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K.H.M. v. State Health Benefits Commission

April 27, 2010


On appeal from a final administrative determination of the Board of Trustees, State Health Benefits Commission.

Per curiam.


Submitted November 9, 2009

Before Judges Rodríguez and Yannotti.

K.H.M. appeals from a final determination of the State Health Benefits Commission (Commission), which found that she was not entitled to reimbursement pursuant to the State Health Benefits Program (SHBP) for costs incurred by her son, J.M., at Three Springs, a therapeutic boarding school in Huntsville, Alabama. We affirm.

This matter was heard by the Office of Administrative Law (OAL) as a contested case. The record developed in the OAL reveals the following. K.H.M. is a state employee, who is covered pursuant to the SHBP. She selected the traditional plan, believing that it provided the most extensive coverage for her family. J.M. was diagnosed with Attention Deficit Hyperactive Disorder (ADHD) while in grammar school. Upon entering high school, J.M. began displaying behavioral problems, including displays of anger and physically threatening other household members. J.M. also abused alcohol and drugs.

Michael P. Gentile, M.D., an expert in psychiatry with a specialty in the treatment of psychiatric conditions of adolescents, treated J.M. He recommended that J.M. receive more intensive specialized schooling, which would include therapeutic treatment for his psychological and substance abuse problems. Dr. Gentile prepared a "retrospective evaluation" which set forth a diagnosis and treatment plan. K.H.M. contacted Horizon, the administrator of SHBP, to inquire whether the treatment at Three Springs would be covered by the traditional plan. K.H.M. was informed that inpatient treatment would be covered "like any other illness." This conversation and K.H.M.'s testimony is corroborated by notes next to a March 12, 2002 Horizon entry.

K.H.M. placed her son in the inpatient program at Three Springs from May 9, 2002 to January 12, 2004. During J.M.'s stay, Three Springs was not a licensed hospital nor was it licensed to provide a residential drug and alcohol treatment program.

Three Springs provided, among other services: individual and group counseling; participation as a team member in educational and group projects; training and counseling assertiveness and problem solving skills; therapy in dealing with family conflict; counseling for drugs and alcohol use; training in time management and study skills; daily participation in educational, recreational, vocational and group projects. J.M. obtained his high school diploma while at Three Springs. The total cost of the program was $82,890. K.H.M. and her husband paid this amount. The Board of Education that would have provided a public education to J.M. reimbursed them for thirty percent of the cost of the educational component at Three Springs.

After J.M. entered Three Springs, a Horizon representative again advised K.H.M. that the drug and alcohol rehabilitation costs would be covered on an inpatient basis. This conversation is corroborated by notes next to a May 20, 2002 entry in Horizon's record.

Horizon requested the following from Three Springs: a copy of the licenses for the facility; a copy of all accreditations; an itemized list of the services, including lincensure; and a six digit Medicare provider identification number. Three Springs sent a reply letter with an attached copy of the license for the facility, indicating that it was a private school. Wendy Rutan, a Horizon manager in the complaints and appeals department, testified that Horizon would not pay for the facility services because the facility was a school, but it would allow benefits for medical services rendered. Horizon then inquired into the professionals providing service to determine the eligibility of possible medical services.

Horizon made the first payment to Three Springs in January 2003. Horizon made three payments in total. Shortly after these payments, the Commission concluded that J.M.'s stay at Three Springs was not a covered benefit pursuant to the SHBP traditional plan. This decision was based on the determination that Three Springs did not meet the definition of an eligible facility for services rendered prior to June 30, 2003. In particular, Three Springs did not meet the traditional plan's definition of "hospital," which was contained in the traditional plan's Member Handbook (Handbook).

K.H.M was provided a copy of the Summary Program Description (SPD) upon the commencement of her employment. The first page of the SPD provided:

[b]asic benefits include inpatient covered services at an approved acute care hospital, skilled nursing facility or detoxification center facility.

The Commission determined that Three Springs was not licensed as a hospital, ambulatory facility or birth center and did not meet the tests pertaining to an institution for the treatment of alcoholism. The Commission noted that educational services are not covered by ...

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