STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA DEPARTMENT OF HEALTH ) AND REHABILITATIVE SERVICES, )

)

Petitioner, )

)

vs. ) CASE NO. 82-3027

) MENTAL HEALTH DISTRICT BOARD ) II-B, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above- styled case on March 11, 1983, at Tallahassee, Florida.

APPEARANCES

For Petitioner: Joseph L. Shields, Esquire

1323 Winewood Blvd.

Building 1, Room 402

Tallahassee, Florida 32301

For Respondent: Ronald W. Brooks, Esq. and

Jerrold K. Phillips, Esquire 863 E. Park Avenue Tallahassee, Florida 32301

By letter dated October 25, 1982, Mental Health District Board II-B, Respondent, by its Executive Director, requested a hearing to contest the claim by the Department of Health and Rehabilitative Services, Petitioner, that an audit of Respondent's Baker Act expenditures disclosed insufficient records to support $43,832 payments to Respondent. Specifically the audit disclosed that provider records were insuricient to establish the entire $43,832 paid to Drs. Head and Phillips for the fiscal years ending June 30, 1979 and 1980 was not reimbursed by third party payers.

At the hearing Petitioner called one witness, Respondent called two witnesses, and seven exhibits were admitted into evidence. There was no oispute regarding the relevant facts here involved. Proposed findings submitted by the parties and not included below were not supported by The evidence or were deemed immaterial to the results reached.

FINDINGS OF FACT

1. Petitioner contracted with Respondent to provide, inter alia, through appropriate subproviders, mental health services in accordance with the

   provisions of the Baker Act, Chapter 494 Part I, Florida Statutes and rules and regulations promulgated pursuant thereto (Exhibit 3).

   
   

2. Respondent subcontracted with Apalachee Community Mental Health Services, Inc. (MHS) to provide, as an independent contractor, or through subagreement with qualified providers, services according to the Mental Health Board Plan; and, in carrying out these services, to comply with federal and state statutes and regulations. In carrying out this contract MHS processed and paid, from funds receivec rem Petitioner, provider services in connection with the Baker Act program.

   
   

3. During the period covered by this audit, Dr. Robert G. Head and Dr. Cyril Phillips provided psychiatric care to Baker Act patients for which they were reimbursed by MHS. Most of this care was provided at Goodwood Mental Health Facility, a unit operated by Tallahassee Memorial Regional Medical Center (TMRMC). Both Head and Phillips were designated as mental health providers by Petitioner. Head and Phillips shared office space and a secretary but were not a partnership or organized as a professional association.

   
   

4. While conducting the audit, the auditors contacted Dr. Head to audit his racords for the Baker Act patients treated. Dr. Head claimed he had no advance notice of this audit and when he was called by his office at his home while suffering from the flu he refused permission for the auditors to examine his records. The audit was completed without benefit of any of Head's or Phillips' records and the discrepancy in failing to account for third party reimbursements formed the basis for the deficiency here claimed.

   
   

5. When Dr. Head was told the auditors had the right to inspect Baker Act patient records, he rescinded his refusal and some four months later his office was visited to check these records. Upon the auditor's arrival no Baker Act patient records for the audit period could be located. The secretary for Head and Phillips had absconded and their accountant found she had embezzled a considerable sum ($75,000 - $100,000) from the office by forging endorsements on checks received and depositing in her or her husband's bank account. Apparently patient records were removed or destroyed to conceal the embezzlement. In any event no such records were produced by the doctors and no effort was made by the doctors to obtain from TMRMC records of those patients treated by them who had insurance to cover part or all of their treatment. Such insurers would be third party payers from whom the provider is required to collect and account to Petitioner for such collections.

   
   

6. That the doctors provided the treatment is evidenced by the bills they submitted. The only issue is whether the doctors were also paid by third parties for these services, and if so, how much were they paid that should be returned to Petitioner.

   
   

7. Neither Head nor Phillips gave sufficient attention to the paperwork involved with the Baker Act patients but left this up to the secretary. The missing records covered two fiscal years so the inadequate supervision of the office continued over a prolonged period.

   
   

8. Respondont suggests that Petitioner's auditors could have reconstructed the doctors' records by comparing the Baker act patients for whom they billed MHS with TMRMC records to show which of those patients costs could have been part reimbursed by third parties. Had that been done it would have shown that a majority of those patients had no "third Party" source of funds. No evidence was submitted that Petitioner has such a duty. Exhibit 3 provides the Board and

   the provider will retain all financial records, supporting documents, statistical records and any other doctments pertinent to this agreement for a period of three years after submission of final report, if an audit has not been initiated during that period, and the findings have not been resolved at the end of three years, the records shall be retained until the resolution of the audit findings.

   
   

9. Exhibit 6 consists of records of seven patients treated by Head or Phillips during the audit period. Of these seven, two had insurance available from which third party payments were available.

   
   

10. No audits of providers were made by Respondent during the period covered by the audit.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administratlve Hearings has jurisdiction over the parties to and the subject mater of, these proceedings.

    
    

12. Rules for administering the provisions of the Baker Act are contained in Section 10E-4.12(8), Florida Administrative Code. These rules provide generally that the Department will contract for the payment of providers through the Mental Health District Boards and will contract with the designated public receiving facilities for the provision of all Baker Act services; that District Boards will execute subagreements with designated public receiving facilities for the provision of eligible services to eligible clients; that these subagreements will include, inter alia, assurances of compliance with all state regulations regarding monitoring, auditing, reporting, and provision of services; that receiving facilities will contract with service providers, insure that physicians mo provide eligible services are identified by a Baker Act identification number, insure that these physicians are aware that the approved billing form is a contract, and that in signing that billing form the physician is certifying that billed services were performed; that District Boards must assure that third party payments have been handled appropriately; that District Boards shall make periodic audits of physician and provider records to assure that third party and federal funds are reported properly; and that providers of services will be required to return to the state any funds paid for services not actually performed and/or any funds owing the Department because of violation of rules and regulations.

    
    

13. These rules require the providers to collect from third party payers when available and to account for those funds. Drs. Head and Phillips left the matter of collecting from insurance carriers up to the secretary with little or no supervision. It is doubtful either ever bothered to check a file to determine if a third party payer was extant for the patient. When their records were found to be missing, neither doctor attempted to have the records at TMRMC checked to ascertain which, if any, of their patients had third party coverage. Thev appeared to have taken the position that their function was only to treat the patient and accounting for this treatment, which involved the expenditure of state and/or federal funds, was not something with which they should be bothered.

    
    

14. When providers accept public funds to provide treatment to indigent patients or Baker Act patients, they agree to comply with the regulations established to account for these public funds. This is not a duty that may be undertaken lightly.

15. Accepting Respondent's contention that the records of Drs. Head and Phillips were not produced as required when the auditors were offered the opportunity to view these records because they had been removed or destroyed to cover the criminal activities of their secretary, still does not exonerate Respondent. Respondent failed to comply with the requirement that it conduct periodic audits of physicians provider records.

    
    

16. While specific testimony was not presented regarding the percentage of Baker Act patients who have medical insurance to cover part of their treatment costs, it is evident from Exhibit 6 that all such patients do not have third party sources for the costs of their treatnent. Although the providers here involved are not without fault in allowing the delicts of the secretary to go undetected for so long, the same result, i.e. loss of records, could have resulted from a fire at the office. If so, would it be appropriate to expect Drs. Head and Phillips to return all monies they had been paid for treating Baker Act patients because the records were not available to determine if third party reimbursements were properly accounted for? I think not. While Head and Phillips were not without fault, it was not disputed that the records were discovered missing after the secretary absconded and the embezzlement was uncovered. Embezzlement and records removal are not intervening forces normally to be expected.

    
    

17. From the foregoing it is concluded that Respondent failed to conduct annual inspections of its providers and failed to make periodic audits of these providers. It is also concluded that Drs. Head and Phillips failed to produce records of Baker Act patients, the treatment for whom they had been reimbursed by MHS, to show that contributions from third party payers had been collected when appropriate, and properly accounted for as required by the contract and regulations. However, a demand that the entire $43,832 should he removed because that sum may have been recoverable from third parties, is unrealistic. It is therefore

RECOMMENDED that Respondent be required to reimburse Petitioner by recovering from Drs. Head and Phillips 25 percent of the total paid to these doctors, or $10,958.

ENTERED this 31st day of March, 1983, at Tallahassee, Florida.

K.N. AYERS Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 31st day of March, 1983.

COPIES FURNISHED:

Joseph L. Shields, Esquire 1323 Winewood Blvd.

Building 1, Room 402

Tallahassee, Florida 32301

Ronald W. Brooks, Esquire and Jerrold K. Phillips, Esquire 863 E. Park Avenue Tallahassee, Flcrida 32301

David H Dingree Secretary

Department of Health and Rehabilitative Services

1323 Winewood Blvd.

Tallahassee, Florida 32301

Docket for Case No: 82-003027

Orders for Case No: 82-003027