20-000056 Lawrence Abele vs. Department Of Management Services, Division Of State Group Insurance Status: Closed Recommended Order on Thursday, May 14, 2020.

Summary: Petitioner did not prove that he is entitled to reimbursement as his prescription for compound drug was not covered under the Prescription Drug Plan for State of Florida employees.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

L AWRENCE A BELE ,

Petitioner ,

vs. Case No. 20 - 0056

D EPARTMENT OF M ANAGEMENT S ERVICES ,

D IVISION OF S TATE G ROUP I NSURANCE ,

Respondent .

/

R ECOMMENDED O RDER

On March 17 , 2020, Administrative Law Judge Yolonda Y. Green, of the

Division of A dministrative Hearings (ÑDOAH Ò), conducted a hearing

pursuant to section 120.57(1), Florida Statutes (201 9), i n Tallahassee ,

Florida.

A PPEARANCES 1

For Petitioner: Lawrence Abele , pro s e

841 Maderia Circle

Tallahassee, Florida 32312

For Respondent: Erica D. Moore, Esquire

Gayla Grant, Esqu ire

Office of the General Counsel

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399 - 0950

S TATEMEN T OF T HE I SSUE

The issue to be determined in this proceeding is whether Petitioner is

e ntitled to a refund of the costs paid for prescriptions for compound Midrin.

P RELIMINARY S TATEMENT

Petitioner requested payment for certain medical expenses , which wa s

denied on March 20, 2019. By letter dated April 22, 2019, Respondent

notified Petitioner that his Level I c linical appeal was denied. On May 8,

2019, dissatisfied with the outcome of the Level I appeal, Petitioner filed a

reques t for a Level II appeal wi th Respondent. The L evel II appeal was also

denied. Petitioner then requested an informal hearing.

On December 6, 2019, an informal hearing was convened, during which

the presiding hearing officer determined that there was a disputed issue of

material f act presented by the case. The hearing officer entered an Order

Transferring Matter to the Division of Administrative Hearings (DOAH). On

January 7, 2020, Respon dent referred the dispute to DOAH, which scheduled

and conducted the formal hearing.

At the hearing, Petitioner testified on his own b ehalf. Respondent

presented the testimony of four witnesses: Dr. Anthony Arnett (senior

medical director i n medical affairs for Caremark); Dearline Thomas - Brown,

MPH, BSN, RN (l egal nurse coordinator for DMS); Adam Korn (senior

director of client operations) ; and Dr. John Ness (PetitionerÔs primary care

physician). Respondent also offered Exhibits 1 through 5 , 7, and 8, which

were admitted into evidence.

1 The attorney for CVS Caremark (Caremark) , Jacob Koffsky, Esquire , of Foley & Lardner LLP , represented

witness es who are current employees of Caremark during the proceeding. However, Caremark was not a

named party in this proceeding.

The one - volume T ranscript of the hearing was filed on April 14, 2020 .

Both parties timely filed post - hearing submittals, which have been

considered in the preparation of this Recommended Order.

Unless specifically stated otherwise herein, all references to Florida

Statutes will be to the 2018 codification.

F IND INGS OF F ACT

1. The Division of State Group Insurance (Division) is the executive

agency within the Department of Management Services (Department) that is

responsible for the administration of the State Group Insurance Program

(Program).

2. Petitioner i s retired and receives medical benefits through the State

EmployeesÔ HMO Standard Medical Plan (the Plan), which is administered

b y Capital Health Plan (CHP).

3. T he State Employee s Ô Prescription Drug Program is administered by

CVS Caremark . Responde nt is the state agency responsible for resolving

appeals of medical claims denied by Caremark.

Background

4 . Mr. Abele was employed with the State of Florida until he retired. He

was covered by the Plan and his coverage has remained since his retirement .

5. For the past three years, Mr. Abele has filled a prescription for generic

Midrin to treat migraine headaches . The medication was prescribed by his

primary care physician, John Ness, M.D.

6. The evidence offered at hearing includes a total of 18 claims 2 for

prescriptions for compound Midrin that Mr. Abele submitted to Caremark for

reimbursement. Mr. Abele submitted claims for prescriptions fill ed in 2018

dated: July 12 and 25 , 2018; August 2, 2018; September 7, 2018; October 5

and 22, 2018; November 6 a nd 26, 2018; December 12, 201 8 . Mr. Abele also

submitted c l aims for prescriptions filled in 2019 dated : January 9 and 30,

2019; February 12, 2019; March 6, 18, and 29 , 2019 ; April 10 and 25 , 2019 ;

and May 10, 2019. Each of the 18 claims was for reimburseme nt of $105 for a

total of $1,890 .

Relevant Definitions

7 . The Plan Booklet and Benefit D ocument (ÑPlanÒ) includes definitions ,

relevant in part here, as follows:

"Cove red Services and Supplies" mean s those

health care services and supplies, including

pharmaceutical s as described in Section VIII, for

which reimbursement is covered under this Plan.

"Exclusions" is defined as any provision of the Plan

whereby coverage for a specific hazard or condition

is entirely eliminated.

ÑMedically NecessaryÒ is d efined as any

appropriate medical treatment ... as provided by a

physician ... which is necessary for the diagnosis ,

care and/or treatment of a Health Plan MemberÔs

illness or injury, and which is:

Ŭ Consistent with the symptom, diagnosis, and

treatment of the Health MemberÔs condition;

Ŭ The most appropriate level of supply and/or

service for the diagnosis and treatment of the

Health Plan MemberÔs condition;

Ŭ In accordance with standards of accep table

community practice;

Ŭ Not primarily intended for the personal comfort

or convenience of the Health Plan Member , the

Health Plan MemberÔs family, the physician or

other health care providers;

Ŭ Approved by the appropriate medical body or

health care specialty involved as effective,

2 The claims at issue are those claims submitted by Mr. Abele in support of his request for reimbursement .

appropriate and essential for the care and

treatment of the Health Plan MemberÔs condition;

and

Ŭ Not Experimental or investigational.

Medical Nec es s ity

8 . Dr. Ness, a family practice physician with 30 years of experien ce,

prescribed generic Midrin for Mr. Abele t o treat migraine headaches.

Dr. Ness prescribed generic Midrin to treat Mr. Abele based on his

assessment that other medications were contraindicated for Mr. Abele due to

Mr. AbeleÔs risk for cardiovascular adve rse effects if he uses other

medications. Dr. Ness credibly testified that Midrin is medically necessary to

treat Mr. AbeleÔs migraine headaches.

9 . Anthony Arnett, M.D., the physician for Caremark responsible for

reviewing claims for coverage , determined that Midrin was not m edically

necessary to treat Mr. AbeleÔs migraine headaches. How ever, Dr. Arnett

conceded that his decision was based on his general determination that there

are other options available for migraine headaches.

10. The undersigned fin ds Dr. NessÔ testimony more persuasive

concerning the determination that Midrin was medical ly necessary to treat

Mr. Abele for migraines.

Midrin History

11. At the time Dr. Ness prescribed generic Mid rin to Mr. Abele, it was an

FDA - approved drug. In fact , Midrin was approved for use in 1948 based on

safety and effectiveness. However, in 2017 , the United States Food and Drug

Administration (the Ñ FDAÒ) determined that Midrin was no longer safe and

effective .

12 . On October 12, 2017, the FDA notified manuf acturers of prescription

drugs containing isometheptene mucate that they should immediately cease

distribution of the product. On June 13, 2018, the FDA issued a subsequent

notice listing the drugs that were no longer approved by the FDA and that

manufactu ring companies were required to stop producing. The drug

combination for Mr. AbeleÔs prescription for compound Midrin

(acetaminophen, dich l oralp he nazone, and isometheptene mucate) is on the

FDA non - approved list.

Midrin Prescription/ Coverage Denial

13 . I n January 2018, Mr. Abele presented his prescription for generic

Midrin to his local CVS Pharmacy to be filled but the prescription was

refused. Mr. Abele indicated that the pharmacist told him that the

manufacturer had stopped producing the drug and sugge sted that he could

have the drug compounded.

14. Since generic Midrin wa s no longer available, Dr. Ness issued a

prescription for the compound Midrin , in capsule form, with a 10 - day supply

for each prescription . The medication name was listed as ÑMidrin

(A LTERNATE) 325MG/100MG/65MG Capsule,Ò and the ingredients were

listed as acetaminophen, dich l oralp hen azone, isometheptene mucate, and

microcrystalline cellulose 3 . Mr. Abele filled the prescriptions at a local in -

network compounding pharmacy.

15 . On January 14, 2018, Mr. Abele contacted Caremark about his

compound Midrin prescription and Mr. Abele was told that he would need to

submit a claim to determine whether the compound drug ingredients would

be covered . There is no evidence that the Caremark representa tive made any

false or misleading representation that Mr. AbeleÔs compound prescription

would be approved.

16. On December 14, 2018, Mr. Abele submitted claims to Caremark for

reimbursement for compound Midrin . On December 17, 2018, Caremark

notified Mr . Abele by letter that the claims he submitted were not allowed.

The reason provided for disallowance was because the drug was not on the

planÔs formulary. The letter also notified Mr. Abele that his request for

exception did not include the information ne cessary to approve the request.

17 . On February 1, 2019, Dr. Ness, on behalf of Mr. Abele, submitted a

non - covered drug formulary excepti on request seeking approval for compound

Midrin . He requested the drug in caps ule form for the treatment of

Mr. Abele Ôs migraines . However, the request form did not include a copy of

the prescription for the compound formula for Midrin. The form also did not

describe the drug as the compound alternative. Dr. Ness testified that it is a

common medical practice to use Ñcap Ò to refer to the capsule form, even for

the compound formula.

18. The Caremark appeals department faxed a response to Dr. Ness as

follows: ÑIn researching your fax request, the memberÔs prescription benefit

coverage indicates a [p]rior [a]uthorization i s NOT required. For additional

questions regarding the medicationÔs coverage under the memberÔs plan,

please contact Customer Service using the number on the back of the

memberÔs prescription benefit card.Ò

19. Dr. Anthony Arnett testified that he interp reted the ex ception request

as being for Midrin c apsule s , rather than the compound form. Based on that

interpretation, the response to the exception request was that prior

authorization was not necessary. The undersigned finds that even if prior

authorizat ion was not required for the prescription , it does not amount to an

approval for coverage of the claims .

Appeal of Coverage Denial

20 . On February 5, 2019, Mr. Abele appealed the denial of reimbursement

for compound Midrin. On February 13, 2019, Caremar k responded to

Mr. Abele instructing him to submit additional information for his claims to

be processed. On February 18, 2019, he submitted the requested information

and materials.

21. On March 30, 2019, Caremark notified Mr. Abele by letter that his

dru g coverage request was denied. The basis for the denial was that the

3 Microcrystalline cellulose may be used as a bulking agent in pharmaceutical products.

prescription was for a compound dru g containing, as relevant here, bulk

powder.

22. Mr. Abele then submitted a L evel I appeal, also referred to as a

clinical appeal 4 , on April 18, 2019. Dr. Arnett reviewed Mr. AbeleÔs claims for

the L evel I appeal. While Dr. Arnett acknowledged th at compounding could

be approved if no other drug is available for treatment of migraines , he

concluded that Mr. AbeleÔs exception request could not be approved because

the compound formula included bulk powder.

23. Caremark denied Mr. AbeleÔs Level I appeal and notified Mr. Abele by

letter of their decision on April 22, 2019. In the letter, Caremark stated that

Ñ p etitionerÔs appeal for D ichloralphenazone Powd er Compound has been

determined as not medically necessary; and, Ó the plan crite ria does not allow

coverage of d ic hloralphenazone Powder CompoundÔ if the compound

contained Óbulk powderÔ as an ingredient. Ò

24. On May 8, 201 9, d issatisfied with the outcome of the Level I appeal,

Mr. Ab ele requested a Level II appeal . The Department denied the Level I I

appeal on the basis that the compound Midrin Ñdid not meet the medical

necessity criteria and non - FDA approved compounds are excluded from the

plan.Ò

Limitati ons and Exclusions

25 . The Department's concurrence of CaremarkÔs decision that coverage

for the compound Midrin prescription shou ld be denied was based on the

Plan Ôs general Limitations and Exclusions section, which applies to the

Prescription Drug Progra m. The Prescription Drug Program also outlines

specific exclusions related to medications.

26. The Prescription Drug Program, described in Part VIII, provides that

covered drugs shall include, but are not limited to, any drug, medicine,

medication , or comm unication that is consumed, administered , or provided at

4 Level I appeals are handled by Caremark by a specific group that focuses on prescriptions

appeals.

the place where the prescription is given at the medi cal providerÔs office or

health care facility.

27. The PlanÔs limitations and exclusions section provides, Ñ t he following

services and supplies are excluded from coverage under this Plan unless a

specific exception is noted. Exceptions may be subject to certain coverage

Limi tations. Ò Under the P lan, t he exclusions include Ñany non - prescription

medicine, remedy, biological product, pharmaceutical or c hemical compound,

vitamins, mineral supplements, fluoride products, health foods , or blood

pressure kits , except as specifically provided for in the covered benefits

section under prescription drugs. Ò

28 . T he Ad ditional Exclusions section provides that bul k powders, bulk

chemicals, and proprietary bases used i n compound medications and

over - the - counter (ÑOTCÒ) products used in compound medications are

excluded from coverage. Further, the plan excludes services or supplies not

medically necessary as determi ned by the Plan a nd/or the Prescription Drug

Program clinical staff and the state.

29. The Prescription Drug Program provides that the Prescription Drug

P rogram does not cover non - fede ral legend or OTC products, and bulk

powders, bulk chemicals, and propr ietary bases used in compounded

medications.

C ONCLUSIONS OF L AW

30 . DOAH has jurisdiction of the subject matter of and the parties to this

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

31 . Respondent is the state agency with the duty to oversee the

administrati on of the P rogram. § 110.123, Fla. Stat.

32 . The Plan is a health insurance benefit enacted by the Florida

Legislature and offered by Respondent. § 110.123, Fla. Stat.

33 . Section 110.123(5), Florida Statutes, assigns responsibility for final

decisions on matters of the existence of coverage or covered benefits under

the Program to Respondent.

34 . In an administrative proceeding such as here , the party asserting the

affirmative of an issue has the burden to prove by a preponderance of the

evide nce that it is entitled to the relief sought. Alexander v. Dep't of Mgmt.

Servs. , Case No. 13 - 2095, RO at 20 (Fla. DOAH Aug. 16, 2013)(citing Young

v. Dep't of Cmty. Aff. , 625 So. 2d 831, 833 - 34 (Fla. 1993)); Dep't of Transp. v.

J.W.C. Co. , 396 So. 2d 778, 788 (Fla. 1st DCA 1981); Balino v. Dep't of HRS ,

348 So. 2d 349, 350 (Fla. 1st DCA 1977). As the party asserting the right to

payment of his claim s under the Plan, the Petitioner had the initial burden of

demonstrating by a preponderance of the evidence t hat his claim is quali fied

for coverage. Assuming Petitioner meets this requirement , the burden then

shifts to Respondent to establish that the claim is excluded from coverage

under the terms of the policy. See Young v. DepÔt of Cmty. Aff. , 625 So. 2d 831

(Fla. 1993); Herrera v. C.A. Seguros Catatumbo , 844 So. 2d 664, 668 (Fla. 3d

DCA 2003); State Comprehensive Health AssÔn v. Carmichael , 706 So. 2d 319,

320 (Fla. 4th DCA 1997).

35 . In this case, Petitioner has established that his claim s were medically

nec essary to treat his migraines . However, he has not established that the

claim is qualified for coverage. Although the Petitioner testified that

Caremark previously paid the claims for PetitionerÔs generic Midrin

prescription , t he evidence established that the compound Midrin was

excluded from coverage under the prescription plan.

36. Petitioner contends that even if the prescription for compound Midrin

was excluded form coverage, he is entitled to reimbursement for the claims in

question because he det rimen tally relied upon representations from

Caremark when he paid fo r compound Midrin medication. Petitioner believed

he would be reimbursed for the claims for the prescriptions based on the

statements and documents from Caremark . Petitioner is relying upon the

doctrine of equitable estoppel to support his claim.

37. In o rder to demonstrate estoppel, [Petitioner] must show that :

(1) a [Petitioner] represented a material fact

contrary to its later - asserted position; (2) the

[ Petitioner] relied on the Division Ô s earlier

representation; and (3) the [Petitioner] changed

positions to [his] detriment due to the agencyÔs

representation and [his] reliance thereon. Unlike

the elements to demonstrate entitlement to

coverage under the Plan, the elements of estoppel

must be proved by clear and convincing evidence.

Hoffman v. DepÔt of Mgmt. Servs., Div. of Ret. , 964 So. 2d 163 (Fla. 1st DCA

2007).

38 . Clear and convincing evidence Ñrequires more proof than a

Ópreponderance of the evidenceÔ but less than Óbeyond and to the exclusion of a

reasonable doubt.ÔÒ In re Graziano , 696 So. 2d 744, 753 (Fla. 1997).

39 . Here, Petitioner relied upon statements included in the documents

and phone calls with Caremark and asserted that Respondent made a false or

misleading statement. He relied upon CaremarkÔs response to the request for

exception indicating prior authorization is not required. That statement alone

is not sufficient to prove by clear and convincing evidence Respondent made a

misleading statement which could reasonably lead Petitioner to ascertain

that his claims would be approved. Second, he asserts that Caremark

requested additional receipts and information when each claim was

submitted. Again, Caremark did not make any representation that the claim

would be approved. To t he contrary, CaremarkÔs request for additional

informa tion was merely an attempt to obtain sufficient information and

receipts necessary to make a final d etermination concerning whether

coverage would be approved . Whil e Caremark did not specifically state the

claim was still pending until all information was received, there is no clear

and convincing evidence that Respondent made a false or misleading

statement.

40. Based on the foregoing, Petitioner has not proved that he is entitled to

reimbursement for the claims he submitted because compound Midrin was

excluded from coverage and he has not met the requirements for the doctrine

of equitable estoppel to apply in this matter.

R ECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, i t is

R ECOMMENDED that the Di vision of State Group Insurance, Department of

Management Services , enter a final order denying Lawrence AbeleÔs request

for reimbursement for the claims submitted for his compound Midrin

prescription.

D ONE A ND E NTERED this 14t h day of May , 2020 , in Tallahassee, Leon

County, Florida.

S

YOLONDA Y. GREEN

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 14th day of May , 2020 .

C OPIES F URNISHED :

Lawrence Abele

841 Maderia Circle

Tallahassee, Florida 32312

(eServed)

Erica D. Moore, Esquire

Office of the General Counsel

Department of Management Services

4050 Esplanade Way , Suite 160

Tallahassee, Florida 32399 - 0950

(eServed)

Jacob Koffsky, Esquire

Foley & Lardner LLP

2 South Biscayne Boulevard , Suite 1900

Miami, Florida 33131

(eServed)

Gayla Grant, Esquire

Off ice of the General Counsel

Department of Management Services

4050 Esplanade Way , Suite 160

Tallahassee, Florida 32399 - 0950

(eServed)

William Chorba , General Counsel

Office of the General Counsel

Department of Management Services

4050 Esplanade Way , Suite 160

Tallahassee, Florida 32399

(eServed)

N OTICE OF R IGHT T O S UBMIT E XCEPTIONS

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.