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News Service Of Florida

The News Service of Florida provides journalists, lobbyists, government officials and other civic leaders with comprehensive, objective information about the activities of state government year-round.

Court sides with contractor in ‘AOB’ case

In a case dealing with the controversial issue known as “assignment of benefits,” a state appeals court Friday sided with a contractor in a dispute with an insurance company about a water-damage claim.

A panel of the 2nd District Court of Appeal overturned a circuit judge’s ruling that had been in favor of Homeowners Choice Property and Casualty Insurance Co.

The Hillsborough County case stemmed from a pipe bursting in 2012 in the home of Homeowners Choice policyholder Richard Prager. Prager hired B&M Clean, LLC, and Nicon Construction, Inc., to provide water and debris removal and other services. Prager also assigned the insurance benefits to the firms – a process in which the firms pursued payment from the insurer.

Both firms eventually sued Homeowners Choice, arguing they had not been fully paid under the policy, according to Friday’s decision.

A circuit judge granted summary judgment to Homeowners Choice on the Nicon Construction claim, finding that Prager had assigned all the benefits for the loss to B&M Clean. But the appeals court Friday said the circuit judge too narrowly interpreted language in the assignment of benefits.

“In finding that Mr. Prager had no further interest in the claim to assign to Nicon, the trial court isolated a phrase in the assignment rather than viewing it in the context of the entire agreement,” said the decision, written by appeals-court Judge Patricia Kelly and joined by judges Morris Silberman and Susan Rothstein-Youakim. “When the phrase (in the agreement) ‘any and all insurance rights, benefits, and causes of action under my property insurance policy’ is read in the context of the entire assignment and the purpose for which it was entered into, it is evident that Mr. Prager was assigning all his rights under the policy to payment for the services performed by B&M Clean – not all his rights to payment for the entire covered claim.”

Assignment of benefits, or AOB as it is commonly known, is one of the most controversial issues in Florida’s insurance industry. Insurers argued that fraud and litigation involving the process are driving up insurance rates.

The industry’s critics, however, argue that assignment of benefits helps make sure insurers properly pay claims.

Republished with permission of the News Service of Florida.

John Morgan pours another $154K into minimum wage drive

Setting the stage for a possible ballot proposal in 2020, Orlando attorney John Morgan last month put more than $154,000 into an effort to raise Florida’s minimum wage, according to a finance report posted online Thursday.

The $154,230 contribution from Morgan’s firm, Morgan & Morgan P.A., went to the political committee Florida For A Fair Wage.

Since December, the Morgan firm has funneled $478,158 to the committee — all the money the committee has raised.  The committee, which is chaired by Morgan, is backing a proposed constitutional amendment that would raise the state’s minimum wage to $10, effective Sept. 30, 2021, and then raise it $1 a year until it is $15 on Sept. 30, 2026.

A deadline has passed to get initiatives on the 2018 ballot, but Morgan’s committee could try to place the measure on the 2020 ballot.

Morgan also spearheaded efforts to pass a 2016 constitutional amendment that broadly legalized medical marijuana in Florida.

As an indication of the preparations for a ballot drive, the committee spent $165,855 in April — with almost all of it going to AAP Holding Company, LLC, a petition firm. To make it onto the 2018 ballot, initiatives were required to have 766,200 petition signatures. That required number is expected to change for the 2020 ballot.

Bill Nelson, Democrats blast proposed Medicaid cuts

U.S. Sen. Bill Nelson and Democratic U.S. House members Thursday called for the federal Centers for Medicare & Medicaid Services to reject a move by Gov. Rick Scott’s administration to cut $98 million by trimming the length of time people have to apply for the Medicaid program.

“I rise here today because the state of Florida has again proposed to harm thousands of seniors and folks with disabilities who rely on Medicaid for their health care,” Nelson, a Democrat who faces an election challenge this year from Scott, said on the Senate floor.

Nelson, along with U.S. Rep. Kathy Castor and 10 other Democratic members of Florida’s congressional delegation sent a letter to CMS Director Seema Verma urging her to reject a proposed amendment to a state Medicaid “waiver” that would exempt Florida from a federal requirement that gives people up to 90 days following a health problem to apply for Medicaid coverage.

The Scott administration proposed — and the Republican-led Legislature agreed — to require people to apply for Medicaid during the same month of the health event.

“Retroactive eligibility is designed to protect Medicaid beneficiaries — including seniors, pregnant women, individuals with disabilities, and parents — and their families from the steep costs of medical services and long-term care. Importantly, this protection was also designed to minimize uncompensated care costs faced by hospitals and other health care providers who take care of our neighbors and are already challenged by the state’s low reimbursement rates,” the letter said.

The state Agency for Health Care Administration estimates that 39,000 people could be impacted by the change. Hospitals and nursing homes, though, say the numbers could be much higher.

The change has become a flashpoint between Democrats and Scott.

“It is our duty to ensure eligible individuals have access to care without going into debt to obtain it, which is why retroactive eligibility is so vital. This proposal would not only wipe out many families’ pocketbooks, but it would also place a financial burden on health care providers, the state and indeed all Florida taxpayers through increased uncompensated care costs,” the letter said. “We fail to see how this proposal will ‘enhance fiscal predictability’ as the state claims when it will increase costs across the board.”

But Mallory McManus, a spokeswoman for the Agency for Health Care Administration, issued a statement Thursday saying it is “categorically false to assert that this change impacts the care” provided to Medicaid beneficiaries.

“Florida continues to focus on quickly enrolling Florida’s most vulnerable people including children, frail elders, those with disabilities and pregnant women,” the statement said. “By enrolling individuals quickly, you ensure better-coordinated fully integrated care, as well as access to preventative services.”

Tim Canova: If I lose, I’ll sue

Progressive Tim Canova is still fuming about his 13-percentage point loss in a Democratic primary in 2016 to U.S. Rep. Debbie Wasserman Schultz and — more so — that the Broward County Supervisor of Elections office destroyed paper ballots from the contest.

Now, Canova is launching a new bid against Wasserman Schultz, this time without a party affiliation. The move allows the Bernie Sanders ally to take on the former Democratic National Committee chairwoman in November when all voters, not just party faithful, will decide.

Canova is also preparing to challenge the results. At least, if he doesn’t win.

“We are prepared to bring a lawsuit even if we lose the race by one vote or by 10,000,” Canova said Friday while in Tallahassee after qualifying to run for the office.

Canova, a Nova Southeastern University law professor, contends his field numbers in 2016 showed “a very good result for us,” but because of the margin of the results he didn’t file a challenge within a 10-day post-election window.

Since then, he’s read about foreign interference in the U.S. voting process and that electronic voting machines may not be as secure as officials claim. Then came an order last September by Broward County Supervisor of Elections Brenda Snipes to destroy boxes of vote-by-mail certificates and early-voting ballots — after scanning and storing electronic copies of the ballots — as Canova sued for access to paper ballots from the primary.

“We’ve lost confidence in the integrity of the election system in the Broward County in light of the ballot destruction,” Canova said. “I’ve got folks saying, you should challenge even if you win — I don’t think we’ll challenge if we win. But considering what happened in the last race, I think we’d be foolish not to be prepared to challenge an election result that goes against us.”

Health plans mount challenges over Medicaid contracts

Twelve managed-care companies challenging the state’s award of tens of billions of dollars in Medicaid contracts have spelled out their arguments about why Florida officials were wrong in the handling of the coveted multi-year deals.

The filings allege a long list of errors by the Agency from Health Care Administration ranging from math mistakes, to not finishing reviews on time, to awarding a contract to a vendor that submitted the wrong bid.

In some cases, the petitions allege wrongdoing by rival health plans.

The challenges by the managed-care companies reflect the high stakes surrounding Florida’s massive Medicaid program. If the initial contracting decisions stand, some companies will be shut out of the managed-care program for the next five years.

The 12 plans filed challenges in 11 regions across the state for decisions involving a variety of health care services, including comprehensive care and specialty care such as providing services to people with mental-health issues or HIV and AIDS. In all, the companies filed 88 petitions by a Monday deadline.

Chief among the companies protesting the state’s handling of the contracts is Molina Healthcare, which currently has a footprint in eight of the state’s 11 Medicaid regions. The health plan applied for openings — through a process formally known as an invitation to negotiate — in all 11 regions but wasn’t among the top-scoring plans chosen by AHCA for negotiations.

Lawyers for Molina argue, among other things, that agency staff made mathematical errors throughout the scoring process. They contend the state was required to average scores of three different evaluators to determine top-ranking health plans but, instead, used aggregate scores.

Tallahassee attorney Robert Vezina wrote that AHCA’s alleged failure to follow criteria about scoring and ranking was “clearly erroneous, contrary to competition, and arbitrary and capricious” and made the “entire procurement process fundamentally and fatally flawed.”

Molina is requesting that if the disputes cannot be amicably resolved that the state be required to start over with a new procurement process.

The Agency for Health Care Administration went through a lengthy process before it announced its April 24 decisions to award five-year contracts to nine managed care plans. For contracting purposes, the state is divided into 11 regions. State law establishes a minimum and maximum number of plans that can operate in each of the 11 areas.

This is the second such procurement since the Florida Legislature passed a law in 2011 mandating that most Medicaid patients enroll in managed-care plans. A top Medicaid official has said that the new contracts, in aggregate, could be worth up to $90 billion.

The new contracts also have the potential to upend parts of the existing Medicaid program because, in some instances, existing providers would be eliminated. Magellan, a long-standing Medicaid provider specializing in mental-health services, would be locked out of the managed-care program if the agency decisions remain intact.

Attorneys for Magellan allege in filings that numerous mistakes and errors were made during the procurement process. The plan argues that competitor Staywell was awarded a Medicaid contract to provide mental-health services to patients in Medicaid Region 2 despite not submitting a bid for the area, which stretches across 14 counties in Northwest Florida, including Leon County.

Magellan’s attorneys argue that Staywell erroneously responded to the invitation to negotiate in Region 2 by submitting its response to the so-called ITN for Region 5, which covers Pasco and Pinellas counties.

State evaluators “noted the discrepancies,” according to Magellan’s petition, but “there is no evidence that AHCA requested, or that Staywell submitted, a corrected Region 2 response.”

Magellan’s attorneys are asking that AHCA award a contract to Magellan or, alternatively, reject all specialty-plan submissions and conduct a new procurement.

Not all plans that filed petitions with the state would be locked out of the Medicaid program in the coming years. For instance, UnitedHealthcare was awarded contracts in Medicaid Regions 6 and 11 for comprehensive care, which includes long-term care services as well as traditional health care covered under Medicaid.

But United also wanted contracts statewide to provide services to people with serious mental illnesses and was shut out of that market. United filed 11 petitions — one in each region — challenging those decisions. United alleges in its petitions that AHCA agreed to extend an internal deadline for a trio of evaluators to complete their work but that time ran short before one of them — “evaluator No. 3” — could finish the review.

According to United’s petition, “evaluator No. 3” completed 20 percent of the task by the Dec. 29 extended deadline and executed what is known as an “independent evaluators certification.” The certification stated that any plan that scored a zero “was intended to score a zero”

But United attorney Seann Frazier argued that a score of zero should only be given if the vendor didn’t provide a response. Frazier said that “in reality,” a large number of the components in the ITN were scored by two, and not the required three, evaluators.

Not all of the allegations of wrongdoing were leveled against the state, though. In filings for Simply Healthcare, attorney Robert Hosay accused competing health plans of not following rules.

For instance, the ITN required health plans to disclose their largest out-of-state Medicaid contracts. But Hosay argued that Humana — which could operate statewide if the agency’s decisions stand — failed to disclose an out-of-state contract it has in Wisconsin or report on how the plan performed on certain quality-of-care measurements.

The contract is with a company called iCare, which is a joint venture between Humana and the Centers for Independence, a Milwaukee-based non-profit rehabilitation provider.

Hosay also alleged in the petitions that Staywell was not truthful when it disclosed that its Medicaid contract had been terminated in Iowa in December 2015. Staywell attributed the termination to bid protest proceedings, but Hosay argued the disclosure was misleading.

“In reality, WellCare’s Iowa contract was terminated as a result of unfair bidding practices on WellCare’s part being discovered, including a violation of bidding rules and an attempt to acquire an unfair advantage over competing bidders,” wrote Hosay, referring to Staywell’s parent company.

Donald Trump taps Maria Chapa Lopez as U.S. Attorney

Longtime federal prosecutor Maria Chapa Lopez has been selected by President Donald Trump to serve as U.S. attorney in the sprawling Middle District of Florida, according to an announcement Thursday by the White House.

Chapa Lopez worked as an assistant U.S. attorney from 2000 to 2016, before a nearly two-year stint as a Department of Justice deputy attache in the U.S. Embassy in Mexico City. She currently serves as interim U.S. attorney in the Middle District, which stretches from Fort Myers to Jacksonville and includes Orlando and Tampa.

Her selection by Trump is subject to U.S. Senate confirmation. Republican U.S. Sen. Marco Rubio, of Florida, quickly issued a statement Thursday supporting the pick.

“She has significant experience in this (Middle District) office and has been integral in prosecuting and dismantling drug trafficking and money laundering operations and has most recently helped lead the Department of Justice’s efforts to stop heroin, fentanyl, and human trafficking into the United States,” Rubio said. “With her knowledge and expertise, I am confident she will honorably serve the people’s interests in the Middle District of Florida.”

State asks judge to reject ‘bump stock’ lawsuit

Attorney General Pam Bondi’s office is asking a Leon County circuit judge to dismiss a lawsuit that alleges a recently approved ban on firearm “bump stocks” is an unconstitutional taking of property.

Lawmakers and Gov. Rick Scott approved a ban on the devices after the Feb. 14 mass shooting at Broward County’s Marjory Stoneman Douglas High School that killed 17 people. Bump stocks make semi-automatic weapons mimic fully automatic firearms and drew widespread attention after a mass shooting last year in Las Vegas.

The lawsuit, filed in March in Leon County circuit court, seeks compensation for owners of bump stocks, arguing that the Florida Constitution bars the state from taking private property “except for a public person and with full compensation therefore paid to each owner.”

But in a 12-page document filed April 30, state Chief Deputy Solicitor General Edward Wenger argued that the lawsuit should be dismissed.

In part, Wenger said the state can outlaw property that it determines to be dangerous.

“The state determined that bump-fire stocks pose a threat to public safety, and it exercised its police power to prohibit their possession or sale,” Wenger wrote. “Because that decision was not a ‘taking’ and the Legislature exercised its discretion to not provide a ‘bounty’ to owners, plaintiffs are not entitled to compensation.”

The ban, which was part of a broader bill dealing with school-safety and gun issues, takes effect Oct. 1. The case has been assigned to Leon County Circuit Judge James Shelfer.

Regulators sign off on TECO solar projects

The Florida Public Service Commission on Tuesday approved a plan that will lead to customers of Tampa Electric Co. paying slightly more each month to cover the costs of two solar-energy projects.

The projects, which are expected to be finished in September in Polk and Hillsborough counties, are part of a series of plans by Tampa Electric to add solar generation in coming years.

The Public Service Commission in 2017 approved a settlement agreement that set Tampa Electric’s base electric rates until 2022. Part of that agreement allowed the utility to return to the commission to seek approval to recoup money for solar projects.

The projects approved Tuesday are a 70.3-megawatt facility in Polk County and a 74.4-megawatt facility in Hillsborough. To help pay for the projects, residential customers who use 1,000 kilowatt-hours of electricity a month will see a $1.85 increase on their bills, according to commission numbers.

The utility industry commonly uses 1,000 kilowatt-hours a month as a benchmark, though actual electricity usage varies widely.

“We are pleased to have the support of the Florida commission,” Nancy Tower, the utility’s president, said in a prepared statement. “Clean energy is the future for utilities, and our solar projects are a win for customers and a win for the environment.”

Tampa Electric has about 750,000 customers in Hillsborough, Polk, Pinellas, and Pasco counties.

Republished with permission of the News Service of Florida.

Court sides with church in priest defamation fight

Saying judges cannot become entangled in church administrative decisions, an appeals court Wednesday blocked a Catholic priest’s defamation lawsuit against the Diocese of Palm Beach.

The lawsuit, filed by priest John Gallagher, came after series of events that started with allegations in early 2015 that another priest at Holy Name of Jesus Catholic Church in West Palm Beach had shown child pornography to a 14-year-old boy. The other priest, Joseph Palimattom, was arrested, pleaded guilty and was ultimately deported to his native India, according to Wednesday’s ruling in the 4th District Court of Appeal.

After the incident involving the other priest, Gallagher was not offered the job of pastor of Holy Name and was reassigned to another parish, a transfer he did not accept. He alleged that the diocese tried to cover up the child-pornography incident and that he was reassigned for not going along, Wednesday’s ruling said. Gallagher, who is from Northern Ireland, also made accusations against the diocese during an interview on Irish radio.

In response, diocese officials made critical comments about Gallagher, who alleged that he had been defamed because of statements about him being a liar, unfit to be a priest and in need of professional help, Wednesday’s ruling said.

A circuit judge refused to dismiss the lawsuit, but the appeals court sided with the diocese, at least in part because the court said judges cannot get involved in church decisions about issues such as employment.

“Father Gallagher’s complaint that the diocese’s statements were false and resulted in actual damages cannot be decided on neutral principles,” said the ruling, written by Judge Robert Luck and joined by judges Barbara Lagoa and Edwin Scales. “These claims would entangle the courts in the diocese’s ministerial staffing decisions, the interpretation and application of canons and doctrines, and church discipline, which the civil courts must abstain from reviewing and deciding.”

The three judges serve in the neighboring 3rd District Court of Appeal, but the Florida Supreme Court directed that the case be handled by a panel from that court instead of the 4th District Court of Appeal, which typically decides issues from Palm Beach County.

The ruling focused heavily on a legal concept known as the “ecclesiastical abstention doctrine,” which prevents civil courts from getting involved in issues involving management of churches. While Gallagher alleged wrongdoing in his reassignment, the ruling said diocese officials had met with Hispanic church members who had been dissatisfied with how they were treated by Gallagher.

The court said it “must ask whether Father Gallagher’s defamation claim can be decided on neutral principles of secular law; or, is this a ministerial employment dispute that would require the courts to get excessively entangled in issues of internal church discipline, faith, and organization that are governed by ecclesiastical rule, custom, and law.”

“Determining the falsity of whether Father Gallagher was unfit to serve gets the court excessively entangled in Catholic Church doctrines and canonical law,” the ruling said, addressing one of Gallagher’s allegations. “The falsity question turns on whether Father Gallagher was doing what he was supposed to be doing as a priest and parochial administrator at Holy Name. In his interactions with parishioners, fellow priests, and the diocese hierarchy, was Father Gallagher following church canons and teachings? Father Gallagher says yes; the diocese says no.

“We do not need to answer the question because asking it requires us to determine the duties assigned to a priest that make him fit to serve, and whether Father Gallagher was qualified to do the job. A determination of a priest’s duties and whether he is qualified to serve are uniquely decisions of the diocese and would excessively entangle us in questions of religious administration and government, and the procedures and dictates of the Catholic faith.”

Rick Scott, Cabinet eye land conservation projects

Gov. Rick Scott and the Florida Cabinet are expected next month to consider whether to spend nearly $11 million to help limit future development on four ranches and farms in four counties.

The proposals would add 8,388 acres to the Rural and Family Lands Protection Program, which through the use of “conservation easements” restricts future development but allows owners to continue using land for such things as agricultural operations.

Scott and the Cabinet had been expected to take up the proposals during a meeting next week, but the meeting was canceled because Scott plans to attend the funeral of Highlands County Deputy William Gentry, who was shot to death while on duty. McKinley Lewis, a spokesman for Scott, said the agenda for the scheduled Tuesday meeting would be rolled to a June 13 meeting.

The proposals are a 4,476-acre project in Highlands County known as Goolsby Ranch, with a cost of $7.63 million; a 929-acre project in Manatee County known as Howze Ranch, with a cost of $1.5 million; a 1,400-acre project in Madison County known as Sampala Lake Ranch, with a cost of $1.26 million; and a 1,583-acre project in Putnam County known as Rodman Plantation, with a cost of $540,000.

State staff members have recommended approval of all four projects. The Rural and Family Lands Protection Program, a priority of Agriculture Commissioner Adam Putnam, has been used 41 times to secure 42,276 acres across the state.

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