06-000754PL Department Of Financial Services vs. Jennifer Sophia D`alessandro Status: Closed Recommended Order on Friday, December 29, 2006.

Summary: Respondent pre-signed a blank pre-enrollment application form, but bad intent, willfulness, and fraudulent conduct was not established. No disciplinary action can be imposed on her license under Subsection 626.611(7) or 642.041(5), Florida Statutes.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL )

SERVICES , )

)

Petitioner , )

)

vs. ) Case No. 06 - 0754PL

)

JENNIFER SOPHIA D'ALESSANDRO , )

)

Respondent . )

)

RECOMMENDED O RDER

On August 24, 2006, a formal administrative hearing was

held in this case in St. Petersburg, Florida, before Carolyn S.

Holifield, Administrative Law Judge, Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Philip M. Payne, Esquire

Department of Financial Services

624 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

For Respondent: Doug Wilcock, Esquire

Bauman and Wilcock, P. A.

6640 34th Avenue, North

St. Petersburg, Florida 33710

STATEMENT OF THE ISSUE S

The issue s for determination are whether Respondent

violated Subsections 626.611(7) and 642.041(5), Flori da Statutes

(2004) , 1 as alleged in the Administrative Complaint , and, if so,

what disciplinary actions should be imposed on her license as a

health insurance agent and legal expense sales representative.

PRELIMINARY STATEMENT

On February 16, 2006, Petition er, the Department of

Financial Services (“Department”), filed an Administrative

Complaint against Respondent, a licensed Florida health

insurance agent and legal expense sales representative. The

Administrative Complaint alleges the following: (1) while

licensed as a health insurance agent and legal expense sales

representative, Respondent was accountable for the submission of

a February 2005 fraudulent Medicaid p re - enrollment application

and appointment sheet for Susan Scott, of New Port Richey,

Florida , without Ms. Scott's knowledge, consent, and proper

signature; (2) Respondent's signature was on the "fraudulent "

application; (3) the "fraudulent " application and appointment

sheet were submitted to Amerigroup Corporation; and (4) as a

result of the sub mission of the " fraudulent " application and the

appointment sheet, Amerigroup paid Respondent a commission and

issued a Medicaid coverage identification card to Ms. Scott.

The Department charged that by engaging in the alleged conduct,

Respondent has demo nstrated lack of fitness or trustworthiness

to engage in the business of insurance, which is a basis for the

Department's taking disciplinary action against Respondent's

insurance licenses, pursuant to Subsections 626.611(7) and

642.041(5), Florida Statu tes.

Respondent challenged the factual allegations and timely

requested a formal hearing. On or about March 1, 2006, the

Department forwarded the matter to the Division of

Administrative Hearings for assignment of an Administrative Law

Judge to conduct th e formal hearing. By Notice issued March 14,

2006, the hearing was initially set for April 26, 2006.

However, the parties subsequently requested and were granted two

continuances.

At the hearing, the Department presented the testimony of

two witnesses, S usan Scott and Patricia Watkins. Petitioner's

Exhibits 1 through 10 were received into evidence. Respondent

testified on her own behalf and presented the testimony of

Anthony Nespeca.

A Transcript of the hearing was filed on September 11,

2006. At the c onclusion of the hearing, the time for filing

proposed recommended orders was set for ten days after the

Transcript was filed. The Department filed its Proposed

Recommended Order on September 21, 2006. Subsequently,

Respondent requested and was granted a n extension of time to

file her p roposed r ecommended o rder. Respondent's Proposed

Recommended Order was filed on October 5, 2006. The P roposed

R ecommended O rders of both parties have been carefull y

considered in preparation of this Recommended Order.

FIN DINGS OF FACT

1. Respondent was and, at all times material hereto, has

been licensed in Florida as a health insurance agent and a legal

expense sales representative. Respondent’s license number with

the Department is D037418.

2. On or about August 16, 2005, Respondent was appointed

as an agent with Amerigroup of Florida, Inc. (Amerigroup) .

3. In early February 2005, Susan Scott and Frank Barrs,

her husband, 2 had Medicaid coverage through the Stay w ell Medicaid

Program. Later that month, Ms. Scott recei ved a "Welcome

Packet" from Amerigroup and enrollment cards which indicated

that she had Medicaid coverage through Amerigroup.

4. Ms. Scott then contacted the Medicaid Options Office

and Amerigroup to advise both offices that she had not

authorized that h er Medicaid coverage be switched from Staywell

to Amerigroup. Upon receiving the call from Ms. Scott,

Amerigroup investigated the matter.

5. Amerigroup's investigation concluded that Ms. Scott's

Medicaid plan was switched from Staywell Medicaid p lan to t he

Amerigroup Medicaid p lan without her knowledge, consent, and/or

approval.

6. Ms. Scott was unaware of how the unauthorized switch of

her Medicaid plan occurred. However, Ms. Scott recalled that

sometime prior to the unauthorized switch, she was appr oached by

an Amerigroup representative while she was at the Department of

Children and Famil y Serv i c es o ffice. That representative asked

Ms. Scott if she had Medicaid coverage and about her insurance

and her open enrollment period. Ms. Scott believed tha t these

inquiries were made in an effort to persuade her to change her

current Medicaid coverage. However, at that time, Ms. Scott

told the representative four or five times that she was

satisfied with her current Medicaid p rogram.

7. Subsequently, the r epresentative , who had approached

Ms. Scott at the Department of Children and Family Services

o ffice, showed up at her house without her permission.

Ms. Scott identified this person as Herbert Stadler.

8. It was soon after the person whom Ms. Scott iden tified

as Mr. Stadler came to her house that Ms. Scott learned that her

Medicaid insurance coverage had been switched from Staywell to

Amerigroup without her prior knowledge, consent, or

authorization.

9. A transfer of coverage to Amerigroup required thre e

steps: (1) a completed Appointment Sheet Form (Appointment

Sheet) , (2) an in - person presentation by an Amerigroup

representative and completion of a pre - enrollment form , and

(3) a call by the applicant to the Medicaid Options Office to

advise that offi ce of the applicant's decision or plan to change

his/her Medicaid coverage.

10. Amerigroup’s Appointment Sheet requires that the

"applicant" listed on the Appointment Sheet indicate how the

applicant's appointment with the Amerigroup representative was

ma de. These options are whether the appointment was made in

person or by the applicant's calling Amerigroup to request an

appointment. The Appointment Sheet includes spaces for the

applicant to list his/her name, address, and telephone number,

to consent t o have a representative of Amerigroup contact the

applicant within the next 90 days or during the applicant's next

enrollment period, and to give Amerigroup permission to view the

eligibility of recipients listed on the Pre - Enrollment

Application. Finally , the Appointment Sheet includes signature

lines for the applicant's signature and the Amerigroup marketing

representative's signature.

11. An Amerigroup Appointment Sheet dated February 16,

2005, bears the signature of Anthony Nespeca, as the marketing

representative, and also purports to bear the signature of Susan

Scott. The Appointment Sheet lists Ms. Scott's address as

10625 Houston Avenue, in Hudson, Florida, in Pasco County,

Florida. According to the Appointment Sheet, Ms. Scott

consented to hav e an Amerigroup representative contact her.

12. It is unknown who signed Ms. Scott's name on the

Appointment Sheet referred to in paragraph 11, but clearly,

Ms. Scott did not sign that form. Also, notwithstanding the

indication on the Appointment Sheet to the contrary, Ms. Scott

never made or requested an appointment with an Amerigroup

representative -- either in person or by telephone. Finally, the

address listed on the Appointment Sheet as Ms. Scott's address

was not her and/or her husband's address. On February 16, 2005,

Ms. Scott's and her husband's correct address was an address on

Gray Fox Lane in Port Richey, Florida.

13. Amerigroup has a Pre - Enrollment Application form that

provides space for information regarding the applicant,

including the ap plicant's name and physical address. The Pre -

Enrollment Application also provides a box that the applicant

may check , indicating that "I understand the benefits as they

have been explained to me and I wish to enroll with Amerigroup

of Florida." Immediate ly below that statement is a line for the

applicant's signature. The Pre - Enrollment Application also

provides a space for the marketing representative's signature

and a place for the marketing representative to print his or her

name. Finally, the Pre - Enr ollment Application has a space to

indicate whether the applicant called the Medicaid Options

Office to report the change in his/her Medicaid plan.

14. The Pre - Enrollment Application, applicable in this

case, lists Ms. Scott and her husband as the applica nts, and

includes a signature, dated February 17, 2005, purporting to be

that of Ms. Scott. Notwithstanding the purported signature of

Ms. Scott on the Pre - Enrollment Application, Ms. Scott did not

sign that form. Moreover, the Pre - Enrollment Application , like

the Appointment Sheet, incorrectly lists Ms. Scott's address as

being in Hudson, Florida, when, in fact, her address was in Port

Richey, Florida. Finally, even though the Pre - Enrollment

Application indicates that Ms. Scott placed a telephone call t o

the Medicaid Options Office to change her Medicaid enrollment,

she never made such a call.

15. On the Pre - Enrollment Application, Respondent's

signature is on the line designated for the marketing

representative's signature. Next to Respondent's signa ture is

February 17, 2005, which is one day after she was appointed an

agent with Amerigroup; however, there is no evidence that

Respondent wrote that date on the Pre - Enrollment Application.

Below Respondent's signature is a space for the marketing

repre sentative to print his or her name. Printed in that space

is the name, "Anthony Nespeca."

16. Based on the information from the Appointment Sheet

and Pre - Enrollment Application forms, Ms. Scott and her husband

were entered into Amerigroup’s Florida sales tracking data base.

This resulted in Ms. Scott and her husband being switched from

the Staywell Medicaid p lan to the Amerigroup Medicaid p lan.

17. Based on Amerigroup's practice, the representative or

representatives whose names appeared on the Pre - Enr ollment

Applications were paid a commission for the new customer. Whe n

there were two names appearing on the Pre - Enrollment Form, as in

this case, the commission was split between the two individuals.

Here, because both Respondent's name and Anthony Nesp eca's name

appeared on the Pre - Enrollment Form, Amerigroup paid a

commission to Respondent and Mr. Nespeca.

18. The Amerigroup investigation found that the telephone

call to the Medicaid Options Office for the enrollment of

Ms. Scott was placed from Mr. Nespeca’s home telephone.

19. T he undisputed evidence in this proceeding is that

Ms. Scott and her husband were switched from their Staywell

Medicaid p lan to the Amerigroup Medicaid plan, without their

knowledge, consent, and/or authorization. Also, the undisputed

evidence in this proceeding established that the call to

Medicaid Options Office, purported to be from Ms. Scott, was

made from Mr. Nespeca's home telephone.

20. Mr. Nespeca was subsequently terminated from his job

with Amerigroup and thereaft er entered into an agreement with

the Department of Financial Services for a consent order that

resulted in a 12 - month suspension of his license.

21. It is undisputed that Respondent’s signature appeared

on the Pre - Enrollment Application for Ms. Scott. H owever, there

is no evidence that Respondent knew about or was in any way

involved in the transaction which resulted in Ms. Scott's

Medicaid plan being improperly switched.

22. The credible testimony of Respondent is that an agent

employed by Amerigroup o ften partners with another agent in the

company to share commissions. Often these agents go together to

visit potential clients, but there are times when they do not do

so. Nonetheless, in order to share commissions, the names of

both agents/representati ves must be on the Pre - Enrollment form.

To ensure that Respondent and Mr. Nespeca received the shared

commissions, they exchanged pre - signed Pre - Enrollment

Application forms, that were not filled out, as a mechanism of

splitting commissions.

23. The prac tice of agents sharing commissions was not

uncommon or against Amerigroup policy. Furthermore, Amerigroup

used the Pre - Enrollment Application forms to determine which

agents/representatives should be paid commissions.

24. Respondent was not involved in t he telephone call to

the Medicaid Options Office that was an important element in

Ms. Scott’s insurance carriers being switched , and no evidence

to the contrary was presented.

25. Respondent has never met Ms. Scott and has never gone

to her house. Respo ndent did not fill out the Pre - Enrollment

Application , and the telephone call did not come from her house.

26. Prior to the investigation conducted by Amerigroup , in

which she was questioned and confronted about Ms. Scott's

complaint, Respondent had no kn owledge or involvement in the

events which led to Ms. Scott's Medicaid plan being switched.

27. Respondent's only involvement with the transaction

involving Ms. Scott's Medicaid coverage being switched was that

she and Mr. Nespeca split the commission. T his action did not

require or involve any action by Respondent. The mere fact that

Respondent's signature was on the Pre - Enrollment Application

form triggered the process that resulted in Amerigroup 's paying

the commission for that enrollment to Responden t and

Mr. N especa.

28. In her first year with Amerigroup, Respondent was the

top producer and, except for this case, Respondent has never

been accused of submitting a fraudulent claim.

CONCLUSIONS OF LAW

29. The Division of Administrative Hearings has

j urisdiction of the subject matter of and the parties to this

proceeding. See §§ 120.569 and 120.57(1), Fla . Stat. (200 5 ).

30. The Department’s Administrative Complaint alleges that

Respondent violated Subsections 626.611(7) and 642.041(5),

Florida Statut es.

31. Subsection 626.611 (7), Florida Statutes, authorizes

the Department to suspend, revoke, or otherwise discipline the

license of an insurance agent, if such licensee has

"demonstrated lack of fitness or trustworthiness to engage in

the business of i nsurance."

32. Subsection 642.041(5), Florida Statutes, authorizes

the Department to suspend, revoke, or otherwise discipline the

license of a sales representative if such licensee has

"demonstrated lack of fitness or trustworthiness to engage in

the busi ness of legal expense insurance."

33. In the instant case, the Department has the burden of

proving its allegations by clear and convincing evidence. See

Department of Banking and Finance v. Osborne Stern and Company ,

670 So. 2d 932, 935 (Fla. 1996); Fer ris v. Turlington , 510 So.

2d 292 (Fla. 1987).

34. Clear and convincing evidence is that which is

credible, precise, explicit, and lacking confusion as to the

facts in issue. The evidence must be of such weight that it

produces in the mind of the trier o f fact the firm belief of

conviction, without hesitancy, as to the truth of the

allegations. Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla. 4 th

DCA 1983).

35. The alleged violation of Subsections 626.611(7) and

642.041(5), Florida Statutes, relates to t he allegations in the

Administrative Complaint that Respondent was "accountable" for

the submission of a fraudulent Medicaid Pre - Enrollment

application and appointment sheet, which resulted in

Respondent's receiving a commission.

36. In order to establish a lack of fitness or

trustworthiness to engage in the business of insurance under

Subsection 626.611(7), Florida Statutes, the Department must

adduce evidence of bad intent, willfulness or fraudulent

conduct. See Hartnett v. Department of Insurance , 406 So. 2d

1180 ( Fla. 1 st DCA 1981), cited in In the Matter of Oscar Brown,

Jr. , at paragraph 42, Case No. 04 - 0765PL ( DOAH September 30,

2004) (Final Order adopting Recommended Order filed December 17,

2004). 3

37. Subsection 642.041(5), Florida Statutes, lik e

Subsection 626.611(7), Florida Statutes, refers to "lack of

fitness or trustworthiness" to engage in certain business

activities. The only difference in the two provisions is that

the former provision refers to the "business of legal expense

insurance," and the latter one refers to the "business of

insurance." Given that the key language in those provisions is

identical, the elements of bad intent, willfulness, and

fraudulent conduct required to prove Subsection 626.611(7),

Florida Statutes, is also req uired to prove Subsection

642.041(5), Florida Statutes.

38. In this case, the Department failed to meet its burden

of proof. While the Department asserts that Respondent,

willfully and without justifiable excuse, signed her name to the

fraudulent Amerigr oup Pre - Enrollment Application form of

Ms. Scott and her husband, it failed to present evidence to

support that assertion.

39. The Department offered no credible evidence to show

that Respondent was involved in the execution and subsequent

submission of the fraudulent Appointment Sheet and the Pre -

Enrollment Application or the phone call to Medicaid Options

necessary to fraudulently transfer Ms. Scott’s Medicaid

carrier.

40. The Department's assertion that Respondent's signature

was on the fraudulent fo rms and that she was accountable for the

submission of those forms, does not meet the elements of bad

intent, willfulness, or fraudulent conduct necessary to prove

the alleged violations. Rather, the clear and convincing

evidence established that Responde nt pre - signed Pre - Enrollment

Application forms and that one of these forms was misused by

someone else to enroll Ms. Scott in Amerigroup, without

Ms. Scott's permission, consent, or authorization.

41. The Department failed to meet the burden as to the

willfulness of Respondent’s conduct since the Administrative

Complaint does not allege that pre - signing a pre - enrollment form

is a violation of law or policy. At most, Respondent's conduct

of pre - signing an otherwise incomplete Pre - Enrollment

Application may constitute negligence and/or reflect poor

judgment. However, no such allegations were made in the

Administrative Complaint.

42. In summary, the conduct of Respondent, pre - signing an

otherwise incomplete Pre - Enrollment Application that was later

fraud ulently completed and submitted by another agent, reflects

poor judgment. However, for the reasons found and concluded

above, Respondent is not guilty of violating the provisions

under Subsection s 626.611(7) and 642.041(5), Florida Statutes.

RECOMMENDATI ON

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department of Financial Services enter

a final order dismissing the Administrative Complaint.

DONE AND ENTERED this 2 9 th day of December , 2006 , in

Tallahassee, Leon County, Florida.

S

CAROLYN S. HOLIFIELD

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Fi ling (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 2 9 th day o f December , 2006 .

ENDNOTES

1/ All references to Florida Statutes are to Florida

Statutes (2004), unless otherwise indicated.

2 / Ms. Scott testified that in February 2005, she and Mr. Barr

were living together, but since that time, in March 2006, they

were married.

3/ While the Hartnett Court explicitly deferred to the

Department on interpreting Subsection 626.611(7), it cautiousl y

“venture[d] to suggest” that the element of willfulness would be

essential to proving a case pursuant to Subsection 626.611(7),

Florida Statutes. Hartnett at 1184. Based on the Department's

ruling in Brown, it has adopted the element of "willfulness" t o

prove a case under Subsection 626.611(7), Florida Statutes.

COPIES FURNISHED :

Philip M. Payne, Esquire

Department of Financial Services

624 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

Doug Wilcock, Esquire

Bauman and Wilco ck, P. A.

6640 34th Avenue , North

St. Petersburg, Florida 33710

Honorable Tom Gallagher

Chief Financial Officer

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399 - 0300

Carlos G. Muñiz, General Counsel

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399 - 0307

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.