed to the Agency; and 8. A demand for relief. A formal hearing will be held if there are disputed issues of material fact. Additionally, mediation may be available in conjunction with a formal hearing. Mediation is a way to use a neutral third party to assist the parties in a legal or administrative proceeding to reach a settlement of their case. If you and the Agency agree to mediation, it does not mean that you give up the right to a hearing. Rather, you and the Agency will try to settle your case first with mediation. Tf you request mediation, and the Agency agrees to it, you will be contacted by the Agency to set up a time for the mediation and to enter into a mediation agreement. If a mediation agreement is not reached within 10 days following the request for mediation, the matter -will proceed without mediation. The mediation must be concluded within 60 days of having entered into the agreement, unless you and the Agency agree to a different time period. The mediation agreement between you and the Agency will include provisions for sclecting the mediator, the allocation of costs and fees associated with the mediation, and the confidentiality of discussions and documents involved in the mediation. Mediators charge hourly fees that must be shared equally by you and the Agency. 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Asay av 206082 SLOL02 L8P969 Lesg69 S86189 060E29 06999 ZLEGSS poRsssg bobver9o 6249829 6921429 682b29 89LLZ9 tZ-209 SCELIG cOSOby 289606 b6LS6r6 40L02E SOLOLE bZZ0vE 6PL6ZL 66LbcL 88956 BSbcSr6 tSL6Eb6 8210666 LOvr2e6 vLS6P86 bye 2956 CLBbbS6 SOerhSE E€660ES6 SOEB0ES 90E60E6 6SZE626 4SZE6CE LSLESZE O8Lzezé b8L2ec6 S6LELLE 89rBE06 8E2SZ06 er9SZ06 9r8le6e L6Lp968 6er2cse 2065228 So0e/z1/8 SOOZ/Er8 sooz/ee soocizig SOOZ/L/8 SOOZ/62/L SOOZ/B2/2 soogLese SOOC/L2/L so0z/sere SOOC/S2L S00z/e2ie SO0e¢zzz SOOz/eZeit SOOT EL SDOZ/L EL SOOZ/0E/9 sooze7s SO00Z/Z7/9 Sodz/ee/9 so0z/ez9 s00z/0z/9 SO0Z/L/9 soozse/s Sooz/eers SOOzETz/s SOOC/ELIS SOOZ/OL/S SOOZ Ziv SO0d/Sc/p sodese/e SOOZ/IEZ/E SOOC/ECIE SOOeZz/E gooe/s7e so0d/Se/e S00c/re/e SOO0e¢/P2/e SOC Zz SO0z/ez/z SOOZLLIZ SO0z/v/z SOO0c/22/L So0e/se/t soozeert SOO?/Le/L SOOC/E L/L SOOc/r/L poozecet leurpseg IEUIPIED leulped leulpses jeulprea jeuipses, jeulpleg reulpses jeulpieg IEUIPIED leuipseg leuIpyeg leUIPIeED IEUIPIED leulpses IEUIPJED feulpies on8g oo}1eg leulpse jeuipses jeulpseg reuipies jeulpieg [BUIPIED oo|jag ooi9g reulpies jeulpseg leurpreg feUIpIED reuipreg, jeulpses jeuped FEUIPIED eulpseg jeurpeg jeulpseg eulpseo, jeuipeg eulpled UIPIED eulpleg feuipes, feUlpueD BUIPIeED reUIpIED {EUIDJED leUlpleD leUIpleg OD807289Z0 # JapiAcig O11 SIduOS}aAA fan im tee (Page 7 of 48) Weliscnpts LLC INVOICE REVIEW Provider # 026820800 . Shipp Cardinal 8/15/2005 791058 1 Cardinal 8/25/2005 881593 ABILIFY 15MG TABS 1 30 30 Cardinal 8/25/2005 881597 ABILIFY 1S5MG TABS 2 30 60 Cardinal 8/29/2005 902946 ABILIFY 15MG TABS 1 30 30 Cardinal 8/29/2005 902948 ABILIFY 1SMG TABS 2 30 60 Cardinal 8/29/2005 902956 ABILIFY 15MG TABS 1 30 30 Cardinal 8/30/2005 912207 ABILIFY 15MG TABS 3 30 90 Cardinal 9/12/2005 999712 ABILIFY 15MG TABS 4 30 30 Cardinal 9/12/2005 $99717 ABILIFY 15MG TABS 4 30 30 Cardinal 9/14/2005 1024276 ABILIFY 15MG TABS 1 30 30 Cardinal 9/15/2005 1034422 ABILIFY 15MG TABS 1 30 30 Cardinal 9/26/2005 1108713 ABILIFY 1SMG TABS 1 30 30 Cardinal 9/28/2005 1108714 ABILIFY 15MG TABS 1 30 30 Cardinal 9/27/2005 1124704 ABILIFY 15MG TABS 2 30 60 Cardinal 9/27/2005 1124731 ABILIFY 15MG TABS 1 30 30 Cardinat 9/29/2005 1146258 ABILIFY 15MG TABS 1 30 30 Cardina 9/29/2005 1146262 ABILIFY 15MG TABS 3 30 90 Cardinal 10/5/2005 1192557 ABILIFY 15MG TABS 1 30 30 Cardina 10/10/2005 1217189 ABILIFY 15MG TABS 1 30 30 Cardina 10/14/2005 1257074 ABILIFY 15MG TABS 1 30 30 Cardinal 10/17/2005 1272799 ABILIFY 15MG TABS 1 30 30 Cardinal 10/19/2005 1298947 ABILIFY 15MG TABS 1 30. 30 Cardinal 10/27/2005 1353780 ABILIFY 15MG TABS 3 30 90 Cardinal 10/27/2005 1353777 ABILIFY 15MG TABS 4 30 30 Cardina 10/31/2005 1370709 ABILIFY 15MG TABS 2 30 60 Cardinal 10/31/2005 1370806 ABILIFY 15MG TABS 2 30 60 Cardinal 14/2/2005 1398925 ABILIFY 15MG TABS 1 30 30 Cardinal 11/11/2005 1480110 ABILIFY 15MG TABS 1 30 30 Cardinal 11/18/2005 1538685 ABILIFY 15MG TABS 1 30 30 Cardinal 11/22/2005 1556873 ABILIFY 15MG TABS 1 30 30 Cardinal 11/22/2005 1556878 ABILIFY 15SMG TABS 2 30 60 Cardinal 11/23/2005 1573553 ABILIFY 15MG TABS 3 30 90 Cardinal 11/25/2005 1584639 ABILIFY 15MG TABS 1 30 30 Cardinal 11/28/2005 1596696 ABILIFY 15MG TABS 3 30 90 116 3480 Cardinal 12/1/2004 8554332 ABILIFY 20MG TABS 2 30 60 Cardinal 1/19/2005 8964791 ABILIFY 20MG TABS 2 30 60 Cardinal 4/5/2005 9660446 ABILIFY 20MG TABS 1 30 30 Cardinal 4/8/2005 9701773 ABILIFY 20MG TABS 1 30 30 Cardinal 4/15/2005 9769768 ABILIFY 20MG TABS 1 30 30 Cardinat 4/22/2005 9834433 ABILIFY 20MG TABS 4 30 30 Cardinal 4/28/2005 9886981 ABILIFY 20MG TABS 1 30 30 Bellco §/3/2005 9424853 ABILIFY 20MG TABS 2 30 60 Belico §/13/2005 9439751 ABILIFY 20MG TABS 2 30 60 Cardinal 6/6/2005 214635 ABILIFY 20MG TABS 1 30 30 Cardinal 7/6I2005 = 480967 ABILIFY 20MG TABS 4 30 30 Cardinal 7/20/2005 596573 ABILIFY 20MG TABS 1 30 30 Cardinal 7/27/2005 = 655812 ABILIFY ZOMG TABS 1 30 30 Cardinal 7/28/2005 666494 ABILIFY 20MG TABS 1 30 30 (Page 8 of 48) Wellseripts LLC INVOICE REVIEW Prowider # 026820800 ABILIFY 20MG TABS Cardinai 4 Cardinal 8/3/2005 707078 = ABILIFY 20MG TABS 1 Cardinal 8/4/2005 716272 ABILIFY 20MG TABS 2 Cardinal 8/5/2005 727080 ABILIFY 20MG TABS 1 Cardinal 8/9/2005 752202 ABILIFY 20MG TABS 1 Cardinal 8/18/2005 823986 ABILIFY 20MG TABS 1 Cardinal 8/18/2005 823979 ABILIFY 20MG TABS 1 Cardinal 8/19/2005 837948 ABILIFY 20MG TABS 1 Cardinal 8/24/2005 869158 ABILIFY 20MG TABS 1 Cardinal 8/29/2005 902946 ABILIFY 20MG TABS 1 Cardinal 8/29/2005 902957 ABILIFY 20MG TABS 1 Cardinal 9/7/2005 968721 ABILIFY 20MG TABS 4 Cardinal 9/19/2005 1054543 ABILIFY 20MG TABS 4 Cardinal 9/20/2005 1067199 ABILIFY 20MG TABS 1 Cardinal 9/29/2005 1146260 ABILIFY 20MG TABS 2 Cardinal 10/6/2005 1202484 ABILIFY 20MG TABS 3 Cardinal 10/18/2005 1287251 ABILIFY 20MG TABS 1 Cardinal 10/20/2005 1311217 ABILIFY 20MG TABS 1 Cardinal 10/27/2005 1353780 ABILIFY 20MG TABS 1 Cardinal 11/7/2005 1437858 ABILIFY 20MG TABS 2 Cardinal 41/47/2005 1524077 ABILIFY 20MG TABS 1 47 1410 Cardinal 12/2/2004 8562529 ABILIFY 30MG TABS 2 30 60 Cardinal 12/15/2004 8675501 ABILIFY 30MG TABS 1 30 30 Cardina 12/17/2004 8698886 ABILIFY 30MG TABS 2 30 60 Cardinal 12/20/2004 8710356 ABILIFY 30MG TABS 1 30 30 Cardina 12/21/2004 8724586 ABILIFY 30MG TABS 1 30 30 Cardinal 12/21/2004 8724595 ABILIFY 30MG TABS 1 30 30 Cardina 12/23/2004 8747265 ABILIFY 30MG TABS 2 30 60 Cardina 12/28/2004 8775907 ABILIFY 30MG TABS 1 30 30 Cardinal 1/3/2005 8812583 ABILIFY 30MG TABS 4 30 30 Cardinal 1/4/2005 8827487 ABILIFY 30MG TABS 1 30 30 Cardinal 1/11/2005 8892068 ABILIFY 30MG TABS 2 30 60 Cardina 18/2005 8956215 ABILIFY 30MG TABS 1 30 30 Cardina. 1/18/2005 8986222 ABILIFY 30MG TABS 2 30 60 Cardinal 1/19/2005 8964791 ABILIFY 30MG TABS 2 30 60 Cardinal 1/20/2005 8976487 ABILIFY 30MG TABS 1 30 30 Cardinal 1/20/2005 8976494 ABILIFY 30MG TABS 1 30 30 Cardinal 1/26/2005 9025642 ABILIFY 30MG TABS 1 30 30 Cardinal 1/26/2005 9025744 ABILIFY 30MG TABS 4 30 30 Cardinal 1/26/2005 9025739 ABILIFY 30MG TABS 4 30 30 Cardinal 2/1/2005 9079101 ABILIFY 30MG TABS 1 30 30 Cardinal 2/8/2005 9138551 ABILIFY 30MG TABS 3 30 90 Cardinai 2/9/2006 9152356 ABILIFY 30MG TABS 4 30 30 Cardinal 2/11/2005 9177628 ABILIFY 30MG TABS 1 30 30 Cardinal 2/18/2005 9240012 ABILIFY 30MG TABS 1 30 30 Cardinal 2/21/2005 9250274 ABILIFY 30MG TABS 1 30 30 Cardinai 2/24/2005 9293161 ABILIFY 30MG TABS 2 30 60 Cardinal 2/24/2008 9293259 ABILIFY 30MG TABS 4 30 30 (Page 9 of 48) Weilscripts LLC INVOICE REVIEW Provider # 026820800 ‘ oem nae
The Issue Whether the Petitioner is required to repay $2,269.00 to the Respondent?
Findings Of Fact The Petitioner entered into a "Noninstitutional Professional and Technical Medicaid Provider Agreement" (hereinafter referred to as the "Medicaid Provider Agreement") with the Respondent. Pursuant to the Medicaid Provider Agreement, the Petitioner agreed to participate in the Florida Medicaid Program. Pursuant to paragraph 2 of the Medicaid Provider Agreement, the Petitioner agreed to the following: The provider agrees to keep such records as are necessary to fully disclose the extent of services provided to individuals receiving assistance under the State Plan and agrees to furnish the State agency upon request such information regarding any payments claimed for providing these services. Access to these pertinent records and facilities by authorized Medicaid Program representatives will be permitted upon a reasonable request. The Petitioner also agreed in the Medicaid Provider Agreement to submit claims under the Medicaid Provider Agreement in accordance with the Florida Medicaid Program and applicable "Florida Administrative Rules, Florida Statutes, policies, procedures, manuals of the Florida Medicaid Program and Federal laws and regulations." Paragraphs 3 and 7 of the Medicaid Provider Agreement. Medicaid is essentially a mechanism by which the federal government provides funds for the payment of a part of certain medical service costs to the State of Florida. It is a federal grant under Title XIX of the Social Security Act. In Florida, community mental health services provided to persons eligible for Medicaid coverage can be paid for under the Medicaid program. Generally, the federal government provides 56 percent of the costs of Medicaid services and the State is responsible for 44 percent. As eligible services are rendered federal Medicaid funds are received and deposited in the Medical Care Trust Fund. In order for services to constitute "eligible services" they must have been rendered in compliance with Chapter 10C-7, Florida Administrative Code. If services are not "eligible services" (they do not comply with Chapter 10C-7), the State is not entitled to receive federal Medicaid funds. In order to insure that providers of Medicaid services are providing "eligible services" the Respondent conducts compliance audits. The purpose of compliance audits is to determine if federal Medicaid funds have been properly received. On June 27, 1985, the Respondent's Medicaid Program auditors conducted a compliance audit of the records of the Petitioner pertaining to Medicaid clients of the Petitioner's Bristol office. As a result of the June 27, 1985 audit, the Respondent determined that the Petitioner had improperly submitted claims for Medicaid care and that such claims had been improperly paid by the Respondent. The parties stipulated that the Petitioner was paid $2,269.00 for claims for which there was insufficient documentation to warrant payment under Chapter 10C-7, Florida Administrative Code. Petitioner claimed $2,269.00 as an amount due for Medicaid "eligible services" and was so paid by the Respondent. In fact, however, the services were not Medicaid "eligible services." The State was not entitled to federal Medicaid funds for these services. The Petitioner improperly received the amount in controversy because the Petitioner did not comply with Chapter 10C-7, Florida Administrative Code, as it was required to do pursuant to the Medicaid Provider Agreement. On May 21, 1985, the Petitioner executed an "Alcohol, Drug Abuse and Mental Health Services Contract Between State of Florida Department of Health and Rehabilitative Services and Apalachee Community Mental Health Services, Inc." (hereinafter referred to as the "Provider Contract"). The Provider Contract was executed by the Respondent on June 11, 1985. Pursuant to the Provider Contract, the Petitioner agreed to provide alcohol, drug abuse and mental health services in eight designated counties. In paragraph IC4 of the Provider Contract, the Petitioner was required to comply with Chapters 394, 396 and 397, Florida Statutes, and Chapters 10E-13 and 10E-14, Florida Administrative Code, "as appropriate." 15. Paragraph IC5 of the Provider Contract also required the Petitioner to "comply with all other applicable state standards, provided they are specified in Florida Statutes or Administrative Rules established by the department or made known in writing to the contractor." Paragraph IE1 and 2 of the Provider Contract required that the Petitioner "participate in the Community Mental Health/Alcohol Services Program as defined in Section 10C-7.525, F.A.C." and that the Petitioner "pursue and submit vouchers on all Medicaid eligible clients for Medicaid eligible services." [Emphasis added]. Paragraph IG1 of the Provider Contract required the Petitioner to provide an annual audit report by an independent certified public accountant to the Respondent. Paragraph IH of the Provider Contract required the Petitioner to permit monitoring for compliance with state and federal rules and regulations. Paragraph IIA1 of the Provider Contract provided that the Respondent will pay up to 75 percent of approved costs as determined under Chapters 394 and 397, Florida Statutes, and Chapter 10E-14, Florida Administrative Code, in an amount not to exceed $4,096,175.00. Paragraph IO of the Provider Contract required that the Petitioner secure "local match." Pursuant to the Provider Contract the Petitioner is entitled to receive payment for eligible expenditures" up to the amount of the Provider Contract and subject to the availability of funds. Services to be paid for pursuant to the Provider Contract include Medicaid eligible services and non-Medicaid services. Even though the Petitioner did not provide "eligible services" the amount in controversy may have been an "eligible expenditure" for which it may receive payment at a later date. Whether the Petitioner is entitled to payment of the amount in controversy will be determined at a later date as a result of the financial audit required by paragraph IGI of the Provider Agreement and will depend on the availability of funds and whether the Petitioner has already received the maximum amount specified in the Provider Contract. Whether the Petitioner is entitled to ultimate payment of the amount in controversy at a later date is governed by Chapters 394 and 397, Florida Statutes, and Chapters 10E-13 and 10E-14, Florida Administrative Code. A dispute arose between certain medical health providers and the Respondent over whether Medicaid funds are considered "state funds" for which local match is required pursuant to Chapter 394, Florida Statutes. The Department took the position that Medicaid funds are considered state funds and thus require local match and are subject to audit pursuant to Chapter 10E-13, Florida Administrative Code. When the dispute arose, the Respondent developed an "Issue Paper" (Petitioner's exhibit 2). The Respondent adopted one of the alternatives recommended in the Issue Paper to treat Medicaid funds as state funds for which local match is required. The Respondent also took the position that Medicaid eligible services were subject to the provisions of Chapter 394, Florida Statutes, and Chapter 10E, Florida Administrative Code. The Respondent's decision to treat Medicaid funds as state funds subject to local match was challenged by the Florida Council for Community Mental Health, Inc. Florida Council for Community Mental Health, Inc. v. Department of Health and Rehabilitative Services, 8 FALR 756 (Feb. 6, 1986). The issue in that case was whether the position of the Respondent taken in the Issue Paper was a rule.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner repay the Respondent $2,269.00 for services improperly billed. DONE and ENTERED this 17th day of March, 1987, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1500 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of March, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-1381 The parties have submitted proposed findings of fact. It has been generally noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. Paragraph numbers in the Recommended Order are referred to as "RO ." Petitioner's Proposed Findings of Fact: Proposed Finding RO Number of Acceptance of Fact Number or Reason for Rejection 1 RO 15-16. RO 17-19. The first and second sentences incorrectly refer to Paragraph I(C)(6) of the Medicaid Provider Agreement. The correct paragraphs are 1(0)4 (first sentence) and 1(0)5 (second sentence). The following portion of the second sentence is not supported by the weight of the evidence: "or incorporated as part of the contract. The following portion of the third sentence is not supported by the weight of the evidence: "and HRS Manual 230-31. The first sentence is accepted in RO 28. The rest of this proposed finding of fact is generally accepted in RO 28. 4-5 These proposed findings of fact are too broad and are not supported by the weight of the evidence. Irrelevant and not supported by the weight of the evidence. Too broad and not supported by the weight of the evidence. See RO 28. Too broad and not supported by the weight of the evidence. See RO 30. 9-17 These proposed findings of fact are irrelevant. Additionally, the third and fourth sentences of paragraph 16 are not supported by the weight of the evidence. RO 6. RO 9. The last sentence is irrelevant. Not supported by the weight of the evidence. Irrelevant. Respondent's Proposed Findings of Fact: 1 RO 1-3. 2 RO 10. 3 RO 11. 4 RO 12-13 5 Hereby accepted. COPIES FURNISHED: Sam Power, 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 Theodore E. Mack, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building 1, Room 407 Tallahassee, Florida 32399-0700 Ronald W. Brooks, Esquire Brooks, LeBoeuf & LeBoeuf 863 East Park Avenue Tallahassee, Florida 32301
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
The Issue The issues in this bid protest are whether, in making the decision to award Intervenor Prestige Health Choice, LLC ("Prestige"), a contract to provide Medicaid managed medical assistance services as a provider service network in Region 11 (covering Miami-Dade and Monroe Counties), Respondent Agency for Health Care Administration ("AHCA") acted contrary to a governing statute, rule, or solicitation specification; and, if so, whether such action was clearly erroneous, contrary to competition, arbitrary, or capricious. (In this protest, Petitioner Care Access PSN, LLC ("Care Access"), challenges AHCA's intended award to Prestige in Region 11, and only that award. Care Access does not seek to upset any other intended awards in Region 11 or in any other Region.)
Findings Of Fact On December 28, 2012, AHCA issued 11 separate invitations to negotiate, one for each region of Florida as established by the legislature in section 409.966, Florida Statutes. These invitations to negotiate solicited proposals from vendors seeking contracts to provide managed medical assistance services to Medicaid enrollees. The goal of these interrelated procurements was (and remains) to enable AHCA, as the agency responsible for administering the Medicaid program, to purchase medical goods and services for all Medicaid recipients throughout the entire state of Florida on a managed care basis instead of under a fee-for-service payment model. At issue in this case is Invitation to Negotiate No. 027-12/13 (the "ITN"), which sought proposals from eligible plans4/ to provide services to Medicaid enrollees in Region 11, which consists of Miami-Dade and Monroe Counties. In compliance with section 409.974(1)(k), Florida Statutes, the ITN stated that AHCA intended to enter into at least five contracts and up to ten contracts in Region 11, with at least one of those contracts being awarded to a provider service network ("PSN"), if a responsive bid from a responsible PSN were received. Fourteen plans responded to the ITN. Four of the bidders identified themselves as PSNs: Care Access; Prestige; Salubris PSN; and South Florida Community Care Network PSN. The other ten bidders were health maintenance organizations ("HMOs"). As described in the ITN, the evaluation phase of the selection process consisted of the following components: evaluation of mandatory criteria; (2) evaluation of financial stability; (3) review and scoring of comments from enrolled Medicaid providers regarding the vendor; (4) review and scoring of the vendor's past performance; and (5) evaluation and scoring of the technical responses. AHCA appointed 28 evaluators to evaluate and score the bids. At the completion of the evaluation phase, AHCA tabulated the evaluators' scores and ranked the 14 Region 11 bids from first to last. The HMOs occupied the first 10 places, followed by Prestige (No. 11), Care Access (No. 12), and the other two PSNs. Thereafter, in July 2013, AHCA invited the eight highest-ranked HMOs and the two highest-ranked PSNs (Prestige and Care Access) to participate in negotiations. AHCA held three negotiation sessions apiece with the ten vendors who advanced to this phase of the competition. Following these negotiations, AHCA presented the vendors with an offer of the contractual terms AHCA sought, including a composite capitation rate and a list of expanded benefits to be covered by the plans. Vendors were instructed to accept AHCA's proposed terms or make a counteroffer. On September 23, 2013, AHCA gave notice of its intent to award contracts in Region 11 to six plans, including Prestige, which was the only PSN to receive an intended award. AHCA later notified the public that four additional contracts would be awarded in Region 11, each to an HMO. With these announcements, which brought to ten the total number of intended awards, AHCA reached the maximum number of contracts it can offer in Region 11. Care Access was not selected for an intended award in Region 11. Care Access timely initiated the instant protest, seeking to have Prestige disqualified from the competition or, failing that, the proposed award to Prestige set aside for reasons independent of Prestige's alleged ineligibility. While Care Access protests the intended award on numerous grounds, the principal objective of this challenge is to establish that Prestige is not really a PSN, which if true would mean that AHCA's intended award is contrary to the mandate of section 409.974(1)(k) that at least one contract in Region 11 be let to a PSN. In this regard, Care Access contends that Prestige fails to meet the PSN provider control and financial interest requirements (about which more will be said) for two separate but related reasons, namely: (a) an HMO named Florida True Health ("FTH"), rather than a group of affiliated health care providers, effectively owns and controls Prestige; and (b) Prestige is not majority-owned (over 50%) by a group of affiliated health care providers. Care Access's position relating to FTH's alleged control of Prestige is based on the undisputed facts that FTH not only owns 40% of Prestige's shares, but also holds an option, which it can exercise at any time until December 31, 2020, to purchase the remaining 60%. Relying on the contractual instruments behind the complex transaction by which FTH purchased both its 40% stake in Prestige and the option to acquire the entire company, Care Access argues that FTH has already taken over Prestige through a "virtual merger," even though the option it holds has not yet been formally exercised. If this were the case, Prestige clearly would not be a provider- operated PSN, because FTH is not a health care provider. Concerning the requirement that a PSN be majority- owned by providers, Care Access asserts that affiliated health care providers, as a group, own less than 50% of Prestige because, even if FTH is merely a minority shareholder, one of the putative "provider owners"——Health Choice Network of Florida, Inc. ("HCNF")——is actually not a provider. There is no dispute that HCNF owns 13.333% of Prestige. There can be no dispute that if, in determining whether Prestige meets the PSN ownership requirement, HCNF's 13.333% interest were subtracted from the sum of Prestige's "provider ownership," Prestige would not be majority-owned by a group of health care providers (because, as everyone agrees, at least 40% of Prestige is owned by non-provider FTH)——and thus it would fail one of the tests for determining PSN status. Care Access's remaining protest grounds can be boiled down to three salient objections: (1) Prestige's bid deviated materially from the ITN specifications because the electronic version of the document Prestige submitted which identified its network providers had been saved in a file format not supported in Microsoft Excel, a popular spreadsheet application; Prestige improperly colluded with FTH, the HMO with which it has a business relationship; and (3) AHCA's decision to set a base price neutralized any competitive advantage for having the lowest bid, in violation of the statutory directive to achieve the "best value" for the state. As mentioned above, the ITN provides that "[a]t least one (1) award in this Region will be to a PSN provided a PSN submits a responsive reply and negotiates a rate acceptable to the Agency." The principal statutory definition of a PSN is set forth in section 409.912, Florida Statutes, which states as follows: (4) [For the purpose of purchasing goods and services for Medicaid recipients in the most cost-effective manner consistent with the delivery of quality medical care, the] agency may contract with: * * * (d)1. A provider service network, which may be reimbursed on a fee-for-service or prepaid basis. Prepaid provider service networks shall receive per-member, per-month payments. A provider service network that does not choose to be a prepaid plan shall receive fee-for-service rates with a shared savings settlement. The fee-for-service option shall be available to a provider service network only for the first 2 years of the plan's operation or until the contract year beginning September 1, 2014, whichever is later. * * * 4. A provider service network is a network established or organized and operated by a health care provider, or group of affiliated health care providers, including minority physician networks and emergency room diversion programs that meet the requirements of s. 409.91211, which provides a substantial proportion of the health care items and services under a contract directly through the provider or affiliated group of providers and may make arrangements with physicians or other health care professionals, health care institutions, or any combination of such individuals or institutions to assume all or part of the financial risk on a prospective basis for the provision of basic health services by the physicians, by other health professionals, or through the institutions. The health care providers must have a controlling interest in the governing body of the provider service network organization. (Emphasis added.)5/ Section 409.962(13) supplies another, slightly different definition of the term: "Provider service network" means an entity qualified pursuant to s. 409.912(4)(d) of which a controlling interest is owned by a health care provider, or group of affiliated providers, or a public agency or entity that delivers health services. Health care providers include Florida-licensed health care professionals or licensed health care facilities, federally qualified health care centers, and home health care agencies. The ITN required each bidder to include, with its submission, a signed Exhibit C-3 titled "Required Certifications and Statements." Item No. 8 of Exhibit C-3 required the bidder to certify that it was a type of plan eligible to respond to the ITN. Prestige certified its eligibility as a PSN by marking the following box: I hereby certify that my company currently operates as one (1) of the following: * * * ? Provider Service Network (PSN) qualified by Section 409.912(4)(d), Florida Statutes, which is majority owned (over 50%) by a health care provider, group of affiliated providers, public agency, or entity that delivers health services (Section 409.962(13), Florida Statutes), and possess a Florida Third Party Administrative License or a subcontract/letter of agreement with a Florida-licensed Third Party Administrator. In addition, the respondent shall complete Exhibit C-4, Disclosure of Ownership and Control Interest Statement (CMS 1513). (Emphasis added.) Prestige's certification was at least partially true. Prestige is a Florida limited liability company that was established in 2007 by a group of Florida-based, federally qualified health centers ("FQHC"s) and community mental health centers. First accepted by AHCA as a PSN in 2008, Prestige has provided services under continuous contract with AHCA ever since, with the most recent contract renewal effective October 1, 2013. The ITN, however, added a requirement that the statutes do not impose, i.e., that a network, to be a PSN, must be majority-owned (over 50%) by a provider or group of affiliated providers. Recall that the statutes, in contrast, mandate that a provider or group of affiliated providers have "a controlling interest" in both the entity and its governing body, which is not the same as owning a majority of its shares.6/ While owning more than 50% of a corporation is likely to ensure a controlling interest in the entity, having a controlling interest is not dependent upon or tantamount to majority ownership. As both AHCA and Prestige acknowledge in their respective proposed recommended orders, it is possible for a minority shareholder or group of affiliated shareholders whose combined ownership is less than 50% to have a controlling interest in a corporation.7/ It is possible, therefore, for an entity to satisfy the definitions of a PSN under sections 409.912(4) and 409.962(13) because a group of affiliated providers have a controlling interest in the network, and yet not be eligible for an award as a PSN pursuant to the ITN because the group of affiliated providers' combined ownership interests total less than 50%. As required by Item No. 8 of Exhibit C-3, Prestige submitted a fully executed Exhibit C-4, the form titled "Disclosure of Ownership and Control Interest Statement." This instrument——a form whose provenance is the Centers for Medicare and Medicaid Services——is commonly known as a "CMS 1513." In its CMS 1513, Prestige divided its shareholders into two categories: "Provider Owners" and "Other Owners." Within the category of Provider Owners, Prestige identified three subcategories: "Health Choice Network of Florida, Inc.-FQHC Controlled Network"; "FQHC Owners"; and "Other Provider Owners." The category of Other Owners, comprising non-providers, was not subdivided.8/ Under the respective subcategories of Provider Owners, Prestige named the shareholder or shareholders belonging to each subset; disclosed each shareholder's percentage of ownership; and provided a subtotal of the aggregate ownership interests within each subcategory. So, under the subcategory of Health Choice Network of Florida, Inc.-FQHC Controlled Network, one entity was identified, i.e., HCNF, whose 13.333% stake represented the subtotal of ownership for that subcategory. Under the subcategory of FQHC Owners, 17 separate entities were listed, whose respective interests added up to a subtotal of 21.139%. Under the subcategory of Other Provider Owners, Prestige enumerated 12 shareholders, some of whom are individuals, and others of which appear to be facilities or organizations. The subtotal of the Other Provider Owners' interests was shown to be 23.364%. For the whole category of Provider Owners, Prestige represented that the combined ownership interests——the sum of the several subtotals——amounted to 57.836%. In addition to the CMS 1513, PSN applicants needed to complete and submit a form titled "Managed Medical Assistance (MMA) Provider Service Network (PSN) Provider Ownership Interest and Disclosure Report," also known as Exhibit C-5. This exhibit contained the following directions: Directions: List each PSN respondent owner included on the completed CMS-1513, Disclosure of Ownership and Control Interest Statement in Column (1). Include direct and indirect owners. In Column 2, specify the percent of indirect and direct ownership of each owner in the PSN respondent (see Item III on the CMS-1513 Detailed Instructions for information on direct and indirect ownership interest). In Column (3), indicate if the owner is currently a Medicaid provider (Yes or No). Only MMA providers included in the legend below are considered providers for the purpose of meeting the MMA PSN ownership requirement pursuant to Section 409.962(13), Florida Statutes. If the answer to Column (3) is yes, complete Columns (4), (5) and (6); otherwise, leave these columns blank. If completing Column (5), preface the number with either "L" for License Number or "M" for Medicaid identification number. In Exhibit C-5's ownership disclosure table, a portion of which is reproduced below,9/ Prestige reported HCNF's ownership interest as follows: In answering "Yes" to the question of whether HCNF is a Medicaid provider, Prestige did not tell the truth. In reality, as the evidence persuasively demonstrates, at no time relevant to this case was HCNF a health care provider, much less an enrolled Medicaid provider. HCNF is a nonprofit corporation organized under chapter 617, Florida Statutes. As described in its bylaws, HCNF's purposes are as follows: [T]he Network's specific purposes shall be to operate and/or support clinical programs, to carry out certain community initiatives, and to perform certain management functions, including but not limited to, information systems and financial services, for the benefit of health centers as defined in Section 330 of the Public Health Service Act and similar community-based primary or behavioral health care organizations that serve medically underserved and uninsured populations . . . . Formed and governed by community medical and behavioral health centers, HCNF qualifies, under federal law, as a tax-exempt "501(c)(3) organization." Under its Articles of Incorporation, moreover, HCNF has chosen to be operated, at all times, "exclusively as a supporting organization within the meaning of Section 509(a)(3) of the [Internal Revenue] Code." As a section 509(a)(3) organization, HCNF is required to provide support services for the benefit of public agencies or private 501(c)(3) organizations. This it generally does for community mental health centers and FQHCs, which——unlike HCNF——directly provide health-care services. According to HCNF's CEO Kevin Kearns, whose testimony on this point is credited as truthful, HCNF is a "fiscal intermediary services organization" ("FISO"). As defined in section 641.316(2)(b), Florida Statutes, a FISO is: a person or entity that performs fiduciary or fiscal intermediary services to health care professionals who contract with health maintenance organizations other than a hospital licensed under chapter 395, an insurer licensed under chapter 624, a third- party administrator licensed under chapter 626, a prepaid limited health service organization licensed under chapter 636, a health maintenance organization licensed under this chapter, or a physician group practice as defined in s. 456.053(3)(h) which provides services under the scope of licenses of the members of the group practice. "Fiduciary or fiscal intermediary services" include: [receiving and collecting reimbursements] on behalf of health care professionals for services rendered, patient and provider accounting, financial reporting and auditing, receipts and collections management, compensation and reimbursement disbursement services, or other related fiduciary services pursuant to health care professional contracts with health maintenance organizations. § 641.316(2)(a), Fla. Stat. FISOs must register with the Florida Office of Insurance Regulation. § 641.316(6), Fla. Stat. HCNF is also a health center controlled network ("HCCN"). This term, as used by the Health Resources and Services Administration ("HRSA") of the U.S. Department of Health and Human Service, means:10/ group of safety net providers (a minimum of three collaborators/members) collaborating horizontally or vertically to improve access to care, enhance quality of care, and achieve cost efficiencies through the redesign of practices to integrate services, optimize patient outcomes, or negotiate managed care contracts on behalf of the participating members. As a FISO and an HCCN, HCNF does not provide health- care services. Rather, HCNF provides back-office services to its members, each of whom is either a behavioral health care center or FQHC and, thus, a health care provider.11/ The back- office services available to HCNF's members include financial services, information technology services, billing services, and centralized referral services. HCNF members pay annual dues for access to these services, and each of them pays additional fees to the corporation based upon the scope and volume of the services that HCNF renders to the individual member. In the abstract, HCNF's membership can reasonably be considered a "group of affiliated providers," for HCNF's members enjoy a mutually beneficial association under, and share a common interest in the continued operation of, the nonprofit corporation which is their jointly controlled service provider, i.e., HCNF. Prestige, however, identified HCNF as a "GP," thereby signifying that HCNF (as opposed to its collective membership) is a "group of affiliated providers," that is, one of the health care "provider types" listed in Exhibit C-5's ownership disclosure table. Given that HCNF is not any type of provider, the designation of HCNF as a GP was of debatable accuracy,12/ but Prestige had claimed HCNF as a GP owner in previous filings with AHCA (unrelated to this procurement), and AHCA had not objected, so there was at least some historical precedent for such a characterization of HCNF. In contrast, Prestige's statement in Exhibit C-5 that HCNF is a Medicaid provider was a material misrepresentation for which no persuasive justification has been made. While the evidence fails to establish that Prestige intended to deceive AHCA, it does show that AHCA relied on Prestige's representations, including this one, which it accepted at face value. As AHCA explains in its Proposed Recommended Order, "Nothing in the ITN required AHCA to look beyond Prestige's certifications and disclosures in Exhibits C-3, C-4 and C-5 in determining Prestige's status as PSN."13/ Thus, in making its decision to award Prestige the contract reserved for a PSN, AHCA did so in the mistaken belief that HCNF was a Medicaid provider, which in fact it is not. This is significant because if HCNF were a Medicaid provider, as AHCA thought, there would be no dispute over the treatment of HCNF's 13.333% interest in Prestige as "provider ownership" for the purpose of determining whether Prestige is majority-owned (over 50%) by a group of affiliated providers. As it is, there is no reason to consider non-provider HCNF's 13.333% interest for the purpose of meeting the PSN ownership requirement. For reasons that will be more fully explained below in the Conclusions of Law, the undersigned determines as a matter of ultimate fact that Prestige is not a PSN for the purposes of the ITN because: (a) HCNF is not a health care provider; (b) HCNF is not a "group of affiliated providers" as that term is used in sections 409.912(4) and 409.962(13) and in Item No. 8 of ITN Exhibit C-3, nor, as a non-provider, can it be a member of such a group; and (c) when HCNF's 13.333% ownership interest is excluded from consideration, as it must be, Prestige is not majority-owned (over 50%) by a group of affiliated providers, as required by Item No. 8 of ITN Exhibit C-3. Because Prestige is not a PSN for the purposes of the ITN, it is ineligible for the PSN award pursuant to the set- aside provided for in section 409.974(1)(k), Florida Statutes, which is what Prestige has tentatively won under AHCA's intended decision. AHCA's proposed action is, therefore, contrary to the plain and unambiguous language of the governing statutes and applicable ITN specifications. To the extent AHCA's proposed action is based upon interpretations of these statutes and specifications, such action is clearly erroneous. The determination, as a matter of ultimate fact, that Prestige fails to meet the ITN's majority-ownership test and, hence, is not a PSN for purposes of this procurement provides a sufficient basis, without more, for concluding that AHCA should not proceed with the intended award. This makes it unnecessary to decide whether FTH is either in exclusive control of Prestige or, alternatively, the sole legal and beneficial owner of Prestige's shares, as Care Access contends; accordingly——and because a thorough discussion of the dispute over the nature and extent of FTH's respective ownership and controlling interests might entail the disclosure of facts that Prestige considers confidential trade secrets——no further findings or conclusions on this issue will be made.14/ Although the merits of Care Access's remaining protest grounds need not be decided either, the undersigned will address them in abbreviated fashion. The Provider Network File. Each bidder was required to submit, as Exhibit E-3, a "Provider Network File" that contained a comprehensive listing of its proposed provider network. The ITN provided the following instructions for completing and submitting the Provider Network File: Respondents shall submit both a printed hard copy and electronic version of the Provider Network File saved to CD. The electronic version of the Provider Network File shall be an Excel spreadsheet, and should adhere to the data specifications outlined below. The Agency will evaluate the Provider Network File using a Provider Network Assessment Tool . . . . (Emphasis added.) Addendum 2 to the ITN warned bidders as follows: Respondents to the ITN shall utilize the Attachment E, Exhibits E-1 through E-5, as applicable. All respondents bidding on a Standard MMA Plan shall complete the following Exhibits to Attachment E: Exhibit E-1, Standard Submission Requirements and Evaluation Criteria; Exhibit E-2, Standard Quality Measurement Tool; and Exhibit E-3, Provider Network File. Failure to use the formats provided by the Agency or failure to properly complete any Exhibit may result in a reduction of the score (to include an award of zero (0) points for the submission.) (Emphasis added.) Neither Care Access nor any other vendor challenged this amendment to the ITN. Prestige submitted its digital Provider Network File in the Portable Document Format ("PDF"), which is not supported in Microsoft Excel. Therefore, the AHCA evaluators were unable to extract data from the electronic version of Prestige's Provider Network File and needed to review the printed hard copy instead——a less efficient method of performing the task of evaluating Prestige's network. Prestige's failure to submit the Provider Network File in the proper digital format did not give Prestige a competitive advantage over other bidders who strictly complied with the electronic filing requirements. A list of Prestige's providers was, after all, submitted (as required) in a printed hard copy and thus available for review. In addition, AHCA's evaluators deducted points from Prestige's score for the mistake of submitting an incompatible electronic file, a penalty which placed Prestige at a competitive disadvantage relative to compliant bidders. In giving Prestige zero points for evaluation criteria related to the Provider Network File, the evaluators took action consistent with the ITN's instructions. AHCA determined, as a matter of ultimate fact, that Prestige's submission of an electronic PDF document containing its provider list, rather than an Excel-compatible file, was a minor irregularity, not a material deviation. This determination, the undersigned finds, was not clearly erroneous. AHCA's decision to waive the minor irregularity is entitled to great deference and should be upheld unless it was arbitrary or capricious. The undersigned cannot say that waiving the technical deficiency was illogical, despotic, thoughtless, or otherwise an abuse of discretion. Therefore, the intended award should not be rescinded based upon Prestige's noncompliance with the electronic filing requirements. Collusion. The ITN contained three separate provisions prohibiting collusion and requiring the bidders to independently prepare their responses. In Attachment A, the ITN provided as follows: 9. Respondent's Representation and Authorization. In submitting a response, each respondent understands, represents, and acknowledges the following (if the respondent cannot so certify to any of following, the respondent shall submit with its response a written explanation of why it cannot do so). * * * The submission is made in good faith and not pursuant to any agreement or discussion with, or inducement from, any firm or person to submit a complementary or other noncompetitive response. * * * The respondent has made a diligent inquiry of its employees and agents responsible for preparing, approving, or submitting the response, and has been advised by each of them that he or she has not participated in any communication, consultation, discussion, agreement, collusion, act or other conduct inconsistent with any of the statements and representations made in the response. In Attachment C, the ITN provided these instructions for preparing a response: Independent Preparation of Response: A respondent shall not, directly or indirectly, collude, consult, communicate or agree with any other respondent as to any matter related to the response each is submitting. Additionally, a respondent shall not induce any other respondent to submit or not to submit a response. Finally, the ITN required bidders to sign a "Non- Collusion Certification," which provided as follows: I hereby certify that all persons, companies, or parties interested in the response as principals are named therein, that the response is made without collusion with any other person, persons, company, or parties submitting a response. In applying the foregoing anti-collusion provisions, consideration must be given to section 409.966(3)(b), Florida Statutes, which governs the instant procurement and provides as follows: An eligible plan must disclose any business relationship it has with any other eligible plan that responds to the invitation to negotiate. The agency may not select plans in the same region for the same managed care program that have a business relationship with each other. Failure to disclose any business relationship shall result in disqualification from participation in any region for the first full contract period after the discovery of the business relationship by the agency. For the purpose of this section, "business relationship" means an ownership or controlling interest, an affiliate or subsidiary relationship, a common parent, or any mutual interest in any limited partnership, limited liability partnership, limited liability company, or other entity or business association, including all wholly or partially owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates of such entities, business associations, or other enterprises, that exists for the purpose of making a profit. (Emphasis added.) It is not surprising that, in view of section 409.966(3)(b)——which practically requires potential bidders having a business relationship with each other to coordinate in some fashion so as to avoid an intra-regional competition that would be at best a zero-sum game between them——several vendors sought clarification of the anti-collusion provisions during the pre-bid question-and-answer process. Of interest are the following questions: 6. Can entities which have some common ownership, share common management or have Board of Directors that overlap, strategize and determine [through] communications and discussion which region under the SMMC ITN is appropriate for each such entity to respond to as a bidder without violating the prohibition against "inducement" set forth in the SMMC ITN? * * * 13. Does this section apply to respondents who are affiliates and who are preparing responses in different regions? * * * 23. How can entities which share some common ownership or are otherwise related in some manner AND who are responding to the SMMC ITN in separate and distinct regions collaborate, communicate, consult and strategize on each's respective response to the SMMC ITN for the applicable region without violating the requirement of "independent preparation of response" as set forth in the SMMC ITN? AHCA answered each of these questions with the same response: "Each Regional ITN is a separate procurement, the specifications of which apply to that region." This answer was made part of the ITN through Addendum 2. What AHCA meant by this, the evidence shows, is that the anti-collusion provisions were intended to apply only to bidders competing against each other within a particular region. While there might be other reasonable interpretations of the ITN's anti-collusion specifications, AHCA's is within the range of permissible interpretations and, thus, not clearly erroneous. Indeed, a stricter interpretation might have discouraged affiliated companies from competing.15/ FTH did not submit a bid in response to the ITN. Pursuant to AHCA's interpretation of the ITN's anti-collusion specifications——an interpretation which no one protested upon its publication in Addendum 2 to the ITN——Prestige and FTH were free to communicate with each other about one's bid in any region, such as Region 11, where the two would not be competing head-to-head. AHCA's proposed action should not be set aside based upon the objection that Prestige violated the ITN's anti- collusion provisions by communicating with FTH. Cost Proposals. Care Access objects to AHCA's refusal to allow a bidder to achieve an advantage over competitors by offering a lower price. The evidence shows that, after comparing and evaluating the price proposals submitted by each vendor for the region, AHCA developed a common base rate, which was presented to the bidders invited to participate in negotiations. This rate ($366.66) was higher than Care Access's initial offer ($317.46). During negotiations, Care Access acceded to AHCA's proposed rate, apparently because there was nothing to be gained by offering a lower price, as it had been willing to do. AHCA's establishment of a common base rate which a bidder willing to accept less was not allowed to beat for competitive advantage conformed to the answer AHCA had given in response to a pre-bid question, which had been published in Addendum 2 to the ITN. The question was: "Will the state consider plan specific reimbursement rates or will there be a common rate negotiated among the awarded plans within a region?" AHCA answered as follows: "The Agency intends to negotiate common base rates for each region." No potential bidder protested this response, which became part of the ITN. It is determined as a matter of ultimate fact that the procedure used by AHCA with respect to the common rate was not contrary to the terms of the ITN, but rather was consistent therewith. Consequently, AHCA's intended action should not be disturbed based upon Care Access's objection to use of a common base rate.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that AHCA enter a Final Order (a) rescinding the proposed award to Prestige on the ground that Prestige, being minority owned (under 50%) by a group of affiliated health care providers, is not a PSN for the purpose of this procurement; and (b) taking such further remedial action(s)——besides upsetting any other intended awards in any Region——as AHCA, in its discretion as the letting authority, deems necessary or appropriate in light of Prestige's ineligibility to receive the PSN contract in Region 11. DONE AND ENTERED this 2nd day of January, 2014, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of January, 2014.
The Issue Whether Petitioner's Medicaid provider number should be cancelled for the reason given in Respondent's June 16, 1995, letter to Petitioner?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: Petitioner is a provider of transportation services. It provides these services to residents of Delray Beach and surrounding areas. From October of 1990, until June 15, 1995, Petitioner provided transportation services to Medicaid recipients pursuant to a Medicaid provider agreement, paragraphs 8 and 9 of which provided as follows: The provider and the Department [the Agency's predecessor] agree to abide by the Florida Administrative Code, Florida Statutes, policies, procedures, manuals of the Florida Medicaid Program and Federal laws and regulations. The agreement may be terminated upon thirty days written notice by either party. The Depart- ment may terminate this agreement in accordance with Chapter 120, Florida Statutes. Daniel Murtha and his wife, Beverly Murtha, own and operate Petitioner. On or about April 11, 1995, the Murthas received the following letter from the Agency's Medicaid Area Nine office (hereinafter referred to as the "Agency's Medicaid office"), which was sent by certified mail: Dear Transportation Provider: This letter is to inform you that our office is currently in the process of planning for Medicaid Transportation Services to become a part of the coordinated transportation disadvantaged program in your county. Florida has a state law, Chapter 427, Florida Statutes, which requires all state and federally supported transportation disadvantaged services to be coordinated through a local community transportation coordinator (CTC). Our plan is to come under this coordinated transportation system in the near future. Once our plans with the CTC are finalized, Medicaid Transportation Services will be coord- inated through their office. Operators under the coordinated system will have to meet Trans- portation Disadvantaged and CTC Standards for insurance, licensing, vehicle safety inspections and driver drug-testing requirements. Our office will keep you informed as to our coordination progress. Thank you for your interest in our program and our clients. Approximately a month later, on May 16, 1995, the Agency's Medicaid office sent, by certified mail, return receipt requested, the following letter (hereinafter referred to as the "May 16 letter") to the Murthas: Dear Provider: This is to advise you that you must re-enroll as a Medicaid provider in order to maintain your eligibility to participate in the Medicaid program. In order to re-enroll, you must provide our office with the following documents: A completed, signed and dated application (blank attached) A signed and dated Non-Institutional Agreement (blank attached) Proof of insurance coverage of at least $100,000 per person and $300,00 per incident for all vehicles, whether owned by your company or subcontracted by you. Copies of current state, county and municipal licensing documents for each vehicle and driver for all cities, counties, and towns in which you will provide "pick-up" services. Failure to complete and return the application, the provider agreement and the requested documentation within 30 days of your receipt of this letter, will result in your disenrollment from the Medicaid program. You will no longer receive payment for any trips you provide after that date. SEND THE ABOVE INFORMATION TO THE WEST PALM BEACH ADDRESS LISTED AT THE BOTTOM OF THIS LETTER. PLEASE INCLUDE YOUR PROVIDER NUMBER IN THE TOP RIGHT HAND CORNER OF THE RIGHT FRONT OF THE APPLICATION FORM FOR IDENTIFICATION. If you have any questions, please call our Provider Relations Section at 840-3144. Thank you for your prompt attention to this matter. The Murthas received the May 16 letter on Wednesday, May 17, 1995. They wanted to maintain Petitioner's eligibility to participate in the Medicaid program. (The provision of services to Medicaid recipients generated approximately 15 to 20 percent of Petitioner's yearly revenue.) Accordingly, on the evening of Sunday, May 21, 1995, they filled out the re-enrollment application form that the Agency's Medicaid office had sent them with the May 16 letter and they gathered the necessary insurance and licensing documents referenced in the letter, including a 1995 Vehicle for Hire Business Permit (Number 95-0077) issued to Petitioner by Palm Beach County. The next day, Monday, May 22, 1995, they made copies of these insurance and licensing documents. On the morning of Tuesday, May 23, 1995, Mr. Murtha reviewed, signed and dated the re-enrollment application form and signed and dated the provider agreement that he and his wife had received from the Agency with the May 16 letter. The Murthas then made copies of the completed, signed and dated re- enrollment application and the signed and dated provider agreement. When he left for work that day (Tuesday, May 23, 1995), Mr. Murtha took with him a manila envelope containing the completed, signed and dated re- enrollment application, the signed and dated provider agreement, and copies of the insurance and licensing documents, including the 1995 Vehicle for Hire Business Permit, that the Agency had requested in the May 16, letter. The envelope bore the "West Palm Beach address [of the Agency's Medicaid office] listed at the bottom of th[e May 16] letter," as well as a return address. Before leaving, Mr. Murtha told his wife that he intended to go to the post office and mail the envelope to the Agency's Medicaid office by certified mail. It was not until 5:30 or 5:45 p.m. that afternoon that Mr. Murtha arrived at the U.S. Postal Services's Delray Beach station. The station was closed when he arrived. Rather than return the next day to mail the envelope by certified mail, Mr. Murtha placed the envelope in a collection box (for regular U.S. States mail) located outside the entrance to the station. Although the Murthas acted in a manner that was reasonably calculated to "re-enroll [Petitioner] as a Medicaid provider," through no fault of their own, such re-enrollment was not accomplished inasmuch as the Agency's Medicaid office did not receive the materials Mr. Murtha had mailed to it on May 23, 1995. Not having received any response to its May 16 letter within the 30- day period prescribed in the letter, the Agency's Medicaid office, on June 16, 1995, sent, by certified mail, return receipt requested, another letter (hereinafter referred to as the "June 16 letter") to the Murthas. The letter, which was signed by Bette Hickey, the Medicaid Program Administrator, read as follows: Letter to Beverly Transport, Transportation Provider, advising you that your Medicaid provider number has been terminated due to failure to complete re-enrollment process. Dear Provider: This letter is to inform you that effective 6-15-95, your Medicaid transportation provider number has been terminated due to your failure to successfully comply with the re-enrollment process. Currently, there is a moratorium in Palm Beach County for accepting and processing new appli- cations to become a Medicaid transportation provider. You are considered to be a new applicant to the Medicaid Transportation Program, therefore, we will not process your application to become a new provider. We will advise you when the moratorium for accepting applications is removed. The Murthas received the June 16 letter on June 21 1995. They were "shocked" to learn of their "failure to complete [the] re-enrollment process." Before receiving the letter, they had had no idea that there was any problem with their application for re-enrollment. The same day he and his wife received the June 16 letter, Mr. Murtha twice telephoned the Agency's Medicaid office to speak with Bette Hickey. He left messages on both occasions inasmuch as Hickey was unavailable to speak with him. Mr. Murtha spoke with Hickey later that day when she returned his calls. He told Hickey that he had mailed the necessary re-enrollment materials to her office the previous month. He also mentioned to her that he had maintained a copy of those materials. The following day (June 22, 1995), at around 2:10 p.m., Mr. Murtha went to the Agency's Medicaid office and hand-delivered the copy of the re- enrollment materials (about which he had spoken to Hickey the day before), along with a cover letter, which read as follows: I have attached copies of the forms we mailed on 5/23/95 (postmark would be 5/24) to your office. In addition, we have enclosed our business envelope to help in your search. My wife Beverly and I are going to the Delray Post Office today to see if they can initiate some level of investigation. 2/ We appreciate your time on the phone yesterday. I guess we just needed to talk about [what] Bev and I are very concerned. Hope to hear positively from you soon. The Murthas did not hear again from the Agency's Medicaid office until they received ("via certified mail") a letter from Hickey, dated August 7, 1995 (hereinafter referred to as the "August 7 letter"), which read as follows: Re: Terminated Medicaid Provider NO. 0887757-00 Dear Provider: This letter is a follow up to our letter dated June 15 [sic], 1995, advising you that your Medicaid provider number has been terminated due to the failure to respond to the re-enrollment request for documents required for transportation providers, pursuant to the Florida Administrative Code Rule 59G-4.330, Section 409.907(2), Florida [S]tatutes, and Medicaid Transportation Provider Handbook. If you wish to appeal this decision, a copy of Standards for requesting an Administrative Hearing is attached. Please note that a request for either a formal or informal hearing must be received by this agency within 21 days of your receipt of this notice at the address on the attached copy of standards. Please accept our sincere appreciation for your services to the Medicaid recipients of our State. If you have any further questions regarding this letter, please contact me at (407) 840-3142. After receiving Hickey's August 7 letter, the Murthas, through counsel, filed with the Agency a Petition for Formal Review Hearing challenging the decision of the Agency's Medicaid office to terminate Petitioner's provider number.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration (1) treat as timely filed, and process accordingly, Petitioner's application for re- enrollment in the Medicaid program as a provider of transportation services, and (2) not terminate Petitioner's provider agreement and cancel Petitioner's Medicaid number on the ground that Petitioner did not timely provide the re- enrollment materials requested in the May 16 letter. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 5th day of March, 1996. STUART M. LERNER, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of March, 1996.
The Issue Whether, in making a preliminary decision to award a contract for the subject services, Respondent acted contrary to a governing statute, rule, policy, or project specification; and, if so, whether such misstep(s) was/were clearly erroneous, arbitrary or capricious, or contrary to competition. Also at issue is whether Petitioner’s response to the subject Request for Proposal (RFP) was responsive and whether Petitioner has standing to bring this proceeding.
Findings Of Fact Pursuant to Section 409.902, Florida Statutes,1 the Respondent is the state agency charged with the responsibility and authority to administer the Medicaid program in Florida. On February 20, 2007, Respondent issued the RFP to select a vendor for the Florida Medicaid HIV/AIDS Disease Management Program. Cathy McEachron, Director of Respondent’s Procurement Office, served as the Issuing Officer for the RFP. The RFP requests that vendors submit proposals to provide disease management (DM) services to Florida’s Medicaid patients suffering from HIV/AIDS outside of Broward and Duval Counties (where Medicaid reform has been enacted) as well as services under the Project AIDS Care Services (PAC services) throughout the state. DM involves registered nurses who assess a patient’s condition, develop a plan of care, and implement that plan to ensure that the patient receives the care he or she needs. There are two goals or reasons for having a DM program. First, a DM program helps to hold down costs because the enrollees in the program (HIV/AIDS patients) who follow a plan of care are less likely to require more costly treatment, such as hospitalization. Second, DM tends to improve the outcome for the patients being managed. By memorandum from Roberta Kelly of Respondent’s Bureau of Health Systems Development, Respondent explained why an invitation to bid was not being used for the subject procurement: The Agency [Respondent] has a solid and satisfactory history with its contracts for HIV/AIDS disease management. Program evaluations and outcome measurements have shown the services to be beneficial to the health and outcomes of Medicaid enrollees while helping to control the costs of medical care. Given past performance the Agency knows that vendor qualifications, experience, and quality of services are more important than price for the procurement of said services, therefore a Request for Proposals is the appropriate method for procurement. There was minimal confusion as to the term of the RFP. In one place, the RFP indicated that it was for a one-year term while in other parts of the RFP the reference was to a two-year term. That erroneous statement was corrected. Proposed vendors were clearly notified by an addendum that the term was for two years. The addendum superseded the erroneous statement that the RFP was for a one-year term. Following the receipt of proposals, the two responding vendors were e-mailed about a possible change Respondent was contemplating to the scope of the services. The inquiry was whether the contemplated change, if put into place, would change the response of either vendor. Respondent made no change to the RFP. The subject e-mail did not flaw the procurement process. The RFP was divided into three parts: a Transmittal Letter, a Technical Proposal, and a Cost Proposal. The scores for all three parts were combined for the evaluation. Two responses to the RFP were received. Petitioner filed a response, as did Intervenor. MANDATORY CRITERIA Attachment E of the RFP, entitled Evaluation Criteria, provides in paragraph E.1 the following: Responses to this solicitation will be evaluated against the mandatory criteria found in Part I, Mandatory Criteria. Responses failing to comply with all mandatory criteria will not be considered for further evaluation. The checklist for the Mandatory Criteria is set forth in Part I of Attachment E (page 3 of 11). Four items are listed on the checklist with Item Three having four subparts. Only Items Three and Four are relevant to this proceeding. Item Three includes as a mandatory criteria that the transmittal letter include a copy of the vendor’s current accreditation. Item Four asks whether the response included a three-page Cost Proposal, as required in Section C.38. These mandatory requirements will be discussed in more detail below. PETITIONER’S HISTORY Petitioner is a newly formed corporation. Its parent corporation, AIDS Healthcare Foundation, Inc. (AHF), is the incumbent provider of the services sought by the RFP pursuant to a contract with Respondent. There has been no issue with regard to the quality of care provided by AHF under that contract. AHF caused Petitioner to become incorporated because the RFP contained a provision that a direct pharmaceutical provider could not be considered for the contract. AHF is a direct pharmaceutical provider. Petitioner is not a direct pharmaceutical provider. Petitioner’s response to the RFP proposed to transfer the program (personnel, facilities, accreditation, and other assets) that AHF is currently utilizing to provide the services required by the RFP from AHF to Petitioner. Further, Petitioner’s financing is dependent on AHF. PETITIONER’S COST PROPOSAL Attachment J to the RFP is incorporated herein by reference. Pursuant to Attachment C.38C (Attachment C, page 22 of 23) under the heading: “Cost Proposal (Must be submitted on page provided as Attachment J.[2]),” the following appears: The respondent [the vendor submitting the proposal] shall submit a cost proposal, as outlined in Attachment J., with each technical response. The cost proposal shall be labeled and tabbed separately and shall include a proposed unit price for each specified PAC served, a per member - per month case management fee for DM Program enrollees, and a detailed budget. The annual cost for each year will be added together to arrive at a two-year total cost, which shall not exceed $9.95 million. FAILURE TO SUBMIT ATTACHMENT J, COST PROPOSAL, INCLULDING THE DETAILED BUDGET FORM, SHALL RESULT IN THE REJECTION OF A PROSPECTIVE VENDOR’S RESPONSE. On page 1 of Attachment J the vendors were instructed to complete and return three tables. Table 1, pertaining to costs for PAC services, and Table 2, pertaining to costs for DM services, are found on page 2 of Attachment J. Table 3, pertaining to the detailed budget, is found on page 3 of Attachment J. Table 1 required the vendor to propose a unit price for each PAC service included in the RFP, to calculate the total cost for each category of service, and to show the grand total for all categories of PAC services. Table 1 included three categories of services. For each category of service, Table 1 provided an anticipated enrollment figure that was to be used in calculating the total cost for each category of service and in calculating the grand total for the PAC services. The total cost for a category of service was to be determined by multiplying the unit price by the anticipated enrollment figure. For the category “PAC Assessments”, Table 1 provided the anticipated enrollment figure of 6,334. For the category “Re-Assessments”, Table 1 provided the anticipated enrollment figure of 6,334. For the category “Exception Request Processing”, Table 1 provided the anticipated enrollment figure of 4,000. Table 1 required the vendor to calculate the grand total of the proposed costs for the three categories of PAC services. Table 1 also contained the caveat that the grand total could not exceed the sum of $950,000. Petitioner inserted a proposed per unit cost for each category. For the category “PAC Assessments”, the unit cost was $100.00. For the category “Re-Assessment”, the unit cost was $70.00. For the category “Exception Request Processing”, the unit cost was $25.00. However, in calculating the total cost for each category of service and the grand total for the PAC services, Petitioner did not use the anticipated enrollment figure set forth in Table 1, but, instead, used a lower anticipated enrollment figure that does not appear anywhere in the RFP. Instead of using Respondent’s anticipated enrollment figures, Petitioner made its own estimate of those figures. For the category “PAC Assessments”, Petitioner used the anticipated enrollment figure of 5,278 (as opposed to Respondent’s figure of 6,334) and the unit price of $100.00. By using its lower anticipated enrollment figure, Petitioner calculated the sum of $527,800.00 as the total cost for this category of service. Had it used Respondent’s anticipated enrollment figure, the calculation would have been $633,400.00. For the category “Re-Assessments” Petitioner used the anticipated enrollment figure of 5,000 (as opposed to Respondent’s figure of 6,334) and the unit price of $70.00. By using its lower anticipated enrollment figure, Petitioner calculated the sum of $350,000.00 as the total cost for this category of service. Had it used Respondent’s anticipated enrollment figure, the calculation would have been $443,380.00. For the category “Exception Request Processing” Petitioner used the anticipated enrollment figure of 2,664 (as opposed to Respondent’s figure of 4,000) and the unit price of $25.00. By using its lower anticipated enrollment figure, Petitioner calculated the sum of $66,600.00 as the total cost for this category of service. Had it used Respondent’s anticipated enrollment figure, the calculation would have been $100,000.00. By using the lower anticipated enrollment figures, Petitioner was able to propose a higher per unit cost for each category of service and stay below the not to exceed figure of $950,000. Petitioner’s grand total for the PAC services, using its anticipated enrollment figures, equaled $944,400.00. Had Petitioner used the Respondent’s anticipated enrollment figures for each category of service, the grand total would have been $1,176,780.00, which exceeds the not to exceed figure of $950,000.00. Petitioner completed Table 2, pertaining to DM services as instructed. Table 2 contained the caveat that the grand total for DM services was not to exceed $9,000,000.00. The grand total of the proposed services as reflected by Table 2 was $8,999,965.00, which is below the not to exceed figure. However, if Petitioner had used the Respondent’s anticipated enrollment figures in calculating the grand total costs for the PAC services in completing Table 1, its proposed total costs for the PAC services ($1,176,780.00) and its proposed costs for the DM services ($8,999,965.00) would have totaled $10,176,745.00, which exceeds the do not exceed figure of $9,950,00.00, for all categories of services. Section 287.012(26), Florida Statutes, defines the term “responsive vendor” as being “. . . a vendor that has submitted a bid, proposal, or reply that conforms in all material respects to the solicitation.” The undersigned rejects the argument that Petitioner was free to use its own anticipated enrollment figures since it would not be able to collect more than the not to exceed figure of $950,000.00 for the PAC services regardless of the unit price and regardless of the number of enrollees. Petitioner’s use of the lower anticipated enrollment numbers enabled it to propose a higher unit cost than it could have proposed had it used Respondent’s anticipated enrollment figures, thereby providing Petitioner with an unfair competitive advantage. This higher unit cost would enable Petitioner to collect its funds more quickly during the term of the contract than it could have with a lower unit cost rate. The higher unit cost rate would also have resulted in Petitioner collecting more than it could have if the actual number of enrollees is less than the Respondent’s anticipated enrollment figure.3 Petitioner’s failure to use the Respondent’s anticipated enrollment figure in completing Table 1 of Attachment J is a major deviation from the solicitation document that renders Petitioner’s cost proposal non-responsive. Petitioner is a non-responsive bidder because the cost proposal is a mandatory item. After the deadline for the submission of responses, Ms. McEachron reviewed Petitioner’s response and Intervenor’s response to determine whether the responses met all mandatory criteria. Ms. McEachron determined that both responses met all mandatory criteria. Ms. McEachron testified at the formal hearing that she made a mistake in reviewing Petitioner’s cost proposal in that she did not notice that Petitioner had not used Respondent’s anticipated enrollment figures in completing Table 1 of Attachment J. Ms. McEachron testified, credibly, had she not made that mistake, she would have determined Petitioner’s response to be non-responsive and that Petitioner’s response would not have been submitted for further evaluation. PETITIONER’S LACK OF ACCREDITATION Attachment D, page 2 of the RFP requires that a vendor must be experienced in the delivery of HIV/AIDS services, accredited by a recognized entity such as URAC, JCAHO, or NCQA, and be a financially sound DM organization. As stated above, the Mandatory Criteria set forth in Attachment E, page 3 of 11, requires that a vendor’s transmittal letter include a copy of the vendor’s current accreditation. Petitioner did not include a copy of its accreditation in its transmittal letter. Instead, Petitioner inserted the following: AIDS Healthcare Foundation (AHF), the current holder of the Disease Management contract, operates that program with NCQA accreditation. As laid out in detail in the application, all of AHF’s Disease Management operations in Florida are being transferred to AHFDM [Petitioner], a wholly separate corporation from AHF. Under the rules set forth by the NCQA, the accreditation can be transferred within 30 days by applying for transfer to the NCQA. AHFDM [Petitioner] is in the process of making this transfer. The transfer will be accomplished by the anticipated July 1, 2007 contract start date. Respondent and Intervenor correctly argue that Petitioner’s failure to have accreditation prior to submitting its proposal is a deviation from the RFP specifications.4 While Ms. Stidman’s testified that AHF had agreed to this procedure, there was no documentary evidence to support her testimony. Petitioner’s failure to comply with this mandatory item rendered its response non-responsive. INTERVENOR’S 2004/2005 FINANCIAL STATEMENT Petitioner challenged the sufficiency of Intervenor’s response to the requirement of Attachment C, paragraph 38.B.2.c, (Attachment C, page 15 of 23) that each vendor responding to the RFP file “[a] copy of the vendor’s most recent financial statement or audit” (the financial requirement). In response to the financial requirement, Intervenor submitted an audited financial statement for the Intervenor and its subsidiaries for the calendar years 2004 and 2005. Because Intervenor’s subsidiaries were included, the audited financial statements were considered to be consolidated financial statements. The audited financial statement provided by Intervenor for those two years was the most recent audited financial statement available to Intervenor. Intervenor had more recent financial statements, but those financial statements were not audited. Ms. McEachron, as the agency procurement director, interpreted the financial requirement to require a vendor to provide its latest unaudited financial statement or its latest audited financial statement without regard to whether one statement was more recent than the other. Ms. McEachron testified that Intervenor complied with the financial requirement because it submitted its most recent audit despite the fact that the audit was for the years 2004/2005. Ms. McEachron’s interpretation is consistent with the plain reading of the provision. Ms. Newman evaluated Intervenor’s financial condition based on the information that had been provided to her by Intervenor. Ms. Newman testified that she was not concerned that the audited financial statement was for years 2004/2005. She further testified that audited financial statements are frequently required for the type evaluation at issue in this proceeding. Ms. Newman awarded Intervenor a rating of 2, which signified that its financial condition, based on the information available to her, was below average. Ms. Newman has, in other procurements, used a score of 2 or below to reflect her opinion that the bidder is “not financially stable.” There was no evidence as to the evaluation criteria for those other procurements. Ms. Newman testified that for the subject procurement, she did not evaluate Intervenor as being “not apparently financially stable” she evaluated its financial condition as below average.5 Mr. Law, who has considerable experience dealing with agency procurements, reviewed Intervenor’s 2004/2005 audited financial statement on behalf of Petitioner. Mr. Law opined that the audited financial statement demonstrated that Intervenor was not a responsible vendor, and explained his opinion. Mr. Law believed that Intervenor had insufficient working capital to perform the contract. He was concerned that Intervenor had a net profit of $29,732.00 in 2004 and a net loss of $273,213.00 for 2005. At the end of 2004, Intervenor had working capital of $512,000.00. At the end of 2005, Intervenor’s working capital had been reduced to approximately $265,000.00. Mr. Law opined that Intervenor would need $660,000.00 in upfront working capital to fund the contract in the first year.6 Mr. Mercer, who also has extensive experience, reviewed Intervenor’s 2004/2005 audited financial statement on behalf of Intervenor. Mr. Mercer opined that the financial statement Intervenor provided as part of its response to the RFP demonstrated that Intervenor was a responsible bidder, and explained the rationale for his opinion. Mr. Mercer testified to the following: Intervenor had a Current Ratio of 3.23 at the end of 2005, which showed a strong working capital relationship;[7] Intervenor needed working capital of $250,000.00 to fund the contract. It had working capital in the amount of $265,000.00 at the end of 2005;[8] Intervenor had a positive asset to debt ratio of .32; Intervenor was creditworthy based on its ratio of assets to liabilities, its amount of working capital, its positive ratio of assets to liabilities, and its history; Intervenor’s Defense Interval ratio of 25 days was average;[9] Intervenor’s Debt to Equity ratio of .46 was positive; Intervenor’s Collection Period of 19 days was positive;[10] Intervenor had the necessary capital to purchase needed equipment; Intervenor’s financial condition would benefit by the subject contract; and The appearance of Intervenor’s financial strength at the end of 2005 was diminished by the payment of discretionary bonuses to avoid taxation at the corporate and individual shareholder level. Both Mr. Law and Mr. Mercer agreed that Intervenor would need an infusion of start-up capital for the contract. Both agreed that most lenders would require more recent financial information than the 2004/2005 audited financial statement prior to lending money to Intervenor. Mr. Mercer opined that Intervenor would require approximately $150,000.00 in capital as opposed to Mr. Law’s opinion that $660,000.00 would be needed. Mr. Mercer testified that Intervenor was creditworthy based on its 2004/2005 financial statement. Mr. Law testified that further information would be required to make that determination. The undersigned has carefully considered the testimony of Ms. Newman, Mr. Law, and Mr. Mercer. The conflicting evidence is resolved by finding that Ms. Newman correctly evaluated Intervenor’s financial condition based on her review of the 2004/2005 audited financial statements. The 2004/2005 audited financial statement reflected that Intervenor’s financial condition is “below average.” The financial statement did not establish that Intervenor was a non-responsive bidder due to a lack of financial stability to complete the contract. IS INTERVENOR A RESPONSIBLE BIDDER? Section 287.012(24), Florida Statutes, defines the term “responsible vendor” as follows: (24) “Responsible vendor” means a vendor who has the capability in all respects to fully perform the contract requirements and the integrity and reliability that will assure good faith performance. Section 287.057(2)(b), Florida Statutes, requires that contracts be awarded to responsible vendors as follows: (b) The contract shall be awarded to the responsible and responsive vendor, whose proposal is determined in writing to be the most advantageous to the state, taking into consideration the price and the other criteria set forth in the request for proposals. The contract file shall contain documentation supporting the basis on which the award is made. Six subsidiaries were shown on the consolidated financial statement submitted by Intervenor. Each subsidiary was a limited liability company that Intervenor had established. Each subsidiary was established to provide DM services in a specific state pursuant to a subcontract between the subsidiary and a company named McKesson Health Solutions, LLC (McKesson). McKesson, in turn, had a contract with the specific state to provide DM in that state. During 2005, Intervenor controlled subsidiaries that had subcontracts with McKesson to provide DM services in each of the following states: Mississippi, Montana, New Hampshire, Texas, and Washington. The 2004/2005 audited financial statement demonstrated that in 2005, approximately 87 percent of the total revenues on a consolidated basis came from the five subsidiaries for the states mentioned above, and not from Intervenor. Intervenor’s reliance on these subsidiaries for income was heavy. For the year ending December 31, 2005, the consolidated financial statement reflected a negative net income of $273,000.00. For the year ending December 31, 2004, the consolidated financial statement reflected a small profit. The consolidated financial statement reflected a downturn between those two years. At the time Intervenor filed its response to the RFP, its contracts with McKesson had been terminated and each of its subsidiaries had been dissolved.11 Ms. Newman testified that it would be highly unlikely that the audited consolidated financial statement for the years 2004/2005 fairly represented the financial condition of Intervenor in 2007. Petitioner proved that Intervenor’s financial condition experienced substantial and material changes between the ending date of the audited financial statement and the date of Intervenor’s response to the RFP. Because of those changes, Respondent has relied on stale financial information. Respondent does not, without updated financial information, have sufficient information to determine whether Intervenor is a responsible vendor with the requisite financial stability to perform the subject contract.12 While Respondent acted within its discretion in allowing a vendor to use stale financial information as part of its evaluation process, it does not have such discretion in determining whether a vendor is a responsible vendor within the meaning of Section 287.012(24), Florida Statutes, as required by Section 287.057(2)(b), Florida Statutes. The statutory requirement that an agency deal only with responsible vendors cannot be waived by a vendor or ignored by an agency. Petitioner established that Respondent failed to ensure that Intervenor is a responsible vendor.13 The evidence established that but for the missing up- to-date financial information, Intervenor is a responsive bidder.14 THE EVALUATION For a procurement of the nature and dollar amount of this procurement, Respondent’s agency head is required by the provisions of Section 287.057(17)(a), Florida Statutes, to appoint: (a) At least three persons to evaluate proposals and replies who collectively have experience and knowledge in the program areas and service requirements for which commodities or contractual services are sought. By memo dated March 16, 2007, Thomas W. Arnold, Respondent’s Deputy Secretary for Medicaid, appointed the following to serve on the evaluation team for the subject procurement as follows: Brenda Jones-Garrett, Medical Health Care Program Analyst, Bureau of Medicaid Services, Division of Medicaid. Responsible for the Project AIDS Care Waiver service oversight. Ms. Garrett-Jones previously worked in AHCA’s division of Quality Management and had been working with HIV/AIDS prior to coming to the Agency. Talisa-Hardy, Clinical Program Manager, Bureau of Medicaid Pharmacy Services. Dr. Hardy has a doctorate in pharmacy and has been practicing for seven and a half years in several areas including HIV/AIDS. Vivian Booth, Nurse Consultant, Bureau of Medicaid Health Systems Development. While employed with AHCA, Ms. Booth provides RN consulting service and is the contract manager for the Minority Physician Network Program. She has served on the HIV/AIDS Title II Collaborative as the Agency representative for approximately one year, and participated in the on-site monitoring of the HIV/AIDS disease management program, Positive Health Care. Gayle McLaughlin, Nurse Consultant, Florida Department of Health, HIV/AIDS Bureau. Dr. McLaughlin has worked for seven years as a nurse consultant with the Bureau of HIV/AIDS. She functions as a primary clinical resource for public and private sector medical providers involved in HIV/AIDS care. She is also currently a member of HRSA Title II Collaborative which is a national initiative focused on improvement of the quality of HIV/AIDS care. Kay Newman, Senior Management Analyst, Office of the Deputy Secretary for Medicaid. Ms. Newman is a certified public accountant, who will evaluate the solvency of the respondents via review of their financial statements. Ms. Newman’s evaluation was limited to the financial evaluation. There was no contention that Ms. Newman lacked the qualifications and training to conduct her evaluation. As discussed above, Ms. McEachron reviewed the proposals to determine whether the vendor met all mandatory items and Ms. Newman evaluated the vendors’ financial statements. Paragraph E.2 provided instructions as to how each response was to be evaluated. The following point system was to be utilized: Points 0 The component was not addressed. The component contained significant deficiencies. The component is below average. The component is average. The component is above average. The component is excellent. Part II of Attachment E (page 4 of 11) set forth the areas of the proposal to be evaluated, gave the maximum raw score possible for each area, and provided a weight factor for each score. Each evaluator could award a maximum of 325 points for a proposal. The four evaluations would then be added for the final tally. The “Detailed Evaluation Criteria Components” are set forth in Attachment E, pages 5–11. Attachment D of the RFP discusses in detail the Scope of Services to be provided and the requirement that staffing levels be sufficient to complete all of the responsibilities outlined in the RFP. Each vendor is required to discuss its proposed staffing for the project and its service delivery approach. The RFP does not contain minimum staffing requirements. Paragraph 3 of the Detailed Evaluation Criteria Components (Attachment E, pages 5 and 6), under the heading Project Staffing, instructs the evaluators as to how they are to evaluate the portion of the vendor’s response that addresses its proposed staffing. Paragraph 4 of the Detailed Evaluation Criteria Components (Attachment E, pages 6 – 8) instructs the evaluators as to how they are to evaluate the portion of the vendor’s response that addresses its service delivery approach. There was no independent training of the evaluators. The evaluators were not provided materials outside of the RFP and the responses thereto. Each evaluator independently evaluated the responses. As instructed, no evaluator discussed her evaluations with the other evaluators. Petitioner presented the testimony of Ms. Garrett- Jones, Dr. Hardy, and Ms. Booth. Dr. McLaughlin was not called as a witness. The testimony of Ms. Jones-Garrett established her educational background and her experience. Ms. Jones-Garrett is the analyst in charge of the PAC services waiver for Respondent. One of the major components of the RFP was for the delivery of waiver for PAC services. Ms. Jones-Garrett has five and a-half years experience working in the public health department and an immunology/AIDS clinic in Orlando. During her time working there, she supervised an LPN, who was responsible for adherence to AIDS medication. She has knowledge of HIV care and regimens. She has a good understanding of the PAC services waiver and PAC waiver assessments. Based on her background and experience, the undersigned finds that she was qualified to sit as an evaluator.15 There was no evidence that she failed to follow the instructions given to her in performing her evaluation. Petitioner failed to establish that the evaluation process was flawed by the manner in which Ms. Jones-Garret performed her evaluation of the two responses. The testimony of Dr. Hardy established her educational background and her experience. Dr. Hardy has a Doctor of Pharmacy degree, is a licensed pharmacist, and has served as clinical pharmacy program manager for Respondent, where she oversees the delivery of medical and pharmaceutical services to Florida recipients suffering from co-morbid diseases. Dr. Hardy was previously employed by Florida State Hospital as a clinical pharmacist. While there, she dealt with patients, many of whom had HIV or AIDS. Their drugs, because of the clinical effects and drug interactions with psychotropic medications, were closely monitored. As a pharmacist, Dr. Hardy performed drug counseling for HIV/AIDS patients, drug utilization reviews, and other critical components involved in assisting in the management of an HIV/AIDS patient’s disease. Based on her background and experience, the undersigned finds that she was qualified to sit as an evaluator. There was no evidence that she failed to follow the instructions given to her in performing her evaluation. Petitioner failed to establish that the evaluation process was flawed by the manner in which Dr. Hardy performed her evaluation of the two responses. The testimony of Ms. Booth established her educational background and her experience. Ms. Booth has served as a contract manager for disease management projects, has been involved in assessing HIV/AIDS patients for medical care or disease management purposes. She has developed care plans for disease management programs requiring the coordination of physicians, therapists, nurses, and aides. She has significant experience supervising nurses and determining their staffing schedules. Ms. Booth is also a certified contract manager with training in procurement of disease management services. Based on her background and experience, the undersigned finds that she was qualified to sit as an evaluator. There was no evidence that she failed to follow the instructions given to her in performing her evaluation. Petitioner failed to establish that the evaluation process was flawed by the manner in which Ms. Booth performed her evaluation of the two responses. INTERVENOR’S STAFFING PROPOSAL Paragraph C.38.B of Attachment C of the RFP sets forth Technical Response requirements, beginning on page 14. Sub- paragraph 3 thereof (on page 15) pertains to Project Staffing and provides, in part, as follows: The respondent [vendor] shall demonstrate its capability by describing the qualifications and experience of its proposed staff, as stated in Attachment D, Section D.8. The description shall include, at a minimum: * * * d. The number, qualifications and credentials of the proposed RNs/LPNs, and how each area of the state will be served by the HIV/AIDS disease management program staff, number of staff for each area, the percentage of time to be devoted to this Program, information on the lead case manager (RN/LPN) in each geographic area, ability to be available 24 hours per day, seven (7) days per week, and where they will be located in Florida. Intervenor’s response to the RFP contained a detailed description in compliance with this requirement. The Detailed Evaluation Criteria Components, found beginning at page 5 of Attachment E, established that each evaluator could award a maximum of 45 points for the Project Staffing category. Since there were nine subparts to the category, each category, including the category pertaining to the nursing staff, could be awarded a maximum of five points. Each evaluator was to score Intervenor’s response to this category on the 0 to 5 scale set forth above. Ms. Stidman testified at length as to the deficiencies in Intervenor’s staffing plan for nurses. This testimony did not establish that Intervenor was a non-responsive bidder or that any evaluator failed to properly score this category. Intervenor was awarded a total of 14 points for this category from the four evaluators. THE FINAL TALLY Following the evaluation, Intervenor was awarded a total of 985 points. Petitioner was awarded 943 points. Petitioner failed to establish that the evaluation process was materially flawed. Petitioner failed to establish that it should have been awarded more points than Intervenor.
Recommendation Based on the foregoing findings of fact and conclusions of Law, it is RECOMMENDED that Respondent enter a final order that adopts the Findings of Fact and Conclusions of Law set forth herein. It is further recommended that Petitioner’s proposal be rejected because it is non-responsive. It is further recommended that Intervenor’s proposal be rejected because Respondent has insufficient information to determine whether it is a responsible vendor. DONE AND ENTERED this 6th day of September, 2007, in Tallahassee, Leon County, Florida. S CLAUDE B. ARRINGTON 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 6th day of September, 2007.
