STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

NEONATOLOGY ASSOCIATES, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 95-3049

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in this case in Tallahassee, Florida on January 29, 1996, before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Frank P. Rainer, Esquire

Ruden, McClosky, Smith, Schuster & Russell, P.A.

215 South Monroe Street, Suite 815 Tallahassee, Florida 32302

For Respondent: Mark S. Thomas, Esquire

Agency for Health Care Administration 2727 Mahan Drive, Suite 3407

Tallahassee, Florida 32308-5403 STATEMENT OF THE ISSUE

The issue for consideration in this matter is whether Petitioner should be reimbursed for the amount claimed in the five cases in controversy in this hearing.

PRELIMINARY STATEMENT

By letter dated January 14, 1995 the Florida Director of Medicaid informed Petitioner that the five claims in issue here did not meet the criteria for exception to the twelve month filing limit regarding Medicaid reimbursement claims and were denied. Thereafter, Petitioner filed a Petition for Formal Administrative Hearing to contest the agency's position and this hearing ensued.

At the hearing, Petitioner presented the testimony of Richard E. Blasioli, Petitioner's Finance Manager, and introduced Petitioner's Exhibits 1 through 14. Respondent presented the testimony of Laura Lee Rutledge, at the time in issue a community health nursing consultant with the Agency's Children's Medical Services Division; and Thomas W. Arnold, the Agency's Medicaid Operations Director. Respondent also introduced Respondent's Exhibits A though D.

A transcript of the proceedings was furnished, and subsequent to the hearing, both parties submitted Proposed Findings of Fact which have been ruled upon in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. At all times pertinent to the issues herein either the Florida Department of Health and Rehabilitative Services, (Department), or the Florida Agency for Health Care Administration, (Agency), its successor agency, operated the Medicaid Program in Florida, a state and federally funded program to provide medical services to indigent and eligible individuals, including children, in Florida. Petitioner, Neonatology Associates, Inc., (NAI), is a provider to the Medicaid Program of the State of Florida, and is located in St. Petersburg, Florida. Its Medicaid provider number is 067920-01. It has been a Medicaid provider for approximately thirty years.

   
   

2. Medicaid and Children's Medical Services (CMS) were, at one time, both separate components of the Department of Health and Rehabilitative Services. On July 1, 1993, responsibility for Medicaid was assigned to the Agency for Health Care Administration. Medicaid, and its fiscal agent, FMMIS, are not now and never have been a part of either Children's Medical Services or Regional Perinatal Intensive Care Center (RPICC) and neither CMS nor RPICC have ever been a part of Medicaid or its fiscal agent. RPICC serves only peripherally to Medicaid as a claims transmittal agency or billing agent. That relationship was formalized by a contract which is considered by FMMIS as a billing agent contract.

   
   

3. The parties stipulated prior to the hearing that the medical services, which are represented by Petitioner to have been performed were actually performed and rendered, and that all of the patients for the disputed claims are assumed to be Medicaid eligible. The parties stipulated at the hearing that the five claims were submitted by Petitioner to RPICC in a timely manner; that the five claims were received by RPICC within a twelve month period from the date of service; that there was a problem at RPICC which precluded the transmittal of these five claims in a timely manner to the Florida Medicaid Management Information System, (FMMIS), the office with which they were to be filed for payment; and that there was communication by telephone and in person between officials of Petitioner, RPICC, and the Department/Agency, (CMS), in an effort to resolve the filing difficulty. These claims relate to five patients, M.H., M.C., C.J., B.A. and R.W.

   
   

4. Claims which are not received by Medicaid or its fiscal agent within twelve months of service may not be paid pursuant to law described in the trade as the "twelve month rule." The five claims in issue here were transmitted electronically to RPICC by NAI's agent, Ms. Chandler, the RPICC billing clerk at All Children's Hospital, where the service was rendered, for subsequent re- transmittal by RPICC to FMMIS. This procedure is authorized by the Agency. However, due to technical problems not further identified, the claims were never received by FMMIS.

   
   

5. RPICC, a part of the Department's Children's Medical Services, and operated by the University of Florida, does not adjudicate claims but merely gathers and analyzes neonatology data for statistical reporting. FMMIS, Medicaid's fiscal agent since July 1, 1993, is operated by a private vendor.

6. The contract between Medicaid and the University under which RPICC data services are provided, and that between NAI and Medicaid, which provides for medical services, both contain the same "boiler plate" clauses. Both NAI and RPICC transmit electronic claims to Medicaid for adjudication, but neither is a party of or agent of Medicaid. FMMIS is Medicaid's agent for payment.

   
   

7. RPICC data processing services charges are paid to the University of Florida by Children's Medical Services under their contract. Medicaid pays only for the actual medical care provided to indigent mothers and their sick newborn children. NAI has a contract with Medicaid. RPICC has a contract with Medicaid. Children's Medical Services has a contract with RPICC at the University of Florida. These are the only formal agreements involved in this situation.

   
   

8. The contract between NAI and Medicaid provides that NAI will submit Medicaid claims "in accordance with program policies." Medicaid policy provides that receipt of electronic claims submission to Medicaid or its fiscal agent, FMMIS, takes place only upon acceptance and confirmation by FMMIS. Acceptance occurs when each claim is assigned its own identification number. Medicaid policy also provides that submittal of a claim to RPICC does not constitute receipt of the claim by Medicaid or its fiscal agent, and submittal of a claim to RPICC does not toll the running of time accounted for under the twelve month rule.

   
   

9. The relationship between Medicaid and the RPICC data center may be likened to that of RPICC's being a billing transmittal agent for FMMIS. RPICC does not process claims submitted to it but merely forwards those it receives to the fiscal agent which operates the FMMIS. Medicaid, by letter from Mr. Thomas Arnold, dated March 5, 1990, authorized FMMIS to receive Medicaid claims from RPICC. That letter does no more than offer providers an option to have RPICC bill the fiscal agent for them, thereby creating a "billing agent" status for RPICC. It does not state that submittal of claims by providers to RPICC constitutes filing a claim with Medicaid or the fiscal agent so as to toll the running of the twelve months limit.

   
   

10. The Medicaid Physician Provider Handbook made available to all providers expressly states that all claim inquiries be made to Consultec, a private computer services provider. Both Mr. Blasioli and the Agency's regional claims representative noted that NAI did not contact Consultec regarding the computer problems regarding the instant claims prior to the expiration of the twelve month claim filing limit. Neither did NAI make use of RPICC's internal claims tracking system during the period in issue.

    
    

11. The evidence establishes that NAI experienced difficulty in submitting the five claims in issue. Nonetheless, within a month of being employed by NAI, its billing administrator advised Medicaid that he had addressed the problem and had established procedures with RPICC's data center to prevent future claims from exceeding the twelve month limit.

    
    

12. NAI's difficulty with the five claims in issue were first brought to the attention of Medicaid personnel after the twelve month filing limit had expired. Though the claims in issue here were submitted electronically, NAI could have submitted these claims directly to FMMIS by traditional paper claim, omitting the RPICC channel and its potential for technical problems. It chose not to do so.

    
    

13. The "twelve month rule" provides for exceptions which are expressly limited to those claims which are delayed by either legal action or lack of

    proof of recipient eligibility. An additional exception is afforded claims delayed by "crossovers" with Medicare. The rule does not provide for extension of time due to computer system error unless such error relates to processing errors which arise subsequent to Medicaid's acknowledgment of claim receipt. In essence, to justify an exception to the twelve month rule, the computer error must be Medicaid's.

    
    

14. The Medicaid program cannot deviate from federally imposed requirements. Should it do so, it faces the potential loss of federal expenditure reimbursement which constitutes fifty-five percent of all money spent by Florida in its operation of the Medicaid program. The program processes 100,000,000 claims annually from more than 60,000 providers, paying out approximately $6,700,000,000 each year. Even minor exceptions to the rules governing the adjudication process could have extensive impact on and consequences to the program and the benefits it imparts to the indigent health care recipients it serves.

    
    

    CONCLUSIONS OF LAW

    
    

15. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this case. Section 120.57(1), Florida Statutes.

    
    

16. Under the provisions of Section 409.913(5), Florida Statutes, "providers" under Medicaid are to:

    
    

    1. supervise the provision of, and be responsible for goods and services claimed to have been provided,

    2. supervise and be responsible for pre- paration and submission of the claim [for goods or services rendered]

    3. present a claim that is true and accurate and that is for goods and services which [have actually been provided, were necessary, of the same quality as given to the general public, have not or could not be paid by some other source, and in accordance with Medicaid handbooks and policies].

       
       

17. Consistent with Section 409.907(5), Florida Statutes, the contractual obligations placed on the Medicaid Program as to claims are:

    
    

    1. to accurately process submitted claims,

    2. to timely process accurately submitted claims, and

    3. to timely pay appropriate claims.

       
       

18. Under the appropriate federal and state statutes, and the rules of the Department, "Medicaid" is the medical assistance program authorized by Title XIX of the Social Security Act, 42 U.S.C. ss. 1396 et seq., and regulations thereunder, as administered in this state by the Agency for Health Care Administration. A "fiscal agent" is any corporation or other legal entity that has contracted with the Department/Agency to receive, process and adjudicate claims under the Medicaid program.

19. RPICC, to whom the five claims in issue were submitted by Petitioner for transmittal to the fiscal agent, does not process or adjudicate claims. It is not, therefore, under the terms of the pertinent statutes and rules, the fiscal agent to whom Petitioner's claims must have been submitted for proper processing and payment. Consultec, Incorporated is the sole fiscal agent contractor for the Agency and the organization responsible for processing and adjudicating all Medicaid claims submitted for services rendered to Medicaid recipients by eligible Medicaid providers. All claims for services provided under Medicaid must be processed for payment by Consultec, Inc. which thereafter processes them through the Florida Medicaid Management Information System (FMMIS), the computer system used to process Florida Medicaid claims and to produce management information relating to the Florida program.

    
    

20. All claims for payment under Medicaid must be submitted by the provider no later than 12 months from the date of service, and the "clean" claim for the services [or goods] rendered by eligible providers must generally be received by the agency or its fiscal agent contractor not later than 12 months from the date of service in order for the claim to be considered for payment.

    In that regard, the date stamped on the claim by the agency or the fiscal agent contractor upon receipt is the recorded date of receipt for a paper claims. The date electronically recorded on the provider's electronic transmission by the fiscal agent contractor is the recorded date of receipt for an electronic claim. A "billing agent" is a person or entity that has an agreement with a provider to submit Medicaid claims on its behalf.

    
    

21. In the instant case, though not specifically defined as such by contract, RPICC served as billing agent for Petitioner for the five claims in issue. No ancillary statement by an agency representative or party can lawfully modify the statutory or regulatory definitions or standards imposed for the filing and payment of Medicaid claims. These include the identity of the fiscal agent or the twelve month rule.

    
    

22. Mr. Arnold's March 5, 1993 letter, which characterized RPICC as "billing agent" for providers, did not make filing with RPICC tantamount to filing with the fiscal agent. Further, it did not in any way change the requirements of the law that clean claims be submitted and received by Medicaid or its fiscal agent, within twelve months of the provision of service. By the same token, Mr. Arnold's letter does not create, as Petitioner claims, either a promissory estoppel or equitable situation, regardless that NAI did not have a contract with RPICC for the latter to serve as its billing agent. The five claims in issue were not timely filed and cannot be paid by Medicaid.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Agency for Health Care Administration enter a final order denying as untimely Petitioner's five claims in issue.

DONE and ENTERED this 22nd day of May, 1996, in Tallahassee, Florida.

ARNOLD H. POLLOCK, 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 22nd day of May, 1996.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-3049

To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact:

Petitioner's Proposed Findings of Fact.

1. - 3. Accepted and incorporated herein.

1. First sentence accepted. Balance accepted as definitions, not Findings of Fact.

2. - 12. Accepted.

1. Merely a restatement of testimony in support of Petitioner's position. Not a proper Finding of Fact.

2. Accepted.

3. Rejected as no more than a comment on the evidence and a statement of party position.

4. - 20. Accepted as a statement of position, but rejected as probative of any material factual issue.

21. - 24. Accepted.

1. Accepted.

2. & 27. Not Findings of Fact but citations of statute.

28. & 29. Accepted.

1. Not Findings of fact but cites of agency rule.

2. A restatement of Handbook matter.

3. Accepted.

4. - 35. Accepted.

1. Accepted but non-probative argument.

2. Rejected as contra to the weight of the evidence.

3. - 43. Accepted.

1. Not a Finding of Fact but a restatement of testimony.

2. - 49. Accepted.

50. & 51. Accepted and incorporated herein.

52. - 55. Accepted.

56. - 58. Accepted.

59. & 61. Accepted, but no evidence exists that RPICC's actions constitute receipt of the claim. The evidence of record better suggests that RPICC receives information from providers based upon which it acts as billing agent for the provider and it remains incumbent upon the provider to insure it gets the pertinent

information to RPICC in sufficient time for the claim to be billed within the tweleve month constrains.

62. - 65. Rejected as contra to the better evidence of record.

Respondent's Proposed Findings of Fact.

1. & 2. Accepted and incorporated herein.

1. Not a Finding of Fact but a restatement of the issue.

2. - 7. Accepted and incorporated herein.

8. & 9. Accepted.

10. - 14. Accepted.

1. Accepted.

2. - 18. Accepted.

19. & 20. Accepted and incorporated herein.

1. Not a Finding of Fact but a restatement of and comment on testimony.

2. & 23. Accepted and incorporated herein.

24. Accepted but not probative of any material issue of issue of fact.

COPIES FURNISHED:

Frank P. Rainer, Esquire

Ruden, McClosky, Smith, Schuster, and Russell, P.A.

215 South Monroe Street, Suite 815 Tallahassee, Florida 32310

Mark S. Thomas, Esquire Agency for Health Care

Administration

2727 Mahan Drive, Suite 3407

Tallahassee, Florida 32308

Sam Power Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Suite 3431

Tallahassee, Florida 32308

Jerome W. Hoffman General Counsel

Agency for Health Care Administration

2727 Mahan Drive

Tallahassee, Florida 32309

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to the Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should consult with the agency that will issue the Final Order in this case concerning their rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

Docket for Case No: 95-003049

Orders for Case No: 95-003049