STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, BOARD OF MEDICINE, )

)

Petitioner, )

)

vs. )

) CASE NO. 89-1708

ELIEZER F. CASTRO, M.D., )

)

Respondent. )

)

RECOMMENDED ORDER

Upon due notice, this cause came on for formal hearing on July 27 1989 in St. Augustine, Florida, before Ella Jane P. Davis, a duly assigned Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Mary B. Radkins, Esquire

Department of Professional Regulation 1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399-0792

For Respondent: Clyde E. Wolfe, Esquire

Corporate Square, Suite B-1

105 South Park Boulevard

St. Augustine, Florida 32086 STATEMENT OF THE ISSUES

This cause proceeded to formal hearing upon the first Amended Administrative Complaint, which alleged in Count I that Respondent had violated Section 458.331(1)(1), F.S. (1985), now Section 458.331(1)(k) F.S. (1987) by

making deceptive, untrue or fraudulent representations in the practice of medicine or employing a trick or scheme in the practice of medicine, and which alleged in Count II that Respondent had violated Section 458.331(1)(o), F.S. (1985), now Section 458.331(1)(n), F.S. (1987), by exercising influence on the patient or client in such a manner as to exploit the patient or client for financial gain of the licensee or of a third party.

PRELIMINARY STATEMENT

Petitioner and Respondent entered into a joint Prehearing Stipulation, which by agreement was admitted as HO-Exhibit 1, and which has been utilized to the extent appropriate in the preparation of this Recommended Order.

Petitioner presented the oral testimony of J.C., Sylvester Lucas, Terry Paul, and William B. Carter (tendered and accepted as an expert in Medicare claims and processing). Petitioner had 10 exhibits admitted in evidence.

Respondent presented the oral testimony of Michelle Campochiaro, Clarita Castro, and the Respondent, Eliezer Castro, M.D. Respondent had admitted 5 exhibits.

A transcript was provided and all timely-filed proposed findings of fact have been ruled upon, pursuant to Section 120.59(2), F.S., in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Petitioner is the state agency charged with regulating the practice of medicine pursuant to Section 20.30 and Chapters 455 and 458, F.S.

   
   

2. Respondent is and has been at all times material hereto a licensed medical physician in the State of Florida, having been issued license number ME 0029506.

   
   

3. Medicare is a health insurance program for beneficiaries 65 or older or disabled. It is a Federal program under Title 18, USCA, the Social Security Act. By contract, Blue Cross/Blue Shield administers the Medicare Program in Florida, and is hereafter also referred to as "Medicare" throughout this Recommended Order.

   
   

4. On or about August 23, 1986, Respondent rendered care and treatment to patient G.C. by assisting one Dr. Kluger with patient G.C.'s surgery.

   
   

5. On or about September 1, 1986, patient G.C. expired. He was survived by his widow, J.C.

   
   

6. An assignment is an agreement between the physician and the patient/beneficiary whereby the patient/beneficiary transfers to the physician his rights to benefits based on covered services specified on the assigned claim. When the physician accepts said assignment, he agrees that the allowed charges determined by Medicare is the full amount he expects to receive, and his charges to the patient/beneficiary should be no more than 20% of the allowed charges.

   
   

7. It is clear on the record that on January 9, 1987, Respondent advised

   J.C. that he would not accept a Medicare assignment for his services, and that he required full payment from her. On that date, she paid him in full by personal check the undiscounted amount of $731.75 which he had billed her on October 24, 1986. It is not certain whether Respondent ever specifically told

   J.C. before January 9, 1987 that he would not accept assignment, but it is clear that he never told her that he would accept assignment and that he billed her for the full amount on October 26, 1986, before anybody made any claim to Medicare.

   
   

8. Prior to Respondent's January 9, 1987 conversation with J.C., Respondent's wife and office manager had, on November 28, 1986, submitted a claim to Medicare for Respondent's services to G.C. This claim was submitted over Respondent's (apparently stamped) signature, making him responsible for its contents. Despite her denials on the record, Mrs. Castro clearly has difficulty understanding others and expressing herself orally in the English language. Her recollection was that she had submitted the Medicare claim form dated November 28, 1986 without checking either the box on the form by which a physician signifies agreement to accept assignment or the box on the form whereby the

   physician declines to accept assignment. The reason she gave at formal hearing for not checking the assignment box is that she knew that Dr. Kluger had not accepted assignment for treatment of G.C. and that it also had been Respondent's oral instruction to her not to accept assignment of his associate fees.

   However, Mrs. Castro's only explanation as to why she had left both boxes blank instead of checking the one signifying "no assignment" was that she understood that forms without any election were usually processed as non-assigned claims. This November 28, 1986 claim form, as produced by Medicare authorities, shows the "yes assignment" box marked.

   
   

9. The widow, J.C., had some memory retrieval problems in the course of her testimony. She testified that on January 10, 1987 she personally went to the Jacksonville, Florida, offices of Medicare and, using a receipt given her by Respondent for her check presented to him the day previously, she made a Medicare claim in her own name. (TR-20) However, she also testified that she received "no satisfaction" from her claim because the Respondent had already submitted a claim. (TR-21-23) Medicare has no record that such a claim was ever made by J.C.

   
   

10. A physician can file claims with Medicare by applying for a provider number and using it on his claims for reimbursement. At all times material, Respondent had such a Medicare provider number. However, acceptance of such a provider number by a physician does not automatically make a physician a "participating physician," nor does it obligate him to accept assignments to Medicare. "Participating physicians" have also signed a contract agreeing to accept assignment on every claim they submit. For "non-participating physicians," assignments or non-assignments are done on a claim by claim basis. At all times material, Respondent was a "non-participating physician." If the physician submitting a claim is a "non-participating physician" and the assignment block is left blank on his claim form, Medicare's standard operating procedure is to process his claim form as a "non-assignment." If a physician discovers he has made an error in checking the wrong block on his claim form, it is also Medicare's standard operating procedure to correct that error provided both the physician and the patient/beneficiary notify Medicare prior to the time Medicare applies a reasonable charge to the claim. As a practical matter, the window for this type of notification covers only the period of time required for Medicare to receive the original erroneous claim form, microfilm it, and feed it into the Medicare computer; in total, perhaps less than one workday. After the computer applies a reasonable charge to the claim, Medicare will not permit mistaken assignments to be rescinded.

    
    

11. On or about March 2, 1987, Medicare sent Respondent a check for

    $174.64, which is 80% of the amount Medicare approved for his services. There is no adequate explanation in the record why it took Medicare from December 3, 1986 when it received the November 28, 1986 claim form until March 2, 1987 to process the initial claim. Respondent's office deposited the $174.64 Medicare check in the normal course of business.

    
    

12. On or about March 3, 1987, J.C. received an "Explanation of Medical Benefits" letter (EMOB) from Medicare advising her that Respondent had accepted assignment on G.C.'s claim, that Medicare had allowed Respondent $220.00 for his services, that Medicare had paid Respondent $174.64, and that J.C. owed Respondent $44.10. Quite naturally, J.C. was incensed by this notification from Medicare because she had already paid Respondent in full on January 9, 1987.

13. Sometime after March 2, 1987, but prior to April 1, 1987, Respondent sent his own check for $174.64 to Medicare, stating that the money should have been sent by Medicare directly to J.C.

    
    

14. In March of 1987, J.C. requested a refund from Respondent. Respondent refused to give her the refund, stating that Medicare should pay her directly. Therefore, J.C. contacted Medicare for a refund.

    
    

15. Thereafter, various employees of Medicare contacted Respondent telling him repeatedly that because the "yes assignment" box had been checked on the November 28, 1986 claim form, he must take the discounted amount allowed by Medicare and refund an amount to J.C. sufficient so that she would not have paid more than 20% of the allowed charges. Apparently, Respondent was given to colorful language in his telephone conversations both with Respondent and with Medicare personnel, and no meeting of the minds ever was reached between Respondent and J.C. or between Respondent and Medicare.

    
    

16. The situation was further complicated when Medicare sent Respondent a letter on May 5, 1987 acknowledging his return of the $174.64 to Medicare and advising Respondent that,

    
    

    We have received your $174.64 payment dated March 16, 1987. We have applied this money to your account.

    Thank you for returning the payment issued to you in error. Our records are being corrected accordingly. . .

    
    

17. Therefore, when, on or about August 24, 1987, Medicare sent Respondent a new check for $165.45 for the same claimed services to G.C. because Medicare had unilaterally made a correction to its "Procedure Code," Respondent assumed that Medicare had made another mistake. His office again cashed this Medicare check, and only after Medicare fraud and abuse investigators contacted him, did Respondent send Medicare his own check, dated November 30, 1987, for the

    $165.45. With Respondent's check, Mrs. Castro enclosed a note, dated December 1, 1987, requesting that Medicare send payment directly to J.C. Respondent has no record of submitting a third check to Medicare, but Medicare records show that at some point Medicare issued yet another check to Respondent for $165.45, and that Respondent again returned the money through his own check.

    
    

18. Mrs. Castro testified that she re-submitted the health insurance claim form to Medicare on or about April 20, 1987 with the "no assignment" box checked and that she did so in an attempt to get Medicare to pay J.C. directly and to straighten out the problem with G.C.'s bill. At that time, she did not indicate "signature on file" as she had on the initial November 28, 1986 claim form. Instead, she made a big "X" and signed the deceased patient's name beside the "X." Mrs. Castro asserted that she never attempted to emulate G.C.'s handwriting, and examination of the form does not suggest that she did.

    Medicare has no record of receiving this form contemporaneously with the April 20, 1987 date on it, but Medicare received it either from the Respondent with his November 30, 1987 check and Mrs. Castro's December 1, 1987 note requesting that Medicare pay J.C. direct or they received it at about the same time from Respondent's attorney. Medicare personnel interpreted the April 20 claim form to constitute a forgery of G.C.'s signature since it had not been received by Medicare in April 1987 and because G.C. had died in September, 1986. Medicare never processed the April 20, 1987 claim form as either a substitute for, or as an amendment to, the original November 28, 1986 claim form. Mrs. Castro was

    unable to explain at formal hearing why the April 20, 1987 claim form was not received by Medicare until December, 1987, and her explanation that she thought Medicare would interpret the "X" as an indication that someone else had signed for the decedent is illogical. However, upon Mrs. Castro's candor and demeanor while testifying, it is plausible that she genuinely believed that coupled with the repeated return of all monies to Medicare hers was an acceptable way to explain to Medicare the Respondent's consistent intent to refuse assignment and to defuse the escalating acrimony of the claim situation. Upon this basis, Medicare's interpretation of Mrs. Castro's meretricious motivation with regard to the April 20 claim form, which motivation Medicare also attributed to the Respondent, is rejected. The burden to prove fraud by clear and convincing evidence is upon Petitioner, and there is no affirmative proof of meretricious motive here.

    
    

19. Throughout this dispute, Medicare continued to tell J.C. that after all adjustments, Respondent should pay her $689.97 (the balance of the full payment amount she had paid Respondent above the 20% of the charge allowed by Medicare).

    
    

20. Respondent has never refunded any monies to J.C.

    
    

    CONCLUSIONS OF LAW

    
    

21. The Division of Administrative Hearings has jurisdiction of the parties and subject matter to this cause. See Section 120.57(1), F.S.

    
    

22. Respondent at all times told J.C., the widow of his patient, that he would not accept an assignment from Medicare. There is no dispute as to this fact. He states it and she acknowledges it. Therefore, there was no fraud or deceit in that relationship. Respondent returned all monies to Medicare within time frames reasonably explained; he kept none. Respondent attempted in every way he knew to correct Medicare's misapprehension that he had agreed to accept an assignment on behalf of G.C. (patient) or J.C. (beneficiary). Therefore, there was no fraud or deceit in that relationship.

    
    

23. Respondent's wife may have left both assignment boxes blank on the November 28, 1986 claim form as she thinks she did. If she did, past standard operating procedure of Medicare permitted Respondent and his staff to rely upon the blank form being processed as a non-assignment because Respondent was registered with Medicare as a "non-participating" provider. On the other hand, Mrs. Castro may have inadvertently checked the "assignment yes" box or someone else may have checked it during processing, perhaps even J.C. checked it on her trip to see Medicare personnel on January 10, 1989, but any such scenario is speculative and not controlling.

    
    

24. What is significant is that the only reason Medicare personnel would not correct this clerical error, once Respondent notified them, was because, from Medicare's corporate viewpoint, the notification was not made quickly enough. The parties have not suggested that Medicare's narrow window for such notification is a published "condition" of physician's or patient/beneficiary's utilizing the Medicare program, or that it is not physically possible for Medicare to make such a correction. Making such a correction may be inconvenient; it may increase everybody's processing costs; but it cannot create circumstances of fraud and deceit where neither meretricious intent nor fraudulent gain has been proven. 1/

25. Pursuant to Section 458.331(2), F.S., the Board of Medicine is empowered to revoke, suspend, or otherwise discipline the license of a physician for any of the following violations:

    
    

    25a. Section 458.331(1)(1), F.S. (1985), now Section 458.331(1)(k) F.S.

    (1987)-- making deceptive, untrue, or fraudulent representations in the practice of medicine or employing a trick or scheme in the practice of medicine.

    
    

    25b. Section 458.331(1)(o), F.S. (1985), now Section 458.331(1)(n), F.S.

    (1987)-- exercising influence on the patient or client in such a manner as to exploit the patient or client for financial gain of the licensee or of a third party which shall include, but not be limited to, the promotion or selling of services, goods, appliances, or drugs.

    
    

26. Petitioner has the burden of proof in this license discipline case and must prove the alleged violations of the above-cited statutory provisions clearly and convincingly. See, Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

27. It is clear, despite the language difficulties of Mrs. Castro and despite some understandable impairments in J.C.'s memory due to her age and recent bereavement, and despite the fiery disposition of Respondent, that Dr. and Mrs. Castro consistently attempted to have the Medicare payments paid directly to J.C. and that they were under the belief that they were following the correct procedures to accomplish that goal. The enthusiastic assistance rendered by Medicare personnel to J.C., when combined with Respondent's verbal exasperation with the system, exacerbated J.C.'s confusion with regard to her rights when she herself knew that no assignment had been agreed upon. Her confusion, which apparently was eventually shared by the other two principals (Respondent and the insurance entity, Medicare) is not clear and convincing evidence of the occurrence of any act of Respondent which is subject to discipline by the Board.

    
    

28. Petitioner has failed to show by clear and convincing evidence that Respondent made deceptive representations or employed trickery in the practice of medicine. The evidence shows that Respondent informed the beneficiary, J.C., that he was not accepting Medicare assignment, that Respondent returned or refunded all monies to Medicare which he had received from Medicare on patient G.C.'s account, and that Respondent and his office manager/wife attempted to communicate to Medicare that its payments should go directly to J.C. because she had already paid Respondent directly and in full, without any assignment of benefits.

    
    

29. Petitioner has failed to show by clear and convincing evidence that Respondent exercised influence on the patient or client in such a manner as to exploit the patient or client for financial gain of himself or a third party, including, but not limited to the promoting or selling of services, goods, appliances or drugs. The evidence shows that Respondent advised J.C. that he would not accept assignment of Medicare benefits and that Respondent and his office manager/wife followed the procedures and filed the forms which they believed would enable J.C. to receive Medicare benefits.

RECOMMENDATION

Based upon the foregoing findings of fact and conclusions of law, it is:

RECOMMENDED that the Board of Medicine enter a Final Order dismissing all charges against Respondent.

DONE and ENTERED this 21st day of September, 1989, at Tallahassee, Florida.

ELLA JANE P. DAVIS

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 21st day of September, 1989.

ENDNOTE

1/ Petitioner has not asserted such a position, but the undersigned clearly recognizes that Medicare might legitimately choose to discourage a policy of wholesale after-the-fact corrections to claims since such a policy might encourage unscrupulous providers to attempt to rescind an agreed assignment whenever the "reasonable charge" applied by Medicare falls below their expectations. However, that scenario is completely absent from the record of this cause.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-1708

The following are specific rulings, pursuant to Section 120.59(2), F.S., upon the parties' respective proposed findings of fact (PFOF):

Petitioner's PFOF:

Accepted: 1, 2, 3, 7, 9, 10, 16, 18, 20, 22, 24, 28.

Accepted as modified to more clearly reflect the record: 4, 11, 12, 13. Unnecessary, subordinate, or cumulative to the facts as found: 5, 6, 8,

14, 15, 19, 21, 25, 26, 27.

Rejected because not supported by the record as a whole as stated in the proposal: 17, 23 (see TR 20-23), 29.

Rejected as mere legal argument and unreconciled testimony: "Argument" 1-5 (a-h). Otherwise, rejected on the basis of the credibility of the respective witnesses.

Respondent's PFOF:

Accepted: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14, 16, 17, 18.

Accepted as modified to clearly reflect the record: 13. Accepted but as a conclusion of law: 15

COPIES FURNISHED:

Mary B. Radkins Senior Attorney

Department of Professional Regulation Suite 60

1940 North Monroe Street Tallahassee, Florida 32399-0792

Clyde E. Wolfe, Esquire Corporate Square, Suite B-1

105 South Park Boulevard

St. Augustine, Florida 32086

Dorothy Faircloth Executive Director Board of Medicine

Department of Professional Regulation Suite 60

1940 North Monroe Street Tallahassee, Florida 32399-0792

Kenneth E. Easley General Counsel

Department of Professional Regulation Suite 60

1940 North Monroe Street Tallahassee, Florida 32399-0792

Docket for Case No: 89-001708

Orders for Case No: 89-001708