STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

APALACHEE COMMUNITY MENTAL ) HEALTH SERVICES, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 86-1381

) DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to written notice a formal hearing was held in this case before Larry J. Sartin, a duly designated Hearing Officer of the Division of Administrative Hearings, on October 20, 1986, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Ronald W. Brooks, Esquire

Brooks, LeBoeuf & LeBoeuf 863 East Park Avenue Tallahassee, Florida 32301

For Respondent: Theodore E. Mack, Esquire

Department of Health and Rehabilitative Services

1323 Winewood Boulevard

Building 1, Room 407

Tallahassee, Florida 32399-0700 PROCEDURAL STATEMENT

By letter dated March 13, 1986, the Respondent, the Department of Health and Rehabilitative Services, notified the Petitioner, Apalachee Community Mental Health Services, Inc., now known as Apalachee Center for Human Services, Inc., that it had been overpaid $3,025.00 by the Medicaid Program. The Petitioner timely filed a Petition for Formal Administrative Hearing contesting this determination.

At the commencement of the final hearing the parties stipulated that the amount in controversy is $2,269.00.

At the final hearing the Petitioner presented the testimony of Ronald Norman Manasa, John Murray Whiddon and John Earl Simpson. The Petitioner also presented 3 exhibits which were marked as "Petitioner's" exhibits. Petitioner's exhibit 3 was accepted into evidence. A ruling was reserved on Petitioner's exhibits 1 and 2. Those exhibits are hereby accepted into evidence. Those exhibits, which were objected to on the grounds of relevancy, are relevant in

determining whether the Respondent is estopped from asserting that the Petitioner is required to comply with Rules 10C-7, Florida Administrative Code.

The Respondent presented the testimony of John Murray Whiddon.

Respondent's exhibit 1 was accepted into evidence.

Finally, official recognition of the Final Order in Florida Council for Community Mental Health, Inc. v. Department of Health and Rehabilitative Services, 8 FALR 756 (Feb. 6, 1956), was taken.

The parties have timely filed proposed recommended orders. The proposed recommended orders contain proposed findings of fact. Each proposed finding of fact has been accepted either directly or indirectly in this Recommended Order or has been accepted or rejected in the Appendix attached hereto. In the Appendix it has been indicated where proposed findings of fact which have been accepted in the Recommended Order have been made and why proposed findings of fact which have not been accepted have been rejected.

ISSUE

Whether the Petitioner is required to repay $2,269.00 to the Respondent?

FINDINGS OF FACT

1. The Petitioner entered into a "Noninstitutional Professional and Technical Medicaid Provider Agreement" (hereinafter referred to as the "Medicaid Provider Agreement") with the Respondent. Pursuant to the Medicaid Provider Agreement, the Petitioner agreed to participate in the Florida Medicaid Program.

   
   

2. Pursuant to paragraph 2 of the Medicaid Provider Agreement, the Petitioner agreed to the following:

   
   

   1. The provider agrees to keep such records as are necessary to fully disclose the extent of services provided to individuals receiving assistance under the State Plan and agrees to furnish the State agency upon request such information regarding any payments claimed for providing these services. Access to these pertinent records and facilities by authorized Medicaid Program representatives will be permitted upon a reasonable request.

      
      

   2. The Petitioner also agreed in the Medicaid Provider Agreement to submit claims under the Medicaid Provider Agreement in accordance with the Florida Medicaid Program and applicable "Florida Administrative Rules, Florida Statutes, policies, procedures, manuals of the Florida Medicaid Program and Federal laws and regulations." Paragraphs 3 and 7 of the Medicaid Provider Agreement.

      
      

   3. Medicaid is essentially a mechanism by which the federal government provides funds for the payment of a part of certain medical service costs to the State of Florida. It is a federal grant under Title XIX of the Social Security Act.

      
      

   4. In Florida, community mental health services provided to persons eligible for Medicaid coverage can be paid for under the Medicaid program.

   5. Generally, the federal government provides 56 percent of the costs of Medicaid services and the State is responsible for 44 percent.

      
      

   6. As eligible services are rendered federal Medicaid funds are received and deposited in the Medical Care Trust Fund. In order for services to constitute "eligible services" they must have been rendered in compliance with Chapter 10C-7, Florida Administrative Code.

      
      

   7. If services are not "eligible services" (they do not comply with Chapter 10C-7), the State is not entitled to receive federal Medicaid funds.

      
      

   8. In order to insure that providers of Medicaid services are providing "eligible services" the Respondent conducts compliance audits. The purpose of compliance audits is to determine if federal Medicaid funds have been properly received.

      
      

   9. On June 27, 1985, the Respondent's Medicaid Program auditors conducted a compliance audit of the records of the Petitioner pertaining to Medicaid clients of the Petitioner's Bristol office.

      
      

   10. As a result of the June 27, 1985 audit, the Respondent determined that the Petitioner had improperly submitted claims for Medicaid care and that such claims had been improperly paid by the Respondent.

       
       

   11. The parties stipulated that the Petitioner was paid $2,269.00 for claims for which there was insufficient documentation to warrant payment under Chapter 10C-7, Florida Administrative Code.

       
       

   12. Petitioner claimed $2,269.00 as an amount due for Medicaid "eligible services" and was so paid by the Respondent. In fact, however, the services were not Medicaid "eligible services." The State was not entitled to federal Medicaid funds for these services.

       
       

   13. The Petitioner improperly received the amount in controversy because the Petitioner did not comply with Chapter 10C-7, Florida Administrative Code, as it was required to do pursuant to the Medicaid Provider Agreement.

       
       

   14. On May 21, 1985, the Petitioner executed an "Alcohol, Drug Abuse and Mental Health Services Contract Between State of Florida Department of Health and Rehabilitative Services and Apalachee Community Mental Health Services, Inc." (hereinafter referred to as the "Provider Contract"). The Provider Contract was executed by the Respondent on June 11, 1985.

       
       

   15. Pursuant to the Provider Contract, the Petitioner agreed to provide alcohol, drug abuse and mental health services in eight designated counties.

       
       

   16. In paragraph IC4 of the Provider Contract, the Petitioner was required to comply with Chapters 394, 396 and 397, Florida Statutes, and Chapters 10E-13 and 10E-14, Florida Administrative Code, "as appropriate."

15. Paragraph IC5 of the Provider Contract also required the Petitioner to "comply with all other applicable state standards, provided they are specified in Florida Statutes or Administrative Rules established by the department or made known in writing to the contractor."

1. Paragraph IE1 and 2 of the Provider Contract required that the Petitioner "participate in the Community Mental Health/Alcohol Services Program

   as defined in Section 10C-7.525, F.A.C." and that the Petitioner "pursue and submit vouchers on all Medicaid eligible clients for Medicaid eligible services." [Emphasis added].

   
   

2. Paragraph IG1 of the Provider Contract required the Petitioner to provide an annual audit report by an independent certified public accountant to the Respondent.

   
   

3. Paragraph IH of the Provider Contract required the Petitioner to permit monitoring for compliance with state and federal rules and regulations.

   
   

4. Paragraph IIA1 of the Provider Contract provided that the Respondent will pay up to 75 percent of approved costs as determined under Chapters 394 and 397, Florida Statutes, and Chapter 10E-14, Florida Administrative Code, in an amount not to exceed $4,096,175.00.

   
   

5. Paragraph IO of the Provider Contract required that the Petitioner secure "local match."

   
   

6. Pursuant to the Provider Contract the Petitioner is entitled to receive payment for eligible expenditures" up to the amount of the Provider Contract and subject to the availability of funds.

   
   

7. Services to be paid for pursuant to the Provider Contract include Medicaid eligible services and non-Medicaid services.

   
   

8. Even though the Petitioner did not provide "eligible services" the amount in controversy may have been an "eligible expenditure" for which it may receive payment at a later date. Whether the Petitioner is entitled to payment of the amount in controversy will be determined at a later date as a result of the financial audit required by paragraph IGI of the Provider Agreement and will depend on the availability of funds and whether the Petitioner has already received the maximum amount specified in the Provider Contract.

   
   

9. Whether the Petitioner is entitled to ultimate payment of the amount in controversy at a later date is governed by Chapters 394 and 397, Florida Statutes, and Chapters 10E-13 and 10E-14, Florida Administrative Code.

   
   

10. A dispute arose between certain medical health providers and the Respondent over whether Medicaid funds are considered "state funds" for which local match is required pursuant to Chapter 394, Florida Statutes. The Department took the position that Medicaid funds are considered state funds and thus require local match and are subject to audit pursuant to Chapter 10E-13, Florida Administrative Code.

    
    

11. When the dispute arose, the Respondent developed an "Issue Paper" (Petitioner's exhibit 2). The Respondent adopted one of the alternatives recommended in the Issue Paper to treat Medicaid funds as state funds for which local match is required. The Respondent also took the position that Medicaid eligible services were subject to the provisions of Chapter 394, Florida Statutes, and Chapter 10E, Florida Administrative Code.

    
    

12. The Respondent's decision to treat Medicaid funds as state funds subject to local match was challenged by the Florida Council for Community Mental Health, Inc. Florida Council for Community Mental Health, Inc. v. Department of Health and Rehabilitative Services, 8 FALR 756 (Feb. 6, 1986).

    The issue in that case was whether the position of the Respondent taken in the Issue Paper was a rule.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction of the parties to, and the subject matter of, this proceeding. Section 120.57(1), Florida Statutes (1986 Supp.).

    
    

14. The evidence in this case established that the Petitioner claimed and was paid $2,269.00 for Medicaid services which were not properly claimed pursuant to Chapter 10C-7, Florida Administrative Code. Pursuant to the Medicaid Provider Agreement and the Provider Contract entered into by the Petitioner and the Respondent, the Petitioner was required to comply with all applicable Florida and federal laws, rules, regulations, policies, procedures and manuals, including Chapter 10C-7, Florida Administrative Code.

    
    

15. The Petitioner does not dispute the fact that the $2,269.00 it received was not properly claimed or received pursuant to Chapter 10C-7, Florida Administrative Code. Instead, the Petitioner argues that the Respondent is "judicially estopped from asserting that the right to reimbursement for such services is governed by the provisions of Ch. 409, Fla. Stat., and administrative rules [Chapter 10C-7] adopted pursuant thereto." In support of this argument, the Petitioner argues that the Respondent has taken the position that Medicaid funded mental health services are provided pursuant to Chapter 394, Florida Statutes, in Florida Council for Community Mental Health, Inc. v. Department of Health and Rehabilitative Services, 8 FALR 756 (Feb. 6, 1986) and 45th Street Mental Health Center, Inc. v. Department of Health and Rehabilitative Services, DOAH Case No. 86-0125 (Final Order dated November 24, 1986).

    
    

16. Although the state may be estopped, "[a]s a general rule, equitable estoppel will be applied against the state only in rare instances and under exceptional circumstances.'' Department of Revenue v. Anderson, 403 So.2d 397,

    400 (Fla. 1981). In order to conclude that estoppel applies, the following elements must be shown to exist:

    
    

    1. a representation as to a material fact that is contrary to a later-asserted position; 2) reliance on that representation; and 3) a change in position detrimental to the party claiming estoppel, caused by the representation and reliance thereon.

    
    

    Department of Revenue v. Anderson, 403 So.2d at 400; Kuge v. Department of Administration, 449 So.2d 389 (Fla. 3d DCA 1984); and Greenhut Construction Company v. Knott, Inc., 247 So.2d 517 (Fla. 1st DCA 1971).

    
    

17. None of the elements which must be shown for estoppel to apply have been shown to exist by the Petitioner in this case. First, like the facts in Greenhut Construction, the facts in this case do not demonstrate that the Respondent has represented a material fact contrary to a later-asserted position. At most, the Petitioner has attempted to prove that the Respondent has taken a position with regard to a question of law in the Florida Council for Community Mental Health and 45th Street Mental Health Center cases which is contrary to the position taken in this case. Even if the Petitioner had proved that the Respondent had taken the position the Petitioner asserts it took in

    those earlier cases, such a position would not constitute a representation as to a "material fact" which could be concluded is contrary to its position in this case. Under these circumstances, estoppel is not appropriate. See Greenhut Construction, supra.

    
    

18. Additionally, the position taken by the Respondent in the Florida Council for Community Mental Health and 45th Street Mental Health Center cases or at any other time is not contrary to its position in this case. The Petitioner has entered into two separate agreements with the Respondent: the Medicaid Provider Agreement and the Provider Contract. Pursuant to the Medicaid Provider Agreement, the Petitioner agreed to keep appropriate records and to submit claims in accordance with applicable Florida and federal laws. Among the applicable laws are Chapter 10C-7, Florida Administrative Code, and Chapter 409, Florida Statutes. Pursuant to these laws, the Petitioner was required to document that it provided "eligible services" in order for it to be entitled to Medicaid funding for services to Medicaid clients. The Petitioner failed to do so.

    
    

19. Pursuant to the Provider Contract, the Petitioner agreed to comply with Chapters 394, 396 and 397, Florida Statutes, and Chapters 10E-13 and 10E- 14, Florida Administrative Code, "as appropriate." The Petitioner also agreed to "pursue and submit vouchers on all Medicaid eligible clients for Medicaid eligible services." The Petitioner did not do so with regard to the amount in controversy in this case. The Petitioner also agreed to permit monitoring for compliance with state and federal rules and regulations. As a result of the Respondent's compliance audit, the Petitioner was determined to have failed to comply with state and federal rules and regulations.

    
    

20. Based upon the foregoing, the Petitioner agreed to comply with the requirements of Chapters 10C-7, 10E-13 and 10E- 14, Florida Administrative Code, and Chapters 394, 396e 397 and 409, Florida Statutes.

    
    

21. In the Florida Council for Community Mental Health case, the Respondent took the position that its adoption of the alternative contained in the Issue Paper that Medicaid funds are state funds subject to local match did not constitute an improperly adopted rule. In 45th Street Mental Health Center, the Respondent took the position that newly adopted Chapter 10E-14, Florida Administrative Code, applied to the 45th Street Mental Health Center for part of its fiscal year. These positions are not contrary to the conditions the Petitioner agreed to meet in the Medicaid Provider Agreement and the Provider Contract or the position asserted by Respondent in this case.

    
    

22. The Petitioner has argued that by taking the position that Medicaid funded mental health services are provided pursuant to Chapter 394 Florida Statutes, "HRS has necessarily concluded that such services are not provided pursuant to CH. 409, Fla. Stat. (relating to Medicaid) and Respondent's rules encompassed in Ch. 10C of the Florida Administrative Code." This argument is without merit. The Petitioner's argument ignores the terms to which the Petitioner agreed to be subject in entering into the Medicaid Provider Agreement and the Provider Contract.

    
    

23. Based upon the foregoing, it is concluded that there has been no "representation as to a material fact that is contrary to a later-asserted position."

    
    

24. Secondly, there has been no showing that the Petitioner reasonably relied upon any position taken by the Respondent which is contrary to the

    position taken by the Respondent in this case. No evidence was presented by the Petitioner to prove that it claimed or received the amount in controversy in this case based upon any position of the Respondent. Even if such evidence had been presented, such reliance would not be reasonable in light of the terms of the Medicaid Provider Agreement and the Provider Contract. Those agreements contemplate compliance with Chapter IOC-7, Florida Administrative Code, and Chapter 409, Florida Statutes.

    
    

25. Finally, there has been no showing that the Respondent has changed a position detrimentally to the Petitioner. This element cannot be shown to exist in light of the conclusion that there has been no contrary position taken by the Respondent or any reliance upon a position by the Petitioner.

    
    

26. Based upon the foregoing, it is concluded that the Respondent is not estopped from asserting that the Petitioner has improperly received $2,269.00. In light of the stipulation of the parties that the Petitioner has not complied with Chapter 10C-7, Florida Administrative code, and the lack of any evidence to support a conclusion that the amount in controversy is not otherwise recoverable by the Respondent, the Respondent is entitled to repayment of the $2,269.00 at controversy in this case.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner repay the Respondent $2,269.00 for services

improperly billed.

DONE and ENTERED this 17th day of March, 1987, in Tallahassee, Florida.

LARRY J. SARTIN

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1500

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 17th day of March, 1987.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-1381

The parties have submitted proposed findings of fact. It has been generally noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. Paragraph numbers in the Recommended Order are referred to as "RO ."

Petitioner's Proposed Findings of Fact:

Proposed Finding RO Number of Acceptance of Fact Number or Reason for Rejection

1 RO 15-16.

1. RO 17-19. The first and second sentences incorrectly refer to Paragraph I(C)(6) of

   the Medicaid Provider Agreement. The correct paragraphs are 1(0)4 (first sentence) and 1(0)5 (second sentence). The following portion of the second sentence is not supported by the weight of the evidence: "or incorporated as part of the contract. The following portion of the third sentence is not supported by the weight of the evidence: "and HRS Manual 230-31.

2. The first sentence is accepted in RO 28.

The rest of this proposed finding of fact is generally accepted in RO 28.

4-5 These proposed findings of fact are too broad and are not supported by the weight of the evidence.

1. Irrelevant and not supported by the weight of the evidence.

2. Too broad and not supported by the weight of the evidence. See RO 28.

3. Too broad and not supported by the weight of the evidence. See RO 30.

9-17 These proposed findings of fact are irrelevant. Additionally, the third and fourth sentences of paragraph 16 are not supported by the weight of the evidence.

1. RO 6.

2. RO 9. The last sentence is irrelevant.

3. Not supported by the weight of the evidence.

4. Irrelevant.

Respondent's Proposed Findings of Fact: 1 RO 1-3.

2 RO 10.

3 RO 11.

4 RO 12-13

5 Hereby accepted.

COPIES FURNISHED:

Sam Power, Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Gregory L. Coler, Secretary Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Theodore E. Mack, Esquire Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Building 1, Room 407

Tallahassee, Florida 32399-0700

Ronald W. Brooks, Esquire Brooks, LeBoeuf & LeBoeuf 863 East Park Avenue Tallahassee, Florida 32301

Docket for Case No: 86-001381

Orders for Case No: 86-001381