STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
PATRICK CADIGAN, M.D.,
Petitioner,
vs.
AGENCY FOR HEALTH CARE ADMINISTRATION,
Respondent.
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) Case Nos. 01-4083MPI
) 02-2113MPI
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RECOMMENDED ORDER
This case came before Administrative Law Judge John G. Van Laningham for final hearing in Miami, Florida, on
January 15-16 and 30, 2003, and again on June 2, 2003, by video teleconference, at sites in Tallahassee and Miami, Florida.
APPEARANCES
For Petitioner: Anthony C. Vitale, Esquire
Christopher A. Parrella, Esquire Anthony C. Vitale, P.A.
799 Brickell Plaza, Suite 700
Miami, Florida 33131
For Respondent: L. William Porter II, Esquire
Debora E. Fridie, Esquire
Agency for Health Care Administration 2727 Mahan Drive, Suite 3431
Fort Knox Executive Center III Tallahassee, Florida 32308-5407
STATEMENT OF THE ISSUE
The issue for determination is whether Petitioner must reimburse Respondent an amount up to $269,456.35, which sum
Petitioner received from the Florida Medicaid Program in payment of claims arising from Petitioner's treating of AIDS patients with infusions of intravenous immune globulin between January 1, 1996, and August 11, 2000. Respondent contends that Petitioner is not entitled to retain the payments in question for several reasons, the principal one being that the subject treatments allegedly were not medically necessary.
PRELIMINARY STATEMENT
Respondent Agency for Health Care Administration is the agency responsible for administering the Florida Medicaid Program. Petitioner Patrick Cadigan, M.D., is a Medicaid provider.
After auditing Petitioner's claims-payment history and selected medical records, the Agency issued two Final Agency Audit Reports on July 31, 2001——one report for each of Petitioner's offices——in which the Agency alleged that Petitioner had been overpaid $28,020.38 and $241,435.97, respectively, for Medicaid claims arising from Petitioner's treating of AIDS patients with infusions of intravenous immune globulin. (Later, on August 21, 2002, the Agency would issue an Amended Final Agency Audit Report concerning the alleged
$241,435.97 overpayment which added additional grounds for recovering such amount.)
By letter dated August 14, 2001, Petitioner requested an administrative hearing on the larger overpayment assessment, which request was referred to DOAH on October 11, 2001, and resulted in the initiation of Case No. 01-4083MPI. A Petition for Formal Hearing regarding the smaller assessment was filed with the Agency on February 6, 2002. This petition was referred to DOAH on May 20, 2002, giving rise to Case No. 02-2113MPI. In the fullness of time, the two cases were consolidated for all purposes, including discovery and final hearing.1
The final hearing was held largely in Miami, Florida, on January 15-16 and 30, 2003. The Agency presented its rebuttal case on June 2, 2003, which portion of the hearing was conducted by video teleconference, at sites in Tallahassee and Miami.
Both sides appeared at all scheduled proceedings.
At hearing, Respondent presented three fact witnesses, namely its employees Art Williams, Margarite Johnson, and Nancy Carvallo, together with Joseph Shands, M.D., who testified as an expert. Respondent also offered 55 exhibits, numbered 1 through
56 (number 39 was omitted), which were admitted into evidence.
Included in these exhibits were the medical records for 28 of Petitioner's patients.
Petitioner testified on his own behalf and called two expert witnesses: Robert Weatherford and Jeffrey Bettinger,
In addition, Petitioner tendered exhibits numbered 1
through 15, 17 through 57, 59, and 60, and these were received into evidence.
The final hearing transcript comprises five volumes.
Volumes I through IV were filed with DOAH on March 31, 2003. The final volume was filed on July 1, 2003. The parties timely filed proposed recommended orders before the established deadline, which (after a couple of extensions) was January 16,
2004. These papers were carefully considered in the preparation of this Recommended Order.
FINDINGS OF FACT
Background
Petitioner Patrick Cadigan, M.D. ("Cadigan") is a physician who has been licensed to practice medicine in Florida since 1988. Board certified in internal medicine, Cadigan specializes in the treatment of patients with HIV infection and AIDS.2 At all times relevant to this case, Cadigan practiced in Miami-Dade County.
Respondent Agency for Health Care Administration ("AHCA" or the "Agency") is the state agency responsible for administering the Florida Medicaid Program ("Medicaid").
Cadigan was, at all relevant times, a Medicaid provider. From time to time, therefore, he had entered into various written contracts with the Agency, which will be referred to collectively as the "Provider Agreement."
During the relevant time frame, from 1996 to 2000, Cadigan saw patients in two separate clinics, one in North Miami and the other in Miami Beach. Cadigan had a separate Medicaid Provider Number for each office.
Around the mid-1990s, Cadigan began infusing some of his AIDS patients with intravenous immune globulin ("IVIG"). IVIG is a biological product derived from blood. Its use in treating adult AIDS patients was controversial, if for no other reason because there was relatively little data on the efficacy of IVIG replacement therapy as an AIDS treatment.3 Some studies, however, had concluded that IVIG could, in fact, be used to beneficial effect in the treatment of AIDS. The most important of these studies, according to the instant record, was conducted by Dr. Michael Kiehl at the University of Munster, Germany, between August 1991 and June 1994 (the "Kiehl Study").
In December 1996, an article reporting on the Kiehl Study was published in the American Medical Association's Archives of Internal Medicine. In this article, Dr. Kiehl and his research colleagues stated their conclusion that the prophylactic use of IVIG therapy to treat AIDS patients "decreases the frequency of serious infections and is associated with a reduction of hospitalization for short-term care." It should be noted that the Kiehl Study did not purport to be the last word on the issue of IVIG therapy as an AIDS treatment;
while confident that the results of their "randomized open study" had demonstrated the "obvious benefits of [IVIG] treatment," the Kiehl Study's authors nevertheless acknowledged that "a double-blinded, placebo-controlled study [was] urgently needed."
Cadigan was impressed by the Kiehl Study. The results of the Kiehl Study were consistent with Cadigan's empirical findings that his patients seemed to feel healthier, have fewer infections, and otherwise respond positively to treatment with IVIG.
Cadigan was not alone in prescribing IVIG for AIDS patients in the 1990s. In fact, quite a few physicians, mostly in South Florida, were billing Medicaid for this treatment——so much so that AHCA began to take notice. At around $1,800 per infusion, IVIG was relatively expensive, and the Agency became concerned about the amount of money that Medicaid was spending on IVIG replacement therapy for AIDS patients. In 1995, the Agency started identifying Medicaid providers who were prescribing IVIG, for the purpose of auditing them.
The first provider to be audited was the Mayer Foundation, a clinic in Miami that primarily treated AIDS patients. The Agency conducted the audit using a so-called "generalized analysis," or "GA" for short. In a GA audit, the provider's claims history is reviewed for policy violations——
usually of an obvious nature. One such a violation, as an example, would be billing for an office visit and a urinalysis with respect to a single patient on the same day. Medicaid will not pay both charges, on the theory that the urinalysis should be included in the office visit. A generalized analysis can spot this kind of policy violation without resort to reviewing individual patient's charts.
In the case of the Mayer Foundation, the putative violation was less obvious, because Medicaid did not have a policy specifically prohibiting the use of IVIG in the treatment of AIDS patients. However, because Medicaid only reimburses providers for medically necessary services, there is effectively a general prohibition against any and all treatments that can retrospectively be deemed medically unnecessary. Thus, as part of the GA audit of the Mayer Foundation, the Agency consulted with a physician peer reviewer, Dr. Scott Folk, who gave the opinion that IVIG was not a medically necessary——and hence not a Medicaid compensable——treatment for patients with AIDS. Dr. Folk's opinion became the basis of an incipient policy of exclusion regarding IVIG——a policy that could easily be applied using the GA auditing method.
In due course, other South Florida Medicaid providers known to be prescribing IVIG, including Cadigan, came under AHCA's scrutiny as well. In January 1996, AHCA asked Cadigan to
produce the records of five patients, which he did.4 After receiving these records on February 8, 1996, the Agency forwarded them to Dr. Folk for review. On April 18, 1996, Dr. Folk again gave AHCA his opinion that IVIG was not a medically necessary treatment for patients with AIDS.
After that, Dr. Folk refused to review additional medical records until his (and the Agency's) opinion that IVIG was not a medically necessary treatment for AIDS had been vetted in an administrative proceeding. Consequently, the Agency decided to demand recoupment from the Mayer Foundation and pursue that demand as a test case. In the meantime, the audit of Cadigan was put on hold pending the outcome of the test case. The Agency did not notify Cadigan that emerging Medicaid policy deemed IVIG medically unnecessary for the treatment of AIDS patients.5
As it happened, the case against the Mayer Foundation was settled before an administrative hearing was had. To proceed with the audits of Cadigan and others, the Agency decided to obtain a second opinion on medical necessity, so it sent various providers' medical records to Dr. Margaret A. Fischl at the University of Miami School of Medicine. Although these records remained with Dr. Fischl for about a year and half, she did not render an opinion for the Agency, one way or the other, regarding the efficacy of IVIG. As a result, the
Agency retrieved the documents from Dr. Fischl and sought out another suitable peer reviewer.
In November 1998, the Agency retained Dr. Joseph W. Shands, Jr., a professor at the University of Florida College of Medicine, as its peer reviewer. At the time, Dr. Shands was 68 years old and partially retired, although he was still seeing patients, including persons with AIDS. (Dr. Shands was fully retired as of the final hearing.) Dr. Shands believed, as had Dr. Folk, that IVIG replacement therapy was not medically indicated for AIDS patients.
After being hired as the Agency's expert, Dr. Shands reviewed the medical records that the Agency had gathered from Cadigan two years earlier. In October 1999, he told the Agency that there was "no justification" for Cadigan's having prescribed IVIG for his AIDS patients.
Based upon Dr. Shands's opinions and its audit of Cadigan's claims-payment history and selected medical records, the Agency issued two Final Agency Audit Reports on July 31, 2001——one report for each of Cadigan's offices. In these reports, the Agency alleged that Cadigan had been overpaid
$28,020.38 and $241,435.97, respectively, for Medicaid claims involving IVIG infusions. (Later, on August 21, 2002, the Agency would issue an Amended Final Agency Audit Report
concerning the alleged $241,435.97 overpayment which added additional grounds for recovering such amount.)
On January 8, 2002, the Agency published its policy regarding IVIG as a so-called "Banner Notice," that is, a statement inscribed upon the remittance vouchers sent to physicians participating in Medicaid. One of the first public pronouncements of the Agency's policy,6 the Banner Notice advised providers that Medicaid coverage for IVIG would be limited to specified diagnoses. Some of the Medicaid authorized uses of IVIG were "off-label" (meaning not FDA-approved) uses.
As a preface to the ultimate factual determinations, issue-framing findings will next be made regarding the parties' respective positions.
The Agency's Case
As pleaded, the Agency' main theory of recovery was premised on the "policy" that IVIG replacement therapy is not a medically necessary treatment for AIDS patients.7 The Agency further alleged, as distinct but related grounds, that this use of IVIG was "experimental," "clinically unproven," and not FDA- approved (i.e. "off-label"). In its Amended Final Agency Audit Report issued on August 21, 2002, the Agency added, with regard to the alleged $241,435.97 overpayment, that (a) Cadigan's medical records failed to demonstrate the medical necessity of the IVIG treatments for which Medicaid had reimbursed him and
(b) Cadigan was unable to produce documents proving that he had had enough IVIG on hand at the relevant times to dispense to his patients in the quantities shown in the claims at issue.
On the question of medical necessity, the Agency's expert witness at hearing was Dr. Shands, whose opinion remained that IVIG therapy is not appropriate for AIDS patients because it affords little or no benefit at great cost.8 Dr. Shands did allow that IVIG might be medically necessary for AIDS patients who happened also to be diagnosed with a separate (perhaps secondary) condition such as thrombocytopenia, for which IVIG would be indicated. But this possibility did not amount to an exception to his negative opinion regarding the treatment of AIDS patients with IVIG because in such instances the AIDS diagnosis would be neither determinative nor even especially relevant; instead, the other condition (e.g. thrombocytopenia) would drive the determination of medical necessity.9
Dr. Shands also reviewed the medical charts of the 28 patients whose treatments led to the alleged $241,435.97 overpayment. Specifically, Dr. Shands looked in the charts for evidence that a particular patient or patients might have had one of the several conditions, besides AIDS, that reasonably could have been treated, in his opinion, with IVIG replacement therapy. He found one——Patient #6——whose IVIG infusions were, in his opinion, medically necessary. With regard to the other
patients, Dr. Shands found nothing in the medical records justifying the use of IVIG.
On other issues, Dr. Shands essentially disclaimed the Agency's contention that the use of IVIG in the treatment of AIDS patients was "experimental." He also acknowledged that IVIG is (and was, at all relevant times) an FDA-approved product. Dr. Shands conceded that some off-label uses of IVIG are medically necessary and thus Medicaid compensable.10 In short, Dr. Shands's testimony did not persuasively support the Agency's allegations that the claims at issue should be denied on grounds that the use of IVIG to treat AIDS patients was experimental or not FDA-approved.
In support of its allegation that Cadigan's medical records failed adequately to document medical necessity, the Agency offered (in addition to Dr. Shands's testimony) the charts of 28 patients. After the final hearing, the Agency agreed to remove six of these patients from the audit. One, just mentioned, was Patient #6. The others were Patient ##7, 11, 19, 21, and 26. The total dollar amount of the claims associated with these six patients is $3,980.78, which sum, the Agency stipulated, could be subtracted from the original demand of $241,435.97. After these adjustments, therefore, the relevant documentary evidence regarding Cadigan's medical records comprises 22 patient-charts, and the total demand for
recoupment in connection with this group of patients is
$237,455.19.
With regard to the allegation that Cadigan was unable to produce documentary evidence of his IVIG inventory, the evidence is undisputed: Cadigan admitted that he possessed no records showing that he had purchased IVIG for resale to his
patients.
Cadigan's Case
Cadigan challenged the Agency's case along two fronts.
First, he sought affirmatively to prove that the IVIG treatments at issue were, in fact, medically necessary. Second, he raised several points as affirmative defenses.
On medical necessity, Cadigan testified credibly that his patients actually benefited from IVIG replacement therapy. He claimed——and the evidence does not disprove——that his patients felt better, had more stamina, needed fewer hospitalizations, had fewer infections, and experienced fewer neuropathies, when treated with IVIG. While this sort of "anecdotal evidence" is not the equivalent of data from a controlled clinical study, it is some evidence, at least, that the treatment works for some patients some of time.
There is little evidence in the record of a technical nature explaining how or why IVIG might benefit AIDS patients. Cadigan described his understanding of the operation of IVIG in
laymen's terms, stating that the product provides a temporary (approximately one month) boost to the patient's immune system, which protects the patient against opportunistic infections and other complications of immunosuppression until other types of treatment allow the patient's immune function to improve.
One important indicator of the health of a patient's immune system is his CD4-cell count. A normal, healthy immune system will produce a CD4-cell count, which is measured through a blood test, in the range between 500 and 1800. A count below
200 is generally considered a sign that AIDS has developed.
Cadigan testified that many of the patients whose treatment is at issue had CD4-cell counts below 200 and that some had counts in double or single digits.11
Cadigan also testified that many of his patients had blood disorders secondary to AIDS that required treatment with IVIG. These disorders were thrombocytopenia, which is characterized by low blood platelet counts; agranulocytosis, which results in low white blood cell counts; and neutropenia, a condition manifested by low neutrophil counts in the blood. As Cadigan further pointed out, the Agency's existing policy recognizes that IVIG might be medically indicated for the treatment of these illnesses.12
As mentioned, Cadigan urges, through a number of positions that are effectively affirmative defenses, that he
should not be liable to Medicaid even if the IVIG treatments at issue be found medically unnecessary. A summary of his principal defenses follows.
Unadopted rule. Cadigan maintains that the Agency's policy——that IVIG is not a medically necessary treatment for AIDS——is a statement of general applicability meeting the definition of the term "rule" set forth in Section 120.52(15), Florida Statutes.13 He contends that the Agency should be precluded from relying upon the policy because it failed properly to adopt the policy as a rule, in violation of Section 120.54(1)(a).
Breach of Duty. Cadigan claims that, in early 1996, the Agency knew (or at least was inclined to believe) that IVIG was not medically necessary for AIDS patients and also knew that Cadigan was actively prescribing IVIG for his AIDS patients, yet failed immediately to tell Cadigan that IVIG was likely to be declared noncompensable, allowing him to run up several years' worth of alleged overpayments that could have been avoided. Cadigan contends, in short, that the Agency breached a duty to prevent him from continuing to prescribe IVIG to his Medicaid- covered AIDS patients. Cadigan suggests various sources of this duty, including public policy, tort law, and an Internal Operating Procedure that requires the Agency to notify a provider of proposed agency action "[w]hen . . . a determination
of . . . a violation [of Medicaid law]" has been made. Such a duty is not, however, imposed under federal law, the state Medicaid statutes or rules, or the Medicaid Provider Agreement.
Waiver and Estoppel. Cadigan asserts that the Agency should be barred from recovery in this case under equitable principles borrowed from federal Medicare law, which latter forgives providers for overpayment liability if (to oversimplify) they are without fault. The inherent weakness in this argument——which Cadigan concedes——is that, for whatever reasons, neither Congress nor the Florida Legislature has chosen to include similar provider protections in the Medicaid laws. As additional and alternative grounds for waiver or estoppel, Cadigan again points to the Agency's conduct in paying claims for IVIG despite having decided (without telling Cadigan) that such treatment was medically unnecessary.
Lack of Peer Review. Cadigan attacks the evaluation of his professional practices by Dr. Shands as violative of the statutory requirements for peer review. This attack takes two distinct forms. One focuses primarily on the fact that Dr. Shands was in the process of retiring when he began his review and was fully retired as of the final hearing. Thus, Cadigan claims, Dr. Shands was not in "active practice" as required by Section 409.9131(2), Florida Statutes. The other relies on the fact that Dr. Shands (evidently) did not review the charts of
the patients whose treatments led to the alleged $28,020.38 overpayment. On this latter point, it should be noted that there is no testimony specifically relating to these patients, and their medical records are not in evidence.14
Third-Party Records Custodian. As an explanation for his failure to produce inventory records, Cadigan states that he was an employee of Home Patient Care of America, Inc. ("HPC") from September 1995 until March 1998, and that HPC not only purchased the medications (including IVIG) that Cadigan dispensed but also maintained the records of these transactions. Unfortunately for Cadigan, however, HPC later went out of business, and Cadigan was unable to obtain the records showing that IVIG had been bought in sufficient amounts to support the Medicaid claims at issue.
AHCA did not refute Cadigan's evidence in this regard.
Instead, it maintains that Cadigan, as the Medicaid provider, was personally responsible for maintaining the records. Thus, claims the Agency, the fact that HPC kept the records (and perhaps lost them) is no defense. (The Agency might have added that, even if this were a defense, it would not be a great one, because, as will be seen, the majority of the infusions in question occurred after March 1998, when Cadigan presumably was again in control of all his records.)
Ultimate Factual Determinations
The Policy. The undersigned agrees with Cadigan that, at some point prior to the final hearing, but not later than the date of the Banner Notice, the Agency's policy of denying Medicaid coverage for "medically unnecessary" IVIG replacement therapy (when administered as a treatment for AIDS) matured into a statement of general applicability that prescribes Medicaid policy. It is determined, therefore, that this policy of IVIG exclusion is a rule-by-definition. See § 120.52(15), Fla. Stat. (definition of "rule").
This finding is of limited utility, however, because Cadigan did not file an original petition with DOAH challenging the Agency's policy pursuant to Section 120.56(4), Florida Statutes. As a result, the undersigned does not have jurisdiction in this action to determine whether the Agency violated Section 120.54(1)(a), Florida Statutes. Further, Cadigan never notified the Agency that he might be seeking relief pursuant to Section 120.57(1)(e), Florida Statutes. Thus, the undersigned is constrained not to subject the policy to a de novo review in accordance with Section 120.57(1)(e).15
The question next arising is whether the Agency established an adequate factual predicate for its policy. In this regard, it is determined that, at least as of the final hearing, the Agency had reasonable, nonarbitrary grounds for a
general policy of exclusion with regard to IVIG as a treatment for AIDS.16 The Agency's general policy of exclusion was supported by such considerations, taken together, as IVIG's efficacy (which is fairly debatable), cost (which is high), and availability (which is limited).17
Here, the undersigned must make——and emphasize——a negative finding: The evidence, taken as a whole, does not establish that IVIG was never medically necessary for any AIDS patient during the relevant period.18 That is, the Agency's policy of exclusion was not justified solely on the basis that IVIG was an ineffective treatment for AIDS patients in the years 1996 through 2000.19 Rather, the general policy, as proved, admits the possibility that medical necessity might exist in a given instance. Thus, the Agency's proving-up of its policy- based exclusion is not the equivalent of demonstrating that the IVIG treatments in question were not medically necessary for the individual patients whom Cadigan cared for between 1996 and 2000.20
The upshot is that the Agency's policy-based exclusion, as proved, cannot be applied to deny coverage for the subject treatments, which might otherwise have been within Medicaid coverage per the governing laws and Provider Agreement in effect at the time services were provided.21 Thus, medical
necessity must be determined in this case on a patient-by- patient basis.
The patients. To make patient-specific determinations of medical necessity, the undersigned carefully reviewed the charts in evidence, as well as the testimony provided by Doctors Shands and Cadigan. In the course of this review, it became apparent that the most relevant patient-data were those pertaining to a patient's condition at or around the time of a disputed infusion. This is because: (a) most of the charts cover several or more years of treatment; (b) patients' conditions, generally speaking, were fluid, getting better or worse over time; and (c) although the audit period covers four years, seven months, and 11 days, 90 percent of the disputed infusions occurred in 1998 and 1999.22 Thus, the undersigned determined that if a patient received, say, one disputed infusion in February 1999, that patient's condition in February 1996 would not be relevant in deciding whether the disputed infusion was medically necessary.23
It was then determined a "snapshot" of these patients' conditions on the relevant dates could be obtained from the blood test results, which for most of these patients are available on a monthly basis. Based on the testimony presented at hearing, the undersigned decided to focus on five lab values: CD4-cell count ("CD4"); absolute neutrophil count ("ANC"); white
blood cell count ("WBC"); platelet count ("PLT"); and the CD4/CD8 ratio.
Based on the evidence in this case, the undersigned developed the following framework for determining medical necessity in a given patient's case.24 Medical necessity would be established for a particular infusion if, at or around the time of the disputed infusion, the patient met one of the following profiles:
The patient's CD4 count was less than
200 and at least one of the following lab values was out-of-range: ANC, WBC, PLT, and CD4/CD8 ratio (collectively the "Other Results").
The patient's CD4 count was 200 or greater but less than 500 and at least two of the Other Results were abnormal.
(1) (a) The patient's CD4 count was less than 200; (b) The patient's CD4 count was
200 or greater but less than 500 and at least one of the Other Results was abnormal; or (c) Any two of Other Results were abnormal; and (2) contemporaneous clinical progress notes specifically document a condition or conditions suggesting a significant impairment of immune function, such as recurrent serious infections.
To implement this decisional framework, the undersigned extracted the relevant data from the charts and recorded such data on tables created for each of the 22 patients. The tables are hereby incorporated by reference in this Recommended Order. The original tables will be transmitted
to the Agency as Appendix A of the Confidential Appendix to this Recommended Order.25 (A copy of the entire Confidential Appendix will be provided to all counsel of record.)
Next, on separate tables, the undersigned recorded each of the dates of service in question for the 22 patients, and noted whether, on these dates, the patient met either Profile A, B, or C as described above. The tables showing this information are hereby incorporated by reference in this Recommended Order. The original tables will be transmitted to the Agency as Appendix B of the Confidential Appendix to this Recommended Order.
Finally, on separate tables, the undersigned recorded the disallowed claims per patient, according to dates of service, claim code, and amount. This facilitated the computation of a per-patient overpayment. The sum of these per- patient overpayments equals the total overpayment. The tables showing this information are hereby incorporated by reference in this Recommended Order. The original tables will be transmitted to the Agency as Appendix C of the Confidential Appendix to this Recommended Order.
Before turning to the per-patient overpayment data, some additional observations on the above methodology are in order. First, it turned out that 26 infusions (out of 126) were found medically necessary because the patient met Profile A.
Eighteen were found medically necessary because the patient met Profile B. Thirty of the infusions were given to a patient who satisfied the criteria of Sub-Profile C(1)——but in none of these instances did the patient also meet Sub-Profile C(2). Thus, none of the infusions at issue could be found medically necessary under Profile C. At bottom, 44 infusions were found medically necessary; 82 were not.
Second, all of the 44 infusions that the undersigned has determined were medically necessary were also proved, by contemporaneous records in the charts, to have been performed, as claimed. In other words, lack of documentation did not provide a basis to disallow an otherwise medically necessary infusion.
Third, various problems with the blood test records were observed in connection with 40 of the 82 disallowed infusions. Because the problems were potentially outcome determinative, more needs to be said about them.
The problems in question fall into three groups: the relevant blood test record was either illegible, or incomplete, or unavailable. The undersigned determined that these problems neither undermine nor invalidate the methodology used, for the following reasons.
Illegibility played a role in the determination in 15 instances. It is possible that some of these infusions might
have been found medically necessary if good copies of the blood work had been offered into evidence. However, because the burden was on Cadigan, ultimately, to ensure that legible copies of the medical records were received in evidence, it is determined that the consequences of bad copies should fairly fall on him.
In ten instances, the blood work was available but incomplete, meaning that one or more of the values that the undersigned was looking for were not found in the record. Interestingly, nine of these involved infusions administered to one patient (#16) in just three months (February, April, and May of 1996). Any potential unfairness to Cadigan was ameliorated, however, by the fact that both of the patients involved (the other was Patient #4) satisfied Sub-Profile C(1) for each of the ten infusions under consideration. Thus, their charts were carefully examined for indicia of medical necessity apart from the blood work, and none was found.
Finally, there were 15 instances where blood work was unavailable for a disputed infusion. This category was determined to present the greatest potential for unfairness to Cadigan. The undersigned reasoned that a particular blood test record could be unavailable either because (a) although it exists (or once existed), it was not (or could not be) offered into evidence at hearing or (b) no blood test was ordered for
the particular month in with the infusion was given. As with illegible documents, the negative consequences of situation (a) can fairly be assigned to Cadigan, whose burden it was to maintain and produce complete medical files. Situation (b) is distinguishable, however, because there was no proof that blood work needed to be ordered every month for every patient.
Fortunately, it is possible to make a simple adjustment to mitigate any unfairness that might have arisen from situation (b).
In this regard, it is worth noting, initially, that the problem of unavailable blood tests results is relatively minor, affecting only 15 out of 126 claims. There was, in fact, a remarkable consistency in Cadigan's ordering of blood work on a regular——usually monthly——basis.
Getting to specifics, of the 15 dates of service for which there is no corresponding blood work, eight involve one patient (#17). Seven of these eight comprise all of the disputed infusions administered to Patient #17 in 1999. Put another way, there is no blood work for Patient #17 in connection with any of the seven infusions for which claims were made in 1999. Because Cadigan routinely ordered blood work, it is reasonable to infer, and is found, that blood tests were taken contemporaneously with these seven visits. Thus, the
unavailability of test results for Patient #17's seven infusions in 1999 can be attributed to situation (a) as described above.
In contrast, the other eight instances of unavailable blood test results cannot be as easily characterized. Giving Cadigan the benefit of the doubt, the undersigned infers that these eight instances can be attributed to situation (b). Because 44 out of 118 infusions were found medically necessary, it is inferred that the same rate of success——37 percent——would obtain with respect to the remaining eight infusions if blood tests were available, which means that three of these eight should be allowed. It is therefore determined that to mitigate any possible unfairness to Cadigan resulting from the use of blood tests to evaluate medical necessity in connection with infusions administered at times where it might not have been necessary to order such blood tests, an amount equal to three times the average per-claim overpayment should be subtracted from the total overpayment.
Having described the methodology for determining medical necessity in this case and explained that the details of this methodology's implementation are set forth in the Confidential Appendix, the bottom-line findings can be disclosed. The table below shows the per-patient overpayments that the undersigned has determined exist.
Patient Number | Overpayment This Patient |
1 | 9,001.58 |
2 | 1,803.11 |
3 | 1,801.47 |
4 | 1,801.47 |
5 | 4,751.47 |
8 | 14,365.67 |
9 | 1,801.47 |
10 | 0 |
12 | 8,935.36 |
13 | 1,801.47 |
14 | 6,881.78 |
15 | 11,474.34 |
16 | 19,939.20 |
17 | 26,630.85 |
18 | 0 |
20 | 1,801.47 |
22 | 6,552.94 |
23 | 1,801.47 |
24 | 1,493.87 |
25 | 3,593.89 |
27 | 32,062.82 |
28 | 1,450.61 |
The sum of these per-patient overpayments is
$159,746.31. To offset the possible unfairness stemming from unavailable blood test results, an amount equal to three times the average per-claim overpayment ($1,948.13),26 or $5,844.39, should be subtracted from the foregoing sum, producing an overpayment liability of $153,901.92.
As a check on the preceding results, the undersigned re-reviewed the clinical progress notes for Patient ##8, 15, 16, 17, and 27, whose disallowed claims comprise approximately 65 percent of the total. This second-level review, which produced the following observations, did not persuade the undersigned that using the above-described framework had led to an unjust or incorrect result.
Patient #8 was given disputed IVIG infusions between January and August 1998. Then in her late 20s, this patient presented in November and December 1998 with swollen lymph nodes in her neck. Evidently this complaint was resolved, however, because it is not mentioned in the treatment notes made contemporaneously with the disputed infusions. In or around January 1999, the patient was hospitalized for an unspecified viral infection, which was apparently treated successfully. Yet, at the time, her CD4-cell count was in the normal range at 504, which suggests that the HIV infection was under control.27 In January and February 1999, the treatment notes indicate that
Patient #8 might have had a fungal infection in her ears. In March 1999, she was treated for a yeast infection. On the whole, the medical records do not persuasively establish that Patient #8 was suffering from recurrent, serious infections warranting the disallowed IVIG infusions.
The disputed infusions that Patient #15 received occurred between January and July 1999. This patient, then in his early 50s, had medical problems unrelated to AIDS, such as diabetes and hypertension. In January and February, and at least through April 1999, he suffered from kidney stones. Also during that period, he had an upper respiratory infection, which produced mild symptoms and was treated conservatively. The treatment notes do not describe the respiratory condition as serious, however, and Patient #15's CD4-cell count remained in the normal range throughout.
Patient #16, who was infused between February and May 1996, is described in the contemporaneous treatment notes as doing well, except for a bout of diarrhea in February. There is no indication that he was suffering from serious, recurring infections at the time of the disputed IVIG infusions.
Patient #17 received 16 disputed infusions between April 1998 and September 1999. There are no clinical progress notes in the record for 1999 after January 19. The records in evidence do not indicate that Patient #17 was suffering from
serious, recurring infections at the time of the disputed IVIG infusions (although the IVIG infusion given in May 1998 was deemed covered based on his blood work).
Patient #27 was in his late 30s when he received 19 disputed IVIG infusions between April 1998 and August 1999. He was diabetic, obese, and mildly hypertensive. The progress notes report that Patient #17 had an infection on his left earlobe at the end of 1998, which was treated with antibiotics and appears not to have been serious. He also had bronchitis in May 1999, but the notes do not establish that this was a serious or recurring problem (and his CD4-cell count was in the normal range at the time).
The second-level review of the foregoing five patients persuaded the undersigned that the decisional framework was not unduly restrictive but, rather, operated fairly to separate the justifiable claims from those that were not justified.
Peer Review. Because Dr. Shands was still regularly providing medical care to patients in 1998 when the Agency retained him, and because it appears that he continued to see patients within the two-year period before the commencement of the final hearing, it is determined that Dr. Shands sufficiently qualified as a "peer" to authorize his testimony as the Agency's expert on medical necessity.
However, because there is no evidence of a patient- specific peer review of the patients whose treatments led to the alleged overpayment of $28,020.38, it is determined that this latter sum was not shown by the evidence to constitute an overpayment.
Inventory. Although Cadigan failed to produce documents showing that he had purchased IVIG, it is determined that, in fact, Cadigan did have sufficient quantities of the product available during the audit period to support the Medicaid claims at issue. This finding is based on the fact (which was not genuinely disputed) that Cadigan actually provided the infusions and related services that led to the disputed claims, as documented by the medical records maintained in the ordinary course of Cadigan's business. Obviously, the infusions could not have been accomplished unless Cadigan had IVIG on hand.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has personal and subject matter jurisdiction in this proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes.
The Agency is empowered to "recover overpayments . . . as appropriate." § 409.913, Fla. Stat. An "overpayment" is defined to include "any amount that is not authorized to be paid by the Medicaid program whether paid as a result of inaccurate
or improper cost reporting, improper claiming, unacceptable practices, fraud, abuse, or mistake." § 409.913(1)(e), Fla. Stat. Specifically, as well, the Agency is authorized to "require repayment for inappropriate, medically unnecessary, or excessive goods or services from the person furnishing them, the person under whose supervision they were furnished, or the person causing them to be furnished." § 409.913(10), Fla. Stat.
The burden of establishing an alleged Medicaid overpayment by a preponderance of the evidence falls on the Agency. South Medical Services, Inc. v. Agency for Health Care
Admin., 653 So. 2d 440, 441 (Fla. 3d DCA 1995); Southpointe Pharmacy v. Department of Health and Rehabilitative Services, 596 So. 2d 106, 109 (Fla. 1st DCA 1992).
Although the Agency bears the ultimate burden of persuasion and thus must present a prima facie case through the introduction of competent substantial evidence before the provider is required to respond, Section 409.913(21), Florida Statutes, provides that "[t]he audit report, supported by agency work papers, showing an overpayment to the provider constitutes evidence of the overpayment." Thus, the Agency can make a prima facie case merely by proffering a properly supported audit report, which must be received in evidence. See Maz
Pharmaceuticals, Inc. v. Agency for Health Care Administration, DOAH Case No. 97-3791, 1998 WL 870139, *2 (Recommended Order
issued Mar. 20, 1998); see also Full Health Care, Inc. v. Agency for Health Care Administration, DOAH Case No. 00-4441, 2001 WL 729127, *8-9 (Recommended Order issued June 25, 2001)(adopted in toto, Sept. 28, 2001, AHCA Rendition No. 01-262-FOF-MDO).
The pertinent statutes, rules, Handbook, and Medicaid Provider Reimbursement Handbook that were in effect during the audit period govern this dispute. See Toma v. Agency for Health Care Administration, DOAH Case No. 95-2419, 1996 WL 1059900, *23 (Recommended Order issued July 26, 1996) (adopted in toto, Sept. 24, 1996, 18 F.A.L.R. 4735).
Section 409.913(7), Florida Statutes, spells out the duties of providers who make claims under Medicaid:
When presenting a claim for payment under the Medicaid program, a provider has an affirmative duty to supervise the provision of, and be responsible for, goods and services claimed to have been provided, to supervise and be responsible for preparation and submission of the claim, and to present a claim that is true and accurate and that is for goods and services that:
Have actually been furnished to the recipient by the provider prior to submitting the claim.
Are Medicaid-covered goods or services that are medically necessary.
Are of a quality comparable to those furnished to the general public by the provider's peers.
Have not been billed in whole or in part to a recipient or a recipient's responsible party, except for such copayments, coinsurance, or deductibles as are authorized by the agency.
Are provided in accord with applicable provisions of all Medicaid rules, regulations, handbooks, and policies and in accordance with federal, state, and local law.
Are documented by records made at the time the goods or services were provided, demonstrating the medical necessity for the goods or services rendered. Medicaid goods or services are excessive or not medically necessary unless both the medical basis and the specific need for them are fully and properly documented in the recipient's medical record.
The terms "medical necessity" and "medically necessary" are statutorily defined to mean
any goods or services necessary to palliate the effects of a terminal condition, or to prevent, diagnose, correct, cure, alleviate, or preclude deterioration of a condition that threatens life, causes pain or suffering, or results in illness or infirmity, which goods or services are provided in accordance with generally accepted standards of medical practice. For purposes of determining Medicaid reimbursement, the agency is the final arbiter of medical necessity. Determinations of medical necessity must be made by a licensed physician employed by or under contract with the agency and must be based upon information available at the time the goods or services are provided.
§ 409.913(1)(d), Fla. Stat.; see also § 409.9131(2)(b), Fla. Stat.
Pursuant to Section 409.9131(5), Florida Statutes, when the Agency makes a determination of overpayment with respect to a physician, it must:
Use accepted and valid auditing, accounting, analytical, statistical, or peer-review methods, or combinations thereof. Appropriate statistical methods may include, but are not limited to, sampling and extension to the population, parametric and nonparametric statistics, tests of hypotheses, other generally accepted statistical methods, review of medical records, and a consideration of the physician's client case mix. Before performing a review of the physician's Medicaid records, however, the agency shall make every effort to consider the physician's patient case mix, including, but not limited to, patient age and whether individual patients are clients of the Children's Medical Services network established in chapter 391. In meeting its burden of proof in any administrative or court proceeding, the agency may introduce the results of such statistical methods and its other audit findings as evidence of overpayment.
Refer all physician service claims for peer review when the agency's preliminary analysis indicates a potential overpayment, and before any formal proceedings are initiated against the physician, except as required by s. 409.913.
"Peer review," as that term is used in Section 409.9131(5), Florida Statutes, is defined in subsection (2)(d) of the statute as "an evaluation of the professional practices of a Medicaid physician provider by a peer or peers in order to assess the medical necessity, appropriateness, and quality of care provided, as such care is compared to that customarily furnished by the physician's peers and to recognized health care
standards, and to determine whether the documentation in the physician's records is adequate."
"Peer," as that term is used in Section 409.9131(5), Florida Statutes, is defined in subsection (2)(c) of the statute as "a Florida licensed physician who is, to the maximum extent possible, of the same specialty or subspecialty, licensed under the same chapter, and in active practice."
"Active practice," as that term is used in Section 409.9131(5), Florida Statutes, is defined in subsection (2)(a) of the statute to mean that "a physician must have regularly provided medical care and treatment to patients within the past
2 years."
In addition to its power to recover overpayments, the Agency possesses the authority to sanction, or seek other redress from, any provider who has committed one or more of the offenses enumerated in Section 409.913(14), Florida Statutes, which include:
(n) The provider fails to demonstrate that it had available during a specific audit or review period sufficient quantities of goods, or sufficient time in the case of services, to support the provider's billings to the Medicaid program[.]
Based on the foregoing principles, as applied to the specific facts of this case, the undersigned has determined that Cadigan is liable to the Agency for $153,901.92, which is the
amount paid out by Medicaid for claims that were not shown to be medically necessary.
Before concluding this Recommended Order, the undersigned will make some observations regarding Cadigan's affirmative defenses, namely, breach of duty (to prevent overpayments), waiver, and estoppel. While recognizing that these defenses are doctrinally distinct, at bottom they rest here on Cadigan's nonfrivolous contention that there is something unfair about the Agency's waiting for several years to publicly announce its policy of exclusion with regard to IVIG, thereby allowing Cadigan——whom the Agency knew was using IVIG in a putatively disallowable fashion——to incur an ever-increasing liability for overpayments.
The apparent injustice of the Agency's behavior is underscored by the fact that the exclusion policy is one to which Cadigan surely would have conformed. The undersigned is confident of this because Cadigan impressed him as a competent and caring doctor whose use of IVIG was motivated not by self- interest but by a sincere desire to improve the health of his patients.
Further, in other areas of the law, persons who are aggrieved by the wrongdoing of others nevertheless must mitigate their damages. In essence, that is what Cadigan claims was the Agency's duty: to mitigate damages to Medicaid by taking
reasonable steps——such as announcing the policy of exclusion with regard to IVIG——to avoid overpayments. It is a plausible position, not without appeal.
Ultimately, however, the undersigned is not inclined to impose a new, and potentially costly, duty on the Agency——and he is not convinced that he has the authority to do so even if he were so inclined. To properly fashion such a duty would require the balancing of competing policy interests that is (or should be) the province of the legislature.
Also, the undersigned is not sure that existing law fails to provide adequate protections against the inequity about which Cadigan complains. One such safeguard is found in Section 120.57(1)(e), Florida Statutes. When the Agency delays announcing a Medicaid policy, it runs the risk that affected providers will seek relief under Section 120.57(1)(e), pursuant to which an administrative law judge could, depending on the circumstances, declare that the policy has been applied "without due notice" and prohibit its use. See § 120.57(1)(e)2.e., Fla. Stat.
And even where Section 120.57(1)(e) has not been raised, as here, if the Agency relies upon a previously undisclosed policy (or a disclosed policy that has not been adopted as a rule), it must explicate, support, and defend such policy, with competent substantial evidence, at the final
hearing. See Southpointe Pharmacy v. Department of Health and Rehabilitative Services, 596 So. 2d 106, 111 (Fla. 1st DCA 1992); St. Francis Hosp., Inc. v. Department of Health and Rehabilitative Services, 553 So. 2d 1351, 1354 (Fla. 1st DCA 1989). If the issue is medical necessity, a policy of exclusion should not be dispositive unless the Agency defends its policy with proof that the service in question was never medically necessary during the audit period——a burden that the Agency was unable to carry in this case.28 This, too, provides a measure of protection against the unfairness of which Cadigan complains.
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency enter a final order requiring Cadigan to repay the Agency the principal amount of
$153,901.92.
DONE AND ENTERED this 9th day of February, 2004, in Tallahassee, Leon County, Florida.
S
JOHN G. VAN LANINGHAM
Administrative Law Judge
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(850) 488-9675 SUNCOM 278-9675
Fax Filing (850) 921-6847 www.doah.state.fl.us
Filed with the Clerk of the Division of Administrative Hearings this 9th day of February, 2004.
ENDNOTES
1/ No purpose would be served by summarizing the pre-hearing proceedings had in these cases. Anyone interested in the details can access DOAH's files online at www.doah.state.fl.us/internet.
2/ Henceforth, the term "AIDS" as used herein will mean and include HIV infection, unless a distinction is necessary.
3/ There is no dispute that IVIG is medically indicated for the treatment of pediatric AIDS patients, but the agreement on this point is immaterial, as we are dealing here with adult patients only. That being the case, all subsequent references herein to AIDS patients mean and include only adult AIDS patients, whether or not so qualified.
4/ The evidence does not establish that Cadigan was told the Agency was specifically looking at IVIG usage, nor is the undersigned persuaded that Cadigan should have known, based on the records requested, the subject of the Agency's
concern. Because Cadigan continued to prescribe IVIG, which would have been inconsistent with such knowledge, the undersigned reasonably infers that, more likely than not, Cadigan was unaware of the Agency's concern about treating AIDS patients with IVIG.
5/ There is no direct evidence that Cadigan knew much, if anything, about the administrative action against the Mayer Foundation. On the one hand, it seems reasonable to infer that Cadigan must have heard about the Mayer Foundation's situation "through the grapevine." Yet, on the other hand, Cadigan continued using IVIG to treat his AIDS patients, which the undersigned is persuaded he would not have done had he known the Agency's position on medical necessity. On balance, the undersigned infers that, more likely than not, Cadigan was unaware of the particulars of the Mayer Foundation litigation.
6/ A separate notice of the Agency's IVIG policy, dated December 31, 2001, was sent to pharmacies. This notice announced that "[s]tarting January 2, 2002, Florida Medicaid Prescribed Drug Services [would] begin requiring prior authorization for all [IVIG] claims." After January 2, 2002, some of Cadigan's patients were pre-approved for IVIG treatments.
7/ The term "policy" was put in quotes here because Cadigan contends——not without reason——that the policy in question had ripened into a rule-by-definition by the time of the final hearing. This particular contention will be addressed below. From now on, however, as used in this Recommended Order, the term "policy," standing alone, refers to an agency statement of principle that has not been adopted as a rule pursuant to Section 120.54, Florida Statutes, and which might (or might not) be a rule-by-definition——i.e., a "rule" as that latter term is defined in Section 120.52(15).
To elaborate, as used herein, the terms "policy" and "rule- by-definition" are not mutually exclusive. This is because all rules-by-definition are policies. Conversely, some policies are rules-by-definition, while others (sometimes referred to as "nonrule" or "incipient" policies) are not. The term "nonrule policy," which is often used to denote a policy that is not a "rule," is an unfortunate coinage, despite its wide acceptance, because it is ambiguous, being reasonably understood to mean several different things: (a) policies, both written and unwritten, that are not "formal" rules, properly adopted as such and published in the Florida Administrative Code, and which
might or might not be rules-by-definition (i.e. meet the statutory definition of a "rule"); (b) policies, both written and unwritten, that have not been adopted pursuant to Section 120.54, Florida Statutes, but which nevertheless meet the statutory definition of a "rule" (i.e. are rules-by-definition or "unadopted rules"——the latter term being somewhat confusing because such policies usually have been "adopted" in the sense of being accepted and implemented); and (c) policies, both written and unwritten, but not formally adopted, that are not "rules" according to the statutory definition. The term "rule- by-definition" ordinarily should be used instead of "nonrule policy" if the intent is to express the idea that the statement in question meets (or is alleged to meet) the statutory definition of a "rule." If one means to say that the statement does not meet (or is believed not to satisfy) the statutory definition of a "rule," then the term "incipient policy" should be used in place of "nonrule policy." If, as here, one's intent is to avoid committing to one possibility or the other (incipient policy vs. rule-by-definition), then it is best simply to call the statement a "policy."
8/ Dr. Shands based his opinion primarily on his personal experience, conversations with colleagues, and professional literature. He rejected the Kiehl Study out-of-hand as worthless, however, for reasons that the undersigned does not find persuasive. In particular, Dr. Shands identified the Kiehl Study's limitations——e.g. that it was not double-blinded and placebo-controlled——but failed persuasively to explain why, in the absence of conflicting data from a better study (there are none in evidence), the Kiehl Study should be ignored. Perhaps more to the point, Dr. Shands did not provide persuasive proof that a reasonable practitioner in Cadigan's position should have concluded, as Dr. Shands did, that the Kiehl Study was so unsound as to be, in effect, a nullity (or worse, a fraud).
9/ In other words, Dr. Shands did not say that medical necessity would be shown by the combination of AIDS plus another condition such as thrombocytopenia. Rather, he said that IVIG is sometimes medically necessary for the treatment of certain conditions such as thrombocytopenia. Therefore, if an AIDS patient happens to have thrombocytopenia, then he might appropriately be treated with IVIG. In that event, however, it would be the thrombocytopenia, not the AIDS, necessitating the IVIG treatment. The fact that the patient had AIDS would be irrelevant, therefore, to the determination of medical necessity.
10/ Other evidence confirmed, and it is found, that Medicaid does, in fact, reimburse providers for medically necessary, off- label uses of prescription drugs, including IVIG.
11/ The medical records in evidence confirm that this is true. However, because CD4-cell counts fluctuate over time, it is more important to know what a patient's count was at the time of a disputed infusion, than what its lowest (or highest) mark was during a multi-year period.
12/ The Agency's position, presented through Dr. Shands, is that the medical records in evidence fail to demonstrate that any of the 22 patients at issue reasonably could have been diagnosed with thrombocytopenia, agranulocytosis, or neutropenia.
13/ Unless otherwise indicated, citations to the Florida Statutes refer to the 2003 Florida Statutes.
14/ Actually, to be precise, there was testimony about Patient #12, who happened to be in both groups, and her medical records are in evidence. However, the four claims for Patient #12 that are part of the alleged $28,020.38 overpayment, when added together, total just $50.15——and none is for an IVIG infusion. The undersigned is not persuaded that these four claims were medically unnecessary, and the amount involved is trifling, in any event. De minimis non curat lex.
15/ The statutes do not specify when, and with what particularity, a party whose substantial interests are being determined based on an unadopted rule must plead entitlement to relief under Section 120.57(1)(e). However, because the agency in a Section 120.57(1)(e) proceeding has the burden of proving, in effect, that its unadopted rule is valid, the undersigned concludes that, as a matter of due process, the agency must be given an opportunity to present evidence at hearing after reasonable notice of the allegations——which means, if nothing else, that Section 120.57(1)(e) cannot be raised for the first time in a party's proposed recommended order. (In this case, Cadigan did not cite Section 120.57(1)(e), even in his proposed recommended order, but his arguments about the Agency's policy being an illegal rule-by-definition could only be grounded in that statute, given his failure to file an original petition under Section 120.56(4), Florida Statutes.) This understanding of Section 120.57(1)(e) finds additional support in Section 120.56(4)(f), which refers to "bringing a proceeding pursuant to
s. 120.57(1)(e)." The language just quoted connotes that Section 120.57(1)(e) authorizes something akin to cause of action, which must be formally initiated (brought) in some fashion before the hearing.
All legal conclusions contained in this endnote (and the text to which it is appended), having been placed here for organizational convenience and clarity, are hereby incorporated by reference in the Conclusions of Law section of this Recommended Order.
16/ This determination assumes——because neither party has argued the point——that federal law permits the state to do this, i.e. to limit coverage, across-the-board, for a biological product.
Put another way, the undersigned assumes that federal law permits a state to categorically exclude from coverage, for policy reasons, a drug or biological product whose use might be medically necessary in a particular case, where, on balance, the greater public good outweighs the possibility that some individual patients might suffer from under-treatment.
17/ The policy was justified because of the confluence of these considerations.
18/ The Agency might take exception to this point on the grounds that its policy does not exclude IVIG for all patients, but only for those "uncomplicated" AIDS patients who are not diagnosed with various other conditions for which IVIG treatment is medically indicated. In other words, the Agency might say, the Agency agrees that IVIG is sometimes medically indicated for some AIDS patients, and no attempt to prove otherwise was made.
The finding made in the text is valid and relevant, however, because as mentioned previously, see endnote 9 and accompanying text, what might seem to be exceptions to the Agency's general policy of exclusion really are not. When the Agency concedes medical necessity, it does so not on the basis of patient qua AIDS patient, but patient qua person with, e.g., thrombocytopenia.
19/ To repeat an important point for emphasis, the policy at issue here was supported on grounds including, but not limited to, efficacy. If IVIG were cheap and readily available in unlimited quantities, for example, the policy would not have been justified.
20/ Such proof makes a prima facie case for lack of medical necessity, but it is not dispositive.
21/ If the law allowed policy-based exclusions to be imposed ex post facto, access to Medicaid services inevitably would be adversely affected, as providers fled the system to avoid potentially ruinous contingent liabilities.
22/ To provide some specific numbers, there are a total of 126 "J code" claims at issue in connection with the $237,455.19 alleged overpayment. A "J code" is the category of code that Medicaid assigns to claims for the purchase and administration of injectable medication. The J code used for the infusions in this case was either J1561 or J1562. Additionally, the J code was usually accompanied by claims for the related medical services of inserting the needle and infusing the medicine (36000, 90780, and 90781). For simplicity, the undersigned will refer to each separate J code (infusion), together with any services directly associated therewith (i.e. provided to the same patient on the same date), as a single claim. Of the 126 infusions at issue, 11 occurred in 1996, one in 1997, 56 in
1998, 58 in 1999, and none in 2000.
23/ This determination, admittedly, is subject to criticism on the ground that the patient's condition at the time of a disputed infection might have been relatively good because of the ongoing IVIG treatments, which served to prevent the recurrence of symptoms or infections experienced earlier. At the end of the day, however, the undersigned concluded that attempting to gauge the prophylactic effect of IVIG would require too much speculation, on this record at least, and would also add yet another layer of factual complexity to the decisional process.
24/ It should be emphasized that this framework is not intended to have any application outside of this particular case. The undersigned assuredly does not purport here to announce rules of decision applicable generally to disputes over the use of IVIG. This case-specific decision-matrix is a pragmatic tool designed to facilitate the resolution of a unique case (which happens to involve a large amount of data) that does not lend itself to an easy "all or nothing" solution.
Also, to be clear, neither party proposed this framework; rather, it reflects the undersigned's synthesis, as fact-finder,
of the credible expert testimony, the numerous exhibits, and the record as a whole.
25/ The appendix must be treated as confidential because it reveals the names of the patients.
26/ 159,746.31 divided by 82 equals 1,948.13.
27/ Had her CD4-cell count been below 500 in January 1999, the undersigned would have reconsidered his judgment on the two infusions of IVIG administered to Patient #8 that month, given the recent hospitalization.
28/ Logically, if the Agency were able to prove that a service was never medically necessary during the audit period, e.g. was pure quackery, then it would be (a) unnecessary to consider patient-specific facts and (b) not unfair to charge the provider with overpayments for claims made with respect to such service. Of course, if the Agency could make such a case, then it really would not need a policy, for the proof would establish lack of medical necessity, in fact, as to any claim submitted for the never-necessary service.
COPIES FURNISHED:
Anthony C. Vitale, Esquire Christopher A. Parrella, Esquire Anthony C. Vitale, P.A.
799 Brickell Plaza, Suite 700
Miami, Florida 33131
L. William Porter II, Esquire Debora E. Fridie, Esquire
Agency for Health Care Administration 2727 Mahan Drive, Suite 3431
Fort Knox Executive Center III Tallahassee, Florida 32308-5407
Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive
Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308
Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive
Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308
Rhonda M. Medows, M.D., Secretary Agency for Health Care Administration 2727 Mahan Drive
Fort Knox Building Three, Suite 3116 Tallahassee, Florida 32308
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions within
15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.
| Issue Date | Document | Summary |
|---|---|---|
| May 13, 2004 | Agency Final Order | |
| Feb. 09, 2004 | Recommended Order | Petitioner must reimburse Respondent for sums he received from the Florida Medicaid Program in payment of certain claims arising from Petitioner`s treating of AIDs patients with infusions of intravenous immune globulin that were not medically necessary. |
PATRICK CADIGAN, M.D. vs AGENCY FOR HEALTH CARE ADMINISTRATION, 01-004083MPI (2001)
DEPARTMENT OF HEALTH, BOARD OF MEDICINE vs ESTABAN ANTONIO GENAO, M.D., 01-004083MPI (2001)
AGENCY FOR HEALTH CARE ADMINISTRATION vs PIERRE GASTON, M.D., 01-004083MPI (2001)
HAL COWEN vs AGENCY FOR HEALTH CARE ADMINISTRATION, 01-004083MPI (2001)
