02-003762 Health Options, Inc. vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Monday, March 3, 2003.

Summary: Federal and state legal provisions do not permit imposition of a durational limitation in present cancer therapies. Accordingly, petition is denied.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HEALTH OPTIONS, INC., )

)

Petitioner, )

)

vs. ) Case No. 02 - 3762

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

)

FINAL ORDER

Admini strative Law Judge Don W. Davis of the Division of

Administrative Hearings held a formal hearing in this case on

January 13, 2003, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Daniel Alter, Esquire

Bunnell, Woulfe, Kirschbaum, Keller,

Mc Intrye & Gregoire, P.A.

Post Office Drawer 030340

Fort Lauderdale, Florida 33303

For Respondent: Ursula Eikman, Esquire

Agency for Health Care Administration

2727 Mahan Drive

Building 3, Mail Stop 3

Tallahassee, Florid a 32308

STATEMENT OF THE ISSUE

This is a proceeding under Section 408.7056, Florida

Statutes (2002), in which the issue is whether the denial by

Health Options, Inc. (the Petitioner), of a request that it

cover additional lymphedema outpatient therapy a fter a

mastectomy to treat C.B. (the Subscriber), 1 is consistent or

inconsistent with the rules and laws that regulate managed care

entities. 2

PRELIMINARY STATEMENT

This matter involves a coverage dispute about outpatient

rehabilitation services under th e terms of a group Health

Maintenance Organization (HMO) contract issued by the Petitioner

to Atlantic States Bank for the benefit of its employees and

their eligible dependents, inclusive of the Subscriber.

In May, 2001, the Subscriber underwent a partia l mastectomy

of her left breast. Following surgery, she required outpatient

physical therapy known as decongestive therapy. The Petitioner

denied coverage for continued therapy beyond a consecutive

62 - day period.

By internal appeal to the Petitione r, the Subscriber

challenged the denial of coverage for further outpatient

rehabilitative therapy beyond the consecutive 62 - day period from

the date her therapy began. The Petitioner reaffirmed its

initial coverage determination. The Subscriber filed an appeal

with the Statewide Subscriber and Provider Assistance Panel

(Panel) to hear and review her complaint in accordance with

Section 408.7056, Florida Statutes. A hearing was then held

before the Panel by video conference on July 15, 2002.

On August 2, 2002, the Panel determined that the Subscriber

was entitled to coverage for continued outpatient rehabilitative

therapy. On August 27, 2002, the Agency for Health Care

Administration (AHCA), confirmed this decision and determined

that the Petitioner shou ld authorize continued decongestive

rehabilitative therapy for the Subscriber.

On September 17, 2002, the Petitioner requested a summary

hearing to contest AHCA’s decision. Subsequently, on

September 25, 2002, this matter was referred to the Divisison o f

Administrative Hearings (DOAH) for formal proceedings.

At the final hearing, the Petitioner presented no witnesses

and offered one exhibit. AHCA presented the testimony of one

witness, Dr. Joel Mattison, by telephone, as an expert witness

on the preva iling medical standard for treatment of lymphedema.

AHCA also presented two exhibits, a copy of Dr. Mattison’s

curriculum vitae and a copy of the Women’s Cancer Rights Act of

1998.

The Transcript of the proceeding was filed on January 27,

2003. The parti es were granted leave to file Proposed Final

Orders within 20 days thereafter. Both parties have filed

Proposed Final Orders, which have been reviewed and considered

in the preparation of this Final Order.

FINDINGS OF FACT

1. The following facts were stipulated to at hearing by

the Petitioner and AHCA:

(i) Effective April 1, 2002, the Subscriber in

question was enrolled as a participant in a group HMO

plan issued by the Petitioner to the Subscriber’s

employer for the benefit of its employees and thei r

eligible dependents. This plan constitutes an

“employee welfare benefit plan” pursuant to the

Employee Retirement Income Security Act of 1974

(ERISA).

(ii) As a result of breast cancer, the

Subscriber had a partial mastectomy of her left

breast. Subs equent to her surgery, she required

decongestic therapy due to lymphedema.

(iii) The Petitioner authorized and provided

coverage for decongestic physical therapy benefits for

the Subscriber for services rendered from a

participating provider for the auth orized period of

August 9, 2001, through October 18, 2001.

(iv) The Petitioner denied coverage for

additional decongestic physical therapy beyond the

authorized period of August 9, 2001, through

October 18, 2001, on the grounds that the Subscriber’s

ben efit had been exhausted under the terms of the

Member Handbook.

2. The Member Handbook for the Subscriber's HMO, signed by

Robert I. Lufrano, M.D., the president of the Petitioner’s

company, establishes the description of the rights and

obligations of t he Subscriber and the Petitioner with respect to

the coverage and/or benefits to be provided by the Petitioner.

Pages 20 - 23 of the Member Handbook requires the preparation and

review every 30 days of a treatment plan as recommended by the

Subscriber’s pri mary care physician or authorized provider.

Further, provisions of the Member Handbook document the

Petitioner's obligation to comply with state and federal laws

and regulations and states that the terms of the agreement shall

be interpreted to comply wit h those laws.

3. Joel Mattison, M.D., is board - certified in plastic and

reconstructive surgery. He holds a license in Florida and in

North Carolina to practice medicine and surgery. Dr. Mattison

has a specialty in plastic surgery and tropical diseases.

4. Dr. Mattison's testimony establishes that the most

common treatment form for lymphedema is a method of massage

known as decongestic therapy. Lymphedema is the type of problem

that will reoccur and no current treatment permanently

eliminates the pro blem. If treatment is not received, the

patient will suffer swelling of the body part located near the

problem area causing trauma and infection with fungi and

bacteria. The decongestic therapy is outpatient post - surgical

follow - up care in keeping with t he prevailing medical standard.

5. As established by Dr. Mattison's testimony, the

massage, which is the prevailing medical standard of care for

lymphedemas, could be needed in excess of 62 days.

6. Included in the therapy is the education of the patie nt

to perform self - massage. The instruction in self - massage,

however, is only part of the therapy and the other massage

should not be discontinued.

7. The evidence does not establish that the Subscriber

received any instruction in self - massage or her ability to

perform this function.

8. In addition, Dr. Mattison testified that lymphedemas as

a result of reconstruction and as a result of mastectomy, are

indistinguishable without other indication, such as scars or

patient history.

9. Dr. Mattison te stified that lymphedema pumps are

available to assist in treatment. While it is hoped that the

patient will learn how to use the pump, patients cannot always

be depended on to learn to use them.

10. The evidence fails to establish that the patient was

of fered a lymphedema pump or that using the lymphedema pump

constitutes the prevailing medical standard.

CONCLUSIONS OF LAW

11. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding. Section s 120.57, 120.574, and 408.7056(14), Florida

Statutes.

12. Section 408.7056, Florida Statutes, provides for the

establishment of a program to resolve disputes between managed

care entities and subscribers who receive health care from such

entities. Pe rtinent provisions of Section 408.7056, Florida

Statutes, include the following:

(3) The agency shall review all

grievances within 60 days after receipt and

make a determination whether the grievance

shall be heard. Once the agency notifies

the panel, the subscriber or provider, and

the managed care entity that a grievance

will be heard by the panel, the panel shall

hear the grievance either in the network

area or by teleconference no later than 120

days after the date the grievance was filed.

The agen cy shall notify the parties, in

writing, by facsimile transmission, or by

phone, of the time and place of the hearing.

The panel may take testimony under oath,

request certified copies of documents, and

take similar actions to collect information

and docu mentation that will assist the panel

in making findings of fact and a

recommendation. The panel shall issue a

written recommendation, supported by

findings of fact, to the provider or

subscriber, to the managed care entity, and

to the agency or the depart ment no later

than 15 working days after hearing the

grievance. If at the hearing the panel

requests additional documentation or

additional records, the time for issuing a

recommendation is tolled until the

information or documentation requested has

been provided to the panel. The proceedings

of the panel are not subject to chapter 120.

* * *

(7) After hearing a grievance, the panel

shall make a recommendation to the agency or

the department which may include specific

actions the managed care entit y must take to

comply with state laws or rules regulating

managed care entities.

(8) A managed care entity, subscriber, or

provider that is affected by a panel

recommendation may within 10 days after

receipt of the panel's recommendation, or 72

hours af ter receipt of a recommendation in

an expedited grievance, furnish to the

agency or department written evidence in

opposition to the recommendation or findings

of fact of the panel.

(9) No later than 30 days after the

issuance of the panel's recommendat ion and,

for an expedited grievance, no later than 10

days after the issuance of the panel's

recommendation, the agency or the department

may adopt the panel's recommendation or

findings of fact in a proposed order or an

emergency order, as provided in cha pter 120,

which it shall issue to the managed care

entity. The agency or department may issue

a proposed order or an emergency order, as

provided in chapter 120, imposing fines or

sanctions, including those contained in

ss. 641.25 and 641.52. The agenc y or the

department may reject all or part of the

panel's recommendation. All fines collected

under this subsection must be deposited into

the Health Care Trust Fund.

* * *

(13) Any information which would identify

a subscriber or the spouse, relat ive, or

guardian of a subscriber and which is

contained in a report obtained by the

Department of Insurance pursuant to this

section is confidential and exempt from the

provisions of s. 119.07(1) and s. 24(a),

Art. I of the State Constitution.

(14) A pr oposed order issued by the

agency or department which only requires the

managed care entity to take a specific

action under subsection (7) is subject to a

summary hearing in accordance with

s. 120.574, unless all of the parties agree

otherwise. If the man aged care entity does

not prevail at the hearing, the managed care

entity must pay reasonable costs and

attorney's fees of the agency or the

department incurred in that proceeding.

(15)(a) Any information which would

identify a subscriber or the spouse,

relative, or guardian of a subscriber which

is contained in a document, report, or

record prepared or reviewed by the panel or

obtained by the agency pursuant to this

section is confidential and exempt from the

provisions of s. 119.07(1) and s. 24(a),

Art . I of the State Constitution.

13. The issue in this case is twofold: whether the

Subscriber falls into the class of people intended to be

protected by the federal "Women’s Health and Cancer Rights Act

of 1998” (the Act); and, whether outpatient lymphede ma treatment

is required by Section 641.31(31)(a), Florida Statutes, for the

Subscriber after her mastectomy.

14. The Member Handbook is evidence of the existence of

the group plan. The Member Handbook also establishes the

description of the rights and obligations of the Subscriber and

the Petitioner with respect to the coverage and/or benefits to

be provided by the Petitioner, inclusive of the Petitioner's

obligation to comply with state and federal laws and

regulations.

15. Pursuant to provisions of the Act, the Petitioner is

required to provide coverage for the Subscriber’s lymphedema

treatment. The Act was implemented to provide coverage and

quality of care minimums for mastectomies and for breast

reconstruction for women who have breast cancer. The Act is

codified in Title 29 U.S.C. Section 1185b, which states in part:

(a) In general

A group health plan, and a health

insurance issuer providing health insurance

coverage in connection with a group health

plan, that provides medical and surgi cal

benefits with respect to a mastectomy shall

provide, in a case of a participant or

beneficiary who is receiving benefits in

connection with a mastectomy and who elects

breast reconstruction in connection with

such mastectomy, coverage for -

(1) al l stages of reconstruction of the

breast on which the mastectomy has been

performed;

(2) surgery and reconstruction of the

other breast to produce a symmetrical

appearance; and

(3) prostheses and physical complications

of mastectomy, including lymp hedemas ;

In a manner determined in consultation

with the attending physician and the

patient. Such coverage may be subject to

annual deductibles and coinsurance

provisions as may be deemed appropriate and

as are consistent with those established for

o ther benefits under the plan or coverage.

Written notice of the availability of such

coverage shall be . . . .

(Emphasis added)

16. All women who have breast cancer who need mastectomies

are covered under this Act. Howard v. Coventry Health Care of

Iowa , 158 F. Supp.2d 937 (S.D. Iowa 2001), 3 states the

legislative intent for the enactment of the Act was to "ban

drive - through mastectomies" and to require that insurance plans

cover the costs of breast reconstruction surgeries. See Women's

Health and Cancer Rights Act , 1998 WL 235685 (Cong. Rec.), 144

Cong. Rec. S4644 - 01 at *S4646 (May 12, 1998). 4 This Act was

intended to protect women with breast cancer and to ensure

appropriate treatment for complications of mastectomy, including

lymphedema.

17. The code states in Title 29 U.S.C. Section 1185b (e):

Preemption, relation to state laws —

(1) In general

Nothing in this section shall be construed

to preempt any State law in effect on

October 21, 1998, with respect to health

insurance coverage that requ ires coverage of

at least the coverage of reconstructive

breast surgery otherwise required under this

section.

(2) ERISA

Nothing in this section shall be construed

to affect or modify the provisions of

section 1144 of this title with respect to

group health plans.

18. Notably, as set forth in the foregoing federal

provisions, if the state law conflicts with the federal law,

then the state law preempts. No apparent conflict is

discernible between state and federal provisions on the subject.

As codif ied in Section 641.31(31)(a), Florida Statutes (1997), a

health maintenance contract must provide coverage for outpatient

post surgical follow - up care in keeping with the prevailing

medical standards after a mastectomy. As codified in Section

641.31(32), Florida Statutes, coverage for mastectomy must also

include coverage for prosthetic devices and breast

reconstruction.

19. The Florida law requires coverage of care after a

mastectomy specifically in Section 641.31(31)(a), Florida

Statutes, which states in pertinent part:

(31)(a) . . . Such contract must also

provide coverage for outpatient postsurgical

followup care in keeping with prevailing

medical standards by a licensed health care

professional under contract with the health

maintenance organiz ation qualified to

provide postsurgical mastectomy care . The

treating physician under contract with the

health maintenance organization, after

consultation with the covered patient, may

choose that the outpatient care be provided

at the most medically app ropriate setting,

which may include the hospital, treating

physician's office, outpatient center, or

home of the covered patient. (Emphasis

added)

20. Both the Florida Statute and the Act use the

cost - sharing mechanism of deductibles and coinsuranc e for the

plan to impose limitations on the lymphedemas treatment. The

plain language of the state statute on mastectomy coverage,

Section 641.31(31)(c)2., Florida Statutes, and the federal code,

does not permit durational limitation on the treatment.

21. Coverage limits are stated in the language from Title

29 U.S.C. Section 1185b(a)(3) as follows:

Such coverage may be subject to annual

deductibles and coinsurance provisions as

may be deemed appropriate and as are

consistent with those establishe d for other

benefits under the plan or coverage . . . .

22. Section 641.31(31)(c)2., Florida Statutes, states:

This subsection does not prevent a

contract from imposing deductibles,

coinsurance, or other cost sharing in

relation to benefits pursua nt to this

subsection, except that such cost sharing

shall not exceed cost sharing with other

benefits.

23. AHCA seeks a 30 - day review of the rehabilitative

treatment plan in accordance with provisions for rehabilitative

services set forth on pages 20 - 23 of the Member Handbook, which

requires the preparation and review every 30 days of a treatment

plan as recommended by the Subscriber’s primary care physician

or authorized provider.

24. Section 408.7056(14), Florida Statutes (2002),

concludes with the fol lowing provision:

(14) . . . If the managed care entity

does not prevail at the hearing, the managed

care entity must pay reasonable costs and

attorney's fees of the agency or the

department incurred in that proceeding.

ORDER

Pursuant to the forego ing Findings of Fact and Conclusions

of Law, it is ORDERED:

1. That the Petitioner reimburse the Subscriber for all

lymphedema outpatient therapy received until the date of this

Final Order for as long as the Subscriber maintained coverage

under the Membe r Handbook;

2. That the Petitioner immediately reinstate coverage for

the Subscriber’s lymphedema outpatient therapy for so long as

the treatment is medically necessary and the Subscriber

maintains coverage under the Member Handbook;

3. That a rehabilita tive treatment plan is created in

consultation with the attending physician and patient, and

reviewed by the Petitioner every 30 days until the lymphedema

outpatient therapy is no longer medically necessary; and

4. That jurisdiction is retained solely fo r determination

of the amount of reasonable costs and attorney’s fees to be

awarded to AHCA in this proceeding in accordance with Section

408.7056(14), Florida Statutes (2002), upon filing of

appropriate pleadings by AHCA.

DONE AND ORDERED this 3rd da y of March, 2003, in

Tallahassee, Leon County, Florida.

___________________________________

DON W. DAVIS

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 967 5 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 3rd day of March, 2003.

ENDNOTES

1/ In view of the provisions of Subsections (13) and (15) of

Section 408.7056, Flo rida Statutes, "the Subscriber" has been

substituted for the name of the insured.

2/ Section 408.7056(1)(a), Florida Statutes, defines “managed

care entity” as “a health maintenance organization or a prepaid

health clinic certified under chapter 641, a prepaid health plan

authorized under s. 409.912, or an exclusive provider

organization certified under s. 627.6472.”

3/ A brief summary of this case is: United States District

Court, S.D. Iowa, Central Division. Lisa HOWARD, Plaintiff v.

COVENTRY HEAL TH CARE OF IOWA, INC., Principal Financial Group,

Inc., and Principal Mutual a/k/a Principal Life Insurance

Company , Defendant, No. 4 - 01 - CV - 10196 (July 20, 2001). A group

of breast cancer patients brought putative class action against

health insurer in st ate court, asserting claims for tortious

breach of statute, breach of contract, violation of public

policy, and bad faith. After removing action, insurer moved to

dismiss.

4/ After removing action, insurer moved to dismiss. The

District Court, Longst aff, Chief Judge, held that: (1) there is

no implied private cause of action under provision of Women's

Health and Cancer Rights Act addressing required health coverage

for reconstructive surgery following mastectomies, and

(2) claims for breach of contra ct, violation of public policy,

and bad faith were preempted by Employee Retirement Income

Security Act (ERISA).

COPIES FURNISHED :

Daniel Alter, Esquire

Bunnell, Woulfe, Kirschbaum, Keller,

McIntyre & Gregoire, P.A.

Post Office Drawer 030340

Fort Laud erdale, Florida 33303

Ursula Eikman, Esquire

Agency for Health Care Administration

2727 Mahan Drive

Tallahassee, Florida 32308

Lealand McCharen, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 3230 8

Valda Clark Christian, General Counsel

Agency for Health Care Administration

2727 Mahan Drive

Fort Knox Building, Suite 3431

Tallahassee, Florida 32308

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entit led to judicial review pursuant to Section 120.68, Florida

Statutes. Review proceedings are governed by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing the original notice of appeal with the Clerk of the

Division of Adm inistrative Hearings and a copy, accompanied by

filing fees prescribed by law, with the District Court of

Appeal, First District, or with the District Court of Appeal in

the Appellate District where the party resides. The notice of

appeal must be filed wi thin 30 days of rendition of the order to

be reviewed.