The Issue The issue in this proceeding is whether the intended action of Respondent, Agency for Health Care Administration, to award a contract to Intervenor, eQHealthSolutions, Inc., is contrary to the agency's governing statutes, the agency's rules or policies, or the solicitation specifications. The standard of proof for this proceeding is whether the proposed agency action is clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact AHCA and the Invitation to Negotiate AHCA is the state agency responsible for administering the Medicaid Program in Florida. Medicaid is the state and federal partnership that provides health coverage for selected categories of people with low incomes. Florida's Medicaid recipient population is over 2.8 million individuals. Over one third of this population receives services on a fee-for-services basis. Florida Medicaid spending in Fiscal Year 2008-2009 was approximately $18.8 billion. AHCA’s Division of Medicaid Services is responsible for serving the Medicaid population. AHCA seeks, through the Invitation to Negotiate (ITN) that is the subject of this case, to enter into a new contract with a federally designated Quality Improvement Organization (QIO) for the development and implementation of a statewide comprehensive utilization management program. Utilization management is the process of determining the medical necessity of particular health care procedures and treatments, and their appropriateness under Medicaid or other relevant insurance plans. Prior authorization is a major part of utilization management. Prior authorization, as the name implies, requires a provider or beneficiary to propose the service to be provided, identify the reasons for it, and obtain authorization before providing the service in order to receive payment from Medicaid. It requires determinations of whether the service is covered by Medicaid, whether the service is medically appropriate in the circumstances, and whether it is the most cost effective service in the situation. KePro currently provides AHCA prior authorization services under a contract. Lakia Daniels, Government Operations Consultant for AHCA, manages the current KePro contract with AHCA. Florida law establishes three competitive procurement processes for state agencies. They are Invitation to Bid, Request for Proposal, and Invitation to Negotiate. Agencies use an Invitation to Bid when they can specifically define the scope of work for a service or establish precise specifications defining the commodity sought. Agencies may use the Request for Proposal when the purposes and uses for a service or commodity can be specifically defined and the agency can identify necessary deliverables. Agencies may use the ITN process when they need to determine the best method for achieving a specific goal or solving a particular problem. An agency uses the ITN process to identify one or more responsive vendors with which it may negotiate in order to obtain the best value for the state. The ITN process is the most flexible and least restrictive competitive procurement process. On May 19, 2010, AHCA issued ITN No. 1007, which is the subject of this proceeding. AHCA’s ITN sought vendors to provide a Comprehensive Utilization Management Program for Inpatient Medical and Surgical, Home Health, Prescribed Pediatric Extended Care (PPEC), and Therapy Services. The ITN included Attachments A through L. AHCA amended the ITN on June 25, 2010. References to ITN in this Recommended Order are to the ITN as amended. None of the parties challenged the ITN or the amendment. The contract and the utilization management to be provided under it are critical to Florida's system for controlling Medicaid costs and reducing Medicaid fraud. The ITN contained "Evaluation Criteria." It specified that the criteria were for use in the initial evaluation of vendor replies to the ITN. The ITN also said that vendors whose replies did not comply with the mandatory criteria would not be considered for evaluation. The ITN provided vendors the opportunity to develop methodologies and systems for achieving the purposes of the contract. It repeatedly stated that requirements were minimum requirements, leaving vendors free to propose better or more comprehensive services or means of providing services. The ITN stated that "[t]he use of 'shall,' 'must,' or 'will' (except to indicate futurity) . . . indicates a requirement or condition from which a material deviation may not be waived by the State." It defined a material deviation as one in which "the deficient response is not in substantial accord with the solicitation requirements, provides an advantage to one respondent over another, or has a potentially significant effect on the quality of the response or on the cost to the State." The ITN included a process for vendor questions. The process provided that AHCA's responses to the vendor questions would be posted as an addendum to the ITN. Vendor questions and AHCA answers were included in the June 25, 2010, amendment to the ITN. AHCA is using the ITN procurement process to select a vendor to undertake the substantial task of providing comprehensive utilization management for inpatient medical and surgical, home health, and prescribed pediatric extended care (PPEC), and therapy services for Florida's Medicaid population. The ITN also described providing a Neonatal Intensive Care Unit (NICU) care and home health monitoring program and retrospective medical record reviews as services under the contract. The contract will be a fixed price, also described as fixed fee, contract. The ITN schedules refer to the fee or price as cost. This and the varying use in the ITN, the responses, and the testimony of "fee", "price", and "cost" foster confusion. This Recommended Order uses "cost" to refer to the amount that vendors proposed to charge AHCA either in the aggregate for the services, or as they allocate the amount charged to various components of the services provided including specific staff, training, web site maintenance and the like. The implementation and execution period for the contract for all services, except therapy services, ends June 30, 2011. For therapy services the implementation and execution period is to end March 31, 2011. For all services the contract is to run for three years ending June 30 2014. It may be renewed for up to three years. The ITN provided vendors the anticipated annual review volume in Attachment M-1, a form vendors were required to complete. The anticipated volumes were: Prior Authorization Inpatient Services - 510,000 Prior Authorization Home Health Visits - 55,000 Prior Authorization for Private Duty Nursing, PC, and PPEC 140,000 Prior Authorization Therapy Services - 140,000 Claims Analysis, Respiratory Therapy - 1 Retrospective Medical Record Reviews - 2,000 NICU Care Monitoring Program 700 Home Health Comprehensive Care Monitoring Program - 4,000 Special Studies/Quality Improvement Projects - 1. Although the contract will be for three years, the service volumes do not vary year to year. Florida's Medicaid program has not previously required prior authorization for therapy services. Attachment M-1 sought detailed cost information about various services and components of the project from replying vendors. Effectively, it asked the vendors to allocate their proposed total costs among the various services and components used to provide the services. They include, but are not limited to, items such as prior authorization review for inpatient services, prior authorization review for home health visits, prior authorization for therapy service, NICU care monitoring, customer service, development and Maintenance of a web-based system, database development, salaries, benefits, temporary personnel, postage, rent, office equipment, advertising, telecommunicating equipment, computer equipment, overhead, and profit. The ITN described the Medicaid program and services. It described the purpose of the intended contract, giving the goals of the contract and describing general services the vendor would provide. The ITN left to the vendors the challenge and opportunity of proposing the best method for achieving the purposes of the contract and providing the services needed. The ITN also emphasized the importance of "timely, efficient, productive, consistent, courteous, and professional" performance of services. The technical specifications of the ITN included a wealth of factors and required information. Among them were: limitations on the use of subcontractors, descriptions of how beneficiary information would be protected, lobbying disclosures, client references, information about the vendor's experience and qualifications, information about management and key personnel qualifications, detailed staffing information, a draft contract implementation plan, training plans, computer hardware requirements, computer software requirements, and disaster recovery plans. A 52 page attachment to the ITN described the scope of services the successful vendor would provide. The ITN required that the vendor maintain the ability to manage the volume of work 24 hours per day, seven days a week. It required at least one Florida location where the vendor would perform its contractual responsibilities. The ITN required vendors to develop electronic review instruments for the contract services. It mandated that the instruments allow data input by reviewing professionals. It permitted vendors to provide up to 30 percent of inpatient reviews through a rules-based or criteria-driven algorithm. It permitted vendors to apply recognized medical necessity standards, so long as they met the minimum of InterQual Level of Care criteria and fulfilled all state and federal Medicaid requirements. The ITN advised that the contract would include rigorous review completion timeframes for the contract services. Examples of the timeframes follow. First level review of prior authorization reviews for elective pre-admission, admission, and continued stay inpatient services must be completed within four hours from receipt of a completed request. If a service request is referred to a physician, the ITN required physician review of the requests within one business day of when the request is complete. First level review of home health skilled nursing or nurse's aide visits must be completed with one business day of the request. Physician review must be completed within two days of the request. First level review of requests for therapy services must be completed within one business day of completion of the request. Physician review must be completed within three business days. By repeated references to subcontracting and limitations upon the practice, AHCA manifested both the importance of subcontracting and caution about the issues that could accompany subcontracting. For instance, the ITN prohibited subcontracting, assigning, or transferring any work to any party, except for subcontractors identified in the response, without AHCA's prior written consent. Prior written consent required AHCA’S review and written approval of the terms of the subcontract. The ITN also required detailed information about proposed subcontractors' Medicaid experience and other information, just as it did for key employees and Management Information Systems (MIS) employees of the vendors. The ITN required vendors to describe how they would coordinate with subcontractors and communicate with them. It emphasized that the vendor remained fully responsible for fulfilling all contractual requirements to AHCA. These are just some of the references to subcontracting and requirements for it imposed by the ITN. The tasks described by the ITN rely upon computer and internet technology for communication, analysis, efficiency, and speed. Among other things, the ITN sought a vendor that would provide a web portal for communication, for providers to submit requests for authorization, and for providers to submit information and documents necessary to support the request. The ITN made the importance of a vendor's MIS abilities, experience, and personnel to successfully accomplishing the task clear. The ITN required a detailed description of the vendor's "approach for designing, developing, and maintaining a web-based prior authorization system, which is available to authorized users and providers, as described in the ITN." AHCA identified some required characteristics and tasks that must be performed. Similarly, the ITN identified minimum requirements for system generated reports, but it did not limit the frequency or content of the reports. It left to the vendors the task of developing and maintaining the system that would perform the tasks, have the needed characteristics, and generate the reports required. The ITN required that: The Vendor shall have in-house Management Information Systems (MIS) capability. The Agency will not approve a subcontractor for this function. The Vendor shall maintain a sufficient number of qualified MIS and technical staff to continue operation of the Vendors systems, provide prompt, on-going system support and accurate data access to the Agency and its authorized service providers. It did not specifically identify this requirement as a mandatory criterion. The ITN also required vendors to provide résumés for "MIS staff." This is the only area of expertise where the requirement for résumés went beyond identified key staff positions. The vendor's staff is essential to achieving the goals of the ITN's proposed contract. Staff is key to making judgments about what services should be authorized and obtaining more information about the reasons that the service has been requested. Staff is also critical to meeting the short review timeframes. The ITN emphasized the importance of staff. It cautioned vendors that AHCA reserved the right to determine that staff was insufficient and to require the vendor to cure the insufficiency. It also required detailed information about staff including résumés, staffing charts, and minimum requirements for key staff. Protection of beneficiary privacy is another subject emphasized by the ITN. Several portions required compliance with state and federal privacy requirements, including the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Also, the ITN required vendors to explain in detail how they would protect patient privacy. Evaluation and Negotiation Process AHCA established a two-step process for selecting a vendor with which to contract. Stage one was evaluation of the prospective vendors' responses to the ITN. Stage two was the negotiation phase. In the evaluation phase, each vendor submitted a reply to the ITN. The replies contained the vendor's technical proposal, cost proposal, and staffing proposal for providing services identified in the ITN. It also provided information requested by the ITN and any other information that the vendor chose to include. During the evaluation stage, the vendor replies were to be evaluated, scored, and ranked based on the requirements of the ITN. The purpose of the evaluation and scoring was to determine which vendor or vendors would move to the negotiation phase. It was not to determine which vendor would be awarded the contract. The negotiation phase was to determine with which vendor AHCA would contract. In the negotiation phase, AHCA would gather more information about the vendors, their abilities, and their proposals. The negotiation phase was an opportunity for AHCA to critique vendor proposals and question vendors. It also was an opportunity for each vendor to respond to those critiques and questions as it determined best. July 14, 2010, was the deadline for submitting replies to the ITN. KePro, EQ, and Alliant ASO ("Alliant") timely submitted replies to the ITN. KePro and EQ are parties to this proceeding. Alliant is not. No vendor protested the terms, conditions, or specifications of the ITN. AHCA’s procurement office reviewed the replies for compliance with mandatory minimum requirements. All met the requirements. The Deputy Secretary for Medicaid for AHCA, Roberta Bradford, appointed seven AHCA employees to the evaluation team. They were Claire Anthony-Davis, Lakia Daniels, Princilla Jefferson, Kathleen Core, John Loar, Ryan Fitch and Scott Ward. Ms. Bradford selected these individual because of their experience and subject matter expertise in areas involved in the ITN. For example, Claire Anthony-Davis was AHCA’s Home Health Policy Analyst. She had experience in utilization management and prior authorization of home health services, as well as experience monitoring AHCA’s contracted peer review organization (PRO). Kathleen Core, AHCA’s Medical Health Care Program Analyst, managed the Pediatric Extended Care (PPEC) Services program. She had experience in Medicaid policy and prior authorization. The other evaluation team members had similarly relevant experience. The members of the evaluation team were sufficiently skilled and experienced to evaluate the ITN replies in accordance with the ITN and in compliance with Florida law. The members of the evaluation team independently evaluated the vendor replies. Each employed his or her personal skills and experience in the course of the evaluations. The evaluators had and considered written evaluation instructions, Conflict of Interest Questionnaires, the ITN, all addenda including the vendors' written questions and AHCA's answers, all the vendors' ITN replies, and the evaluation tool. The evaluation process took place over several days. Each team member completed his or her own individual, detailed score sheets for each vendor. Each of the evaluators carefully and thoughtfully scored the ITN replies to the best of their ability and in good faith in accordance with the ITN requirements. Only Ryan Fitch reviewed the financial information and scored the financial stability of the responding vendors. He rated KePro higher for financial stability than the other two vendors. He gave KePro a perfect score. This was the only time in more than two dozen reviews that Mr. Fitch has assigned a perfect score to a company. Scott Ward, AHCA's Information Technology officer, was the only evaluator to review the information technology components of the ITN responses. Mr. Ward did not review any other aspects of the proposals. Mr. Ward assigned a score of 56 to KePro's information technology response and a score of 47 to EQ's. Mr. Ward focused on responsiveness of the replies to specific and limited information technology requirements of the ITN. Those were primarily minimum technical requirements necessary for compatibility with the Agency hardware and software and compliance with AHCA information technology standards. He also checked to verify that the vendors had provided the descriptions of their information technology systems required by the ITN and descriptions of their experience with the systems. He did not and could not evaluate whether those descriptions were accurate. He did not evaluate or score the ability of the systems described to perform the tasks required. Mr. Ward also was not aware of misrepresentations by KePro in the information technology section of its response. This Recommended Order addresses those misrepresentations later. After the evaluators completed scoring, AHCA's procurement office tabulated the vendors' original cost proposals and recorded the scores in the scoring sheets. The individual evaluators ranked the vendors. Two evaluators scored EQ the highest. Two evaluators scored Alliant the highest. One evaluator scored KePro the highest. The average of all scores for each vendor was the same. AHCA invited all three vendors to participate in the negotiation phase. The letter advising the vendors that they had been selected to proceed to negotiations stated: "The negotiation and selection process will consider each company's ability to meet or exceed the requirements of the ITN." Ms. Bradford appointed an eight-person negotiation team. The team members were Darcy Abbott, Shevaun Harris, Lakia Daniels, Claire Anthony-Davis, Kathleen Core, Scott Ward, Barbara Vaughan and Anne Frost. As with the evaluation team, Ms. Bradford selected the negotiation team members because of their experience and subject matter expertise in matters related to the services addressed in the ITN. Five of the negotiators, Darcy Abbott, Shevaun Harris, Lakia Daniels, Claire Anthony-Davis and Kathleen Core, worked in the bureau of Medicaid services with direct responsibility for the current and contemplated contracts. Scott Ward was the director of AHCA Information Technology. Barbara Vaughan and Anne Frost were procurement office representatives. Scott Ward and Anne Frost also were Certified Project Management Professionals. Claire Anthony-Davis, Lakia Daniels, Kathleen Core and Scott Ward, had served on the evaluation team. Ms. Daniels is the AHCA contract manager for the current utilization management contract. Ms. Abbott is the Administrator of all Medicaid sections under the current contract. The members of the negotiation team were sufficiently skilled and experienced to conduct the ITN negotiations. Shevaun Harris facilitated the negotiation sessions. A court reporter transcribed all sessions. Shevaun Harris was the team lead and is direct managing supervisor of the project and the contract that will result from the ITN. AHCA negotiators met with KePro representatives on August 10, 2010. They met with EQ’s and Alliant’s representatives on August 12, 2010. AHCA gave each vendor the same opportunity to appear at the negotiation sessions, by telephone and in person. AHCA gave each vendor the same opportunity to answer questions from the negotiation team. The day before the first negotiation session, AHCA informed all vendors that they would not be permitted to make presentations as part of their negotiation session. This included PowerPoint and web-based presentations. AHCA did this because the negotiation team wanted to spend the time learning about the ITN replies and asking questions instead of basically listening to a sales pitch. The restriction applied equally to all the vendors. Nothing in the ITN or AHCA's letter scheduling the negotiation sessions advised the vendors that they would be permitted to use internet, PowerPoint, or any other assistive devices during negotiations. After the first round of negotiations, the AHCA negotiation team discussed the replies and negotiations. It preliminarily ranked the vendors. EQ ranked highest, but the team was concerned about EQ's costs. They were substantially greater than the costs of the other two vendors. The team consulted with AHCA senior management to ensure that the members understood the budgeted amount available for the contract and any other financial constraints on the decision. AHCA conducted a second negotiation session with EQ on August 18, 2010. It focused on costs. AHCA scheduled the negotiation to obtain more information from EQ about the basis for its costs. AHCA obtained clarification and determined that EQ was willing to reduce its costs. After the negotiation sessions, AHCA asked all of the vendors to submit their best and final offers (BAFOs). The team also concluded that EQ was the preferred vendor if it reduced its costs sufficiently. All three vendors timely submitted their BAFOs to AHCA. The request to EQ for a BAFO stated: Your proposed implementation costs exceed the Agency's budget for Fiscal Year 2010-2011. Please provide a revised cost proposal as follows: One time Implementation Costs for Therapy Services reduced by at least 70-80%. One time Implementation Costs for all other services (Inpatient, Home Health, and PPEC) reduced by at least 65-75%. In addition to the revised cost proposal, please provide the following: A detailed staffing plan to reflect the changes in the reduced Implementation costs. Best and Final Cost Proposal for Implementation Costs, Operations Year 1, Operations Year 2, and Operations 3, eliminating the costs for analysis of respiratory therapy in Year 2 and Year 3. AHCA's request to KePro for a BAFO asked KePro to: Provide a detailed staffing plan with a breakdown- of FTE's for each aspect of the ITN's scope of services which includes the number of staff, when each staff member will start, whether the staff member will be on- going and if so, when they will be phased out. Provide the number of on-site face-to- face assessments for Private Duty Nursing (PON), Prescribed Pediatric Extended Care (PPEC), and Therapy services. Provide Best and Final Cost Proposal for Implementation Costs, Operations Year 1, Operations Year 2, and Operations 3, eliminating the costs for analysis of respiratory therapy in Year 2 and Year 3. All three vendors submitted the requested BAFOs. KePro and EQ both reduced their costs. The negotiation team unanimously agreed that AHCA should contract with EQ. It did not determine a "second place" vendor. A memorandum dated September 27, 2010, (Award Memo) states the team's recommendation. It summarizes the history of the ITN issuance and reply review. The Award Memo concludes with these two paragraphs: Overall, EQ Health Solutions prevailed as the most favorable vendor. Their [sic] proposal demonstrated that they [sic] can provide qualified and experienced professionals to meet the requirements of this multi-faceted program. Out of the three respondents, their [sic] proposed approach will provide the most comprehensive quality model for utilization management. Per the recommendation of the negotiation team, and as Deputy Secretary for Medicaid, my signature below indicates my decision to award a contract for the comprehensive utilization management of Inpatient Medical and Surgical, Home Health, Prescribed Pediatric Extended Care (PPEC) and Therapy Services to EQ Health Solutions. Deputy Secretary Roberta Bradford is the AHCA official with the authority to sign off on the contract. She signed the Award Memo, but the negotiation team prepared the memorandum. Ms. Bradford deferred to the team's recommendation. Neither Ms. Bradford nor other senior management officials of AHCA reviewed any information or documents other than the Award Memo to decide upon the proposed award. The Award Memo does not explain how the EQ proposal provides the best value to the state. The Award Memo does not provide AHCA senior management with any analysis of the respective cost proposals submitted by the vendors. The AHCA files and records and records for the ITN do not contain a document that analyzes the cost differential between the vendors or that articulates how contracting with EQ would provide the best value for the state. They also do not contain a short plain statement that explains the basis for the selection of the vendor and that sets forth the vendor's deliverables and price pursuant to the contract, along with an explanation of how these deliverables and price provide the best value to the state. AHCA's practice before awarding a contract is to maintain a "solicitation file" that contains documents relating to the solicitation process. After awarding a contract AHCA creates a "contract file." Ms. Bradford did not receive or review a cost comparison of the BAFOs. She was not aware of the cost difference between the KePro and EQ proposals. She did not receive or review a written or oral presentation of the relative merits of the vendor proposals or the reasons for choosing EQ, other than the Award Memo. Ms. Bradford relied entirely upon the recommendation of the negotiation team. On September 28, 2010, AHCA posted Notice of its intent to contract with EQ on the Agency procurement website. AHCA did not post an explanation or basis for its proposed decision. Reply and Negotiation Overview As a whole, the reply of EQ and its responses in the negotiation sessions demonstrated a more thorough analysis of the tasks presented by the ITN and the challenges they presented. EQ presented more detail in descriptions of its systems and web portal than KePro did. This is true both in the narrative and the screen shots provided. EQ's reply demonstrated research and understanding of legal requirements involved in the process, such as the work needed to prepare for fair hearings. KePro did not display the same level of research and understanding. For example, KePro proposed a Facebook page for Medicaid beneficiaries, but it had not considered the legal and personal privacy issues that may arise or how to address them. Another example, addressed in detail later, is the analysis of the needs for newly established prior authorization review of therapy services. EQ identified factors and difficulties that newly imposed therapy reviews would create. It determined that therapy reviews could be more difficult and time consuming than inpatient service reviews. EQ crafted its proposal to address those factors and difficulties. KePro did not demonstrate even consideration of the differences between therapy reviews and inpatient service reviews. EQ provided a link to a demonstration site for its information technology system. There is, however, no evidence that any AHCA employee used the link. In its reply and in negotiations, KePro repeatedly referred to its experience as an AHCA contractor and specific individuals' knowledge of KePro. AHCA concluded that EQ's reply and the information EQ presented in negotiations demonstrated a greater understanding of what was needed to successfully administer the prior authorization program and how to do it. The evidence supports that conclusion. Costs and Staffing The three vendors proposed significantly different costs, i.e. fees, to AHCA for the contract. KePro proposed $38,900,064 for the life of the contract. EQ proposed $51,084,928. The third vendor, Alliant, which is not a party to this proceeding, proposed $46,325,552. EQ's proposed costs, the amount that the State will pay over the contract term, are $12,184,864 more than those of KePro. AHCA intends to contract with EQ instead of KePro, despite the twelve million dollar cost differential. This is in part because the replies and the negotiation sessions caused AHCA to conclude that KePro was "lowballing" its costs and/or unrealistic in establishing them. That conclusion is not clearly erroneous, arbitrary, or capricious. Direct personnel costs account for $5,247,861 of the twelve million dollar difference. This is due to the differences in proposed staffing. EQ proposed 136.95 FTEs for the contract. KePro proposed 85 FTEs. EQ's average compensation cost per FTE is 95,521,518. This amount is $3,358.70 than KePro's average of $92,162.482. But the compensation difference only accounts for $460,021 of the $12,184,864 difference over the contract period. The number of FTEs is what causes the difference. The difference between EQ's and KePro's plans for the Home Health Comprehensive Care Monitoring program contributed to the difference in FTEs in the vendor proposals. EQ's costs are $2,081,669 more than KePro's costs. The Home Health Monitoring program calls for visits to the homes of home health care recipients in Miami-Dade County. The visits serve several purposes. One is to verify that the patients are receiving appropriate services. Another is to determine if the patients are actually receiving services. This purpose arises from the fact that 85 percent of the Medicaid funds expended on home health services in the nation are expended in Miami-Dade County. Consequently AHCA surmises that fraud may be an issue in that county. This second purpose is part of AHCA's effort to reduce Medicaid fraud. EQ staffed these visits with two people. KePro staffed them with one. AHCA determined that two people was a better staffing proposal due to the fraud detection facet of the visits and bad experiences of individuals making similar visits in the past. AHCA's preference for the more costly EQ staffing proposal has not been proven clearly erroneous, arbitrary, or capricious. Realistic consideration of the completion timeframe requirements are one reason. Even with the use of rules driven or criteria based algorithms that will trigger some automatic approvals, people perform critical functions in the review process. The role includes nurse or other professional review of requests that do not trigger automatic approval, doctor review of all denials, communication with providers and patients, provider education, assistance preparing for fair hearings, participation in fair hearings, and training for staff and providers. EQ's greater staffing level will likely result in more satisfactory performance of these functions. The contract will include short timeframes for many tasks. Meeting the time requirements is important to prompt provision of needed medical services. EQ's staffing makes EQ more likely to meet or better the timeframe requirements. Inadequate staffing can cause delays, possible medical complications, increased costs, dissatisfied providers, dissatisfied patients, AHCA handling customer inquiries and complaints that the contractor should be handling, and friction between the State and its contractor. The ability to require more staff or impose penalties, likely to involve delay or even legal proceedings, is a poor substitute for adequate staffing from the beginning. In other areas, EQ's more costly proposals are more plausible than KePro's cheaper proposals. This too makes AHCA's decision that the KePro costs were unrealistically low not clearly erroneous, arbitrary, or capricious. The "other direct" cost category includes the following components: software, hardware, equipment purchase and rental, professional services, advertising, training, licensing, recruiting, legal, taxes, and miscellaneous. KePro proposed no costs for these components. EQ proposed costs of $1,443,691 for the same components. While the record does not reveal the basis for EQ's costs, it is more credible that there will be costs of some amount over a three year period than that there will be none. Similarly EQ's rent costs are more plausible than KePro's. This is another reason AHCA's conclusion that KePro's costs were not realistic has not been proven clearly erroneous, arbitrary, or capricious. For the implementation period, KePro allocates no rent cost. This is plausible since KePro is currently providing services and would be as it shifted from its existing contract to the new contract. It is plausible that KePro could handle the implementation work from the offices where it currently provides services. For each full year of the contract, KePro represents rent costs of around $26,000 per year or an average for the three year period of $2,177.42 per month. EQ proposes rent costs of $1,073,267. That includes implementation period rent of $43,139 and first year rent of $330,000, apparently increased by four percent per year to a third-year rent cost of $356,928. EQ's average monthly rent costs for the three full years of the contract are $28,614.67. Nothing indicates AHCA arbitrarily or capriciously accepted these costs instead of EQ's. EQ and KePro differed $242,773 in their postage, shipping, and fulfillment costs. EQ's costs were $349,137 and KePro's costs were $106,364. For the 716,000 annual authorization reviews this correlates to EQ having 48.7 cents postage, shipping, and fulfillment costs per review and KePro having 14.8 cents costs per review. The record does not establish that accepting EQ's costs was clearly erroneous, arbitrary, or capricious or even that KePro's costs of less than one postage stamp per review were reasonable. The difference between EQ's proposed cost for therapy services review and KePro's is $8,015,250. For AHCA to choose EQ as the vendor, despite the difference in proposed costs, it necessarily must have determined the EQ's costs for therapy services were more reasonable than KePro's. In contrast to the magnitude of the differences between the vendors' costs for therapy services, the costs for inpatient reviews are similar. EQ's cost for 510,000 reviews per year of inpatient services exceeds KePro's by $1,307,187 for the contract period. For each full year of the contract, differences between the vendors' inpatient review costs are relatively small. Year one KePro exceeds EQ by $8,832. Year two EQ exceeds KePro by $129,455. Year three EQ exceeds KePro by $350,287. The cost differences each year for providing 140,000 therapy service reviews are, on the other hand, dramatic. In year one EQ costs for therapy reviews exceed KePro's by $2,481,073. In year two the difference is $2,558,825. For year three the difference is $2,673,456. Year one, EQ's costs for therapy reviews are $4,788,242. This is more than EQ costs for 510,000 inpatient service reviews the same year. Year two, EQ's costs for the inpatient service reviews are only $152,490 more than its costs for 140,000 therapy reviews. Year three, EQ's inpatient service review costs exceed the therapy review costs by just $219,207. This is true even though the number of therapy reviews anticipated is 27.5 percent of the anticipated inpatient reviews. EQ justified the therapy costs in its second negotiation session. The review for therapy services is likely to consume a disproportionate amount of staff time for several reasons. Florida does not currently require prior authorization for therapy services. The change will be disruptive and time consuming. Providers, patients, patient families, and patient advocates will have to learn the system. They will have to learn how to request services. And they will have to learn how to support the service requests. As importantly, they will have to learn to accept the fact that prior authorization is now required. All these facts may reasonably be expected to cause difficulties for the vendor and AHCA. Therapy review is likely to result in a higher incidence of requests for additional information and more time spent communicating reasons for decisions than inpatient reviews. Therapy review is also likely to engender a disproportionate number of requests for reconsideration and fair hearings. This is partly due to the human reaction of people being told "no" for the first time in a system. Normal difficulties adjusting to new requirements and to a new system will also contribute. Support in the fair hearing process, which will be mandated by the contract, requires staff time. So too will the multiple communications and re-reviews that inevitably will be required as providers and patients alike learn and accept a new process. The nature of therapy services is also likely to result in more fair hearing requests. Authorization of less service than requested will be a denial of services subject to fair hearing review. In the inpatient setting, this is not always so. Often, services such as a hospital stay can be extended if review at the end of the authorized stay indicates further time in the hospital is needed. Because of these differences between prior authorization of therapy services and prior authorization of inpatient services, AHCA's decision to accept EQ's costs for therapy services has not been shown to be clearly erroneous, arbitrary, or capricious. Information Management Systems AHCA determined that EQ's proposal presented a better, fully developed and previously used information technology (IT) system than KePro. The IT systems and IT staffing proposed by the vendors were important aspects of the utilization management services to be provided under the contract. The ITN made it clear that a significant portion of the prior authorization and other systems in the utilization management services were to be facilitated through the vendors' IT systems. EQ developed its IT system. EQ has operated its system in a state Medicaid environment in Mississippi for approximately thirteen years and in Illinois for eight years. EQ’s in-house IT staff, the same staff that developed the system, will support it. KePro did not develop its proposed IT system, MedManager. Another company, Preferred Physicians Health Alliance (PPHA) developed MedManager. KePro had never used the system or managed prior authorization reviews with it. KePro was attempting to acquire PPHA's MedManager system through a purchase of PPHA’s assets in the summer of 2010. But when KePro submitted its ITN reply on July 14, 2010, KePro had not completed the asset purchase. There was no signed purchase agreement between KePro and PPHA, and no money had been exchanged. KePro did not disclose these facts in its reply. KePro represented in its ITN reply that: Our corporate system, MedManager, is wholly owned by KePro outright, including the design, software source code, and database schema. That enables us to control software changes and be responsive to change requests. We will make all system changes using our in- house, MIS staff. This statement was not accurate. KePro did not own MedManager outright and did not have an enforceable agreement to purchase it. KePro did not acquire the assets of PPHA, including MedManager until July 16, 2010. During the entire period of the ITN process from reply submission to negotiations and BAFOs, KePro and its management had never used MedManager in any setting, commercial or Medicaid. KePro’s Chief Executive Officer, Joseph Dougher, testified that KePro had hired PPHA's personnel and would rely upon them to maintain and refine MedManager. The ITN required vendors to provide résumés for the MIS personnel. KePro’s reply did not provide the résumés of any of the PPHA employees now employed by KePro. It provided only the résumé of Wayne Bolton, a KePro employee of some 20 years. Mr. Bolton had no part in developing MedManager and has not overseen use of MedManager for any prior authorization program. During KePro's negotiations with AHCA on August 10, 2010, Shevaun Harris of AHCA asked KePro Chief Executive Joseph Dougher directly if MedManager was a new system launching for the first time. Mr. Dougher stated that KePro had been using MedManager "on the commercial side of our business for about ten years." This statement was not accurate. KePro had never used MedManager. In addition, the MedManager system KePro proposed had never been used before by KePro or PPHA in a state Medicaid environment. The MedManager system was also not complete at the time of KePro's ITN reply. KePro did not disclose this to AHCA until the negotiation session. The provider portal portion of the MedManager system was not complete. The ITN made clear that the provider portal was a critical part of the system AHCA was seeking. At the time of the final hearing, KePro had not completed the provider portal. And KePro had not yet implemented it for any of its other Medicaid customers. AHCA would have been the first KePro customer to use the MedManager provider portal in a Medicaid environment. The AHCA negotiation team preferred EQ's IT system because it was fully developed and had been used in Medicaid environments for several years. Conversely team members were concerned that the KePro system was still under development. The content of the replies and communications during the negotiations provided a basis for these concerns even without the information revealed during discovery for this proceeding that KePro did not own MedManger when it submitted its reply and had not used MedManager before. AHCA's preference for the existing and tested system used by EQ is not clearly erroneous, arbitrary, or capricious. EQ's proposed disaster recovery plan is superior to KePro's. KePro proposed a tape back-up system. EQ proposed a network-based back-up system. KePro's tape back-up system saves or backs up information and data once a day at 5:00 p.m. Under this system, if the system crashes any time before the daily back-up, all the day's data could be lost. In addition, the back-up tapes would have to be transferred to another site. This will delay recovery. EQ's network-based back-up system backs up data and information continuously throughout the day. If the system crashes, all the day's data entered before the crash would be saved. A network-based back-up system also provides continuous access to the backed-up data on the network in real time rather than having tapes that would have to be delivered from another site. The network-based back-up system is superior. AHCA's preference for the EQ disaster recovery plan is not clearly erroneous, arbitrary, or capricious. Additional ITN Considerations EQ’s proposal recognized the importance of employee training to success. It provided for more training and more extensive training than KePro. AHCA determined that the training provisions added value to EQ's proposal. EQ committed to having its reviewing physicians attempt to contact the physician ordering a service before denying the service. This practice has the potential to reduce incorrect denials and therefore mitigate the costs and disruption of fair hearing disputes. KePro did not make a similar proposal. AHCA determined that this, too, added value to EQ's proposal. EQ proposed to handle all functions of the contract in-house without subcontractors. KePro proposed subcontractors. Although subcontractors were permitted, the AHCA team preferred the EQ proposal without subcontractors. This preference was based upon experience with delays and disputes arising with subcontractors under other contracts. The ITN's many subcontractor provisions issues that can arise with subcontractors made it plain that use of subcontractors was a criterion for consideration. AHCA's preference for the EQ in- house proposal was not clearly erroneous, arbitrary, or capricious. The ITN asked vendors to identify five hospitals that would be part of the NICU Care Monitoring Program. KePro identified five hospitals. EQ did not. AHCA asked EQ about this failure. EQ representatives advised AHCA of the geographic area for the hospitals and represented that they could identify them if requested. This response did not comply with the requirement to identify the five hospitals. However, identification of the five hospitals was not specified as a requirement of the ITN that could not be waived. It also has not been shown to provide EQ an advantage over KePro or to have a potentially significant effect on the quality of EQ's response or on the cost of the services to the State. The 2009 Request for Information AHCA first sought a vendor to provide the services involved here in 2009. At that time, AHCA issued a Request for Information inviting possible vendors to provide information about ways to provide the prior authorization services. KePro and EQ's predecessor, Louisiana Health Care Review, were among those providing information. AHCA reviewed their information and met with representatives of each of them. During that process one or more of the 2010 negotiation team viewed a demonstration of EQ's system. AHCA decided that it was not required to use competitive procurement to contract for the services. It selected EQ as the provider and moved toward executing a contract. In the process, Ms. Core received a more detailed explanation and demonstration of the EQ system. KePro challenged the decision and requested an administrative hearing. AHCA denied the request. KePro appealed. During the appeal, the First District Court of Appeal stayed AHCA from contracting with EQ. The court subsequently issued an opinion holding that KePro was entitled to an administrative hearing to challenge the decision to contract with EQ. Keystone Peer Review Organization, Inc. v. AHCA, 26 So. 2d 652 (Fla. 1st DCA). AHCA decided not to proceed with the hearing. Instead it began the ITN process resulting in this proceeding. Neither Ms. Core nor other AHCA negotiation team members considered the EQ system information they received during the aborted 2009 contracting efforts in deciding to contract with EQ after the ITN negotiations. If they had, it would not have mattered. EQ's ITN reply thoroughly describes and documents its MIS system. The reply also provided a link to a demonstration of EQ's system. Consequently, any information the team members may have recalled from the 2009 efforts was provided in the 2010 ITN process.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is Recommended that Agency for Health Care Administration enter a final order dismissing the formal written protest of Keystone Peer Review Organization, Inc. and awarding the contract to eQHealth Solutions, Inc. DONE AND ENTERED this 12th day of January, 2011, in Tallahassee, Leon County, Florida. S JOHN D. C. NEWTON, II 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 12th day of January, 2011. COPIES FURNISHED: Daniel Lake, Esquire Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308 J. Stephen Menton, Esquire Martin P. McDonnell, Esquire Rutledge, Ecenia, & Purnell, P.A. 119 South Monroe Street, Suite 202 Post Office Box 551 Tallahassee, Florida 32302 Robert H. Hosay, Esquire John A. Tucker, Esquire Foley & Lardner LLP 106 E. College Avenue, Suite 900 Tallahassee, Florida 32311 Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Elizabeth Dudek, Interim Secretary Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Justin Senior, General Counsel Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308
Conclusions Having reviewed the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part Il, Florida Statutes, and Chapter 400, Part X, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaint and Election of Rights form to the Respondent. (Ex. 1) The parties have since entered into the attached Settlement Agreement, (Ex. 2). Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The facility’s Certificate of Exemption is deemed surrendered and is cancelled and of no further effect. 3. Each party shall bear its own costs and attorney’s fees. Any requests for administrative hearings are dismissed and the above-styled case is closed. 4, In accordance with Florida law, the Respondent is responsible for retaining and appropriately distributing all client records within the timeframes prescribed in the authorizing statutes and applicable administrative code provisions. The Respondent is advised of Section 408.810, Florida Statutes. 5. In accordance with Florida law, the Respondent is responsible for any refunds that may have to be made to the clients. Filed December 24, 2014 3:11 PM Division of Administrative Hearings 6. The Respondent is given notice of Florida law regarding unlicensed activity. The Respondent is advised of Section 408.804 and Section 408.812, Florida Statutes. The Respondent should also consult the applicable authorizing statutes and administrative code provisions. The Respondent is notified that the cancellation of an Agency license may have ramifications potentially affecting accrediting, third party billing including but not limited to the Florida Medicaid program, and private contracts. ORDERED at Tallahassee, Florida, on this 25” day of htaewnboer , 2014. , Secretary th Care Administration NOTICE OF RIGHT TO JUDICIAL REVIEW. A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct of this Final Order was served on the below-named persons by the method designated on this eis of , 2014. Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Thomas Jones, Unit Manager Facilities Intake Unit Licensure Unit Agency for Health Care Administration Agency for Health Care Administration (Electronic Mail) (Electronic Mail) Katrina Derico-Harris Medicaid Accounts Receivable Agency for Health Care Administration (Electronic Mail) Shawn McCauley Medicaid Contract Management Agency for Health Care Administration (Electronic Mail) Arlene Mayo-Davis, Field Office Manager Local Field Office Agency for Health Care Administration (Electronic Mail) Daniel A. Johnson, Senior Attorney Office of the General Counsel Agency for Health Care Administration (Electronic Mail) Division of Administrative Hearings (Electronic Mail) Dagmar Llaudy, Esquire Law Office of Dagmar Llaudy, P.A. 814 Ponce De Leon Blvd, Suite 513 Coral Gables, Florida 33134 (U.S. Mail) NOTICE OF FLORIDA LAW 408.804 License required; display.-- (1) It is unlawful to provide services that require licensure, or operate or maintain a provider that offers or provides services that require licensure, without first obtaining from the agency a license authorizing the provision of such services or the operation or maintenance of such provider. (2) A license must be displayed in a conspicuous place readily visible to clients who enter at the address that appears on the license and is valid only in the hands of the licensee to whom it is issued and may not be sold, assigned, or otherwise transferred, voluntarily or involuntarily. The license is valid only for the licensee, provider, and location for which the license is issued. 408.812 Unlicensed activity. -- (1) A person or entity may not offer or advertise services that require licensure as defined by this part, authorizing statutes, or applicable rules to the public without obtaining a valid license from the agency. A licenseholder may not advertise or hold out to the public that he or she holds a license for other than that for which he or she actually holds the license. (2) The operation or maintenance of an unlicensed provider or the performance of any services that require licensure without proper licensure is a violation of this part and authorizing statutes. Unlicensed activity constitutes harm that materially affects the health, safety, and welfare of clients. The agency or any state attorney may, in addition to other remedies provided in this part, bring an action for an injunction to restrain such violation, or to enjoin the future operation or maintenance of the unlicensed provider or the performance of any services in violation of this part and authorizing statutes, until compliance with this part, authorizing statutes, and agency rules has been demonstrated to the satisfaction of the agency. (3) It is unlawful for any person or entity to own, operate, or maintain an unlicensed provider. If after receiving notification from the agency, such person or entity fails to cease operation and apply for a license under this part and authorizing statutes, the person or entity shall be subject to penalties as prescribed by authorizing statutes and applicable rules. Each day of continued operation is a separate offense. (4) Any person or entity that fails to cease operation after agency notification may be fined $1,000 for each day of noncompliance. (5) When a controlling interest or licensee has an interest in more than one provider and fails to license a provider rendering services that require licensure, the agency may revoke all licenses and impose actions under s. 408.814 and a fine of $1,000 per day, unless otherwise specified by authorizing statutes, against each licensee until such time as the appropriate license is obtained for the unlicensed operation. (6) In addition to granting injunctive relief pursuant to subsection (2), if the agency determines that a person or entity is operating or maintaining a provider without obtaining a license and determines that a condition exists that poses a threat to the health, safety, or welfare of a client of the provider, the person or entity is subject to the same actions and fines imposed against a licensee as specified in this part, authorizing statutes, and agency rules. (7) Any person aware of the operation of an unlicensed provider must report that provider to the agency.
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct copy of this Final Order was served on the below-named persons by the method designated on this J x! of Aol » 2012. Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 2 Jan Mills Shaddrick Haston, Unit Manager Facilities Intake Unit Licensure Unit Agency for Health Care Administration Agency for Health Care Administration (Electronic Mail) (Electronic Mail) — Finance & Accounting Revenue Management Unit Agency for Health Care Administration (Electronic Mail) Patricia Caufman, Field Office Manager Local Field Office Agency for Health Care Administration (Electronic Mail) Katrina Derico-Harris Medicaid Accounts Receivable Agency for Health Care Administration (Electronic Mail) Suzanne Suarez Hurley, Senior Attorney Office of the General Counsel Agency for Health Care Administration (Electronic Mail) | Shawn McCauley Medicaid Contract Management Michael Matonte, Administrator and/or Family Carefree House, Inc. Agency for Health Care Administration 1875 Allendale Drive (Electronic Mail) Clearwater, Florida 33760 (U.S. Mail) Elizabeth W. McArthur Administrative Law Judge Division of Administrative Hearings (Electronic Mail) _| NOTICE OF FLORIDA LAW 408.804 License required; display.-- (1) It is unlawful to provide services that require licensure, or operate or maintain a provider that offers or provides services that require licensure, without first obtaining from the agency a license authorizing the provision of such services or the operation or maintenance of such provider. (2) A license must be displayed in a conspicuous place readily visible to clients who enter at the address that appears on the license and is valid only in the hands of the licensee to whom it is issued and may not be sold, assigned, or otherwise transferred, voluntarily or involuntarily. The license is valid only for the licensee, provider, and location for which the license is issued. 408.812 Unlicensed activity. -- (1) A person or entity may not offer or advertise services that require licensure as defined by this part, authorizing statutes, or applicable rules to the public without obtaining a valid license from the agency. A licenseholder may not advertise or hold out to the public that he or she holds a license for other than that for which he or she actually holds the license. (2) The operation or maintenance of an unlicensed provider or the performance of any services that require licensure without proper licensure is a violation of this part and authorizing statutes. Unlicensed activity constitutes harm that materially affects the health, safety, and welfare of clients. The agency or any state attorney may, in addition to other remedies provided in this part, bring an action for an injunction to restrain such violation, or to enjoin the future operation or maintenance of the unlicensed provider or the performance of any services in violation of this part and authorizing statutes, until 3 compliance with this part, authorizing statutes, and agency rules has been demonstrated to the satisfaction of the agency. (3) It is unlawful for any person or entity to own, operate, or maintain an unlicensed provider. If after receiving notification from the agency, such person or entity fails to cease operation and apply for a license under this part and authorizing statutes, the person or entity shall be subject to penalties as prescribed by authorizing statutes and applicable rules. Each day of continued operation is a separate offense. (4) Any person or entity that fails to cease operation after agency notification may be fined $1,000 for each day of noncompliance. (5) When a controlling interest or licensee has an interest in more than one provider and fails to license a provider rendering services that require licensure, the agency may revoke all licenses and impose actions under s. 408.814 and a fine of $1,000 per day, unless otherwise specified by authorizing statutes, against each licensee until such time as the appropriate license is obtained for the unlicensed operation. (6) In addition to granting injunctive relief pursuant to subsection (2), if the agency determines that a person or entity is operating or maintaining a provider without obtaining a license and determines that a condition exists that poses a threat to the health, safety, or welfare of a client of the provider, the person or entity is subject to the same actions and fines imposed against a licensee as specified in this part, authorizing statutes, and agency rules. (7) Any person aware of the operation of an unlicensed provider must report that provider to the agency.
Conclusions THIS CAUSE came on for consideration before the Agency for Health Care Administration ("the Agency"), which finds and concludes as follows: The Agency issued the Petitioner ("the Applicant") the attached Notice of Intent to Deem Application Incomplete and Withdrawn from Further Review (Ex. 1). The parties entered into the attached Settlement Agreement (Ex. 2), which is adopted and incorporated by reference. The parties shall comply with the terms of the Settlement Agreement. If the Agency has not already completed its review of the application, it shall resume its review of the application. The Applicant shall pay the Agency an administrative fee of $4,000.00 within 30 days of the entry of this Final Order. A check made payable to the "Agency for Health Care Administration" containing the AHCA number(s) should be sent to: Agency for Health Care Administration Office of Finance and Accounting Revenue Management Unit 2727 Mahan Drive, MS# 14 Tallahassee, Florida 32308 Any requests for an administrative hearing are withdrawn. The parties shall bear their own costs and attorney's fees. This matter is closed. ORDERED in Tallahassee, Florida, on this _ (· _ day of r{r> , 2013. tary Administration Filed November 4, 2013 11:15 AM Division of Administrative Hearings
Other Judicial Opinions A party that is adversely affected by this Final Order is entitled to seek judicial review which shall be instituted by filing one copy of a notice of appeal with the agency clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The notice of appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy is Final O ebelow named persons/entities by the method designated on this / y of '"'---' 2013. Richard Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone (850) 412-3630 Jan Mills Facilities Intake Unit Agency for Health Care Administration (Electronic Mail) Thomas M. Hoeler, Chief Facilities Counsel Office of the General Counsel Agency for Health Care Administration (Electronic Mail) Finance and Accounting Revenue Management Unit Agency for Health Care Administration (Electronic Mail) Peter A. Lewis, Esquire Law Office of Peter A. Lewis, P. L. 3023 North Shannon Lakes Drive, Suite 101 Tallahassee, Florida 32309 (U.S. Mail) 2
The Issue The issues to be determined are whether Respondent committed the violation alleged in the Administrative Complaint and if so, what penalty should be imposed?
Findings Of Fact Respondent is a licensed registered nurse in the State of Florida, holding license number RN 2802012. In late 2004, Respondent was employed as a nurse by Florida Hospital Deland. At that time, Respondent was experiencing a problem with alcohol use that resulted in complaints of alcohol on her breath when she reported to work and possible intoxication on the job. As a result, she was referred to the Employee Assistance Program (EAP) at the hospital, and suspended from work for a period of three days. The EAP Program referred her to the Intervention Project for Nurses (IPN). IPN is an alternative to discipline program established by legislation in 1983. It is a program authorized pursuant to Section 456.076, Florida Statutes. IPN works through a contract with the Department of Health, Board of Nursing and monitors nurses with substance abuse, dependence, psychiatric illnesses, physical illnesses, and sexual misconduct issues and attempts to assure that licensees with the above-referenced problems are receiving adequate treatment and are safe to practice. On December 8, 2004, Respondent was evaluated by Nancy Ackerman of the Orlando Regional Chemical Dependency Program. Respondent was diagnosed with alcohol dependence, rule out depression, chemical dependency. Based upon this evaluation and diagnosis, the IPN Treatment Team recommended that Respondent receive intensive outpatient treatment, no less than 3 days per week, and contract with IPN for monitoring. The length of a contract with IPN depends on the diagnosis a participant receives. If a participant is diagnosed with alcohol abuse, the contract is generally for two years, with review for completion after one year of compliant monitoring. A diagnosis of alcohol dependence, as with Respondent, requires a five-year contract. The difference between the two contracts is based upon the difference in criteria for the two diagnoses. Consistent with the criteria in the Diagnostic and Statistical Manual IV (DSM-IV), dependence has more factors to consider in terms of consequences for alcohol use. A longer contract for persons with a dependence diagnosis is geared toward reducing the chance of relapse by providing for a longer monitoring period. On or about January 28, 2005, Respondent voluntarily entered into a monitoring contract with IPN. As part of her contract, she was required to complete intensive outpatient treatment, attend weekly nurse support group meetings, attend AA/NA meetings, and participate in random drug testing. At the time Respondent signed her contract with IPN, she was provided with a copy of the Participant Manual, which outlines IPN's policies and requirements. IPN uses urine drug screens to determine whether a participant is using mood-altering drugs or alcohol. A urine sample is considered to be too dilute for testing if the creatinine and specific gravity levels are low. When a sample is too dilute for testing, there is a concern that the sample can be masking the use of a mood-altering substance. For the period from February 2, 2005, to March 31, 2008, Respondent provided 44 urine samples for random drug screening. The majority of her urine samples registered low creatinine levels but were sufficient for testing purposes. Of those 44 samples, however, eight were too dilute for testing. Those urine screens were submitted on the following dates: March 28, 2007; June 25, 2007; September 25, 2007; October 5, 2007; October 23, 2007; December 27, 2007; January 14, 2008; and February 5, 2008. When a participant has a urine specimen that is too dilute for testing, IPN's policy is to contact the participant to submit to an additional test. If two specimens in a row are dilute, IPN will send a warning letter to the participant, counseling them about the need to have the urine samples provided first thing in the morning and advising the participant to decrease their water intake before providing the sample. This letter also advises the participant that there may be a physical condition causing the dilute specimens that should be evaluated. If there is a second incident where two consecutive drug specimens are too dilute for testing, the participant would receive a second letter advising them that the dilute urine samples cannot be treated as a negative drug screen, and advising the participant to schedule an appointment with his or her medical provider to rule out a physical cause for the dilute specimens. On October 5, 2007, Respondent submitted a urine sample that was too dilute for testing. It was her second consecutive dilute sample. Consistent with IPN policy, on October 9, 2007, Lorraine Busch, Respondent's Case Manager, sent her a letter advising her that she had submitted two consecutive dilute samples. The letter advised, Dilute urine drug screens may indicate a physical condition that you should have evaluated. For urine drug screen purposes, IPN recommends that you attempt to give the most concentrated specimen possible in order to avoid questions about the accuracy of your urine drug screen. You may need a physical examination to determine if there is a physiological basis for your urine to be dilute. If you are someone who ingests a lot of fluids, you may need to cut down on your intake of liquids several hours prior to your urine drug screen. You may also want to try to submit an early morning urine specimen, which tends to be more concentrated. There is no clear indication how Respondent responded to this letter. However, on February 5, 2008, and February 13, 2008, Respondent again had consecutive urine specimens that were considered dilute. On February 26, 2008, Ms. Busch wrote to Respondent, advising her that the clinical team had discussed her recurrent dilute urine specimens and directed her to schedule an appointment with her primary care provider to discuss the issue. She also provided a letter to present to the Respondent's primary care provider, which requested a comprehensive physical exam to determine if there was a physical condition causing the recurrent dilute screens. The letter requested that results of the physical exam be sent to the IPN office, along with the primary care provider's impression regarding any physical condition that may produce the results. Respondent made an appointment to see her primary care provider, Dr. Patel. A urinalysis was performed and the results forwarded to IPN which indicated normal levels. However, Respondent took issue with IPN's directions and Dr. Patel's suggested course of action, and on March 28, 2008, wrote to her Case Manager, stating in pertinent part: I feel the need to communicate to IPN of how insane I believe the request for a humane being to be subjected to the medical system for tests no one knows nothing about. To imply someone might have a physical problem is a psyhic hit. How many times we have seen Drs. think they know something and so surg and nothing there and they die. With more people in holistic health & science, we know if you tell someone they are sick they become sick. The mind, body conscience is an amazing study. I am sending you information on the water I drink. I eat a healthy diet. Excercize. I feel great. I went to my primary Dr. and got an urinalysis. After decreasing my water intake x 1 week. My specific gravity remains <. He doesn't know why. The next thing he would order another urinalsis with complete dehydration x 24 hours. Now I am asking IPN in their group conscience if this is something they want to be a part of to another human being. It is against my spritual beliefs to be submitted to the medical system and unneeded tests. I am very grateful to IPN I was very lost & didn't know what to do. You showed me the way. The knowledge, wisdom & higher consciencness that is achievable is amazing. Thanks to yall, I am able to share it. Thanks for letting me share. (Spelling and grammar as in original.) On April 22, 2008, Ms. Busch responded to Respondent's letter, reminding her that the urine drug screen is an important monitoring tool and a part of the contract Respondent signed. Ms. Busch instructed Respondent to have Dr. Patel send documentation to IPN indicating whether or not he feels there is a diagnosis to support her dilute urine drug screens. Ms Cunningham sent another letter dated April 15, 2008, and received by IPN on April 22, 2009, stating: I am requesting an early end to my contract. My enrollment as student healer, medium, & minister will be very involved with classes and study. This is my chosen path now. I prefer to keep an untarnished nursing license, however its in Gods hands now. I thank you for putting me towards my path. Generally, a participant in IPN is allowed to terminate his or her contract early for good cause. A participant is considered to have good cause for early termination when he or she is deployed for active duty in the armed forces. Compassionate release is also allowed when a nurse is no longer physically or mentally able to practice his or her profession and will not be practicing as a nurse ever again. Personal feelings toward the practice of traditional medicine, the desire to consume large quantities of oxygenated water, making healthy lifestyle changes, a reluctance to submit to physical examinations or taking classes toward spiritual pursuits are not considered good cause for early termination of the IPN contract. The Participant Manual which Respondent received specifically addresses failure to progress and dismissal from the IPN program. The Manual provides in pertinent part: Failure to progress is defined as IPN Advocacy Contract noncompliance that results in dismissal from IPN and subsequent report to the DOH/BON. The primary elements indicating failure to progress are: Failure to comply with terms of your IPN Advocacy Contract and the requirements of IPN participation. Failure to obtain IPN facilitated evaluation(s) and/or comply with treatment as recommended by evaluator(s) and required for IPN participation. Unacceptable or limited demonstration of progress as determined by the IPN clinical team and treatment providers. The statutes and rules that govern IPN mandate that IPN participants must demonstrate progress while being monitored by IPN. By law, any IPN participant is to be reported to DOH/FDON if failure to progress occurs. * * * DISMISSAL Specific circumstances which are considered grounds for dismissal of an IPN participant include: Non-compliance with the IPN Advocacy Contract. Failure to progress. Attempting to work or working in nursing without IPN approval. Relocation outside of the State of Florida without IPN approval. Request for dismissal by the IPN participant. At the time of dismissal, IPN will forward a written report to the DOH/FBON with information regarding any alleged violations of the Nurse Practice Act, reasons for dismissal, and any safety concerns the dismissed nurse may present. . . . Consistent with IPN policy and the express terms of the Participation Manual, on April 22, 2008, Respondent was advised by letter that her request for early termination of her contract had been denied, and that she needed to complete her contract, which would end January 20, 2010. She was reminded that "[s]ince IPN is a voluntary program, if you wish to discontinue participation, you may do so. However, as you know, your file will be sent to the Department of Health for whatever action they deem appropriate." On April 24, 2009, Respondent again wrote to her Case Manager, stating, I have decided to discontinue my participation in IPN after much prayer and meditation. I live to share experience strength & hope, activly in AA and to everyone. Its wonderful to live your spitual Truths. I will remain forever grateful to IPN for showing me how to get help. I had so much fear then, today its faith experience strength & hope. (Spelling and grammar as in original.) Thanks again, Nancy Cunningham As a result, on April 29, 2009, Ms. Busch sent Respondent a letter notifying her that she had been dismissed from the IPN effective immediately for failure to comply with the conditions of her contract. She was also notified that her file would be forwarded to the Department of Health.
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED: That a final order be entered finding that Respondent has violated Section 456.072(1)(hh), Florida Statutes; imposing a $250 fine; and suspending Respondent's license until such time as she undergoes an IPN evaluation and complies with any and all recommendations IPN may make, including resumption of her IPN contract, consistent with Florida Administrative Code Rule 64B9- 8.006(1)(d). DONE AND ENTERED this 9th day of June, 2009, in Tallahassee, Leon County, Florida. S LISA SHEARER NELSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 9th day of June, 2009.
Conclusions Having reviewed the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaints and Election of Rights forms to the Respondent. (Ex. 1) The Election of Rights form advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 4. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 5. The Respondent’s license is SURRENDERED. If it has not done so, the Respondent shall promptly return its license certificate back to the Licensure Unit. 6. In accordance with Florida law, the Respondent is responsible for retaining and appropriately distributing all client records within the timeframes prescribed in the authorizing statutes and applicable administrative code provisions. The Respondent is advised of Section 408.810, Florida Statutes. 7. In accordance with Florida law, the Respondent is responsible for any refunds that may have to be made to the clients. 8. The Respondent is given notice of Florida law regarding unlicensed activity. The Respondent is advised of Section 408.804 and Section 408.812, Florida Statutes. The Respondent Filed March 10, 2015 3:03 PM Division of Administrative Hearings should also consult the applicable authorizing statutes and administrative code provisions. The Respondent is notified that the cancellation of an Agency license may have ramifications potentially affecting accrediting, third party billing including but not limited to the Florida Medicaid program, and private contracts. 9. The owner/operator, Atakelte Admasu will never hold or own, directly or indirectly: any AHCA license; any type of entity that holds an AHCA license; any building or physical plant that operates as an AHCA licensee; or be a controlling interest, officer, board member, employee, volunteer, manager, director, or administrator of an AHCA licensee. 10. Administrative fines of $52,834.79 are imposed on the Respondent, but STAYED in accordance with the terms of the Settlement Agreement. : ORDERED at Tallahassee, Florida, on this_/2 day of Arathi. 2015. Agency for Health Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correc eet this Final Adan eb served on the below-named persons by the method designated on this Wea my of , 2015. Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Facilities Intake Unit Agency for Health Care Administration (Electronic Mail) Anne Avery, Unit Manager Assisted Living Unit Agency for Health Care Administration (Electronic Mail) Finance & Accounting Revenue Management Unit Agency for Health Care Administration (Electronic Mail) Robert Dickson, Field Office Manager Local Field Office Agency for Health Care Administration (Electronic Mail) Katrina Derico-Harris Medicaid Accounts Receivable Agency for Health Care Administration (Electronic Mail) Andrew B. Thornquest, Senior Attorney Office of the General Counsel Agency for Health Care Administration (Electronic Mail) Shawn McCauley Medicaid Contract Management Atakelte Admasu, Owner/Administrator Agnes Street Home for the Elderly Agency for Health Care Administration 1346 Agnes Street (Electronic Mail) Jacksonville, Florida 32211 (U.S. Mail) R. Bruce McKibben Administrative Law Judge Division of Administrative Hearings (Electronic Mail) Francis Jerome Shea, Esquire Counsel for Respondent 644 Cesery Boulevard, Suite 250 Jacksonville, Florida 32208 (U.S. Mail) NOTICE OF FLORIDA LAW 408.804 License required; display.-- (1) It is unlawful to provide services that require licensure, or operate or maintain a provider that offers or provides services that require licensure, without first obtaining from the agency a license authorizing the provision of such services or the operation or maintenance of such provider. (2) A license must be displayed in a conspicuous place readily visible to clients who enter at the address that appears on the license and is valid only in the hands of the licensee to whom it is issued and may not be sold, assigned, or otherwise transferred, voluntarily or involuntarily. The license is valid only for the licensee, provider, and location for which the license is issued. 408.812 Unlicensed activity. -- (1) A person or entity may not offer or advertise services that require licensure as defined by this part, authorizing statutes, or applicable rules to the public without obtaining a valid license from the agency. A licenseholder may not advertise or hold out to the public that he or she holds a license for other than that for which he or she actually holds the license. (2) The operation or maintenance of an unlicensed provider or the performance of any services that require licensure without proper licensure is a violation of this part and authorizing statutes. Unlicensed activity constitutes harm that materially affects the health, safety, and welfare of clients. The agency or any state attorney may, in addition to other remedies provided in this part, bring an action for an injunction to restrain such violation, or to enjoin the future operation or maintenance of the unlicensed 3 provider or the performance of any services in violation of this part and authorizing statutes, until compliance with this part, authorizing statutes, and agency rules has been demonstrated to the satisfaction of the agency. (3) It is unlawful for any person or entity to own, operate, or maintain an unlicensed provider. If after receiving notification from the agency, such person or entity fails to cease operation and apply for a license under this part and authorizing statutes, the person or entity shall be subject to penalties as prescribed by authorizing statutes and applicable rules. Each day of continued operation is a separate offense. (4) Any person or entity that fails to cease operation after agency notification may be fined $1,000 for each day of noncompliance. (5) When a controlling interest or licensee has an interest in more than one provider and fails to license a provider rendering services that require licensure, the agency may revoke all licenses and impose actions under s. 408.814 and a fine of $1,000 per day, unless otherwise specified by authorizing statutes, against each licensee until such time as the appropriate license is obtained for the unlicensed operation. (6) In addition to granting injunctive relief pursuant to subsection (2), if the agency determines that a person or entity is operating or maintaining a provider without obtaining a license and determines that a condition exists that poses a threat to the health, safety, or welfare of a client of the provider, the person or entity is subject to the same actions and fines imposed against a licensee as specified in this part, authorizing statutes, and agency rules. (7) Any person aware of the operation of an unlicensed provider must report that provider to the agency.
