Findings Of Fact Petitioner is an employee of the State of Florida, and was at all times pertinent, a member of the State Group Health Insurance Program administered by Blue Cross and Blue Shield of Florida, Inc. In March of 1984, Petitioner was hospitalized due to severe indigestion and abdominal pain. Petitioner was discharged from the hospital and informed by his physician that if his condition worsened, surgery would be necessary. Petitioner's condition worsened and on May 28, 1984, his physician, R. Klein Bowen, M.D., admitted him to the hospital with a pre-operative diagnosis of chronic acalculus cholecystitis which is chronic inflammation of the gallbladder. On May 29, 1984, said physician operated upon petitioner and his operative report listed the following under the title "Operation": Cholescystectomy. Attempted operative cholangiogram. Incidental appendectomy. The description of the operative procedure stated in the operative report (Respondent's Exhibit 1) establishes that the appendectomy which was performed was accomplished through the same incision which was made for performing the cholescystectomy (gallbladder removal). The operative report stated that the appendix was not acutely inflamed. Subsequent to the operative procedures the Petitioner filed a claim with the State Group Health Insurance Plan administrator, seeking payment for the following charges: May 28, 1984, $90.00 for consultation and case history preparation prior to surgery; May 29, 1984, $1,350.00 Cholescystectomy; May 29, 1984, $375.00 Appendectomy. All of said services were performed by R. Klein Bowen, M.D. The State Group Health Self-Insurance Plan paid the charge for the cholescystectomy and denied the claims for consultation and case history preparation prior to the surgery and for the appendectomy. The State Self- Insurance Plan justified its denial of Petitioner's claim for the above benefits based upon limitations it alleged were contained in the State of Florida Employees' Group Health Self-Insurance Plan Benefit Document (Respondent's Exhibit 2). Section VIII entitled "Limitations" in paragraph I. specifies that payment may be made for in-patient medical care physician visits in addition to payment for surgery only when the condition which required medical care is not related to the surgery and does not constitute a part of the pre-operative or post-operative care. Additionally, Section VIII, F. specifies that no additional payment shall be made for a surgical procedure which is an incidental procedure performed through the same incision. Petitioner did not dispute the provisions which Respondent alleged were limitations justifying denial of payment, although he asserted that the provisions contained within the Group Health Self-Insurance Plan Benefit Document were not cost effective and would result in additional expenses and lost time from work and were worthy of reconsideration. However, Petitioner did not present any competent evidence to support his claim or refute the limitations relied upon by Respondent.
Recommendation Based on the foregoing, it is RECOMMENDED that Respondent enter a Final Order denying the Petition. DONE and ENTERED this 14th day of May, 1985, in Tallahassee, Florida. R. T. CARPENTER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of May, 1985. COPIES FURNISHED: Gerald B. Richardson 2909-198 South Semoran Boulevard Orlando, Florida 32822 Richard L. Kopel, Esquire Deputy General Counsel Department of Administration 435 Carlton Building Tallahassee, Florida 32301 Gilda Lambert, Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32301
The Issue Whether Respondents, by refusing to allow consumers to cancel their individual health insurance policies subsequent to the "free-look" period and thereby failing to refund premiums paid, engaged in conduct violative of Subsection 627.6043, Florida Statutes.
Findings Of Fact The parties stipulated that the Petitioner has jurisdiction over Respondents, National States and Penn Treaty, during times material. On June 24, 1993, Petitioner filed a five count administrative complaint against National States alleging that 20 consumers had purchased various types of health insurance policies and that such policy holders requested cancellation of those policies before the expiration date of their policy. The policy holders prepaid the premiums on such policies. National States refused to honor those requests for cancellation and did not refund the unearned premiums remaining on those policies. National States, by its assistant vice president, William O'Connor, advised those policy holders that they were not entitled to cancellation after the "free-look" period and therefore refused to refund any unearned premiums. Policy holders who were denied premium refunds include the following: Alexandrine Austin, Henry M. and Mary Lou Butler, Madeline Goding, William O. and Rowena Haisten, Sebastian N. and Jane E. Imme, Teresa Karl, John F. Killinger, J. Robert Merriman, Nell I. Mooney, Ralph Motta, Kathryn Patterson, Alene R. Smith, and Bernadine Weiss. On June 17, 1993, Petitioner filed a three count administrative complaint against Penn Treaty alleging that certain consumers had purchased various health insurance policies, that the policy holders requested cancellation of those policies prior to the expiration and Penn Treaty refused to honor those requests for cancellation and to refund any unearned premium remaining. Penn Treaty advised those policy holders, by letter, that they could not cancel their policies after the "free-look" period. The policy holders who were denied cancellation and/or a refund by Penn Treaty were Adelbert Gronvold, George and Marie Hutnyak and George F. and Elizabeth M. MacVicar. Health insurance policies do not contain a provision granting the policy holder the right to cancel. Ms. Kitterman, a former employee of Petitioner who has reviewed health insurance policies for over sixteen (16) years, was familiar with such policy forms. She has not seen a provision in an individual health insurance policy which specifically granted an insured the right to cancel a policy midterm. Dr. Solomon, an expert with extensive knowledge concerning health insurance policy provisions or the absence thereof, opined that health insurance policies do not contain a provision dealing with the ability or the right of the insured to cancel or not to cancel their health insurance policy. Finally, Ms. Andrews, the assistant bureau chief of life and health forms for approximately eight (8) years, has also personally reviewed health insurance policy forms. Ms. Andrews supervised the insurance analysts who reviewed such forms and corroborate the testimony of Kitterman and Solomon that such policy forms do not contain a provision addressing the insured's right to cancel. Petitioner has never required an individual health policy form to contain a provision regarding an insured's right to cancel. Although Petitioner does not require such a provision, it does insist that companies refund unearned premiums once an insured files a request to cancel pursuant to Section 627.6043, Florida Statutes. A discussion of the "free-look" period is contained in Rule 4-154.003, Florida Administrative Code, entitled "Insured's Right to Return Policy; Notice". That rule states: It is the opinion of the insurance commissioner that it will be in the public interest and of benefit to all if the person to whom the policy is issued has the opportunity to return the policy if he is not satisfied with it, provided such return is made within a reasonable length of time after receipt of the policy; therefore, each and every company issuing for delivery a disability policy in this state is requested to have printed or stamped thereon, or attached thereto a notice in a prominent place stating in substance that the person to whom the policy or contract is issued shall be permitted to return the policy or contract within ten (10) days of its delivery to said purchaser and to have the premium paid refunded if, after examination of the policy or contract, the purchaser is not satisfied with it for any reason. The notice may provide that if the insured or purchaser pursuant to such notice returns the policy or contract to the insurer at its home office or branch office or to the agent through whom it was purchased, it shall be void from the beginning and the parties shall be in the same position as if no policy or contract had been issued. This rule shall not apply to either single premium non-renewal policies or contracts or travel accident policies or contracts. Notices in this Rule 4-154.003 and in Rule 4.154.001 may be combined. (emphasis added) Thus, if a policy is returned during the "free look" period, the company is required to return the entire premium paid. The "free-look" period allows the consumer an opportunity to review the contract for the designated period of time. It allows them to make sure that it was the type of contract they intended to purchase and to review the application that was submitted to the company to verify that the information on it is correct. "Guaranteed renewable" is defined in Rule 4-154.004, Florida Administrative Code, titled "Non-cancellable or non-cancellable and guaranteed renewable policy; Use of Terms." That rule states: The terms "non-cancellable" or "non-cancellable and guaranteed renewable" may be used only in a policy which the insured has the right to continue in force by the timely payment of premiums set forth in the policy until at least age 50, or in the case of a policy issued after age 44, for at least five years from its date of issue, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force. Except as provided above, the term "guaranteed renewable" may be used only in a policy in which the insured has the right to continue in force by the timely payment of premiums until at least age 50, or in the case of a policy issued after age 44, for at least five years from its date of issue, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force, except that the insurer may make changes in premium rates by classes. The foregoing limitation on use of the term "non-cancellable" shall also apply to any synonymous term such as "not cancellable" and the limitation on use of the term "guaranteed renewable" shall also apply to any synonymous term such as "guaranteed continuable". Nothing herein contained is intended to restrict the development of policies having other guarantees of renewability, or to prevent the accurate description of their terms of renewability or the classification of such policies as guaranteed renewable or non-cancellable for any period during which there may be actually be such, provided the terms used to describe them in policy contracts and advertising are not such as may readily be confused with the above terms. Thus, the term "guaranteed renewable" as defined by Petitioner's rule notably does not contain any prohibitions against an insured's ability to cancel. Both Dr. Solomon and National States expert, E. Paul Barnhart, agreed that the industry meaning of "guaranteed renewable" is that companies guarantee renewability of a health or accident policy but do not guarantee that the rate will remain constant. Guaranteed renewable policies may be cancelled by the company only for nonpayment of premium or for false statements made by the insured in the application. Guaranteed renewable policies can also be cancelled by the company at the terminal point which, for most of National States policy holders, is when the insured dies but, in a few cases, at age 65. Whether a policy is marketed by the company as "guaranteed renewable" is a business decision made by the insurer generally to meet competition. Thus, the insurer, in making the decision to market an insurance policy as guaranteed renewable, waives any right that might otherwise be available to the insurer to cancel or non-renew except those authorized by statute which are, as noted, nonpayment of premium and material misrepresentation. Nowhere in any of the expert's opinions or Petitioner's witnesses is the term guaranteed renewable construed to mean that an insured has also waived the right to cancel a health insurance policy. All health insurance policies are cancellable by the insurer unless the company has chosen to market the policy as non-cancellable or guaranteed renewable which, as noted, may be only cancelled for nonpayment of premium and material misrepresentation. Dr. Solomon's opinion is based on the equitable theory that an insurance company, when it writes a health policy, does not immediately earn all of the premium collected, and the insured is therefore entitled to the unearned premium if he cancels midterm. Mr. Barnhart confirmed that a premium is not totally earned the moment it is collected but that "it's earned over the period of time for which the premium has been paid . . . if someone pays an annual premium, say on July 1, 1993, that annual premium would become earned at a steady rate over the year that follows and become fully earned as of June 30, 1994." When a premium is received for health and accident policies, the company will establish an unearned premium reserve, which is a basic reserve set up as a result of the payment of premiums and represents, at any given point in time, that portion of the premium that remains unearned. Insurance companies are required by law to maintain unearned premium reserves because they have not earned the premium. Unearned premium reserve is typically a section in the balance sheet of a company that is reserved for that purpose of paying back premiums that are not earned, or holding premiums in that account, as a segregated item, until such time as they are earned. Refunds of premiums are made on the basis of either a short-rate or a pro-rata table. Short-rate refunds are for the purpose of returning a portion of the insured's premium in the event that the insured elects to cancel midterm. The insured is penalized for cancelling the policy midterm under the short-term rate table by absorbing some of the company's expenses of underwriting the policy and administrative costs. That is, if the insured cancels an annual policy within one month after which an annual premium has been paid, the insured will receive less than 11/12ths of the advance premium. Pro-rata refunds mean equal distribution which is the refund procedure used when the insurer makes the decision to cancel. Thus, if the insurer cancels an insured's policy that is so cancellable by the insurer in the annual policy example, the insurer would be liable to make a pro-rata refund of premium to the insured which will be 11/12ths of the premium paid. Thus, an insured is not penalized when it is the insurer who exercises its right to cancel any policies which are so cancellable by the insurer. Section 627.6043(2), Florida Statutes, states: In the event of a cancellation, the insurer will return promptly the unearned portion of any premium paid. If the insured cancels, the earned premium shall be computed by the use of the short- rate table last filed with the state official having supervision of insurance with the state where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro-rata. Cancellation shall be without prejudice to any claim originating prior to the effective date of cancellation. (emphasis added) Ellen Andrews, the Department's former assistant bureau chief for life and health insurance forms several years prior to 1989, and in 1989 when the statute at issue was initially rewritten by the Legislature and as it is currently written, was familiar with the development of Petitioner's position as the statute went through renumberings in 1990 and 1992. It was part of Ms. Andrews' duties and responsibilities to assist Petitioner in the interpretation of that statute. It was her ultimate responsibility to be in charge of implementation of that statute. Petitioner's initial interpretation has remained unchanged since the statute was initially reworded in 1989 and moved to its various sections of part 6 of Chapter 627, Florida Statutes. The Department's opinion and decision on the meaning of what is currently Section 627.6043(2), Florida Statutes, is that if the insured cancels a policy midterm, the insured would be entitled to a return of premium pursuant to the short-rate table if one was filed with the Department. The Department further interprets the statute to mean that the insurer has a right to cancel, unless the insurer has waived that right by selling a guaranteed renewable or non-cancellable policy and if an insurer exercises that right, the insurer must make a refund to the insured on a pro-rata basis. Petitioner's position is based on the statutory provision that the insured shall receive a return of premium if the insured cancels and that if the insured didn't have a right to cancel, then the insured wouldn't have a right to receive a refund of premium. In 1989, Petitioner took the initiative to obtain statutory authority for its position by submitting a proposed draft to the Legislature revising the statute in order to provide insureds, by statute, the right to receive a return of the unearned premium upon notifying the insurer of their decision to cancel the individual health insurance policies. Mr. Barnhart verified that there would be no claims incurred once a policy ceases to be in force; that National States refund a portion of the premium when a policy is rescinded or terminated and that National States refunds unearned premiums when an insured dies midterm of the policy period whether required by statute or not. Penn Treaty refunds unearned premiums upon death and has a provision in its individual health and accidental insurance policies which provides that the insured shall receive a refund of unearned premiums upon death. From an actuarial perspective, there is no difference between either death or cancellation in midterm of a policy period by an insured. Penn Treaty sells, in Florida, long term care, home health care and medicare supplement insurance policies. National States generally sells guaranteed renewable policies in Florida. National States' position is that health and accident policies are not cancellable by the insured in Florida and that only medicare supplement policies are cancellable by the insured because there is a provision in the policy that allows an insured to cancel and because there is statutory authority for the insured to cancel that policy. Its position is that Section 627.6043, Florida Statutes, does not provide for cancellation by the insured. However, National States allows that the statutes regarding cancellation under the medicare supplement law, Section 627.6741(4), Florida Statutes, mandates refunds to insureds who request cancellation of their medicare supplement policies. National States allow cancellations by insureds and refunds unearned premiums on health insurance policies in those other states which have statutes requiring such refunds. Likewise, Penn Treaty's position is that home health care and long term care policies are not cancellable by the insured because there is no provision in the contract to allow cancellation and because they are guaranteed renewable policies. Its position also is that the insured does not have the right to cancel, either contractually or statutorily. Respondents relied on legal opinions from their counsel (in Florida) and an opinion from Petitioner dated June 12, 1991 to deny refunds. Florida law addressing an insured's right to cancel a medicare supplement policy is at Section 627.6741(4), Florida Statutes. That section provides, in pertinent part, that: If a policy is cancelled, the insurer must return promptly the unearned portion of any premium paid. If the insured cancels the policy, the earned premium shall be computed by the use of the short-rate table last filed with the state official having supervision of insurance in the state where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro-rata. Cancellation shall be without prejudice to any claim originating prior to the effective date of the cancellation period. (emphasis added) The above statute is the only Florida law which addresses an insured's right to cancel his medicare supplement policy. Florida law requires that medicare supplement policies be guaranteed renewable. That law is found at Section 627.6741(2)(a), Florida Statutes, which provides: For both individual and group medicare supplement policies: an insurer shall neither cancel nor non-renew a medicare supplement policy or certificate for any reason other than non payment of premium or material misrepresentation. Respondents' position is that in Florida, insureds who purchase their policies are elderly and are easily led. If allowed to cancel, Respondents contend that they would lose out on a number of protections that they would be entitled to if they were required to keep their policies.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: Petitioner enter a final order requiring Respondents to make refunds of premiums to all policy holders who request the cancellation of their health insurance policies after October 1, 1989, with 12 percent interest from the date cancellation was requested and further that Respondents' certificates of authority be placed on suspension for a period of twelve (12) months. It is further recommended that the suspension be suspended upon Respondents, payment of the unearned premiums to the above-referenced consumers. 1/ DONE AND ENTERED this 1st day of March, 1995, in Tallahassee, Florida. JAMES E. BRADWELL 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 1st day of March, 1995.
The Issue The issue for consideration in this hearing was whether Petitioner was entitled to insurance coverage reimbursement for items claimed as a result of his son's hospitalization at a specialty hospital in April, 1989.
Findings Of Fact At all times pertinent to the issues herein, Petitioner, Claud E. Leiby, was employed by the State of Florida and was a member of the State Group Health Self Insurance Plan. The State of Florida, Department of Administration, Division of State Employees' Insurance, is the state agency responsible for administering the Group Health Self Insurance Plan in Florida. On April 5, 1989, Petitioner's son, Floyd (Chris), attempted to take his own life. Chris is hearing impaired. He is a 22 year old who was, at the time, six months away from earning his Bachelor of Science degree in Computer Engineering Technology at Tampa Technical Institute. Prior to this suicide attempt in April, 1989, Chris had been seen by a psychologist who referred him to a psychiatrist. Chris had previously been seen by a psychiatrist for a drug abuse problem several years before. Approximately two years ago, Chris was admitted to Palms Hospital in Sarasota, an institution covered by the insurance plan in issue. At that time, the hospital represented it would provide an interpreter for the deaf and those other specialized personnel necessary for appropriate treatment of a hearing impaired individual. However, after several days of treatment which were singularly non-beneficial because of the fact that no interpreter was provided and Chris could not lip read, the treatment was terminated and Chris was discharged. The Leibys felt, based on that experience, that appropriate service could or would not be provided at a facility covered by the plan, and as a result, when Chris attempted to take his life on April 5, 1989, did not even attempt to hospitalize him in either of the covered facilities in Sarasota County, Sarasota Palms Hospital or Sarasota Memorial Hospital. Instead, they had him admitted to Horizon Hospital in Sarasota, a psychiatric specialty hospital which is the only hospital in the area providing a program for the psychiatric treatment of the hearing impaired even though they had been advised such treatment would not be covered. Their conclusion as to the lack of availability of other qualified treatment may not have been accurate, however. Dr. Curran, director of mental health services at Memorial indicated that facility could and would provide adequate treatment for the hearing impaired. This is inconsistent with the Petitioner's prior experience. The Leibys felt that due to the suicidal attempt, the situation constituted an immediate crisis. However, after several days of Chris' hospitalization at Horizon, they were advised that their coverage under the state plan would not cover the incurred expenses at that facility. The Plan administrator indicated the Petitioners were not covered because of the terms of the plan which exclude services and supplies provided by a specialty institution. Further, the Division took the position that since Chris attempted to take his own life, and since the plan excludes coverage for services and supplies resulting from an intentional self-inflicted injury, it was "unlikely" reimbursement would be made even if Chris had been admitted to one of the eligible hospitals. Petitioner claims that the Division's interpretation of the rule and the plan provisions constitutes a form of discrimination against the handicapped which is prohibited by federal and state law. After Chris was discharged from Horizon Hospital, he had another episode while at work and was taken to a medical facility in St. Petersburg. After four days, he was released and taken to see Dr. Douglas R. Elliott, a psychiatrist, who was unable to treat him successfully without the services of an interpreter. Dr. Elliott indicated that Ms. Leiby, who acted as an interpreter on the first session, could not continue to act in that capacity, considering the issues that needed to be addressed. In the doctor's opinion, the treatment Chris received at Horizon was both necessary and beneficial. The Plan brochure provided to state employees contains numerous provisions pertinent to this hearing. On Page 3, the definition of a hospital specifically includes a "specialty institution" and at page 9, the section on Limitations (on coverage) indicates, "Payment for inpatient services rendered by a hospital and/or specialty institution while confined for alcoholism or drug addiction, and/or rendered by a hospital while confined for alcohol or drug addiction or mental or nervous conditions, shall be made for not more than thirty-one (31) days of confinement during a calendar year. Specialty institutions are, in the Summary of Benefits section found on Page 6, identified as being permitted for alcohol/drug impaired employees only. In the Exclusions portion, found on pages 11 and 12, services and supplies provided by a specialty institution or residential facility (with the exception of the alcohol/drug treatment for employees) are excluded as are services and supplies provided by a skilled nursing facility for the treatment of an insured for alcoholism, drug addiction, (other than for employees), or mental or nervous conditions. The Plan Benefit Document itself, which was not previously provided to Petitioner, at page 24, defines a "specialty institution" as a "licensed facility providing an inpatient rehabilitation program for the treatment of persons suffering from alcohol or drug abuse or mental or nervous conditions." At Section VII L, dealing with Exclusions, "...services and supplies provided by a specialty institution, except as provided under Section II G, (treatment relating to alcoholism or drug addiction for the employee only), are excluded from coverage." The Division has defined these terms as meaning, in substance, that a specialty institution is specifically excluded except when a covered employee asks approval for entry into such an institution for alcohol or drug addiction. Otherwise, they have been excluded since implementation of the plan in 1972, because of cost. If these institutions were to be included, the additional costs would, according to Mr. Seaton, mean premium rates to the participants would have to be increased. The benefit document, as it exists, was constructed with the assistance of Blue Cross/Blue Shield and other consultants. It was the intent of the Department to provide services that a majority of the employees and their families need. To change the benefit document requires legislative approval. The plan is not intended to deny coverage to the handicapped. An "appropriate" service was available to Chris at the time of his admission to Horizon Hospital in April, 1989 under the state plan. Further, in Mr. Seaton's opinion, since the injury was self-inflicted, even if Chris had been admitted to an eligible hospital, coverage would not have been available. This latter position is unsupportable as an improper interpretation of the relevant provision. To insure cost reimbursement, Petitioner would have had to have a physician admit Chris to an acute care hospital such as Palms or Memorial, and in that case, according to Seaton, the state would have allowed up to 31 days of inpatient service. Seaton indicates that Section 504 of The Rehabilitation Act of 1973, was not considered in determining benefits to be covered. In his opinion, the "majority of employee needs" were covered and handicapped employees are covered to the same degree as non-handicapped employees. Family coverage for an employee does not include provisions to cover special needs of family members. Since treatment for handicapped is covered as a matter of course, no need was seen to make specific provision for handicapped individuals. The limitations, exclusions, or benefits provided are the same for all members and are provided to the handicapped to the same extent as to the non-handicapped. When asked if the patient had been initially admitted to a general hospital and thereafter referred to a specialty hospital as a matter of appropriate medical treatment by a covered provider, would that specialty admission be covered, Mr. Seaton replied, "absolutely not."
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that the Petition for reimbursement for Chris' hospitalization at Horizon Hospital be denied. RECOMMENDED this 24th day of October, 1989, in Tallahassee, Florida. ARNOLD H. POLLOCK, 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 24th day of October, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-4186 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes on all of the Proposed Findings of Fact submitted by the parties to this case. None submitted by Petitioner: For the Respondent: 1.-5. Accepted and incorporated herein. 6.-7. Accepted and incorporated herein. Accepted. Accepted. Petitioner submitted the hospital bill subsequent to the hearing and after both parties had rested. Respondent moved to strike this evidence but the motion was denied. The amount of the hospital bill is now known, but in light of the Findings and Conclusions is not relevant. Accepted and incorporated herein. Accepted and incorporated herein. Accepted except for last sentence. Petitioner's opinion is based on prior experience. Accepted. This is opinion only. Not a Finding of Fact but a restatement of testimony. The substance of the testimony is accepted, however. Accepted and incorporated herein. 16.-18. Accepted and incorporated herein. 19. Accepted as to lack of discrimination. COPIES FURNISHED: Claude E. Leiby 321 East Lake Drive Sarasota, Florida 34232 Augustus D. Aikens, Jr., Esquire Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 A. J. McMullian, III Interim Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
Findings Of Fact The Parties The School Board of Broward County, Florida is responsible for, among many other things, the purchase of group health insurance for school system employees. The Broward County School System is the second largest in Florida and the seventh largest in the United States with 21,033 eligible employees. PCA, HIP, and Humana are large managed care companies providing a wide range of health care services to the public. Each proposer submitted proposals in response to the RFP. PCA's proposal was subdivided into PCA Basic (which was designed to generally match the current benefit plan) and PCA Enhanced (which was designed to exceed the current benefit plan). HIP and Humana are interested parties, entitled to intervene, because they were jointly awarded the health insurance contract by the Board, subject to PCA's protest. The Insurance Consultant The Board retained the services of Siver Insurance Management Consultants ("Siver"), an independent insurance management consulting firm, to aid it and the Insurance Committee with this RFP and other matters. Siver is a group of professionals who provide advice and counsel to both public and private sector clients. The majority of its public sector work involves assisting governmental entities in purchasing their insurance programs. Siver was not retained to score the proposals or to provide a recommendation to the Insurance Committee or the School Board as to which proposal should be chosen. At one of the early Insurance Committee meetings, Siver made a presentation entitled "Insurance 101" to inform the Committee members about group health insurance and to advise them about the criteria that could be used in the evaluation process. The RFP On April 11, 1995 the Board issued an RFP to solicit bids for its group health program, covering eligible employees of the Broward County School System. It sought proposals on one or more of the following managed care organizations, with each organization to be evaluated on its own merit (standing alone): Health Maintenance Organization (HMO) Point-of-Service Health Maintenance Organization (POSHMO) Preferred Provider Organization (PPO) The contract was to begin January 1, 1996 and run through January 1, 2000 (4 years). The RFP set forth, in general terms, the criteria that would be used to evaluate the proposals. Under the category "Evaluation Criteria and Selection Factors", the RFP provided that out of a total of 100 points, 0 to 45 points would be allocated to projected costs and rate guarantees, 0 to 45 points would be allocated based upon the extent to which the proposers were "willing and able to provide products and services as specified in the RFP", and 0 to 10 points would be allocated for the extent to which minorities and women were to participate in the providing of services. The criteria in the RFP were further broken down for the "willing and able" and M/WBE categories. In the willing and able category (45 points maximum) the major factors which may be considered were stated to be: The degree of relevant experience of the proposer with respect to comparable clients in Florida; the degree to which the proposer matched current plan provisions, coverages and services required by the RFP; the degree to which the proposer exceeded the current plan provisions, coverages, and services required; and the capability of the network to provide proposed care and services. The M/WBE category (10 points maximum) was further broken down as follows: (a) The degree to which minorities and women participate in the services to be performed and (b) the estimated amount of remuneration to qualified M/WBE's. The M/WBE criteria also provided: A greater amount of evaluation credit will be given to Proposers with a Broward County office(s) whose employee composition by ethnicity and gender reflects the Broward County population as defined by the 1990 census. Less evaluation credit will be given to Proposers with administrative office(s) located outside Broward County and/or whose office(s) do not have the employee composition by ethnicity and gender that reflects the Broward County population as defined by the 1990 census. The RFP specifically provided that Proposers could protest the contents of the RFP within 72 hours of its receipt. Neither PCA, nor any other Proposer, filed a protest to the contents of the RFP. Specifically, PCA did not protest the School Board's express intention, set forth in Section II, pages 7-8 of the RFP, to use the ratio of minority and women business enterprises as one of the criteria to rate the proposals. The Insurance Committee The RFP was developed by an Insurance Committee of fourteen individuals chosen by the Superintendent of the School Board. The Insurance Committee was charged with responsibility for evaluating the various proposals submitted in response to the RFP and making a recommendation to the Superintendent. The fourteen Insurance Committee members, and their respective backgrounds, were as follows: Ray Adkins Executive Director Confidential Office Personnel Association Walter Browne Executive Director Federation of Public Employees James Flynn Executive Director Support Services Personnel Association Anthony Gentile President, Broward County Teachers Association Judith Hunt Director of Risk Management and Safety for the Broward County School Board Nona L. Jones Local Businesswoman with background in risk management George Latimer Chief Finance Officer, Broward County School Board Lisa Maxwell Executive Director, Broward County Principals Association Robert Parks School Board Member Professor, Nova Southeastern University William Read Retired Businessman Former Benefits Manager, Chrysler Motor Corporation Mark S. Seigle Associate Superintendent for Personnel of the Broward County School Board Richard Thomas Director of Benefits, Broward County School Board Patricia Thompson President, Broward County Paraprofessional Association Lois Wexler School Board Member Of the 14 Insurance Committee members, two were School Board members, four were high ranking employees of the School Board, six were representatives of various employee unions and associations, and two were from the Broward business community. Each of the Insurance Committee members was furnished with, among other things, a copy of each of the proposals submitted in response to the RFP. These copies comprised several boxes full of documents. The Insurance Committee met a total of 11 times, beginning on February 17, 1995 and ending on July 17, 1995. Each meeting lasted between 3 and 10 hours. All the meetings of the Insurance Committee were publicly held "in the Sunshine." The Committee Evaluation Process The intention of the Insurance Committee in evaluating the proposals was to design evaluation criteria that afforded maximum discretion. There was no intention of making the Insurance Committee a "mathematical scoring machine." Based on consultations with Siver, and through its various meetings, the Insurance Committee adopted a scoring matrix to use in evaluating the various proposals. The scores were divided, as required by the RFP, into three categories: Ready, Willing and Able ("RWA"), Price, andMinority/Women Business Enterprise ("M/WBE"). The maximum scores for each category were as follows: Price 45 Ready and Willing 45 M/WBE 10 TOTAL: 100 Points The RWA category was subdivided into twelve separate criteria. The M/WBE category was subdivided into two separate criteria. The Insurance Committee thus ranked the proposals using a total of 14 separate criteria. Ultimately, the willing and able category was broken down into the following 12 "detailed categories": The number of products offered (1,2 or 3); whether the proposal matched current plan benefits or model; whether the proposal exceeds current benefits or model; allocation of premium dollars to medical services/claims; whether the proposal exceeded, equalled or provided less than the current level of mental health and substance abuse benefits; wellness program (level of services to be provided); credentials for managed care products; the extent to which the proposal exceeded, equalled, or provided less than the current provider of managed care services; the ratio of board certified providers to total network providers; comply with requested services set forth in the RFP; agree to service standards set forth in the RFP; and overall experience, specifically in Florida. The Insurance Committee then allocated maximum points to each of the 12 "detailed categories" according to their importance. The total of the points added up to 45. The Insurance Committee created a scoring grid containing the "detailed criteria", listing the detailed criteria and maximum points to be awarded in each category on the left side of the document, along with the 12 separate proposers across the page from left to right, leaving space to score each proposer in each criterion. In assigning points to the various criteria, it was the intention of the Insurance Committee members to allow for scoring anywhere along the range of assigned points. As noted in an early draft of the scoring matrix: "Maximum Suggested Points means that points may be awarded up to the stated maximum for each criteria." As a general rule, when establishing criteria for the evaluation of competing proposals for the furnishing of services it is best to try to avoid or minimize the use of subjective criteria. However, with regard to proposals of the type involved in this case, it is difficult to make meaningful comparisons on a purely objective basis and a certain amount of subjectivity is unavoidable. Honest mistakes are to be expected in a committee evaluation of competing proposals. Although a number of the criteria adopted by the Committe in this case were largely subjective, all of the criteria were relevant to a reasonable comparison of competing proposals. The consultant for the Board, Siver, prepared an analysis and comparative study of the various proposals to assist the Insurance Committee in scoring the proposals. The Proposal Analysis consisted of a breakdown and comparison of those features in each proposal which were relevant to each of the 12 RWA criteria established by the Insurance Committee. It listed each of the criteria individually and then outlined how each proposer complied or did not comply with the criteria. The analysis provided a quick reference for Insurance Committee members to use during their evaluation of the proposals, particularly given the number and size of the proposals. Each of the Insurance Committee members was provided a copy of the Siver analysis. Siver's Proposal Analysis was limited to the price/cost and "willing and able" categories. The Board utilized the resources of its own staff to assemble and compare information contained in the proposals with respect to the M/WBE category. Ultimately, the Committee decided to break down the M/WBE category into two sub-categories, to wit: workforce environment and M/WBE participation. It also decided that the workforce environment category would count for 3 points, and the M/WBE participation category for 7 total points. Shelia Dudley, the M/WBE coordinator for the Board supplied Insurance Committee members with several proposal analyses. The first was a document analyzing the percentage of minority and women employees in the proposers' regional, local, and corporate offices. The second was a proposal analysis of the extent to which the proposers committed to M/WBE participation. The document contained three columns. The first noted the firmness of any contracts with a qualified M/WBE and the dollar commitment, if provided; the second column set forth the form of minority contractor participation, viz: wellness program, printing, copying, etc., and the third column extracted general information from the proposals which might be useful to the analysis. The next document provided a breakdown of minorities/women for "physicians and others", and Dudley indicated that only Humana provided such information. PCA did supply a list of all minority physicians in Broward County with estimated capitation dollars, although without percentages. Lastly, Ms. Dudley provided Insurance Committee members with a document outlining possible evaluation considerations for the workforce environment criteria and the M/WBE participation criteria. There was no evidence in the record that Ms. Dudley's proposed evaluation considerations were ever adopted by the Committee. The July 13, 1995 Scoring The Insurance Committee met on July 13, 1995, to score the various proposals. Prior to the July 13, 1995, Committee meeting, all of the proposers had been given an opportunity to make an oral presentation, to hand out written presentation materials, and to participate in a question and answer session before the Committee voted. In addition, many of the Proposers, including PCA, had previously met individually with most of the Committee members for 20 or 30 minutes. The Committee members had also been lobbied by the various Proposers. Each member of the Insurance Committee scored the proposals for three different group medical products: an HMO product, a PPO product, and a Point of Service HMO product. The Insurance Committee elected not to independently score the price category, but rather to adopt Siver's price rankings based on a formula approved by the Committee. The July 17, 1995, Scoring The Insurance Committee reconvened on July 17, 1995, because Siver, at the request of some of the proposers, asked the Insurance Committee members to re-check some of their scores that in Siver's opinion were objectively verifiable and possibly inconsistent with the scores given by other Committee members. Siver offered its help, but left it to the individual Committee members to decide whether to rescore. Some did; some did not. (The final scores by each Insurance Committee member on each of the criteria are set forth in Petitioner Exhibit 18.) The Insurance Committee's final aggregate scores on HIP's HMO, Humana's HMO, and PCA's two separate HMOs (referred to as "PCA Basic" and "PCA Enhanced") were as follows: 7/17/95 Score HIP HUM PCA PCA Enh RWA 1 3.00 3.00 2.64 2.69 RWA 2 6.93 7.00 6.21 6.77 RWA 3 4.57 3.00 1.57 3.46 RWA 4 3.00 0.79 2.93 2.92 RWA 5 2.36 2.43 1.86 1.92 RWA 6 2.71 2.36 2.36 2.31 RWA 7 3.04 -0.36 0.29 0.23 RWA 8 1.43 2.21 0.93 0.85 RWA 9 2.64 0.14 0.07 0.08 RWA 10 2.57 2.50 1.93 2.00 RWA 11 2.43 2.50 1.79 1.85 RWA 12 2.75 3.57 1.57 1.54 RWA Subtotal 37.43 29.14 24.14 26.62 Cost 40.49 41.29 43.65 40.42 M/WBE 1 2.73 2.89 1.07 1.15 M/WBE 2 6.00 6.43 4.93 5.31 M/WBE Subtotal 8.73 9.32 6.00 6.46 HMO TOTALS: 86.65 79.75 73.79 73.50 The Insurance Committee posted the final scores for all Proposers and each of their products on July 24, 1995. HIP and Humana scored more total points than any other bidders on each of the three products. Accordingly, the Committee recommended that the School Board award the entire RFP, including the HMO contract, jointly to HIP and Humana. September 5, 1995 School Board Meeting On July 27, 1995, PCA filed a Notice of Protest with the Director of Purchasing of the School Board, as required by the RFP. On August 7, 1995, PCA filed a Formal Written Protest with the School Board. PCA's protest challenged the scoring on eight separate criteria: RWA Criteria Nos. 2, 3, 4, 5, 9, 10, and 11, and the M/WBE criteria. On September 5, 1995, the School Board met to consider PCA's protest. The School Board heard argument from PCA's attorney and from Siver. Mr. Marshall, on behalf of Siver, informed the School Board that, although some of the criteria were objectively verifiable, others had been scored on a subjective range. Following Siver's recommendation and its own evaluation of the criteria, the School Board agreed to give PCA the benefit of the doubt and to accept PCA's asserted revised scores on RWA Criteria Nos. 2, 4 and 9 because those criteria were arguably objectively verifiable. The School Board rejected PCA's arguments regarding the other criteria. Even with the School Board's willingness to give PCA the benefit of the doubt on the three criteria mentioned above, the Insurance Committee's July 17th rankings did not change. Consequently, the School Board denied PCA's protest. The revised aggregate scores agreed to by the parties for purposes of the final administrative hearing include the revised scores recommended by Siver and agreed to by the School Board on Criteria Nos. 2, 4, and 9. They are as follows: 9/5/95 Board Rescoring HUM PCA PCA Enh RWA 1 3.00 2.64 2.69 RWA 2 7.00 7.00 7.00 RWA 3 3.00 1.57 3.46 RWA 4 0.43 3.00 3.00 RWA 5 2.43 1.86 1.92 RWA 6 2.36 2.36 2.31 RWA 7 -0.36 0.29 0.23 RWA 8 2.21 0.93 0.85 RWA 9 0.00 0.00 0.00 RWA 10 2.50 1.93 2.00 RWA 11 2.50 1.79 1.85 RWA 12 3.57 1.57 1.54 RWA Subtotal 28.64 24.93 26.85 Cost 41.29 43.65 40.42 M/WBE 1 2.89 1.15 1.15 M/WBE 2 6.43 5.31 5.31 M/WBE Subtotal 9.32 6.46 6.46 HMO TOTALS: 79.25 75.04 73.73 43. On September 12, Hearing. 1995, PCA filed a Petition for Formal Administrative RWA Criterion # 3 Since neither HIP, Humana, nor PCA received a perfect "5" in the aggregate on Criterion #3, the Insurance Committee members obviously viewed the scoring on this criteria as a range from 0 to 5. Criterion #3 was largely subjective and was scorable on a range based upon the Committee members' individual perspectives of the value of the enhancements. There is a reasonable factual basis in the record for the Insurance Committee members to have differentiated along a range between the proposers on this criterion. Because each proposer offered different enhancements, it was a matter of discretion for each Committee member, in his or her own judgment, to rate those enhancements based on their perceived value to the employees of the Broward County School Board. The evidence is insufficient to show that the scoring on this criterion was arbitrary to any material or quantifiable extent. RWA Criterion #5 Since neither HIP, Humana, nor PCA received a perfect "4" in the aggregate on Criterion #5, the Insurance Committee members obviously viewed the scoring on this criteria as a range from 0 to 4. Criterion #5 was highly subjective and scorable on a range. The RFP required at section III, pages 6-8 that each provider's mental health subcontractors should "reflect the racial and ethnic composition of the School Board's employees." The Insurance Committee members could have differentiated along a range between the Proposers on this criteria. Each Proposer offered different mental health and substance abuse packages, and it was therefore a matter of wide discretion for each Committee member, in his or her own judgment, to rate those packages based on their perceived value to the employees of the Broward County School Board. The evidence is insufficient to show that the scoring on this criterion was arbitrary to any material or quantifiable extent. RWA Criterion #10 Since neither HIP, Humana, nor PCA received a perfect "+3" in the aggregate on Criterion #10, the Insurance Committee members obviously viewed the scoring on this criteria as a range from -3 to +3. The Insurance Committee members could have differentiated along a range between the Proposers on this criteria. For example, each Proposer offered a different number of on-site customer service representatives: HIP offered 6 representatives, Humana offered 2, and PCA offered 1. Members of the Insurance Committee could have evaluated Proposers based not just on whether they would, but whether they could, provide the requested services. This inference could be drawn by a Committee member based on the Proposer's references, which demonstrated their prior ability to perform, and the number of years that the Proposer has been a health care provider. The evidence is insufficient to show that the scoring on this criterion was arbitrary to any material or quantifiable extent. RWA Criterion #11 Since neither HIP, Humana, nor PCA received a perfect "+3" in the aggregate on Criterion #11, the Insurance Committee members obviously viewed the scoring on this criteria as a range from -3 to +3. The Insurance Committee members could have differentiated along a range between the Proposers on this criteria. Just as with Criterion #10, the Insurance Committee members could have evaluated Proposers based not just on whether they would, but whether they could, comply with the requested services. The evidence is insufficient to show that the scoring on this criterion was arbitrary to any material or quantifiable extent. The M/WBE Criteria The M/WBE criteria was broken down into two categories: workforce environment and vendor participation. Out of 10 possible points, the Committee decided to allow a maximum of 3 points for workforce environment and 7 points for minority participation. The RFP, however, expressly indicated that Proposers who did not have an administrative office in Broward County would be scored lower than Proposers that did. (See Paragraph 9 of these Findings of Fact.) PCA does not have an administrative office in Broward County. Both HIP and Humana do have administrative offices in Broward County. This information alone was sufficient for the Insurance Committee, in its honest discretion, to score PCA less than HIP and Humana. The M/WBE Participation Proposal Analysis prepared by the School Board's Equal Employment Opportunity Department indicated that Humana anticipated that 48 percent of its primary care physicians would be M/WBEs, that 35 percent of its specialty physicians would be M/WBEs, and that 43.5 percent ($157,783,000) of the total dollars paid to physicians in 1994 were paid to M/WBEs. PCA did not provide a breakdown of the ratio of its M/WBE physicians to the total number of physicians. Instead, PCA indicated that it had about 378 total M/WBE physicians and that the total fees that would be paid to such physicians were estimated to be $853,944. Humana was the only Proposer to provide a breakdown of its physicians by ethnicity and gender. There was other sufficient information available to the Insurance Committee members upon which they could reasonably have scored PCA lower than HIP and Humana in their "honest exercise of discretion." The evidence is insufficient to show that the scoring of the M/WBE criteria was arbitrary to any material or quantifiable extent. Bias PCA did not present any evidence that any of the Insurance Committee members were biased for or against any of the Proposers. A comparison of the scores of the various Insurance Committee members indicate that they were, for the most part, in reasonably good agreement with respect to how they rated HIP, Humana, and PCA on each criteria. There are, however, as mentioned below, a number of scores that appear to be abberations. Some General Observations The evidence in this case is sufficient to show that at least one member of the Insurance Committee made at least some scoring decisions on the basis of arbitrary considerations. The evidence also establishes that another member of the Insurance Committee made all of his material scoring decisions on the basis of appropriate considerations. The evidence does not show the reasoning behind any of the scoring decisions of any of the other twelve members of the Insurance Committee. Accordingly, the evidence is insufficient to establish that any of the scoring decisions of any of the other twelve Committee members was arbitrary. The arbitrary scoring decisions of one member of the Insurance Committee have not been described in detail in these Findings of Fact because the impact of those few scores on the average scores is de minimus. If all of the average scores were to be recalculated to take into account the few arbirary scores that were proved there would be no significant change in the ranking of the parties. There were some scores by some members of the Insurance Committee that, on the record in this case, appear to be what can best be described as unexplained abberations. Because they are unexplained, the evidence is insufficient to establish that these apparent abberations were based on arbitrary considerations. It is possible they were merely honest mistakes. It is possible there is some logical explanation for some or all of the apparent abberations, which explanation is not part of the record in this case because the members who cast those votes were not called as witnesses. Unexplained abberations are an insufficient basis upon which to conclude that a bidding process is arbitrary. Final Rankings According to the July 17, 1995 scores, PCA's best score was 5.96 points lower than Humana's score. Using the September 5, 1995 scores (and thus giving PCA the benefit of the doubt of higher scores on those criteria that were objectively verifiable), PCA's best score is still be 4.21 points lower than Humana's score. Even if the M/WBE scores were not considered, PCA's best score using the September 5, 1995 scoring would be 1.35 points lower than Humana's. Even if PCA were given the full 10 points for the M/WBE criteria, PCA's best score using the September 5, 1995 scoring would still be .67 points lower than Humana's.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the School Board of Broward County issue a final order in this case dismissing the Petition and Formal Protest filed by the Petitioner and denying all relief requested by the Petitioner. DONE and ENTERED this 8th day of December, 1995, at Tallahassee, Leon County, Florida. MICHAEL M. PARRISH 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 8th day of December, 1995. APPENDIX The following are the specific rulings on all proposed findings of fact submitted by all parties. Proposed findings submitted by Petitioner: Paragraphs 1 and 2: Accepted. Paragraph 3: Accepted in substance, but with a large number of argumentative or editorial details omitted. Paragraph 4: First two sentences accepted in substance. The remainder of this paragraph is rejected as subordinate and unnecessary details, or as irrelevant. Paragraph 5: Rejected as consisting primarily of quotations of testimony and of subordinate and unnecessary details. Paragraph 6: Rejected as subordinate and unnecessary details. Paragraphs 7 through 10: Accepted in substance. Paragraph 12: Rejected as subordinate and unnecessary details that are not entirely accurate. Paragraph 13: Accepted in substance. Paragraph 14: Most of this paragraph has been rejected as consisting of subordinate and unnecessary details and of quotations of testimony; portions also rejected as irrelevant. Paragraphs 15 through 21: Accepted in substance, but with some argumentative and editorial language omitted. Paragraph 22: First two sentences accepted in substance. The remainder is rejected as consisting primarily of argument, of summaries of testimony, and of subordinate and unnecessary details. Paragraph 23: Accepted in substance. Paragraph 24: The basic substance of this paragraph has been accepted, but the majority of the details have been omitted as subordinate and unnecessary or as quotations rather than proposed findings of fact. Paragraph 25: Rejected as subordinate and unnecessary details or as irrelevant. Paragraph 26: Rejected as comprised primarily of argument and proposed legal conclusions, rather than proposed findings of fact. Paragraphs 27 through 31: Accepted in substance, but with a number of argumentative, subordinate, and unnecessary details omitted. Paragraph 32: Rejected as comprised primarily of argument and proposed legal conclusions, rather than proposed findings of fact. Paragraph 33: Rejected as comprised primarily of a statement of another party's position, rather than proposed findings of fact. Paragraphs 34 and 35: Rejected as comprised primarily of argument and proposed legal conclusions, rather than proposed findings of fact. Also rejected as irrelevant, inasmuch as the School Board has agreed that PCA should receive full credit on the subject criterion. Paragraph 36: Rejected as irrelevant, inasmuch as the School Board has agreed that PCA should receive full credit on the subject criterion. Paragraph 37: Most of this paragraph has been rejected as being argumentative, as consisting of subordinate and unnecessary details, or as irrelevant. A few facts from this paragraph have been accepted. Paragraph 38: Most of this paragraph has been rejected as subordinate and unnecessary details, or as irrelevant because, even if accepted, evidence of improper voting by one of fourteen members would not be a sufficient basis upon which to conclude that the Petitioner was entitled to any relief. The last sentence of this paragraph has been rejected as too vague to be meaningful and as not fully supported by the persuasive competent substantial evidence. Paragraph 39: Rejected as subordinate and unnecessary details. Paragraphs 40 through 44: Rejected as consisting primarily of argument and legal conclusions, rather than proposed findings of fact. Paragraphs 45 through 58: These paragraphs are, for the most part, rejected for several reasons. They include many subordinate and unnecessary details. They are comprised extensively of argument, much of which argument is predicated on theories which are not persuasive to the Hearing Officer. Paragraph 59: Rejected as subordinate and unnecessary details. Paragraph 60: Rejected as a combination of argument and subordinate and unnecessary details. Paragraphs 61 and 62: These paragraphs are, for the most part, rejected for several reasons. They include many subordinate and unnecessary details. They are comprised extensively of argument, much of which argument is predicated on theories which are not persuasive to the Hearing Officer. Paragraph 63 through 65: First three sentences of paragraph 63 are accepted in substance. The remainder of these three paragraphs is rejected as irrelevant because they deal with an issue not properly raised in this case. Paragraph 66: Rejected as consisting primarily of argument with subordinate and unnecessary details. Paragraph 67: First sentence is accepted in substance. The remainder of this paragraph is rejected as argument. Proposed findings submitted by Respondent: (None submitted; Respondent adopted the findings proposed by Intervenor HIP.) Proposed findings submitted by Intervenor HIP: Paragraphs 1 through 9: Accepted in whole or in substance. Paragraph 10: Rejected as subordinate and unnecessary details not relevant to the disposition of this case. Paragraphs 11 through 40: Accepted in whole or in substance. Paragraphs 41 through 45: These paragraphs consist of descriptions of a party's positions or arguments; they belong more appropriately in the conclusions of law than in the findings of fact. Paragraphs 46 and 47: Rejected as subordinate and unnecessary details. Paragraphs 48 and 49: The form of these paragraphs is rejected as constituting summaries or quotations of testimony, rather than proposed findings of fact. The underlying essence has been accepted in substance. Paragraph 50: Accepted. Paragraphs 51: Accepted in substance. Paragraphs 52 and 53: Rejected as summaries of testimony, rather than proposed findings of fact. Also rejected as subordinate and unnecessary details. Paragraph 54: Accepted in substance. through 54: The form of these paragraphs is rejected as constituting summaries or quotations of testimony, rather than proposed findings of fact. The underlying essence has been accepted in substance. Paragraphs 55 and 56: Rejected as summaries of testimony, rather than proposed findings of fact. Also rejected as subordinate and unnecessary details. Paragraph 57: This paragraph consists of descriptions of a party's positions or arguments; it belongs more appropriately in the conclusions of law than in the findings of fact. Paragraph 58: Rejected as subordinate and unnecessary details. Paragraph 59: Accepted. Paragraphs 60 through 62: Rejected as summaries or quotations of testimony, or as subordinate and unnecessary details. Paragraph 63: Rejected as a statement of a party's position, rather than a finding of fact based on the evidence. Paragraphs 64 and 65: Rejected as summaries or quotations of testimony, or as subordinate and unnecessary details. Paragraph 66: The first sentence of this paragraph is accepted in substance. Most of the details in the several subparagraphs of paragraph 66 are rejected as subordinate and unnecessary details. Paragraph 67: This paragraph consists of descriptions of a party's positions or arguments; it belongs more appropriately in the conclusions of law than in the findings of fact. Paragraphs 68 through 72: Accepted in substance with a large number of subordinate and unnecessary details omitted. Paragraph 73: This paragraph consists of descriptions of a party's positions or arguments; it belongs more appropriately in the conclusions of law than in the findings of fact. Paragraphs 74 through 77: Accepted in substance with a large number of subordinate and unnecessary details omitted. Paragraph 78: This paragraph consists of descriptions of a party's positions or arguments; it belongs more appropriately in the conclusions of law than in the findings of fact. Paragraphs 79 through 81: Accepted in substance with a large number of subordinate and unnecessary details omitted. Paragraph 82: Accepted. Paragraph 83: This paragraph consists of descriptions of a party's positions or arguments; it belongs more appropriately in the conclusions of law than in the findings of fact. Paragraphs 84 through 86: Accepted. Paragraph 87: Rejected as subordinate and unnecessary details. Paragraph 88: Rejected as consisting of a summary of testimony, rather than proposed findings of fact. Also rejected as subordinate and unnecessary details. Paragraph 89: Accepted in substance. Paragraph 90: This paragraph consists of descriptions of a party's positions or arguments; it belongs more appropriately in the conclusions of law than in the findings of fact. Paragraph 91: This paragraph is rejected as consisting primarily of argument about the weight of the evidence, rather than consisting of proposed findings of fact. Paragraphs 92 through 94: Rejected as subordinate and unnecessary details. Paragraphs 95 through 97: Accepted. Paragraph 98: Rejected as subordinate and unnecessary details. Paragraph 99: Accepted. Paragraph 100: First sentence rejected as constituting primarily argument about the weight to be given to the evidence. Second sentence accepted in substance. Paragraph 101: First sentence accepted in substance. Second sentence rejected as subordinate and unnecessary details. Paragraphs 102 through 104: Rejected as subordinate and unnecessary details. Paragraphs 105 through 107: Rejected as irrelevant or as subordinate and unnecessary details. Paragraph 108: Accepted in substance. Paragraphs 109 through 111: Rejected as subordinate and unnecessary details. Paragraphs 112 and 113: Rejected as comprised primarily of arguments, rather than proposed findings of fact. Also rejected as subordinate and unnecessary details. Paragraphs 114 through 117: Accepted. Proposed findings submitted by Intervenor Humana: (None submitted; Intervenor Humana adopted the findings proposed by Intervenor HIP.) COPIES FURNISHED: Andrew S. Berman, Esquire Young, Berkman, Berman & Karpf, P.A. 17071 West Dixie Highway North Miami Beach, Florida 33160 Edward J. Marko, Esquire Marko & Stephany 1401 East Broward Blvd, Ste. 201 Fort Lauderdale, Florida 33301 Robert L. Shevin, Esquire Richard Simring, Esquire Strook & Strook & Lavan 200 South Biscayne Boulevard Suite 3300 Miami, Florida, 33131 W. George Allen, Esquire Allen, Hursey and Lucas 305 South Andrews Avenue Suite 701 Fort Lauderdale, Florida 33302 Gerald M. Cohen, Esquire 300 South Park Road Hollywood, Florida 33021 Holly Skolnick, Esquire Greenberg, Traurig, Hoffman, Lipoff Rosen & Quentel, P.A. 1221 Brickell Avenue Miami, Florida 33131 Dr. Frank R. Petruzielo Superintendent of Schools Broward County School District 600 S. E. Third Avenue Fort Lauderdale, Florida 33301-3125
The Issue The issue is whether Respondent properly denied payment for Petitioner?s lodging at the Hackerman-Patz Pavilion in Baltimore, Maryland, from December 30, 2011, through January 31, 2012, pursuant to the State Employees? PPO Group Health Insurance Plan.
Findings Of Fact At all times relevant to this proceeding, Petitioner was an attorney in the Pinellas County Public Defender?s office and was enrolled as a member of the State Employees? PPO Plan. At the time of the hearing, Petitioner was 36 years old. Petitioner was provided with the State Employees? PPO Plan Group Health Insurance Plan Booklet and Benefits Document (the “Benefits Document”). The version of the Benefits Document entered into the record in this proceeding bore the statement, “Effective January 1, 2012.” Because Petitioner did not dispute that this was the applicable edition of the Benefits Document, it is assumed to be identical in all relevant respects to the version that was in effect during November and December of 2011. DSGI is the state agency responsible for administration of the state group insurance program. Pursuant to statute, DSGI has contracted with Florida Blue to act as its third-party medical claims administrator for employee health insurance benefits. In 2004, Petitioner was diagnosed with acquired aplastic anemia. A variety of treatments were attempted during the intervening years with some success, but Petitioner?s overall condition continued to decline. By 2011, Petitioner was a candidate for a bone marrow transplant. Her siblings were tested and found not to be human leukocyte antigen identical to Petitioner, meaning they were not candidates for the transplant and that Petitioner would require a matched unrelated donor, or MUD, bone marrow transplant. She went to Johns Hopkins in November 2011 to begin the evaluation process and receive the transplant. Her attending physician was Robert A. Brodsky, the Director of Hematology at Johns Hopkins. Two weeks prior to her admission to the hospital, Petitioner came to Johns Hopkins for testing. She was accompanied by her mother. Petitioner was provided with housing options and was given a form titled “Bone Marrow Transplant (BMT) Housing and Caregiver Information” that contained the following information: Housing: The BMT team wants to watch you closely during your transplant care. Depending on your type of transplant, you will spend some, to all of your time, as an outpatient in the IPOP [Inpatient/Outpatient] clinic. Anytime you are an outpatient in the IPOP clinic, you must stay within 30-60 minutes (including traffic) of The Johns Hopkins Hospital. If you do not already live locally, you and your caregiver must arrange local housing during this time. Talk with your BMT Case Manager about when you will need housing. Some insurances cover housing/relocation costs, but many do not. If you need to arrange local housing, call your insurance company as soon as possible and inquire about their housing coverage policy. If your insurance has a case management option you may want to request this to help with housing coverage questions. You can also talk with your BMT Case Manager and the BMT Finance Office about your housing coverage. * * * The Housing Referral Service has information on many housing options. Prices for housing vary depending on location and amenities.... Petitioner testified that after reviewing all the options, she chose the Hackerman-Patz Patient and Family Pavilion (“H-P Pavilion”) as the best and cheapest option. The H-P Pavilion is a facility located on the Johns Hopkins campus within easy walking distance of the hospital and provides short and long-term housing options for patients and their caregivers. The H-P Pavilion?s informational materials state that it “offers gracious, supportive and affordable hospitality in a home-like atmosphere, a welcoming alternative to hotel living when traveling to receive specialized medical treatment.” It is designed specifically to provide housing for cancer patients and their caregivers, and offers suites for $60.00 per night and apartments for $87.00 per night. The H-P Pavilion is not a hotel that offers accommodations to the general public. In order to stay at the H-P Pavilion, one must be a Johns Hopkins patient or a patient?s caregiver. The patient must be receiving treatment at Johns Hopkins for a minimum of three consecutive days, or at least three days a week. The patient must have a 24-hour per day caregiver who has agreed to stay for the duration of treatment. Children under 12 are not permitted to stay overnight In a letter addressed “To Whom It May Concern” and dated November 9, 2011, Dr. Brodsky wrote as follows, in relevant part: This is to document that Ms. Tayna Alexander has specific housing requirements dictated by the Bone Marrow Transplant Program at the Sidney Kimmel Comprehensive Cancer Center. On November 15, 2011, Ms. Alexander will be admitted to start preparatory chemotherapy for her bone marrow transplant. This is done on an inpatient basis. From the day the preparative regimen begins (six days before the transplant), until approximately 6-8 weeks after transplant she will be inpatient. The hospital stay may be longer if complications occur. After discharge from the hospital, Ms. Alexander is required to stay specifically within an hour of the hospital for daily outpatient clinic visits. She should stay in local housing facilities approved by the transplant team which complies with the housekeeping guidelines established by the Transplant Program. Petitioner was admitted to Johns Hopkins on November 15, 2011, and the bone marrow transplant was performed on November 22. Petitioner remained in the hospital until December 30, 2011, her immune system “wiped out,” in the words of Dr. Brodsky. She received immunosuppressive therapy and daily transfusions of red blood cells and platelets. She suffered from persistent nausea and incontinence. She had a renal insufficiency that led her to gain 50 pounds of water weight. Her physicians repeatedly noted that “due to the nature of her disease and therapy, she continues to be at high risk for morbidity and mortality.” Petitioner testified that she was still so sick on December 30, 2011, that she was surprised that the hospital wanted to release her. She stated that she was taking large doses of Ativan for nausea. She was disoriented and in a poor overall mental condition. Her platelet count remained very low. She continued to experience incontinence and vomiting. Petitioner?s father, Michael Alexander, undertook the task of being Petitioner?s 24-hour-a-day caregiver during the outpatient portion of her post-surgical treatment. He took a skilled caregiver class at Johns Hopkins taught by a registered nurse. The class taught Mr. Alexander how to maintain a sterile environment in the living area, how to prepare proper meals for his daughter, how to monitor her vital signs, and how to clean and flush her Hickman line, the central venous catheter used to administer medications. Mr. Alexander testified that about a week before Petitioner?s release, the medical team asked him about going to the H-P Pavilion. The team believed that getting out of the hospital room would speed Petitioner?s recovery. Mr. Alexander stated that the team was “pushing” the idea. Mr. Alexander told the team that he and his daughter would have to think about it, because she was still very sick. Petitioner told her father that she was willing to try it, though he remained skeptical. Petitioner testified that the hospital gave her the option of staying in the hospital or going to the H-P Pavilion or some other nearby accommodation. Both Petitioner and her father testified that the hospital assured them that she could return to the hospital if she was not comfortable in the H-P Pavilion. In a written statement, Mr. Alexander wrote, “Had I known that this would result in an insurance dispute, I would have suggested an easier route to stay in Johns Hopkins inpatient care and just let the insurance company pay 80 times the cost.” Neither DSGI nor Florida Blue disputed that Petitioner?s insurance would have paid for her continued stay in the hospital, had she decided that she was not well enough to cope with outpatient procedures. Billing information submitted into evidence indicated that a bed in Johns Hopkins was priced in excess of $1,500.00 per day, before any other expenses were added on. On December 30, 2011, Petitioner was discharged from Johns Hopkins and moved into an apartment in the H-P Pavilion with her father.2/ Petitioner continued daily outpatient treatments at Johns Hopkins, most days spending several hours receiving blood transfusions. The H-P Pavilion was attached to the hospital via a walkway and was across the street from the IPOP facility. Petitioner and her father walked back and forth between the pavilion and the IPOP facility every day. Mr. Alexander cared for his daughter throughout their stay at the Pavilion. He flushed the Hickman line every two days and checked for infection. He replaced the Hickman line ports every five days and applied a special bandage for the Hickman line to Petitioner?s chest. He maintained a sterile environment in the living area. He prepared the specific foods required for Petitioner?s restricted diet. He monitored her vital signs and body functions and reported those to Petitioner?s medical team. He dispensed and kept logs of the many medications that Petitioner took every day. He assisted Petitioner with all of her activities of daily living, as well as cleaning up her vomit and urine and washing her clothing and bedding. Petitioner and her father stayed in the H-P Pavilion until January 31, 2012. At that point, they returned to Florida and Petitioner resumed treatment with her local doctors. Petitioner?s stay at the H-P Pavilion was billed directly to her. The bill itself is on the letterhead of Johns Hopkins Hospital and lists Petitioner as the “patient.” Petitioner submitted the bill to Florida Blue for reimbursement. When Florida Blue initially denied her reimbursement, Petitioner sought a Level I Appeal pursuant to section 12 of the Benefits Document. By letter dated October 29, 2012, and signed by Kelly Register, a Critical Inquiry Analyst for Florida Blue, Petitioner was informed that Florida Blue “remains unable to approve additional coverage and/or payment for the Non-Covered Services: Housing.” The sole ground cited by Florida Blue for this denial was that page 5-3 of the Benefits Document excludes “personal comfort, hygiene or convenience items,” which expressly include “motel/hotel accommodations.”3/ Petitioner then pursued a Level II Appeal to DSGI. In a letter signed by Division Director Barbara M. Crosier, dated December 12, 2012, DSGI rejected Petitioner?s appeal. The letter stated as follows, in relevant part: While researching this appeal, we reviewed all documentation you provided, including your letter of appeal, the invoice from The Hackerman-Patz Patient and Family Pavilion, and a letter from Dr. Robert Brodsky stating that you were required to stay within one hour from the hospital. We also reviewed the letter of denial BCBSF sent in response to your prior benefit determination request for coverage of housing costs. While we empathize with your situation, the [Benefits Document] effective January 1, 2007, and as amended by the State Employees? PPO Plan Summary of Plan Description Material Modification, effective January 1, 2009,[4/] states on page 5-3 under Exclusions: “Personal Comfort, Hygiene or Convenience Items and services deemed to be not medically necessary and not directly related to your treatment including but not limited to: travel expenses (other than medically necessary ambulance services); motel/hotel accommodations;” Page 15-4 states: “Medically necessary . . . services required to identify or treat the illness, injury, condition, or mental and nervous disorder a doctor has diagnosed or reasonably suspects. The service must be: consistent with the symptom, diagnosis, and treatment of the patient?s condition; in accordance with standards of good medical practice; required for reasons other than convenience of the patient or the doctor; approved by the appropriate medical body or board for the illness or injury in question; and at the most appropriate level of medical supply, service, or care that can be safely provided. The fact that a service is prescribed by a doctor does not necessarily mean that the service is medically necessary. BCBSF and DSGI determine whether a service or supply is medically necessary.” Based upon careful review of the information you provided to us, we find that medical necessity has not been demonstrated or documented. You did not meet criteria for in-patient hospitalization, and housing during outpatient treatment is not covered by your PPO Plan.” “Personal comfort, hygiene or convenience items and services” is undefined in the Benefits Document except by the list of examples provided. This provision of the Benefits Document provides as follows, in full: Personal comfort, hygiene or convenience items and services deemed to be not Medically Necessary and not directly related to your treatment including, but not limited to: beauty and barber services; clothing including support hose; radio and television; guest meals and accommodations; telephone charges; take-home supplies; travel expenses (other than Medically necessary Ambulance services); motel/hotel accommodations; equipment which is primarily for your convenience and/or comfort, or the convenience of your family or caretakers; modifications to motor vehicles and/or homes such as wheelchair lifts or ramps; electric scooters; water therapy devices such as Jacuzzis, hot tubs, swimming/lap pools or whirlpools; membership to health clubs, exercise, physical fitness and/or massage equipment; hearing aids; air conditioners and purifiers, furnaces, air filters, humidifiers; water softeners and/or purifiers; pillows, mattresses or waterbeds; escalators, elevators, stair glides; emergency alert equipment; blood pressure kits, handrails and grab bars; heat appliances and dehumidifiers, vacuum cleaners or any other similar equipment and devices used for environmental control or to enhance an environmental setting; heating pads, hot water bottles, or ice packs; and massages except as described in section 3. The Benefits Document also provides no definition of the term “motel/hotel accommodations.” The common dictionary definition of “hotel” is “an establishment providing accommodations, meals, and other services for travelers and tourists.”5/ The plain meaning of the term “hotel” includes the concept of a place providing temporary accommodations that is open to all travelers, not a limited purpose facility such as the H-P Pavilion.6/ This distinction is recognized in section 509.013, Florida Statutes, which sets forth the definitions used by the state in regulating lodging and food service establishments. A “hotel” is included in the definition of a “transient public lodging establishment” under section 509.013(4)(a)1., as “any unit, group of units, dwelling, building, or group of buildings within a single complex of buildings which is rented to guests more than three times in a calendar year for periods of less than 30 days or one calendar month, whichever is less, or which is advertised or held out to the public as a place regularly rented to guests.” The H-P Pavilion was not “held out to the public” as a place offering overnight accommodations but was strictly limited to Johns Hopkins? patients and their families. Section 509.013(4) expressly recognizes such a facility as excluded from the definition of a public lodging establishment and therefore not subject to regulation by the Division of Hotels and Restaurants: (b) The following are excluded from the definitions in paragraph (a): * * * Any nonprofit organization that operates a facility providing housing only to patients, patients? families, and patients? caregivers and not to the general public. The H-P Pavilion does not meet the ordinary definition of the term “hotel” and would not be considered a “hotel” for purposes of regulation by the state of Florida. The term “hotel” is not otherwise defined by the Benefits Document. Therefore, DSGI cannot rely on the H-P Pavilion?s status as a “hotel” in order to deny reimbursement to Petitioner without twisting the meaning of the term beyond recognition. Ms. Crosier?s letter also quotes the Benefits Document?s definition of “medically necessary,” presumably to bring Petitioner?s stay at the H-P Pavilion under the category of “personal comfort, hygiene or convenience items and services” even if the H-P Pavilion were found not to be a hotel. Ms. Crosier?s letter does not offer an explanation as to the connection between the definition of “medically necessary” and the H-P Pavilion, as if it were self-evident that Petitioner?s stay at that facility does not meet the terms of the definition. The connection is not self-evident. Petitioner?s medical provider directed her to stay at the H-P Pavilion or a similar facility, as indicated in an August 6, 2013, “To Whom It May Concern” letter from Dr. Brodsky: Ms. Tayna Alexander was under my care from November 2011, until Jan. 31, 2012, for her severe aplastic anemia. She underwent a bone marrow transplant during that time. In preparation for the transplant, she received very high doses of chemotherapy that wiped out her immune system. This made her extremely susceptible to infections and bleeding. Since an infection or issue with bleeding can be fatal if not treated promptly, she was required to stay in housing no farther than 1 hour away from the hospital. As this was medically necessary, she was approved by the bone marrow transplant team and me to stay at the Hackerman-Patz house in Baltimore, Maryland. She was also required to have a 24-hour caregiver to provide assistance and to get her to the hospital for daily visits and to help with any emergencies that might arise. I would like to reiterate that both the housing within an hour of the hospital as well as having a caregiver are not suggestions but rather are medically necessary requirements for patients undergoing a bone marrow transplant. The Benefits Document states that a doctor?s prescription “does not necessarily mean that the service is Medically Necessary.” However, when DSGI determines that the physician?s estimate of medical necessity is incorrect, it must do more than merely cite the definition of “medical necessity” in its determination letter. Moreover, the language in the “personal comfort, hygiene, or convenience items and services” provision of the Benefits Document is in the conjunctive: “deemed to be not Medically Necessary and not directly related to your treatment.” Even if DSGI were correct in determining that Petitioner?s stay in the H-P Pavilion was not “medically necessary,” DSGI would still need to make a determination that the stay was not directly related to Petitioner?s treatment. No such determination was made in Ms. Crosier?s letter, and the facts found above lead to the finding that Petitioner?s stay at the H-Pavilion was directly and intrinsically related to her continuing treatment at Johns Hopkins. Petitioner?s medical team believed it necessary for her to stay nearby because Petitioner?s proximity to the Johns Hopkins facility directly assisted her access to treatment during a time when she was extremely vulnerable physically and mentally. Petitioner?s proximity to the medical facility also eliminated an unnecessary source of anxiety as to emergencies that might arise. Petitioner was very near death at the time of her transplant and remained “at high risk for morbidity and mortality” during the month that she spent at the H-P Pavilion. This was no mere “convenience” but a vital part of Petitioner?s recovery. At the final hearing, Jessica Bonin, a critical analyst for Florida Blue, testified as to a reason for rejection of Petitioner?s claim that was not addressed in the rejection letters of either the Level I or the Level II Appeal. Ms. Bonin stated that the claim should be rejected because it was submitted by Petitioner, not by Johns Hopkins. Section 11 of the Benefits Document states that PPC Network providers such as Johns Hopkins “will file the claim for you and you will be responsible for paying any Co-insurance, deductibles, Co- payments and non-covered services.” From this, Ms. Bonin concluded that Johns Hopkins does not consider the H-P Pavilion as one if its services and that Petitioner?s claim should be rejected. Section 11 of the Benefits Document states, “When you go to a Network Provider or Non-Network Provider participating in the Traditional Program, you do not need to file a claim.” In its Proposed Recommended Order, DSGI cited this language as a “benefit” of the PPC Plan, presumably because it placed the onus for filing a claim on the network provider rather than the covered individual. The Benefits Document does not address the covered individual?s remedy in those instances when the provider fails to file the claim on her behalf. In this instance, Petitioner chose to file the claim directly with Florida Blue. The Benefits Document does not forbid the covered individual from filing a claim within the network. Thus, there is no basis for rejecting Petitioner?s claim solely because she filed it.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of State Group Insurance, enter a final order finding that Petitioner is entitled to reimbursement for her stay at the Hackerman-Patz Pavilion in Baltimore, Maryland, from December 30, 2011, through January 31, 2012. DONE AND ENTERED this 18th day of November, 2013, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON 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 18th day of November, 2013.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Respondent, the Department of Administration, enter a final order denying coverage for the orthodontia recommended for Sandra Walsh. RECOMMENDED this 18th day of March, 1988, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 18th day of March, 1988.
The Issue Whether the Department of Management Services properly denied medical insurance reimbursement to Petitioner, a covered dependent of a state employee insured by the State Employees' Preferred Provider Organization health plan, for Genotropin recombinant growth hormone prescribed for the treatment of long- term growth failure associated with idiopathic short stature.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing, and the entire record in this proceeding, the following findings of fact are made: The state group insurance program is a package of insurance plans offered to, among others, state employees and their dependents. § 110.123(2)(k), Fla. Stat.1/ Petitioner Arturo Puerto is insured as a dependent of a state employee, and is a participant in the state's group self- insured plan, known as the State Employees' Preferred Provider Organization health plan ("PPO plan" or "state plan"). The state plan includes a state employees' prescription drug program. § 110.12315, Fla. Stat. Pursuant to Section 110.123(3)(c), Florida Statutes, the Department is responsible for contract management and day- to-day management of the state employee health insurance program. Section 110.123(5)(c), Florida Statutes, authorizes the Department to contract with an insurance carrier or professional administrator to administer the state plan. The current contract provider of the state plan's pharmacy program is CareMark Inc. ("CareMark"). However, the Department makes all final decisions concerning the existence of coverage or covered benefits under the state plan. The Department's authority in this regard may not be delegated to a contract provider. § 110.123(5), Fla. Stat. Petitioner was born on February 12, 1992. On or about February 3, 2009, Petitioner's physician prescribed Genotropin, a recombinant growth hormone ("GH")2/ approved by the United States Food and Drug Administration ("FDA") as therapy for short stature, including idiopathic short stature ("ISS"). ISS is short stature that does not have a diagnostic explanation, in an otherwise healthy child. ISS is also called "non-GH-deficient short stature." The Group Health Insurance Plan Booklet and Benefits Document, effective January 1, 2007, as modified on January 1, 2009, includes the terms and conditions of participation in the PPO plan and the benefits provided by the PPO plan. The booklet and benefits document contains a section describing the prescription drug program. Participants in the PPO plan are automatically enrolled in the prescription drug program, which features a network of retail pharmacies and a mail order program. The participant makes a co-payment for covered prescriptions. The booklet and benefits document sets forth a list of drugs that are covered, and a list of drugs that are not covered under the prescription drug program. Under the heading "Important Information about the Prescription Drug Program," the document states the following concerning specialty medications:3/ 5. Certain medications, including most biotech drugs, are only available through Caremark Specialty Pharmacy Services. Generally, these drugs are for chronic or genetic disorders including, but not limited to, multiple sclerosis, growth deficiency and rheumatoid arthritis and may require special delivery options, (i.e. temperature control). Caremark Specialty Pharmacy provides 24/7 access and can be contacted at 1-800-237-2767. * * * 12. As part of the Caremark Specialty Services, Caremark will administer the Advanced Guideline Management program for the State Employees' PPO Plan. Advanced Guideline Management is intended to optimize outcomes and promote the safe, clinically appropriate and cost-effective use of specialty medications supported by evidence based medical guidelines. Failure to meet the criteria for Advanced Guideline Management during the respective use review will result in denial of medication coverage for the Plan participant and discontinuation of medication coverage for the Plan participant in the case of concurrent use review. The Advanced Guideline Management Program is a process by which authorization for a specialty medication is obtained based on the application of currently acceptable medical guidelines and consensus statements for appropriate use of the medication in a specific disease state. Therapies reviewed under the Specialty Guideline Management Program include, but are not limited to, the following: multiple sclerosis, oncology, allergic asthma, human growth hormone, hepatitis C, psoriasis, rheumatoid arthritis, and respiratory syncytial virus. Additional therapies may be added from time to time.... CareMark's current guideline covering Genotropin and similar GH medications is set forth in a 2008 CareMark document titled, "Specialty Pharmacy Program for Growth Hormone and Endocrine-Metabolic Disorders." The document contains flow charts describing the criteria employed by CareMark to determine coverage for specific conditions. Among the criteria set forth in the flow chart for prescribing GH to children with ISS is the following question: "Does pre-treatment growth velocity and height meet the AACE (American Association of Clinical Endocrinologists) criteria for short stature?" (See Appendix N). If the answer to the question is "no," then the criteria direct that coverage for the prescription of GH should be denied. Appendix N sets forth the following "AACE criteria for short stature": < -2.25 standard deviations below the mean for age and sex based on patient's growth rate, adult height prediction of less than 5'3" for boys and less than 4'11" for girls. Appendix N is based on the AACE's "Medical Guidelines for Clinical Practice for Growth Hormone Use in Adults and Children-- 2003 Update" and a December 2003 AACE Position Statement on growth hormone usage in short children.4/ The CareMark document is not explicit as to whether the quoted elements of the AACE criteria for short stature are to be considered in the disjunctive. However, the AACE Position Statement expressly states that GH use is indicated for ISS only for children whose height is "< - 2.25 standard deviations below the mean and have an adult height prediction of less than 5'3" for boys and less than 4'11" for girls." (Emphasis added.) The height standard deviation criterion used by CareMark to determine the appropriateness of Genotropin therapy as a treatment for ISS was shown to be consistent with FDA criteria and the specifications established by Pfizer, the manufacturer of Genotropin. The medical records submitted on behalf of Petitioner show that at the time Genotropin therapy was prescribed in February 2009, Petitioner's height was 162.5 cm (5'4"). This was 1.66 standard deviations below the mean for his age and sex. Untreated, his predicted final height was 164 cm (5'4 1/2"). At the time Genotropin therapy was prescribed, Petitioner did not meet the height standard deviation requirement. His height standard deviation was 1.66 standard deviations below the mean. The deviation required by the CareMark criteria was greater than 2.25 standard deviations below the mean. At the time Genotropin therapy was prescribed, Petitioner did not meet the adult height prediction requirement. Petitioner was already 5'4" tall and was projected to reach a height of 5'4 1/2" without treatment. The CareMark criteria required a projected adult height without treatment of 5'3" or below. The PPO plan denied payment for the Genotropin therapy because Petitioner did not meet criteria established by CareMark through its Specialty Pharmacy Program guidelines. The booklet and benefits document makes no provision for exceptions to strict conformity to the CareMark criteria. At the hearing, Petitioner's representative acknowledged that Petitioner does not meet the criteria for Genotropin therapy, but requested that the Department order such coverage as an exception to the criteria.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Department of Management Services, Division of State Group Insurance enter a final order denying coverage for Petitioner's prescription for Genotropin therapy. DONE AND ENTERED this 10th day of March, 2010, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON 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 10th day of March, 2010.
The Issue The issue in this proceeding is whether Petitioner is entitled to prospective enrollment in the State Group Insurance Program.
Findings Of Fact In or around May 2010, the Florida Department of Economic Opportunity hired Petitioner as an "Other Personal Services Employment" ("OPS") worker——a category of state employee that that is not entitled to benefits, and, as a consequence, does not participate in the State Group Insurance Program. Petitioner's entitlement to benefits changed, however, on November 22, 2011, when she was promoted to deputy clerk, which is a career service position. At or around that time, Petitioner was informed that she had 60 days from the effective date of her promotion to enroll in any benefit plan for which she was eligible. Benefits, including insurance plans, are administered by a private contractor, NorthgateArinso, through an online system called "People First." Following her promotion, Petitioner, with the assistance of her supervisor, investigated the benefit plans available to her by accessing the "My Benefits" pages at www.myflorida.com. Subsequently, on December 13, 2011, Petitioner logged on to the People First system with the intent to make her benefit elections and complete her enrollment.1/ Upon entering the website, Petitioner properly clicked on the tab labeled "Health & Insurance," which took her to the "Health & Insurance Home Page." At that point, Petitioner was presented with eight icons from which to choose: General Benefits Information Go to the MyBenefits website for your insurance options. Your Benefits Review your benefits and Flexible Spending Accounts. Insurance Companies See contact information. Your Dependents' Information View and update dependents' information. Benefits Choices Enroll or change your benefits. Benefit Premium History Review your insurance. Required Documentation Review status of your documentation. Benefits Materials View and request insurance forms and booklets. Of the foregoing options, Petitioner correctly selected "Benefits Choices," at which point she was navigated to a page that offered her the ability to register any eligible dependents. Not wishing to add any dependents, Petitioner selected the "Go to Next Step" button, which, in turn, took her to a page that listed "Current Plans." (As Petitioner had not previously made any elections, no health, vision, or dental plans were listed below the tab labeled "Current Plans"). Immediately adjacent to "Current Plans" were eleven other tabs: Health; Flex Spend Acct; Basic Life; Optional Life; Dental; Vision; Accident; Cancer; Disability; Intensive Care; and Hospitalization. From these options, Petitioner first selected "Health," which brought up a list of available health insurance plans. At that point, Petitioner chose the box next to the Coventry Health Care individual health insurance plan. Significantly, however, this action did not finalize Petitioner's selection (as explained shortly, no choices are processed until an employee clicks, on a subsequent web page, the "complete enrollment" button). After choosing——but not finalizing——her health insurance coverage, Petitioner clicked on the "Dental" tab. Although the undersigned credits Petitioner's testimony that she selected the box next to one of the available options, there is an absence of evidence concerning the identity of the plan in which she sought to enroll.2/ Next, Petitioner chose the "Vision" tab, which, similar to the "Health" and "Dental" screens, produced a list of available plans. Of the various choices, Petitioner clicked on the box next to the Coventry Health Care individual vision plan. Significantly, and as alluded to above, benefit elections are not finalized in the People First system until two actions are taken: first, the rectangle labeled "Summary/Last Step" must be selected, which leads to a screen titled "Process Benefit Elections"; and, once taken to the "Benefits Elections Page," the employee must click the shaded rectangle titled "Complete Enrollment." Upon the completion of these steps, a confirmation page appears that lists the employee's name and People First identification number; the page also reads, in pertinent part, "Please save or print for your records . . . This is your confirmation of benefits through the State Group Insurance Program." Notably, the record is devoid of evidence that such a confirmation page was ever generated. While Petitioner's testimony that she "checked the boxes" next to her desired benefits plans has been credited, the undersigned is not persuaded by the greater weight of the evidence that Petitioner completed the process' final two steps on December 13, 2011,3/ or on any other occasion prior to the expiration of the 60-day deadline.4/ On or about January 26, 2012, Petitioner became concerned that she had not received any materials concerning the insurance plans in which she thought she had enrolled. On that date, Petitioner telephoned the People First hotline and, at some point during the conversation that ensued, was informed that there was no record of any benefit elections having been made.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of State Group Insurance, enter a final order denying Petitioner's request to enroll in the State Group Insurance Program. DONE AND ENTERED this 4th day of October, 2012, in Tallahassee, Leon County, Florida. S EDWARD T. BAUER 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 4th day of October, 2012.
The Issue The issue at the hearing was whether Petitioner is entitled to a premium refund of her health insurance premium.
Findings Of Fact The Petitioner, Mildred Daw, is a retired State employee. She is enrolled in the State of Florida, State Employees Group Health Self Insurance Plan (the Plan). Prior to retiring, Petitioner amended her coverage in the Plan, changing from single coverage to family coverage. Petitioner modified her coverage so that her husband would be covered under the Plan. Petitioner's husband was under age 65 and qualified for Medicare Parts A and B. Petitioner was not qualified for Medicare coverage. The premium for family coverage was $178.44 per month. Petitioner began paying this amount shortly before she retired in December 1984. By letter dated, July 8, 1985, the Division of State Employees' Insurance notified retirees that: If you are under age 65 and eligible for Medicare Part A and B because of disability, you may now be eligible for Medicare Coordination coverage at the reduced rate. Please notify our office if you are eligible and send a copy of your Medicare card. Your premium will be reduced the month following our receipt of your notice and the copy of your Medicare card. The letter was sent to retirees and made no mention of surviving spouses or that a current spouse, who fit within the Medicare category, could qualify the insured for Medicare Coordination coverage. The Medicare Coordination coverage is the only program that the State offers in which it is the spouse of the insured/retiree who can qualify the insured for new benefits or different coverage. In this case, the different coverage or new benefit was solely a reduction in premium. Otherwise, the benefits under the family coverage and the Medicare Coordination coverage were the same. An ordinary person reading the letter would not have been placed on notice and would not have assumed that anyone other than the retiree was covered by the letter. If Petitioner had immediately elected the Medicare Coordination coverage, her premium would have been reduced by $42.76 a month, beginning with the August 1985, payment. The July 8, 1985, letter was mailed by first class mail to all retired State employees in the Plan. The business practice of the Division is to mail any such letters to the address of the retiree listed with the Division of Retirement and given to the Division of State Employees' Insurance or to the most current address the Division of Employees Insurance has for that particular retiree. In this case, the address which the Division of Retirement would have had on Petitioner in 1985 was her old address in Jacksonville. However, by July 1985, Petitioner had mailed the Division of State Employees' Insurance a change of address card with her new Pensacola address. She did not mail the Division of Retirement a change of address. There is no evidence as to which address the Respondent mailed the July 8, 1985, letter. Without such evidence Respondent is not entitled to a presumption of proper notice when a letter is mailed to a party with the correct address. Petitioner does not remember receiving the July 8, 1985, letter. She would have elected the Medicare Coordination coverage had she been aware of its availability. Petitioner became aware of her eligibility for reduced premiums in October 1987, when she received an informational bulletin from the Division of State Employees' Insurance. The bulletin stated the premium rates for various types of insurance coverage, including the reduced premiums for family coverage with members of the family who are qualified for Medicare benefits. Petitioner telephoned the Division and was instructed by Division personnel to send in a copy of her husband's Medicare card in order to establish her eligibility for the reduced premium. Petitioner sent a copy of her husband's Medicare card to the Division in October 1987. On November 6, 1987, Petitioner requested a refund of excess insurance premiums paid from July 1985, through November 1987. On December 28, 1987, Petitioner was informed by the Respondent that the earliest date a change in coverage could become effective was October 1987, because Petitioner had not applied for a change of coverage prior to that time. Petitioner was awarded an excess premium refund for the premium paid for November coverage. The Rules governing the Plan are found in Chapter 22I-1, Florida Administrative Code. This Chapter generally requires that an employee or retiree perform an affirmative act, by completing an informational form and sending it to the Department, before any change in coverage can be effectuated. The reason for such a requirement is that the Department has no way of knowing the number of eligible employees or retirees, without being supplied that information from the insureds, so that the Plan's administrator can better manage the Plan's funds to provide an adequate amount for the payment of claims. However, competing with this Rule is the Respondent's policy that a retiree who is otherwise eligible for certain benefits, but did not receive any notice of such eligibility is entitled to retroactive benefits. This policy is based on the Division's duty to administer the State's health plan, including notifying retirees of the availability of new types of coverage or benefits. The evidence showed that this policy takes precedence over the Rule when the Division has failed to notify an eligible retiree. In this case the Division failed to notify Petitioner of her eligibility for Medicare Coordination coverage due to her spouse's qualifications. Petitioner is therefore entitled to retroactive benefits beginning July 1985. Since the benefit of the Medicare Coordination coverage is a reduced premium, Petitioner is entitled to a refund of the excess premium of $42.76 a month from July 1985, through October 1987. The refund for that time period totals $1,154.52.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Administration enter a Final Order refunding to Petitioner excess premiums paid to the Department in the amount of $1,154.52. DONE and ENTERED this 18th day of July, 1989, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 18th day of July, 1989. APPENDIX TO RECOMMENDED ORDER CASE NO. 89-301 The facts contained in paragraphs a, b, c, d, e, f, g, h, i, j and k of Petitioner's Proposed Findings of Fact are adopted in substance, in so far as material. The facts contained in paragraphs l, m, and n of Petitioner's Proposed Findings of Facts are subordinate. The facts contained in paragraph p of Petitioner's Proposed Findings of Facts were not shown by the evidence. The facts contained in paragraph o of Petitioner's Proposed Findings of Fact are rejected. The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 8, 9, 10, 11 and 12 of Respondent's Proposed Findings of Fact are adopted in substance, in so far as material. The facts contained in paragraphs 13 and 14 of Respondent's Proposed Findings of Fact are subordinate. The facts contained in paragraph 7 of Respondent's Proposed Findings of Fact were not shown by the evidence except for the fact relating to the letter being mailed first class mail. COPIES FURNISHED: Karren Lessard 15 West La Rua Street Pensacola, Florida 32521 Larry D. Scott Senior Attorney Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Andrew McMullian III Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Augustus D. Aikens, Jr. General Counsel Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
The Issue Whether the Dynamic Orthotic Cranioplasty band prescribed to treat Petitioner Anna Leigh Miller's deformational plagiocephaly in 2004 was a covered benefit under the 2004 State Employees' PPO Plan.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made to supplement and clarify the factual stipulations set forth in the parties' August 23, 2005, Pre-Hearing Stipulation3: At all times material to the instant case, Petitioner Leigh Lassiter Miller has been employed by the State Attorney's Office in Palm Beach County. As a benefit of her employment, she has received group health insurance under the State Employees' PPO Plan (Plan). Respondent administers the Plan. It does so with the assistance of Blue Cross and Blue Shield of Florida, Inc. (BCBSF). BCBSF was hired by Respondent to provide medical claim processing services under the Plan. The terms and conditions of the Plan that were in effect during the time period at issue in the instant case are set forth in the 2004 Plan Booklet and Benefits Document (Plan Document). According to the Plan Document's "Introduction," the "PPO plan is designed to cover most major medical expenses for a covered illness or injury, including hospital and physician services." The Plan Document's "Summary of Plan Benefits, Covered Services" advises that the Plan "pays a percentage of the cost of covered care and medical supplies as long as the care or supplies are ordered by a covered provider and are considered medically necessary as a result of a covered accident, illness, condition or mental or nervous disorder." For covered "durable medical equipment" obtained from a "non-network" provider, the percentage paid by the Plan is 60 percent. The "Limitations and Exclusions" portion of the Plan Document contains a listing of "Services Not Covered By The Plan." This listing reads, in pertinent part, as follows: The following services and supplies are excluded from coverage under this health insurance plan unless a specific exception is noted. Exceptions may be subject to certain coverage limitations. Cosmetic surgery or treatment, unless it is: a result of a covered accident and the surgery or treatment is performed while the person is covered by this health insurance plan for correction of a congenital anomaly for an eligible dependent and performed while the dependent is covered by this health insurance plan a medically necessary procedure to correct an abnormal bodily function for reconstruction to an area of the body that has been altered by the treatment of a disease * * * 4. Any services or supplies which are not medically necessary, as determined by BCBSF clinical staff and DSGI. * * * 17. Any services provided for preventative care - except those services provided as part of the well-child health supervision services or those services obtained through the $100 Health Screening benefit (see page 22). * * * 45. Services and procedures considered by BCBSF to be experimental or investigational, or services and procedures not in accordance with generally accepted professional medical standards, including complications resulting from these non-covered services. The Plan Document contains the following description of the process involved in "Appealing A Denied Claim": If your benefit claim is totally or partially denied, BCBSF or Caremark, Inc. will send you a written notice on an Explanation of Benefits (EOB) statement stating the specific reason(s) for the denial within 30 days of receiving your claim. The notice will include a list of any additional information needed to appeal the denial to BCBSF or Caremark, Inc. Appealing To The Third Party Administrator- A Level I Appeal Within 90 days of the date of the EOB denial notice you or your authorized representative can appeal a claim that is denied. Your appeal must be in writing and should include any information, questions or comments you think are appropriate. Mail your written appeal to the third party administrator- BCBSF for medical claims or Caremark, Inc. for prescription drug claims - at the address shown on the inside cover of this booklet. The third party administrator will review your claim and provide you with a written notice of the review decision. On the notice, you will also receive information about appealing the decision to DSGI. Appealing To DSGI - A Level II Appeal If you are not satisfied with the first appeal decision given by the third party administrator, you may make a second appeal through DSGI. After you have asked the third party administrator to review your claim and you have received their written notification, you may submit a second appeal to DSGI. Your Level II Appeal must be in writing and must be received by DSGI not later than 60 days after the date of the written notice of the third party administrator decision regarding your Level I Appeal and must include: a copy of the EOB a copy of your letter requesting the third party administrator to review the claim a copy of the third party administrator's written notice of their review decision a letter to DSGI appealing the decision, and any other information or documentation you think is appropriate. Mail your written DSGI at the address shown on page 1. Send your appeal to the attention of the "Appeals Coordinator." Requesting An Administrative Hearing If you want to contest the second appeal decision, you must submit a petition for an administrative proceeding that complies with section 28-106.301, Florida Administrative Code. DSGI must receive your petition within 21 days after you received the written decision on your second appeal. "Definitions Of Selected Terms Used By The Plan" are found on pages 49 through 55 of the Plan Document. These definitions include the following: Accident [means] an accidental bodily injury that is not related to any illness. * * * Condition [means] any disease, illness, injury, accident, bodily dysfunction, pregnancy, drug addiction, alcoholism or mental or nervous disorder. * * * Covered services and supplies [mean] healthcare services and supplies, including pharmaceuticals and chemical compounds, for which reimbursement is covered under this health insurance plan. The Division of State Group Health Insurance has final authority to determine if a service or supply is covered by the plan. * * * Experimental or investigational services [mean] any evaluation, treatment, therapy or device that meets any one of the following criteria: cannot be lawfully marketed without approval of the US Food and Drug Administration or the Florida Department of Health if approval for marketing has not been given at the time the service is provided to the covered person [hereinafter referred to "Experimental/Investigational Criterion No. 1"]; or is the subject of ongoing Phase I or II clinical investigation, or the experimental or research arm of a Phase III clinical investigation - or is under study to determine the maximum dosage, toxicity, safety or efficacy, or to determine the efficacy compared to standard treatment for the condition [hereinafter referred to as "Experimental/Investigational Criterion No. 2"]; or is generally regarded by experts as requiring more study to determine maximum dosage, toxicity, safety or efficacy, or to determine the efficacy compared to standard treatment for the condition [hereinafter referred to as "Experimental/Investigational Criterion No. 3]; or has not been proven safe and effective for treatment of the condition based on the most recently published medical literature of the U.S., Canada or Great Britain using generally accepted scientific, medical or public health methodologies or statistical practices [hereinafter referred to as "Experimental/Investigational Criterion No. 4"]; or is not accepted in consensus by practicing doctors as safe and effective for the condition [hereinafter referred to as "Experimental/Investigational Criterion No. 5"]; or is not regularly used by practicing doctors to treat patients with the same or a similar condition [hereinafter referred to as "Experimental/Investigational Criterion No. 6]. BCBSF and DSGI determine whether a service or supply is experimental or investigational. * * * Illness [means] physical sickness or disease, pregnancy, bodily injury or congenital anomaly. For this plan, illness includes any medically necessary services related to non-emergency surgical procedures performed by a doctor for sterilization. Medically necessary [means] services required to identify or treat the illness, injury, condition, or mental and nervous disorder a doctor has diagnosed or reasonably suspects. The service must be: consistent with the symptoms, diagnosis and treatment of the patient's condition in accordance with standards of good medical practice required for reasons other than the convenience of the patient or the doctor approved by the appropriate medical body or board for the illness or injury in question at the most appropriate level of medical supply, service, or care that can be safely provided. The fact that a service is prescribed by a doctor does not necessarily mean that the service is medically necessary. Medical supplies or equipment [mean] supplies or equipment that are: ordered by a physician of no further use when medical need ends usable only by the particular patient not primarily for the patient's comfort or hygiene not for environmental control not for exercise, and specifically manufactured for medical use. * * * Among the terms not defined in this or any other portion of the Plan Document are "cosmetic," "disease," and "consensus." Petitioner Anna Leigh Miller (Anna) was born two weeks before she was due. Her delivery was normal. Her parents began to notice, immediately following her birth, that her "head tilt[ed]" to the left. Initially, they were not concerned, thinking that this "tilt" was just "temporary." At all times material to the instant case, Anna's primary pediatrician was Ronald Romear, M.D., of Infants and Children, P.A., in West Palm, Florida. When Dr. Romear was unavailable, Anna was seen by other pediatricians in Dr. Romear's practice, including James Beattie, M.D. Anna saw Dr. Romear for her two-week check-up on January 21, 2004. Dr. Romear's physical examination of Anna on this date revealed that her general appearance and head were "normal." In March of 2004, or perhaps somewhat earlier, Anna's parents first noticed that Anna had developed a "flat head." (Anna's "head shape [was] normal at birth.") Anna made a "sick visit" to Infants and Children, P.A., on April 28, 2004, and was seen by Dr. Beattie. She returned, accompanied by her mother, on May 12, 2004, for a "well child visit," and was again seen by Dr. Beattie. During this May 12, 2004, visit, Mrs. Miller shared with Dr. Beattie that, from the time of Anna's birth, Anna was "inclined to do things facing to the left." After examining Anna, Dr. Beattie determined that Anna had torticollis. Torticollis literally means "twisted neck" in Latin. It is a condition characterized by a tightening or foreshortening of the sternocleidomastoid muscle on one side of the neck, resulting in an inability to straighten or turn the head. Anna's torticollis was congenital (that is, present at birth). Dr. Beattie prescribed physical therapy for Anna. Physical therapy is the standard treatment for torticollis. Anna's parents took Anna to the physical therapist twice a week. BCBSF deemed these services to be "covered" under the Plan and authorized payment accordingly. In addition to taking Anna to the physical therapist, Anna's parents, in accordance with instructions they had received, did neck "stretching" exercises with Anna at home five to six times a day. The physical therapist did her "initial evaluation" of Anna on May 20, 2004. During this "initial evaluation," Anna's parents expressed concern about, and the physical therapist observed, "significant flattening of the left posterior aspect of [Anna's] skull resulting in moderated plagiocephalic appearance." The physical therapist told Anna's parents about a cranial orthotic device that was available to treat this "plagiocephalic appearance." Anna's parents knew that this device might not be covered by the Plan. Nonetheless, during a "sick visit" Anna made to Dr. Romear's office on May 26, 2004, Mrs. Miller asked Dr. Romear what his opinion was of the device. Dr. Romear expressed his concurrence with the physical therapist's assessment that Anna was suffering from plagiocephaly, and he referred Anna to Eric Stelnicki, M.D., a craniofacial and pediatric specialist. He also recommended that, before Anna saw Dr. Stelnicki, Anna's parents provide her with repositioning therapy at home. Repositioning therapy involves supervised "tummy time," as well as placement of the child on the side and the use of a strategically placed rolled- up towel or similar item to prevent the child from rolling over on the back and putting pressure on the flattened part of the head. It is the usual first-line treatment for plagiocephaly in those cases where the child is not "able to move readily out of placed positions." Anna's parents followed Dr. Romear's recommendation and attempted repositioning therapy at home. They abandoned their efforts without any success after less than a month because Anna kept moving out of her "placed positions." Instead of seeing Dr. Stelnicki, Anna saw another craniofacial and pediatric specialist in Dr. Stelnicki's practice, Drew Schnitt, M.D. Anna's first visit with Dr. Schnitt was on June 14, 2004. That same day, after the visit, Dr. Schnitt wrote the following letter to Dr. Romear, which accurately related what had occurred during the visit and what Dr. Schnitt had found and recommended: I am seeing Anna in my pediatric cleft and craniofacial office today. She is a 5½ month-old young lady who has been referred to me for an abnormal head shape. She received a full review of systems, history, physical examination, and a set of anthropometric measurements in the office today. Focally, on physical examination, she has a significant amount of left deformational plagiocephaly, with left anterior ear shift, left frontal bossing, fronto-orbital complex shift, and left temporomandibular joint shift. The anterior fontanelle is open. The neck reveals right neck torticollis. The remainder of her physical appearance is within normal limits. Due to the severity of her problem and her age, I am recommending an orthotic cranioplasty device. The preferred device is the DOC band by Cranial Technologies, Inc. I have given them an instruction sheet for range of motion exercises for the neck torticollis and we have demonstrated to them how to do these exercises. I will see them back in one month's time for a re-evaluation. Please do not hesitate to call or contact me with any questions or concerns. Deformational plagiocephaly (which is also known as nonsynostotic positional plagiocephaly) is plagiocephaly (that is, asymmetric or abnormal head shape) caused by external deforming forces. It may be congenital, but, more commonly (as in Anna's case), it occurs postnatally, as a result of, for example, torticollis or forced sleeping position. Deformational plagiocephaly is to be distinguished from another type of skull deformity, craniosynostosis (also referred to as cranial stenostosis), which, unlike deformational plagiocephaly, involves the premature fusion of skull sutures. These sutures need to stay unfused for an infant's head to grow properly and for the infant's brain to expand within the cranial skull. Their fusing prematurely can lead not only to a misshapen skull, but to other problems as well, including vision loss, developmental delay, learning difficulties, increased intracranial pressure and perhaps even herniation of the brain and death. Unlike deformational plagiocephaly, craniosynostosis "typically is a surgical problem, not a problem to try to treat with non-surgical means." Anna was diagnosed as having deformational plagiocephaly, not craniosynostosis. The "DOC band by Cranial Technologies, Inc.," that Dr. Schnitt prescribed for Anna to treat her deformational plagiocephaly4 is a lightweight, custom-fitted skull-molding device consisting of a semi-rigid shell bonded to a foam lining. Worn around the head 23-hours a day, it applies mild dynamic pressure to the prominent areas of the child's skull (while leaving room for growth in the flattened areas) to produce a more symmetrical head shape. Cranial orthotic devices, such as the DOC band, are commonly used to treat children with moderate to severe deformational plagiocephaly for whom repositioning therapy has not worked or for whom repositioning therapy is not a viable option because of their ability "to move readily out of placed positions" or because of the severity of their condition. (These devices are not, however, a treatment for torticollis.) Surgery is performed in "multiple places around the world" to treat deformational plagiocephaly. Cranial orthotic devices, though, are more cost-effective and have fewer complications than surgical intervention. At the time he prescribed the DOC band for Anna, Dr. Schnitt believed that this product was the "best [cranial orthotic device] on the market." Since 1998, the DOC band has been approved by the U.S. Food and Drug Administration (FDA) as safe and effective for the treatment of deformational plagiocephaly. The FDA's approval was announced in the Federal Register, 63 FR 40650-01 (July 30, 1998). The FDA's announcement read, in pertinent part, as follows: ACTION: Final rule. SUMMARY: The Food and Drug Administration (FDA) is classifying the cranial orthosis into class II (special controls). The special controls that will apply to the cranial orthosis are restriction to prescription use, biocompatibility testing, and certain labeling requirements. The agency is taking this action in response to a petition submitted under the Federal, Food, Drug, and Cosmetic Act (the act) as amended by the Medical Device Amendments of 1976, the Safe Medical Devices Act of 1990, and the Food and Drug Administration Modernization Act of 1997. The agency is classifying cranial orthosis into class II (special controls) in order to provide a reasonable assurance of safety and effectiveness of the device. EFFECTIVE DATE: August 31, 1998. * * * SUPPLEMENTARY INFORMATION: I. Background In accordance with section 513(f)(1) of the act (21 U.S.C. 360c(f)(1)), devices that were not in commercial distribution before May 28, 1976, the date of enactment of the Medical Device Amendments of 1976 (the amendments), generally referred to as postamendments devices, are classified automatically by statute into class III without any FDA rulemaking process. These devices remain in class III and require premarket approval, unless and until the device is classified or reclassified into class I or II or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the act, to a predicate device that does not require premarket approval. The agency determines whether new devices are substantially equivalent to previously marketed devices by means of premarket notification procedures in section 510(k) of the act (21 U.S.C. 360(k)) and part 807 of the FDA regulations (21 CFR part 807). -Section 513(f)(2) of the act provides that any person who submits a premarket notification under section 510(k) of the act for a device that has not previously been classified may, within 30 days after receiving an order classifying the device in class III under section 513(f)(1), request FDA to classify the device under the criteria set forth in section 513(a)(1). FDA shall, within 60 days of receiving such a request, classify the device by written order. This classification shall be the initial classification of the device. Within 30 days after the issuance of an order classifying the device, FDA must publish a notice in the Federal Register announcing such classification. -In accordance with section 513(f)(1) of the act, FDA issued an order on March 12, 1998, classifying the Dynamic Orthotic Cranioplasty (DOCTM Band) in class III, because it was not substantially equivalent to a device that was introduced or delivered for introduction into interstate commerce for commercial distribution before May 28, 1976, or a device which was subsequently reclassified into class I or class II. On March 31, 1998, Cranial Technologies, Inc., submitted a petition requesting classification of the DOCTM Band under section 513(f)(2) of the act. The manufacturer recommended that the device be classified into class II. In accordance with 513(f)(2) of the act, FDA reviewed the petition in order to classify the device under the criteria for classification set forth in 513(a)(1) of the act. Devices are to be classified into class II if general controls, by themselves, are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls to provide reasonable assurance of the safety and effectiveness of the device for its intended use. After review of the information submitted in the petition and the medical literature, FDA determined that the DOCTM Band can be classified in class II with the establishment of special controls. FDA believes these special controls will provide reasonable assurance of safety and effectiveness of the device. -The device is assigned the generic name "cranial orthosis," and it is identified as a device intended for use on infants from 3 to 18 months of age with moderate to severe nonsynostotic positional plagiocephaly, including infants with plagiocephalic-, brachycephalic-, and scaphocephalic-shaped heads. The device is intended for medical purposes to apply pressure to prominent regions of an infant's cranium in order to improve cranial symmetry and/or shape. -FDA identified the following risks to health associated with this type of device: (1) Skin irritation, skin breakdown and subsequent infection due to excessive pressure on the skin; (2) head and neck trauma due to alteration of the functional center of mass of the head and the additional weight of the device especially with an infant who is still developing the ability to control his/her head and neck movements; (3) impairment of brain growth and development from mechanical restriction of cranial growth; (4) asphyxiation due to mechanical failure, poor fit, and/or excessive weight that alters the infant's ability to lift the head; (5) eye trauma due to mechanical failure, poor construction and/or inappropriate fit; and (6) contact dermatitis due to the materials used in the construction of the device. -FDA believes that the special controls described below address these risks and provide reasonable assurance of the safety and effectiveness of the device. Therefore, on May 29, 1998, FDA issued an order to the petitioner classifying the cranial orthosis as described previously into class II subject to the special controls described below. Additionally, FDA is codifying the classification of this device by adding new §882.5970. -In addition to the general controls of the act, the cranial orthosis is subject to the following special controls in order to provide reasonable assurance of the safety and effectiveness of the device: (1) The sale, distribution, and use of this device are restricted to prescription use in accordance with 21 CFR 801.109; (2) the labeling of the device must include: (a) Contraindications for the use of the device on infants with synostosis or with hydrocephalus; (b) warnings indicating the need to: (i) Evaluate head circumference measurements and neurological status at intervals appropriate to the infant's age and rate of head growth and to describe steps that should be taken in order to reduce the potential for restriction of cranial growth and possible impairment of brain growth and development and (ii) evaluate the skin at frequent intervals, e.g., every 3 to 4 hours, and to describe steps that should be taken if skin irritation or breakdown occurs; (c) precautions indicating the need to: (i) Additionally treat torticollis, if the positional plagiocephaly is associated with torticollis; (ii) evaluate device fit and to describe the steps that should be taken in order to reduce the potential for restriction of cranial growth, the possible impairment of brain growth and development and skin irritation and/or breakdown; and (iii) evaluate the structural integrity of the device and to describe the steps that should be taken to reduce the potential for the device to slip out of place and cause asphyxiation or trauma to the eyes or skin; (d) adverse events, i.e., skin irritation and breakdown that have occurred with the use of the device; (e) clinician's instructions for casting the infant, for fitting the device, and for care; and (f) parent's instructions for care and use of the device; (3) the materials must be tested for biocompatibility with testing appropriate for long term direct skin contact. * * * V. References -The following references have been placed on display in the Dockets Management Branch (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday. Petition from Cranial Technologies, Inc., dated March 31, 1998. Hellbusch, J. L., L. C. Hellbusch, and R. J. Bruneteau, "Active Counter-Positioning Treatment of Deformational Plagiocephaly," Nebraska Medical Journal, vol. 80, pp. 344 to 349, 1995. Moss, S. D. et. al., "Diagnosis and Management of the Misshapen Head in the Neonate," Pediatric Review, vol. 4, pp. 4 to 8, 1993. -Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 882 is amended as follows: List of Subjects in 21 CFR Part 882 Medical devices. PART 882--NEUROLOGICAL DEVICES * * * 2. Section 882.5970 is added to subpart F to read as follows: §882.5970 Cranial orthosis. -(a) Identification. A cranial orthosis is a device that is intended for medical purposes to apply pressure to prominent regions of an infant's cranium in order to improve cranial symmetry and/or shape in infants from 3 to 18 months of age, with moderate to severe nonsynostotic positional plagiocephaly, including infants with plagiocephalic-, brachycephalic-, and scaphocephalic-shaped heads. -(b) Classification. Class II (special controls) (prescription use in accordance with §801.109 of this chapter, biocompatibility testing, and labeling (contraindications, warnings, precautions, adverse events, instructions for physicians and parents)). Dated: July 21, 1998. A year earlier, in 1997, a "consensus statement" was issued "jointly by several pediatrics organizations (including the Section of Plastic Surgery of the American Academy of Pediatrics and the American Cleft Palate/Craniofacial Society)," in which it was asserted that "deformational plagiocephaly . . . usually responds to conservative measures [such as] the use of skull molding caps." In July of 2003, the American Academy of Pediatrics published a "clinical report" designed to provide "guidance for the clinician in rendering pediatric care" concerning the "[p]revention and [m]anagement of [p]osition [s]kull [d]eformities in [i]nfants."5 The report contained the following observations regarding "skull-molding helmets": Skull-Molding Helmets Several ancient civilization have used head- molding devices in infants to reshape a typically shaped skull into a different but desired skull form. Conversely, skull- molding helmets can be used to correct atypical skull shapes, and similar devices are now proposed for this purpose. However, results from 1 study suggest that repositioning infants may produce improvement in mild to moderate cases similar to that reported with external orthotic devices. Another study has linked the use or helmets with an improvement over that achieved by repositioning alone. The best response for helmets occurs in the age range of 4 to 12 months because of the greater malleability of the young infant skull bone and the normalizing effect of the rapid growth of the brain. There is less modification of the cranial configuration when used after 12 months of age. The use of helmets and other related devices seems to be beneficial primarily when there has been a lack of response to mechanical adjustments and exercises. In most situations, an improvement to repositioning and neck exercise is seen over a 2- to 3- month period if these measures are instituted as soon as the condition is recognized. Because use of skull-molding helmets incurs significant cost, further studies are needed to identify outcomes with and without them. At the end of the report was the following "summary": Summary In most cases, the diagnosis and successful management of deformational plagiocephaly can be assumed by the pediatrician or other primary care clinician. This includes examination for and counseling regarding deformational plagiocephaly in the newborn period and at health supervision visits during infancy, as well as monitoring for improvement or progression. Mechanical methods, if performed early in life, may be effective in preventing further skull deformity and may reverse existing deformity. Referral to a pediatric neurosurgeon with expertise in pediatrics or a craniofacial surgeon should be considered if there is progression or lack of improvement following a trial of mechanical adjustments. BCBSF has a written policy stating that, "[a]s a nonsurgical treatment of plagiocephaly . . . without synostosis, [the DOC band] is considered not medically necessary." This policy statement indicates that it is based on the "lack of [as of February 2004] documented functional impairment" associated with "plagiocephaly . . . without synostosis." The statement, however, does contain an acknowledgement that the "available data [as of February 2004, reveals] that the [DOC band] therapy can indeed reshape the cranium to a more normal contour." Further support for the notion that the DOC band and similar cranial orthotic devices are effective in "reshap[ing] the cranium to a more normal contour" is found in the "most recently published [of the] medical literature" received into evidence at hearing in the instant case: an article entitled, "Management of Deformational Plagiocephaly: Repositioning Versus Orthotic Therapy," authored by John Graham, M.D. and others. This article was published in the February 2005 edition of the Journal of Pediatrics, a "respected [peer-reviewed] journal." Based on their evaluation of the data they examined, the authors of the article concluded that, "[w]hen physical therapy and repositioning fail to treat or prevent plagiocephaly and there is more than 1 cm difference between the two cranial diagonal differences at age 6 months, orthotic therapy is effective in correcting such asymmetry," and they further concluded that "[d]elays in initiating corrective treatment until later infancy may lead to incomplete or ineffective correction even if orthotic therapy is initiated . . ."6 Anna was "cast for the DOC band" at Cranial Technologies, Inc., on June 23, 2004. She returned with her parents to Cranial Technologies, Inc., on July 1, 2003, to try on the DOC band that had been fabricated for her. Only some "trimming adjustments" had to be made. Anna started wearing the band that day. Anna continued wearing the DOC band (23 hours a day) until October 18, 2004. On that date (October 18, 204), the Cranial Technologies, Inc., clinician who had been working with Anna sent Dr. Schnitt a letter advising him that Anna's DOC band treatment had been successfully completed. Anna had obtained a "good result" from the DOC band treatment. Her cranial asymmetry had "markedly improved." Anna's last visit to Dr. Schnitt was on November 29, 2004. That day, after the visit, Dr. Schnitt wrote the following letter to Dr. Romear, which accurately related what had occurred during the visit and what Dr. Schnitt had found and recommended: I am seeing Anna back in my pediatric cleft and craniofacial office today. She is a young lady with left deformational plagiocephaly and right torticollis, who is here again for follow up. She is now 11 months old and was treated in the DOC band cranial molding device for four months and has been out of this since October. She received a full review of systems, history, physical examination, and a set of anthropometric measurements in the office today. Focally on physical examination, she has a mild to moderate amount of residual left deformational plagiocephaly with left anterior ear shift, left frontal bossing, and fronto-orbital complex shift. Her anterior fontanelle remains open. Examination of her neck reveals a minimal amount of residual right neck torticollis. The remainder of the physical examination is within normal limits. I have had a long discussion with mom about the treatment of deformational plagiocephaly. She has made a marked improvement since the beginning of her treatment, and mom is, overall, satisfied, but was asking about going into another helmet to try to improve things further. I have given her this option, but she has decided not to proceed with a second band. I have also advised her of the need to continue with neck range of motion exercises at least until Anna is two years old. Mom would like to continue to follow with me until she is satisfied with the torticollis outcome. I will see her back in two to three months' time. Mom also knows to make an appointment in a more timely manner if she notices any abnormal head growth or regression. Please do not hesitate to call or contact me with any questions or concerns. The Millers were billed $3,000.00 by Cranial Technologies, Inc., for the DOC band and related costs. They filed a claim requesting that the bill be treated as being for services and/or supplies "covered" by the Plan. The request was denied by BCBSF, which issued a Non- Payment Notice. The Millers filed an unsuccessful Level I appeal with BCBSF (as provided for in the Plan Document). They then filed a Level II appeal with Respondent (as provided for in the Plan Document). As noted above, Respondent rejected the Millers' Level II appeal, finding that Anna's DOC band treatment was "cosmetic" and "experimental and investigational" and not "medically necessary," as those terms are used in Plan Document. Thereafter, at the Millers' request, an administrative hearing on their claim was held. The preponderance of the evidence adduced at the administrative hearing establishes that Anna's DOC band treatment was "medically necessary," as that term is defined in the Plan Document, in that the evidence demonstrates the treatment was: "consistent with the symptoms, diagnosis and treatment of [her] condition" (moderate to severe deformational plagiocephaly7 that had not responded to repositioning therapy due, at least in part, to her moving out of her "placed positions"); "in accordance with standards of good medical practice"; "required for reasons other than the convenience of [Anna] or [her] doctor"; "approved by the appropriate medical body or board for the illness or injury in question" in that "pediatrics organizations" have documented their recognition of the beneficial effects devices such as the DOC band have in treating deformational plagiocephaly; and "at the most appropriate level of medical supply, service, or care that [could] be safely provided" in that repositioning therapy had already been attempted without success. The preponderance of the evidence adduced at the administrative hearing fails to establish that Anna's DOC band treatment was " experimental and investigational," as those terms are defined in the Plan Document. Respondent concedes (in its Proposed Recommended Order) the inapplicability of Experimental/Investigational Criterion No. 1 and Experimental/Investigational Criterion No. 2. With respect to the remaining Experimental/Investigational Criteria set forth in Plan Document's definition of "experimental or investigational services": regarding Experimental/Investigational Criterion No. 3, while it has been shown that some "experts" believe more study of DOC band treatment is needed "to determine maximum dosage, toxicity, safety or efficacy," the record evidence is insufficient to demonstrate that DOC band treatment "is generally regarded by experts as requiring [such additional] study"; regarding Experimental/Investigational Criterion No. 4, the record evidence is insufficient to demonstrate that, according to the "most recently published medical literature of the U.S., Canada or Great Britain using generally accepted scientific, medical or public health methodologies or statistical practices," the use of a DOC band to treat a child almost six months of age (Anna's age when she first started wearing the band) with moderate to severe deformational plagiocephaly that has not responded to repositioning therapy is not a "safe and effective . . . treatment of th[is] condition"; regarding Experimental/Investigational Criterion No. 5, while it has been shown that "practicing doctors" do not unanimously accept the DOC band as "safe and effective" for treating deformational plagiocephaly that has not responded to repositioning therapy, the record evidence is insufficient to demonstrate that there is not a consensus or majority8 of "practicing doctors" who are of this opinion9; and regarding Experimental/Investigational Criterion No. 6, the record evidence is insufficient to demonstrate that "practicing doctors" as a group do not "regularly" (meaning typically, but not necessarily in each and every instance, without exception10) use a DOC band or like device to treat deformational plagiocephaly that has not responded to repositioning therapy. The preponderance of the evidence adduced at the administrative hearing establishes that Anna's DOC band treatment was "cosmetic," as that term is used in the Plan Document,11 in that it was prescribed to improve her appearance by ameliorating her deformational plagiocephaly and giving her a more natural-looking, symmetrical head shape, and it had no purpose or effect beyond changing the asymmetrical appearance of her head. The preponderance of the evidence adduced at the administrative hearing fails to establish that this "cosmetic" treatment was the "result of a covered accident." The preponderance of the evidence adduced at the administrative hearing fails to establish that this "cosmetic" treatment was "for correction of a congenital anomaly." While Anna's torticollis was a "congenital anomaly," her deformational plagiocephaly was not, and her DOC band treatment addressed her deformational plagiocephaly, not her torticollis. The preponderance of the evidence adduced at the administrative hearing fails to establish that this "cosmetic" treatment was a "medically necessary procedure to correct an abnormal bodily function." While the treatment was "medically necessary" and undertaken to "correct" an abnormality, the abnormality (the asymmetrical shape of Anna's head) was structural, not functional, in nature. The preponderance of the evidence adduced at the administrative hearing fails to establish that this "cosmetic" treatment was "for reconstruction to an area of the body that has been altered by the treatment of a disease." Inasmuch as Anna's DOC band treatment was "cosmetic" in nature and not within any of the "specific exceptions" noted in the Plan Document, such treatment was excluded from coverage under the Plan.12
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order sustaining the denial of the claim at issue in the instant case. DONE AND ENTERED this 9th day of November, 2005, in Tallahassee, Leon County, Florida. S STUART M. LERNER 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 9th day of November, 2005.
