08-003616 Humana Medical Plan, Inc. vs. Office Of Insurance Regulation Status: Closed DOAH Final Order on Tuesday, February 3, 2009.

Summary: Cold water therapy device is determined to be a convenience item and, therefore, excluded from coverage as failing to meet all the criteria in the definition of durable medical equipment contained within the Certificate of Coverage.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HUMANA MEDICAL PLAN, INC., )

)

Petitioner, )

)

vs. ) Case No. 08-3616

)

OFFICE OF INSURANCE REGULATION, )

)

Respondent. )

)

FINAL ORDER

Pursuant to Notice, this cause was heard by Linda M. Rigot,

the assigned Administrative Law Judge of the Division of

Administrative Hearings, on December 10, 2008, in Tallahassee,

Florida. Pursuant to the parties' agreement, a stipulated

record was admitted in evidence, and the parties presented

closing arguments on both the stipulated record and on a pending

motion for summary final order.

APPEARANCES

For Petitioner: Pamela C. Marsh, Esquire

J. Martin Hayes, Esquire

Bruce D. Platt, Esquire

Akerman Senterfitt

Highpoint Center, Suite 1200

106 East College Avenue

Tallahassee, Florida 32301

For Respondent: Jessica N. Poarch, Esquire

Office of Insurance Regulation

Larson Building, Suite 646E

200 East Gaines Street,

Tallahassee, Florida 32399

STATEMENT OF THE ISSUES

The issues presented are (1) whether the Subscriber

Assistance Panel had jurisdiction to hear the Subscriber's

appeal; (2) whether this matter is properly before the Division

of Administrative Hearings; and (3) whether the cold water

therapy device utilized by the Subscriber is covered under the

subject Humana commercial policy.

PRELIMINARY STATEMENT

By letter dated June 18, 2008, Respondent Office of

Insurance Regulation approved the recommendation of the

Subscriber Assistance Panel and directed Petitioner Humana

Medical Plan, Inc., to provide coverage for a cold water therapy

device for a particular subscriber. Humana timely filed a

petition for hearing challenging the Office's directive. This

cause was thereafter transferred to the Division of

Administrative Hearings to conduct the summary proceeding.

The final hearing was scheduled and continued several times

at the request of the parties. During that time, the parties

acknowledged that this cause is subject to a summary hearing by

statute and that the Division of Administrative Hearings has the

authority to issue a final order in this case. The parties

further agreed that an evidentiary hearing was not necessary and

that this case could be decided upon a stipulated record.

Petitioner's Motion for Summary Final Order was filed on

September 12, 2008, and Respondent's Response to Petitioner's

Motion for Summary Final Order was filed on September 18, 2008.

On September 24, 2008, the prior administrative law judge

assigned to this matter reserved ruling on the Motion. At the

final hearing scheduled in this cause, both parties presented

arguments regarding the pending Motion. Petitioner's Motion for

Summary Final Order is denied.

Petitioner's Unopposed Motion to Make Records Confidential

was filed on December 1, 2008. The Motion specified that all

exhibits and deposition transcripts be submitted under seal and

that all evidence produced be exempt from disclosure. An Order

Granting Motion to Make Records Confidential was entered on

December 2, 2008. It is noted that some of the attachments to

Petitioner's Motion for Summary Final Order and Respondent's

Response to Petitioner's Motion for Summary Final Order contain

references to the name of the Subscriber who is the subject of

this proceeding, and the Motion and the Response are hereby also

placed under seal to remain exempt from disclosure.

Petitioner's Exhibits numbered 1-10; Respondent's Exhibits

lettered A-DD, GG-II, OO, and PP; and Joint Exhibit numbered 1

were admitted in evidence. Petitioner filed the deposition

transcripts of Michelle Sanders and Louis Hochheiser, M.D., and

Respondent filed the deposition transcripts of the Subscriber's

mother K.O., James I. Tighe, and Steven Page, M.D. The

stipulated record, therefore, consists of the Exhibits, the

deposition transcripts, and the Joint Pre-hearing Stipulation

filed December 9, 2008.

The Transcript of the final hearing was filed on

December 17, 2008, and both parties filed proposed final orders

on January 5, 2009. Those documents have also been considered

in the entry of this Final Order.

FINDINGS OF FACT

1. Petitioner Humana Medical Plan, Inc., is a health

maintenance organization (hereinafter "Humana" or "HMO")

authorized to operate in Florida pursuant to a certificate of

authority issued in accordance with Part I of Chapter 641,

Florida Statutes.

2. The affected agency in this proceeding is the Office of

Insurance Regulation (hereinafter "Office").

3. Humana issued a large group contract providing health

insurance coverage to the School District of Hillsborough County

for the benefit of the School District's employees and their

eligible dependents. During all times relevant to this

proceeding, the Subscriber T. O. was enrolled in this HMO Plan.

4. The Office had previously reviewed and approved the

terms of Humana's Certificate of Coverage at issue in this

proceeding. The Certificate of Coverage is a contract between

Humana and the School District. Pursuant to this contract,

Humana provides an agreed-upon set of healthcare services to its

subscribers in exchange for an agreed-upon sum of money.

5. Humana's Certificate of Coverage provides coverage for

durable medical equipment (hereinafter "DME"), which is defined

as equipment meeting all of the following criteria:

A. it can stand repeated use;

B. it is primarily and customarily used to

serve a medical purpose rather than being

primarily for comfort and convenience (i.e.,

scooter to allow a patient to go shopping);

C. it is usually not useful to a person in

the absence of sickness or injury;

D. it is appropriate for home use;

E. it is related to the patient's physical

disorder; and

F. the equipment must be used in the

subscriber's home, a relative's home, or a

home for the aged or other type of

institution.

6. By the use of the word "and" to connect all of the

criteria in the definition of DME, the contract provides

coverage for a DME only if it meets all of the conditions.

Thus, Humana is neither obligated nor authorized to provide

coverage for a DME if any of the criteria in the definition are

not met.

7. The Certificate of Coverage also excludes coverage for

supplies, care, or treatment that are not essential for the

necessary care and treatment of an injury or sickness. The

Certificate also provides that Humana has the full and exclusive

discretionary authority to interpret the Plan's provisions, to

make decisions regarding eligibility for coverage and benefits,

and to resolve factual questions relating to coverage and

benefits.

8. The Subscriber T. O., a then-13-year-old male,

underwent reconstructive knee surgery to repair a torn anterior

cruciate ligament. The surgery was performed by Dr. Steven

Page, an orthopedic surgeon, on August 13, 2007. Dr. Page was

part of a group practice known as Brandon Orthopedic Associates,

which had a contract with Humana to provide in-network

healthcare to Humana subscribers and was, therefore, a

participating provider.

9. On August 7, 2007, the Subscriber's mother received an

item of DME while in Dr. Page's office, which had been

prescribed by Dr. Page. The DME was a cold water therapy

device.

10. She did not receive the device from Dr. Page, and he

had no discussion with her regarding whether the device would be

covered under her group insurance contract. Dr. Page made no

representations to her regarding coverage or non-coverage, and

she made no inquiry regarding whether her insurance would pay

for the device. Instead, according to her own testimony, she

made the decision that she would pay for the device herself if

there was no coverage.

11. In a Letter of Medical Necessity dated August 7, Dr.

Page prescribed the DME to be used for 14 days following

surgery. The Letter further states that the device is being

prescribed for its ability to reduce pain and edema, limit the

patient's hospital stay, and facilitate recovery. It further

states that ice or ice substitutes cannot be used continuously

due to possible tissue damage.

12. The cold water therapy device delivered to the

Subscriber was provided by Aberdeen Medical Services through

office space within the office space of Dr. Page's practice

group. Aberdeen does not have a contract with Humana to provide

services to Humana's subscribers and is, therefore, a non-

participating provider.

13. At the same time the cold water therapy device was

delivered to the Subscriber, the Subscriber's mother signed

Aberdeen's Assignment Agreement. The Agreement includes a

paragraph entitled Assignment of Benefits, which provides that

if the Subscriber's insurance company does not pay the claim in

full, the Subscriber assigns to Aberdeen all rights to any

appeal granted by the Subscriber's insurance company.

14. When the Subscriber's mother failed to bring the cold

water therapy device to the hospital on the day of her son's

surgery, Dr. Page instructed the Subscriber's mother to return

home to retrieve the device. He did not tell her that he would

not perform the surgery if she did not retrieve the device, and

he would not have refused to perform the surgery for a patient

who chose not to use the device.

15. Aberdeen submitted a claim to Humana seeking to be

paid $850 for the Subscriber's rental of the cold water therapy

device for 14 days. Humana denied coverage for the device in

September 2007, stating that there was no prior authorization on

file. The contract between Dr. Page's practice group and Humana

requires that prior authorization must be obtained before a

Subscriber can receive treatment or services from a non-

participating provider.

16. When Humana denied Aberdeen's claim for payment,

Aberdeen initiated the internal appeal and grievance process

with Humana. Humana requested that Aberdeen obtain the

Subscriber's consent by having the Subscriber's mother complete

an Appointment of Authorized Representative Form. The Form was

completed by the Subscriber's mother and returned to Humana by

Aberdeen.

17. Upon receiving confirmation that the Subscriber wished

to be represented in the appeal by Aberdeen, Humana continued

with the internal review process. Humana's Grievance and Appeal

Panel considered the appeal and upheld the denial of coverage,

stating that Humana considers the device to be a convenience

item. Humana informed Aberdeen of the denial of the appeal by

letter dated December 21, 2007, and further informed Aberdeen

that an additional grievance procedure was available before the

State's Subscriber Assistance Panel.

18. The Subscriber's mother filed a grievance with the

Subscriber Assistance Panel (hereinafter "Panel") appealing

Humana's denial of the claim.

19. The Panel heard the case on April 15, 2008. Two

representatives from Humana and the Subscriber's mother appeared

before the Panel by telephone. Aberdeen did not participate in

the Panel review.

20. The Panel found that the cold water therapy device is

excluded from coverage under the terms of the Subscriber's

Certificate of Coverage. The Panel also found that the

Subscriber's mother "detrimentally relied upon the participating

physician's recommendation of the cold water therapy device and

she was not given any other option as to alternative

treatments." The Panel determined that Humana "acted

inconsistently with its obligations to the Subscriber under the

rules and laws that regulated managed care entities" and

recommended to the Office that Humana be ordered to provide

coverage despite the device being excluded under the terms of

the Certificate of Coverage. The Panel did not, however, cite

to any "rules and laws" allegedly violated by Humana.

21. By letter dated June 18, 2008, the Office adopted by

reference and incorporated all the terms of the Panel's Proposed

Recommended Order and ordered Humana to provide coverage for the

device, finding that "coverage ordered herein is necessary in

order for representations made to the Subscriber via the Member

Handbook and Certificate of Coverage to be unambiguous and not

violative of Sections 641.31 and 641.3903, Florida Statutes."

The letter fails to specify what representations made in the

Member Handbook or the Certificate of Coverage are ambiguous and

fails to specify what provisions within the two lengthy statutes

cited would be violated if coverage were excluded in accordance

with the Certificate of Coverage.

22. Humana filed with the Office a timely Petition for

Summary Hearing, which was forwarded to the Division of

Administrative Hearings on July 23, 2008.

23. The cold water therapy device at issue consists of an

8-quart water cooler that looks like a small drink cooler, a

cuff, a pump, and a hose. The pump automatically exchanges

water through the hose from the pump to the cooler to provide a

continuous flow of cold water through the cuff which is wrapped

around the injured area.

24. As opposed to other treatment modalities such as an

ice pack/compression bandage combination or a cuff/water cooler

combination, the cold water therapy device involved in this case

is designed to provide a continuous flow of cold water through

the cuff and eliminate the need for the patient to remove and

replace ice packs or manually exchange the warmed water in the

cuff with cold water from the cooler. The cold water therapy

device also provides compression to the injured area because of

a compression strap and the water pressure inside the cuff. The

device comes with directions to use 20 minutes on and 20 minutes

off, so monitoring is required.

25. Humana requires providers to submit claims using

claims codes. Humana's claims codes for cold water therapy

devices include separate codes for a water-circulating cold pad

with pump, for a pump for a water-circulating cold pad, and for

a pad for a water-circulating unit. None of these devices or

components is a covered benefit under the Certificate of

Coverage involved in this case.

26. Neither Dr. Page nor Aberdeen obtained pre-

authorization from Humana before providing the cold water

therapy device to the Subscriber. According to the contract

between Humana and Dr. Page's practice group, pre-authorization

was required before this device could be considered for coverage

since it was supplied by a non-participating provider.

Likewise, the Subscriber never attempted to contact Humana

regarding any issue related to coverage prior to receiving this

device.

27. Aberdeen's president testified at deposition that

Humana has reimbursed Aberdeen in previous claims for the cold

water therapy device at issue here. However, in those

situations Aberdeen was reimbursed under different policies with

different coverage terms than the one at issue in this case.

28. Moreover, if a specific code is available for a

specific piece of DME, then that is the proper claims code to

use for reimbursement purposes. Aberdeen has submitted claims

for payment for cold water therapy devices under the claims code

"E1399," a claims code that is used for unlisted DMEs. In

conjunction with using that claims code, Aberdeen described the

DME as being "electronic controlled thermal therapy acute pain

management."

29. This claims code and this accompanying description are

not applicable to the cold water therapy device for which

Aberdeen was seeking reimbursement. The correct code should

have been "E0218," the code for a water-circulating cold pad

with pump. Humana admits that it has paid Aberdeen two claims

in error due to Aberdeen's use of the wrong code.

30. The Subscriber's mother has paid nothing toward the

rental of the cold water therapy device from Aberdeen. Aberdeen

has not even sent an invoice or other request for payment to the

Subscriber.

31. Whether Aberdeen will ever seek reimbursement for the

device from the Subscriber is speculative. Whether Aberdeen can

seek reimbursement from the Subscriber is questionable since the

Office offered into evidence two forms provided to the

Subscriber by Aberdeen. One of them is entitled: "Frequently

Asked Questions Regarding Your Responsibilities for the Use of

the Controlled Cold Therapy Device," and the other is entitled:

"Most Frequently Asked Questions Regarding Your Responsibilities

for the Use of the Controlled Cold Therapy Device." Both

contain the question: "Will I be personally responsible for any

of the bill for my use of this device?" The first form answers

the question as follows: "We accept payment consistent with the

terms of your applicable insurance." The second answers as

follows: "We accept payment according to the terms of your

applicable insurance and this is the extent of your

responsibility."

32. Dr. Page uses the cold water therapy device for his

patients who undergo surgery to repair the anterior cruciate

ligament. He was impressed with an article in the American

Journal of Knee Surgery , which found the device to be superior

to using crushed ice. He does not, however, know the prevailing

medical standard among orthopedic surgeons as to use of the

device. The fact that he knows many who do does not establish a

standard of care. He agrees that not everything deemed

medically necessary is covered by insurance and that under his

contract with Humana, Humana has the authority to determine that

the device is a convenience item and not a covered benefit.

33. Dr. Louis Hochheiser is Humana's Medical Director for

clinical policy development. He oversees the committee that is

responsible for examining new medical technologies, as well as

writing and reviewing clinical policies. A clinical policy

provides guidance to Humana's providers so they know what Humana

covers, and it also serves as guidance for physicians and nurses

doing case review to help ensure that all of Humana's

subscribers are treated equally. The clinical policies are

published on Humana's website and are available to its

subscribers and providers.

34. When Humana is developing a clinical policy for a

medical technology or device such as the cold water therapy

device at issue in this case, a workgroup of the committee

researches the device using medical literature and any statement

or assessment that any specialty organization may have made on

that particular device. Humana also subscribes to the services

of two companies that examine and rate new technologies. Humana

also consults the rules of the Center for Medicare and Medicaid

Services and reviews its competitors' positions with respect to

any new technology.

35. When the workgroup has compiled and reviewed the

information, it creates a draft clinical policy. One of the

medical directors of the full committee then reviews the draft

policy form and all the literature that was reviewed in creating

the draft policy form. If necessary, the draft policy is

revised after discussion and further research. Once the draft

policy is approved, it is sent to the full committee for

presentation, discussion, and approval. When the policy is

approved, it is posted on Humana's website and sent to its

providers as part of a quarterly update of new and revised

policies. The provider contract between Humana and Dr. Page's

practice group that requires the group's physicians to comply

with Humana's policies and procedures includes such policies.

36. The voting members of the committee are physicians

from three different areas of Humana: regional medical

directors, market medical officers who work with Humana's

providers, and Medicare medical directors. Approximately 20

physicians participate in the committee on a monthly basis.

Additional input is provided by nurses, legal counsel, product

development, sales and communications, but the voting and

approval of clinical policies is only done by physicians.

37. The committee does not consider cost of the technology

when it creates Humana's clinical policy forms but relies on

medical evidence to make its decisions. If a technology is

supported by the medical evidence, and if it makes improvements

for Humana's subscribers, then the committee will approve the

technology. If such approval results in a higher cost, this

increased cost is addressed by Humana's actuaries and built into

the cost of the health plan.

38. With respect to the development of the clinical policy

on the cold water therapy device at issue in this case, Humana's

technology assessment forum reviewed journal articles,

information supplied by the two organizations that provide

reviews of technology, and literature from the Institute of

Arthritis and Musculoskeletal Skin Diseases' web site to

determine the efficacy of cold and heat therapy based on the

published literature.

39. There is no reliable evidence that cold water therapy

devices provide better outcomes for patients than traditional

cold packs. The only advantage to the cold water therapy

devices compared to cold packs is that of convenience because

the patient does not have to change cold packs if the patient is

using the cold water therapy device.

CONCLUSIONS OF LAW

40. The Division of Administrative Hearings has

jurisdiction over the subject matter and the parties hereto

pursuant to Sections 120.569, 120.57(1), 120.574, and 408.7056,

Florida Statutes.

41. The standard of review in this proceeding is de novo .

Health Options, Inc. v. Office of Insurance Regulation , DOAH

Case No. 06-1183 (F. O. Sept. 11, 2006).

42. The Administrative Law Judge's decision in a

proceeding under Section 120.574, Florida Statutes, is final

agency action subject to judicial review and is in the form of a

and 408.7056(13), Fla. Stat.

43. As a threshold matter, because Humana has challenged

the Subscriber's standing to participate in these proceedings,

the Subscriber's standing must be addressed.

44. A Subscriber is entitled under Section 408.7056,

Florida Statutes, to bring a grievance before the Panel.

Although the statute is silent on the definition of "grievance,"

the statute is also clear that a challenge to the decision of

the Panel and the Office is subject to proceedings under Chapter

120, Florida Statutes. § 408.7056(13), Fla. Stat. Thus, even

if "grievance" is broadly interpreted to encompass every

complaint a subscriber has against an HMO, the subscriber's

standing in this administrative proceeding is still determined

under Chapter 120, Florida Statutes.

45. It is well settled that if a party's substantial

interests are not affected, then the party lacks standing to

participate in administrative proceedings. Agrico Chemical Co.

v. Dept. of Environmental Regulation , 406 So. 2d 478, 482 (Fla.

2d DCA 1981). Humana argues that the Subscriber's mother lacked

standing to participate in the proceeding before the Panel

because her substantial interests have not been affected. She

has not paid for the cold water therapy device, she has not been

billed for the device, and the exhibits admitted in evidence

indicate that she will not be billed and, arguably, cannot be.

46. Humana also argues that the Panel should not have

heard the Subscriber's mother's grievance in light of the

jurisdiction requirement found in Section 408.7056(2)(g),

Florida Statutes. Humana reasons that Aberdeen is a non-

participating provider which pursued Humana's internal grievance

process, and that this is, therefore, a grievance related to an

appeal by a non-participating provider, for which a different

statutory process has been established.

47. Similarly, Humana argues that a grievance brought to

the Panel must be filed "by a subscriber on behalf of a

subscriber," and that this case is not brought on behalf of a

subscriber since the Subscriber's mother is seeking to have a

claim paid to Aberdeen, not to her. Humana, in essence, argues

that the real party in interest in this proceeding is not a

subscriber and that, therefore, the Panel had no jurisdiction to

hear the case or enter its order. The Office disagrees with

these several arguments.

48. It may be that the Legislature intended the Panel to

hear every type of grievance even if the person initiating the

proceeding has suffered no injury and is not likely to suffer an

injury. It may be that the Legislature intended to restrict the

kinds of non-participating providers who have access to the

process established by Section 408.7056, Florida Statutes.

However, it is not necessary to resolve these and the parties'

related arguments in this Final Order.

49. It is necessary for this type of dispute to travel

through the Panel process and for the Panel's recommendation to

be considered by the Office before a proceeding pursuant to the

summary final order process described in Section 408.7056(13),

Florida Statutes, can be filed and referred to the Division of

Administrative Hearings (hereinafter "DOAH"). The contents of

the Panel's recommendation and the Office's subsequent order on

that recommendation become less important because the proceeding

at DOAH is de novo .

50. The parties in this proceeding are Humana and the

Office, and those parties do have interests that are

substantially affected by this proceeding. Accordingly,

Humana's arguments regarding the Subscriber's lack of standing,

regarding Aberdeen's non-participating provider status, and

regarding the Panel's and the Office's lack of jurisdiction to

consider the dispute are not persuasive. DOAH does have

jurisdiction over this proceeding.

51. The rights and obligations of Humana under the HMO

Plan are governed by the terms of the Certificate of Coverage

and applicable state and federal laws and regulations. When

construing the Certificate of Coverage, it must be read as a

whole and each provision must be given its full meaning and

operative effect. Excelsior Ins. Co. v. Pomona Park Bar &

Package Store , 369 So. 2d 938, 941 (Fla. 1979).

52. All services provided under the insurance contract and

any limitations to those services must be clearly and

understandably stated in the certificate of coverage. §§

641.185 and 641.31, Fla. Stat. If the contract is clear and

unambiguous, courts must give effect to the policy as it was

written and may not re-write the policy. Swire Pacific

Holdings, Inc. v. Zurich Ins. Co. , 845 So. 2d 161, 165 (Fla.

2003).

53. The terms of the Certificate of Coverage at issue in

this case are unambiguous. Because the Office previously

reviewed and approved the Certificate pursuant to Section

641.31, Florida Statutes, it is fair to conclude that the Office

determined that the Certificate clearly stated the services to

which a subscriber is entitled and included a clear and

understandable statement of any limitations as required by

Section 641.31(4). Moreover, the meaning of the word

Further, the Certificate plainly grants Humana discretion to

interpret the Plan and make coverage determinations.

54. The insured has the initial burden to establish the

affirmative of the issue presented, i.e. , that there is coverage

for the cold water therapy device under the contract. Fla.

Dep’t of Transp. v. J.W.C. Co., Inc. , 396 So. 2d 778, 788 (Fla.

1st DCA 1981), citing Balino v. Dep’t of Health and Rehab.

Servs. , 348 So. 2d 349, 350 (Fla. 1st DCA 1977). If the insured

can first establish that a claim falls within the scope of

coverage provided by the policy, then the insurer has the burden

to prove that the loss arose from a cause that is excepted under

the policy. State Farm Mut. Auto Ins. Co. v. Pridgen , 498 So.

2d 1245, 1248 (Fla. 1986); Hudson v. Prudential Prop. & Cas.

Ins. Co. , 450 So. 2d 565, 568 (Fla. 2d DCA 1984).

55. Thus, the Office has the burden to prove by a

preponderance of the evidence that the Subscriber is entitled to

coverage for the cold water therapy device. Although the

parties agree that the device is a DME, Humana has proven that

the device is a convenience item, and, thus, under the

definition of DME in the Certificate of Coverage, the Subscriber

is not entitled to coverage for this particular DME. Therefore,

the Office has not met its burden to prove that the Subscriber

is entitled to coverage for the cold water therapy device.

Specifically, the Office has failed to establish that the device

is not a convenience item or that Humana has acted

inconsistently with its obligations to the Subscriber.

56. Interestingly, the Panel and the Office both

determined that there was no coverage for the DME under the

Certificate of Coverage when they considered this case, but

determined that coverage should be afforded despite the

exclusion, asserting that there had been detrimental reliance,

inconsistency with legal obligations, and ambiguity. No

evidence has been offered in this proceeding to support any of

those theories.

57. Rather, the preponderance of the evidence shows that

Dr. Page made no representations to the Subscriber’s mother

regarding coverage, there is no legal requirement that Humana

provide coverage for cold water therapy devices, and no

provision in the Certificate of Coverage or the Member Handbook

has been shown to be ambiguous. Thus, there is no factual

support for the position of the Panel and the Office that Humana

should pay for the device in question although coverage was

excluded under its Certificate of Coverage.

58. Although Dr. Page opined that the cold water therapy

device was medically necessary, whether a service is medically

necessary is irrelevant to the issue of whether a Subscriber is

contractually entitled to coverage for the service or device

under the applicable Certificate of Coverage. Further, the

evidence is uncontroverted that Humana has the discretion to

determine whether the device is medically necessary under the

terms of the Certificate. Lastly, Dr. Page’s testimony that he

would not have refused to perform the surgery had the

Subscriber’s mother been unable to provide the device in

inconsistent with, and appears to undermine, his opinion that

the device was medically necessary.

59. Contract provisions that confer sole discretion on one

of the contracting parties are valid if the discretion is

exercised in good faith. Sepe v. City of Safety Harbor , 761 So.

2d 1182, 1185 (Fla. 2d DCA 2000). Here, Humana has provided

ample evidence, after extensive research and consideration by

medical personnel, that the cold water therapy device provides

no benefits over traditional cold therapy except for convenience

and that, therefore, the cold water therapy device was not

medically necessary. There is no evidence of bad faith on the

part of Humana in denying coverage to the Subscriber.

60. The Office has raised as a new issue during the DOAH

proceeding an allegation that Humana’s denial of coverage for

the cold water therapy device was inconsistent with prevailing

standards of medical practice in the community. Yet, the only

evidence offered by the Office to support this allegation is

that of Dr. Page who clearly testified that he did not know the

prevailing standard of practice. This argument, therefore,

requires no further discussion.

61. Section 408.7056(13), Florida Statutes, provides that

if the managed care entity does not prevail at the hearing, the

managed care entity must pay the reasonable costs and attorney’s

fees incurred by the Office. There is no corresponding

provision requiring the Office to pay the managed care entity’s

costs and attorney’s fees where, as here, the managed care

entity prevails at the hearing. Therefore, no costs or

attorney’s fees are awarded to either party.

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is

ORDERED that:

1. Petitioner’s Motion for Summary Final Order is denied

as moot.

2. Humana Medical Plan, Inc., is not required to provide

coverage for the cold water therapy device requested by the

Subscriber.

DONE AND ORDERED this 3rd day of February, 2009, in

Tallahassee, Leon County, Florida.

S

LINDA M. RIGOT

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 3rd day of February, 2009.

COPIES FURNISHED :

Kevin M. McCarty, Commissioner

Office of Insurance Regulation

200 East Gaines Street

Tallahassee, Florida 32399-0305

Steve Parton, General Counsel

Office of Insurance Regulation

200 East Gaines Street

Tallahassee, Florida 32399-0305

Pamela C. Marsh, Esquire

Akerman Senterfitt

Highpoint Center, Suite 1200

106 East College Avenue

Tallahassee, Florida 32301

Jessica N. Poarch, Esquire

Office of Insurance Regulation

Larson Building, Suite 646E

200 East Gaines Street

Tallahassee, Florida 32399-0305

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is entitled

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 agency clerk of the Division of

Administrative 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 within 30 days of rendition of the order to be reviewed.