STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
AGENCY FOR HEALTH CARE )
ADMINISTRATION, )
)
Petitioner, )
)
vs. )
) KENNETH HARDEN, d/b/a KEN CARE, ) INC., )
)
Respondent. )
Case Nos. 12-2868MPI
12-2869MPI
)
RECOMMENDED ORDER
An administrative hearing was conducted in this case on January 29 and 30, 2013, by video teleconference with sites in Gainesville and Tallahassee, Florida, before Suzanne Van Wyk, Administrative Law Judge with the Division of Administrative
Hearings.
APPEARANCES
For Petitioner: David W. Nam, Esquire
Agency for Health Care Administration Fort Knox Building 3, Mail Stop 3 2727 Mahan Drive, Suite 3431
Tallahassee, Florida 32308
For Respondent: William Johnson, Qualified Representative 2545 Northeast 11th Place
Gainesville, Florida 32461 STATEMENT OF THE ISSUE
Whether the Agency for Health Care Administration (Agency or Petitioner) is entitled to recover alleged Medicaid
overpayments, administrative fines, and investigative, legal, and expert witness costs from Kenneth O. Harden, d/b/a Ken Care, Inc. (Respondent).1/
PRELIMINARY STATEMENT
On November 21, 2011, the Agency issued a letter and Final Audit Report (Audit Report I) advising Respondent of its intention to seek reimbursement of $568,250.01 in alleged Medicaid overpayments, $954.97 in audit costs, and a $113,650.00 administrative fine from Respondent based on Medicaid claims made by the Respondent under Provider No. 6775586-96 from January 1, 2008, through June 30, 2010 (the audit period). That same date, the Agency issued a letter and Final Audit Report (Audit Report II) advising Respondent of its intent to seek reimbursement of $162,700.00 in alleged Medicaid overpayments,
$482.41 in audit costs, and a $32,540.02 administrative fine from Respondent based on Medicaid claims made by the Respondent under Provider No. 6775586-98 during the audit period. The letters also notified Respondent that he had the right to request an administrative hearing within 21 days from his receipt of the notice.
Respondent timely requested an administrative hearing under section 120.57(1), Florida Statutes, and the Agency referred the case2/ to the Division of Administrative Hearings (Division).
Upon referral, the hearing in this case was originally scheduled for November 16, 2012, but, by Order Granting Respondent's Motion for Continuance, the hearing was re- scheduled to January 29 and 30, 2013.
On November 16, 2012, the undersigned granted Petitioner‟s Request for Official Recognition, thereby taking official recognition of certain provisions of chapters 393, 408, 409, and 414, Florida Statutes (2008, 2009, and 2010); sections of Florida Administrative Code Rule 59G; enumerated chapters of the Florida Medicaid Provider General Handbook from January 2007 and July 2008 (Medicaid Handbook); enumerated chapters and appendices of the Developmental Disabilities Waiver Services Coverage and Limitations Handbook from June 2005, June 2007, and December 2008 (DD Handbook); as more particularly listed in the Agency's Request for Official Recognition.
On November 28, 2012, the undersigned issued an Order Accepting Qualified Representative for Respondent.
On January 23, 2013, the Agency filed a Motion to Compel responses to its discovery requests, a Motion to Quash certain subpoenas, and a Motion to Exclude Witnesses. Following a telephonic hearing on January 28, 2013, the undersigned issued an Order Reserving Ruling on Petitioner‟s Motion to Compel and an Order Granting, in Part, Petitioner‟s Motion to Quash Subpoenas and to Exclude Witnesses.
The final hearing convened as re-scheduled by video teleconference on January 29, 2013. The undersigned first addressed Respondent‟s Motion to Dismiss the Complaint with Prejudice filed the same morning, denying the Motion.
At the hearing, the Agency presented the testimony of Magdalena Olsson, an investigator with the Agency's Medicaid Program Integrity Bureau; Robi Olmstead, an Agency administrator with the Medicaid Program Integrity Bureau's waiver unit; Kristen Koelle, a medical health care program analyst with the Agency's Medicaid Program Integrity Bureau; and
Fred W. Huffer, Ph.D., a mathematics professor at Florida State University. The Agency offered Exhibits 1-2, 10-11, 13, 15-19, 21, and 23-28, which were received into evidence without objection.
Respondent offered no testimony, nor submitted any evidence into the record.
At the close of the hearing, the parties were given 10 days from the filing of the transcript within which to file their respective proposed recommended orders. On February 15, 2013, prior to the transcript being filed, Respondent filed a Proposed Recommended Final Order.3/ Respondent filed an amended Proposed Order on February 18, 2013.
The three-volume Transcript of these proceedings was filed on February 22, 2013. On March 7, 2013, Respondent filed
another Proposed Order in which he requested the undersigned to “disregard all prior proposed recommended final orders.” As such, Respondent‟s Proposed Orders dated February 15 and 18, 2013, are considered withdrawn. Petitioner timely filed a Proposed Recommended Order on March 8, 2013. Both Petitioner‟s Proposed Recommended Order and Respondent‟s Proposed Recommended Final Order filed March 7, 2013, have been taken into consideration in preparing this Recommended Order.
On February 18, 2013, Respondent filed a Motion to Dismiss the Agency‟s complaint for failure to state a cause of action. The undersigned denied the Motion as untimely on February 19, 2013. That same date, Respondent filed an Amended Motion to Dismiss the Agency‟s complaint. On February 20, 2013, Respondent filed a Motion to Vacate Order Denying Respondent‟s Motion to Dismiss the Agency‟s Petition. On March 7, 2013, Respondent filed a Motion to Dismiss [the Agency‟s] Complaint with Prejudice. The undersigned‟s rulings on Respondent‟s Motions are being issued contemporaneously herewith and are noted on the docket.
FINDINGS OF FACT
The Agency is the state agency responsible for administering the Florida Medicaid Program (Medicaid). Medicaid is a federally-funded state-administered program that provides health care services to certain qualified individuals.
Respondent, Kenneth O. Harden, is an individual who was enrolled as a provider in both the Florida Medicaid Developmental Disabilities Waiver Program (DD Program) and the Florida Medicaid Family Supported Living Waiver Program (FSL Program) at all material times. By enrolling in the Medicaid programs, Respondent agreed to fully comply with all state and federal laws, policies, procedures, and handbooks pertaining to the Medicaid program.
Respondent submitted bills to Medicaid while he was enrolled and these bills were processed and paid to Respondent through the Florida Medicaid automated payment system. Claimed services for which Respondent submitted bills and was paid by Medicaid include in-home support, personal care assistance, self-care/home management training, companion support, supported living coaching, and respite care.
The Agency is authorized to recover Medicaid overpayments, as appropriate. § 409.913(1)(e), Fla. Stat.4/
One method the agency uses to discover Medicaid overpayments is by auditing billing and payment records of Medicaid providers. Such audits are performed by staff in the Agency's Bureau of Medicaid Program Integrity (MPI).
Providers are identified as potential candidates for auditing by a combination of referrals from field offices, data
processing offices, and the Agency‟s fraud and abuse hotline, and a random audit process.5/
In 2011, Agency Administrator Robi Olmstead identified Respondent as a potential audit candidate through a field office referral. She opened two cases on Respondent, one for each provider number, and assigned the cases to Kristen Koelle, then Program Analyst, for full audits.
Ms. Koelle completed the first steps of the audit process according to established protocols. She reviewed Respondent‟s provider information and billing to determine what types of services he provided, what types of claims he had submitted, and how much had been paid by Medicaid. In consultation with Ms. Olmstead, Ms. Koelle selected January 1, 2008, through June 30, 2010, as the audit period. During that audit period, Respondent submitted 10,578 claims for 47 recipients alleged to have received services from Respondent through the DD Program, and 2,485 claims for 22 recipients alleged to have received services from Respondent through the FSL Program.
When the Agency audits a Medicaid provider for possible overpayments 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 . . . and other generally accepted statistical methods." § 409.913(20), Fla. Stat.
The audit method used by the Agency depends on the characteristics of the provider and of the claims. For example, where a provider serves thousands of Medicaid recipients during the audit period, but the number of claims for each recipient is small, then the Agency may use a single-stage cluster sampling methodology. Under this approach, a random sample of recipients is selected, and then all claims are examined for the recipient sample group.
Alternatively, where there are so many claims per recipient that it would be impractical to review all claims for each recipient or all claims for a sample group of recipients, a two-stage cluster sample methodology may be used. Under this approach, a random sample of recipients is selected, followed by a random selection of sample claims for the recipients in the sample.
As a general target, the Agency considers samples of between 5 and 15 claims per recipient to be reasonable sample sizes for the second stage of two-stage cluster sampling. However, if a given recipient has fewer than 15 claims, a smaller number of claims for that recipient will be selected.
Because of the high volume of claims generated by Respondent during the audit period in this case, Ms. Koelle
determined with her supervisor that a two-stage cluster sampling methodology would be used. In other words, it was not feasible to review all 13,063 claims generated by the recipients Respondent claimed to have served during the audit period.
Using a computer program to carry out the random sampling, the Agency's two-stage cluster sampling software selected a random sample of Respondent‟s recipients under both the DD Program and the FSL Program during the audit period. The software generated a list of 30 recipients in the DD Program and
21 recipients in the FSL Program.
It then selected a random sample of between 5 and 15 claims for each recipient from Respondent‟s paid-claims data in the Agency‟s data warehouse for the audit period. For the DD Program, 344 sample claims for the 30 sample recipients were randomly selected from among the 10,578 claims submitted by Respondent during the audit period. For the FSL Program, 256 sample claims for the 21 sample recipients were randomly selected from among the 2,485 claims submitted by Respondent during the audit period.
Thereafter, Ms. Koelle prepared a “demand letter” for each of the two programs, informing Respondent that audits had been initiated and requesting that Respondent provide Medicaid- related records to substantiate billing records of the identified recipients, as well as the employment/personnel
records or files for any of Respondent‟s staff who provided services to Medicaid recipients during the audit period. The letters gave Respondent the standard 21-day period to submit the requested records.
Ms. Olmstead reviewed and signed the letters and they were mailed, along with a Provider Questionnaire and Certification of Completeness of Records, to Respondent on
July 26, 2011.
After requesting and receiving a series of extensions, Respondent complied with the demand letters on September 13, 2011. Respondent delivered to the Agency Medicaid-related records and employee documents, along with the Provider Questionnaires and signed Certificates of Completeness, which certified the accuracy, truthfulness, and completeness of the records submitted.
Persons who provide Medicaid services must meet certain minimum qualifications and obtain certain trainings, otherwise the person is deemed “ineligible” or “disqualified” and Medicaid cannot reimburse for services provided by such persons. All persons who provide services directly to Medicaid recipients must also pass a Level 2 background screening. Training and screening requirements for staff of Medicaid providers during the audit period are set forth in the Medicaid Handbook and the DD Handbook.
Upon receiving records sent by Respondent in response to the Agency's July 26, 2011, letters, Ms. Koelle first reviewed Respondent's staff files to determine whether each staff member met the necessary requirements to provide Medicaid or Medicaid waiver services.
Respondent produced staff files for 30 of the 39 staff members who provided services to randomly-selected recipients during the audit period. Of those 30 files, 16 contained no documentation of core competency training, eight had incomplete or no background screening documentation, one had a disqualifying background screening, and 22 lacked documentation of required training in HIV/AIDS, Infection Control, Zero Tolerance, or CPR during the audit period. In addition, 13 staff files revealed the staff member did not meet the experience or educational requirements for the position held.
Next, Ms. Koelle reviewed the documentation Respondent submitted for each recipient against the 344 DD Program claims and 256 FLS program claims in the random sample and recorded her findings on worksheets along with her descriptions of any deficiencies or noted violations of Medicaid law.
Ms. Koelle noted numerous violations of Medicaid laws, including, but not limited to, the following: of the 344 DD Program sample claims, 127 were submitted without any supporting documentation, 67 were submitted without a service log to
document services provided to the recipient, 36 were submitted for companion services provided to recipients who were ineligible because they either lived in a licensed residential setting or were receiving in-home support services, and 28 were submitted for unauthorized activities provided to recipients.
The most common violation, services provided by unauthorized staff, appeared in 243 claims submitted by Respondent.
Of the 256 FSL Program sample claims, 50 were submitted without supporting documentation, and 208 were submitted for services provided by unauthorized staff.
Ms. Koelle also documented a handful of cases in which the unauthorized staff provided services outside the scope of the recipient‟s service plan or overbilled for the services provided.
Ms. Koelle found no claims that were allowed under the Medicaid law and, therefore, no claims that merited adjustment.
Ms. Koelle completed her review and entered all amounts that she found to be disallowed into the computer program. The program added the figures to find the overpayment amount for the samples, and then extrapolated the overpayment to the entire universe of recipients, according to an established statistical methodology, which yielded the total overpayment amount. The computer program generated a printout showing the exact overpayment amount for each of the claims in the samples,
and the total overpayment extended to the population. The figures on the printouts correspond to the figures on the worksheets.
Utilizing this methodology, Ms. Koelle determined that Respondent had been overpaid by an amount of $568,250.01 for services in the DD Program, and $162,700.08 for services in the FSL Waiver program. Thereafter, she prepared the Preliminary Audit Reports (Preliminary Audits), describing the methodology applied to determine overpayment and the deficiencies that led to that determination. She attached to the Preliminary Audits the printouts, copies of her worksheets, and a copy of the spreadsheets with staff findings. A provision in the Preliminary Audits explains that Respondent may submit additional documentation to support the sample claims, although such submission may be deemed evidence of previous non- compliance.
Ms. Olmstead reviewed, approved, and signed the Preliminary Audits, which were mailed with attachments to Respondent on October 18, 2011.
After receiving the Preliminary Audits, Respondent again submitted records and a written response in an effort to further support the sample claims. However, Ms. Koelle determined that the records submitted were duplicates of records
previously submitted by Respondent and did not support any change in her findings from the Preliminary Audits.
In preparation of the Final Audit Reports, Ms. Koelle, in consultation with Ms. Olmstead, reviewed Respondent's documentation and found that there was insufficient documentation to support any of the sample claims in either the DD Program or the FSL Program. The deficiencies included incomplete or missing staff files, lack of documentation of services, no service authorization, no service logs or service logs that did not meet Medicaid handbook requirements, no monthly summary, and indications that ineligible staff members were providing services. In some instances, the service provided was ineligible as it did not further the recipient‟s goals or was an unauthorized activity (e.g., watching a movie).
Ms. Koelle recorded her findings in a separate spreadsheet for each audit. The spreadsheets, organized by recipient number, contain the following information for each of the claims in the samples: date of service (DOS), procedure code, procedure description, unit of service (UOS), cost per unit of service, amount paid to Respondent, claim determination (Allow, Adjust, or Deny), review determination, whether there was a document deficiency (Doc. Def.) or a billing amount issue, and the amount of the overpayment for the claim (O/P).
Next, Ms. Koelle entered the disallowed amounts into the computer program, which added the amounts together, found the overpayment amount for the sample, and extended the overpayment to the entire population of 10,578 claims in the DD Program and 2,485 claims in the FSL Program.
Ultimately, Ms. Koelle prepared the Final Audit Reports (Final Audits), which Ms. Olmstead signed and sent to Respondent on November 21, 2011. Because the records submitted by Respondent in response to the Preliminary Audits did not change the findings, the Final Audits reported the same overpayment amounts as the Preliminary Audits: $568,250.01 in the DD Program and $162,700.08 in the FSL Program.
The Final Audits notified Respondent of the total overpayment calculations, described the types of non-compliance found in the sample claims, and explained the methodology employed to select the claims for review and extend the sample overpayment to arrive at the total overpayment amount.
The Final Audits also advised Respondent that the Agency intended to recover fines in the amount of $113,650.00 for violations of requirements in the DD Program and $32,540.02 for violations of requirements of the FSL Program. Additionally, the Agency sought a total of $1,437.38 for costs of the two audits. Copies of the worksheets, as well as the two spreadsheets detailing the staff review findings, were attached.
Respondent disputed the Final Audits and the Agency referred the matter to the Division.
In preparation for the final hearing, the Agency consulted with Dr. Fred W. Huffer, a professor in the Department of Statistics at Florida State University with a B.S. in mathematics from the Massachusetts Institute of Technology and a Ph.D. in statistics from Stanford University. He has taught and researched statistics for more than 30 years at various institutions of higher learning.
Dr. Huffer reviewed the Agency‟s Preliminary and Final Audit findings and found one error in the analysis. In each audit, one randomly-selected recipient had submitted only one claim during the audit period. According to the Agency‟s overpayment calculation methodology, the second-stage random sample may only be taken from those recipients with two or more claims during the audit period. Therefore, the Agency‟s overpayment calculation included one incorrect variable.
Dr. Huffer adjusted the formula and recalculated the overpayment with the correct variables for each audit. The result was a modest change to the final overpayment amounts -- a reduction of $8,368.36 for the DD Program and $818.44 for the FSL Program. The final adjusted total overpayments were
$559,881.65 for the DD Program and $161,881.64 for the FSL Program.
Respondent offered no witnesses and introduced no evidence at the final hearing.
Instead of presenting contradictory expert testimony, Respondent attempted to undermine Dr. Huffer's opinions through cross-examination and argument. On cross-examination, Respondent attempted to challenge the reliability of the Agency‟s sampling methodology and Dr. Huffer‟s calculations. Respondent inquired as to the “authentication” of Dr. Huffer‟s results and the requirements for determining when Dr. Huffer‟s calculations were final, and insinuated that Dr. Huffer may have been biased because he has consulted with the Agency since 2004. Respondent was not effective in this regard.
The methodology and description of two-stage cluster sampling were explained and confirmed at the final hearing by Dr. Huffer, who was accepted as an expert in statistical analysis and methodologies. In addition, the methodology comports with established law. See § 409.913, et seq., Fla. Stat.; Ag. for Health Care Admin v. Custom Mobility, Inc.,
995 So. 2d 984 (Fla. 1st DCA 2008), cert. denied, 3 So. 3d 1246
(Fla. 2009).
Dr. Huffer was familiar with the case at hand and with the science of random sampling of populations and the analysis of samples, including extension of results to the total population.
Dr. Huffer analyzed the sampling method utilized by the Agency in this case with a program he personally developed for that purpose. Dr. Huffer repeated random simulation that recreated the audit circumstances many thousands of times, and found them to be accurate in this case.
The software utilized by the Agency determined the amount of overpayments at a 95 percent confidence level. As explained by Dr. Huffer, if the entire procedure is repeated “many times, 95 percent of the time this value that they get to at the end would be less than the true amount” of the overpayment.
In other words, the amount the Agency has asked Respondent to repay is most likely lower than the actual overpayment.
In sum, Dr. Huffer credibly explained that the Agency‟s cluster sampling method is appropriate and that it comports with the technical meaning of random sample and generally accepted statistical methods. Moreover, Dr. Huffer verified the adjusted overpayment amount through professionally accepted methodology.
Dr. Huffer's opinions that the audits in this case utilized a correct and reasonable application of two-stage cluster sampling and that the sampling method used in this case
was reasonable and comported with generally accepted statistical methods are accepted as credible and accurate.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. §§ 120.569 and 120.57(1), Fla. Stat.
The Agency is required to conduct, or cause to be conducted by contract or otherwise, reviews, investigations, analyses, audits, or any combination thereof, to determine possible fraud, abuse, overpayment, or recipient neglect in the Medicaid program and to report the findings of any overpayments in audit reports as appropriate. § 409.913(2), Fla. Stat.
The audit process that led to the claim for overpayments in this case was properly initiated by the Agency in accordance with section 409.913.
An “overpayment” includes "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.
During the final hearing, Respondent questioned the Agency‟s determination that failure to maintain background screening and training records, or failure to properly screen and train Respondent‟s staff, constitutes “overpayment” under
the statute. Respondent advanced the theory that such shortcomings subject the Medicaid provider only to a fine or sanction, rather than rendering the amounts billed for services provided by those staff subject to repayment as overpayments.
Respondent did not address this issue in his Proposed Recommended Final Order, but it bears some discussion herein.
In Colonnade Medical Center v. Agency for Health Care
Administration, 847 So. 2d 540 (Fla. 4th DCA 2003), the court dealt with a similar argument. Colonnade, a nursing home operator, facing an audit requiring it to repay almost $50,000 in Medicaid moneys, argued that the Agency had no authority to seek repayment of amounts which were paid by Medicaid, although the billings did not comply with Medicaid billing requirements. Id. at 541.
Colonnade had failed to seek prior authorization for Medicaid “H” supplemental payments for patients with AIDS. Colonnade challenged the Agency‟s determination that these amounts constituted “overpayments” subject to recoupment. Colonnade argued, in part, that only section (10) of section 409.913, Florida Statutes, authorizes repayment as a remedy, and then only “for inappropriate, medically unnecessary, or excessive goods or services.” Id. at 542.
An Administrative Law Judge (ALJ) had rejected Colonnade‟s argument, concluding that “Petitioner‟s assertion
that Respondent lacks the authority to demand repayment of an overpayment based on a billing that does not comport with Medicaid billing requirements is based on an overly narrow construction of the statute.” Colonnade Medical Ctr. v. Ag. for Health Care Admin, Case No. 01-1929 (Fla. DOAH Nov. 14, 2001; Fla. AHCA Feb. 8, 2002). The court agreed with the ALJ that the broader construction of the statute “is consistent with the opening paragraph of section 409.913 in which [the Agency] is to
„operate a program to oversee the activities of Medicaid recipients, and providers and their representatives, to ensure that fraudulent and abusive behavior and neglect of recipients occur to the minimum extent possible, and to recover overpayments and impose sanctions as appropriate.‟” 847 So. 2d at 542.
The Colonnade reasoning has been followed consistently by the Division. See, e.g., Ag. for Health Care Admin v.
Rodriquez, Case No. 11-4242 (Fla. DOAH March 26, 2012; Fla. AHCA May 3, 2012)(concluding that claims for services provided by ineligible or unqualified staff and claims for services without proper documentation are properly recouped as overpayments); Ag. for Health Care Admin v. Pugh, Case No. 11-1671 (Fla. DOAH
May 31, 2012)(concluding that claims for services provided by staff members who did not meet Level 2 background screening requirements, who were not trained in accordance with Medicaid
requirements, and who had incomplete or missing staff files were properly recouped as overpayments).
Applicable Laws and Rules
The statutes and rules in effect during the period for which the services were provided, including the Medicaid Handbook and DD Handbook, which are promulgated as rules, govern the outcome of this dispute. Toma v. Ag. for Health Care Admin, Case No. 95-2419, RO at 213 (Fla. DOAH July 26, 1996; Fla. AHCA Sept. 24, 1996).
A number of different statutes and rules were in effect during the three-year timeframe of the audit period.
The 2008 version of section 409.913(15), Florida Statutes, in effect at the beginning of the audit period in this case, specifically authorized the Agency to recoup overpayments
if:
(e) The provider is not in compliance with provisions of Medicaid provider publications that have been adopted by reference as rules in the Florida Administrative Code; with provisions of state or federal laws, rules, or regulations; with provisions of the provider agreement between the agency and the provider; or with certifications found on claim forms or on transmittal forms for electronically submitted claims that are submitted by the provider or authorized representative, as such provisions apply to the Medicaid program; . . . .
This provision remained substantially unchanged in the 2009 and 2010 versions of the Florida Statutes which were in effect during the remainder of the audit period.
Pertinent portions` from the Medicaid Handbook, of which official recognition was taken in this proceeding, include, but are not limited to, the following excerpts:
Medicaid requires that the provider retain all medical, fiscal, professional, and business records on all services provided to a Medicaid recipient. [Medicaid Handbook,
p. 2-50, Jan. 2007 (record keeping requirements)(Ex. 7 at 428)]
Medicaid requires that the provider retain all business records as defined in 59G- 1.010(30) F.A.C. [Medicaid Handbook, p. 2-
55, July 2008 (record keeping
requirements)(Ex. 7 at 437)]
Incomplete records are records that lack documentation that all requirements or conditions for services have been met.
Medicaid may recover payment for services or goods when the provider has incomplete records or cannot locate the records. [Medicaid Handbook, p. 5-8, Jan. 2007
(recovery of costs)(Ex. 7 at 433)]
Incomplete records are records that lack documentation that all requirements or conditions for services have been met.
Medicaid may recover payment for services or goods when the provider has incomplete records or does not provide the records. [Medicaid Handbook, p. 5-8, July 2008
(recovery of costs)(Ex. 7 at 442)]
Records must be retained for a period of at least 5 years from the date of service.
* * *
The provider must send, at his expense, legible copies of all Medicaid-related information to the authorized state and federal agencies and their authorized representatives at the request of [the Agency]. [Medicaid Handbook, p. 2-51, Jan. 2007 (record keeping requirements)(Ex. 7 at 429)]
Providers who are not in compliance with the Medicaid documentation and record retention policies described in this chapter may be subject to administrative sanctions and recoupment of Medicaid payments. [Medicaid Handbook, p. 2-52, Jan. 2007 (record keeping requirements)(Ex. 7 at 430)]
Medicaid payments for services that lack required documentation or appropriate signatures will be recouped. [Id.]
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 the preparation and submission of the claim, and to present a claim that is true and accurate and that is for goods and services that:
* * *
Are provided in accord with applicable provisions of all Medicaid rules, regulations, handbooks, and policies and in accordance with federal, state and local law; [Medicaid Handbook, p. 5-4, Jan. 2007 (provider responsibility)(Ex. 7 at 432)]
Except as otherwise noted, the cited provisions from the Medicaid Handbook effective January 2007 remained essentially unchanged in the July 2008 version which was in effect during portions of the audit period.
Pertinent portions from the DD Handbook, of which official recognition was taken in this proceeding, include, but are not limited to, the following excerpts:
Medicaid will only reimburse for waiver services, at an approved rate, that are specifically identified in the approved plan of care by service type, frequency and duration and for which there is sufficient documentation to support the provision of a service to a recipient. [DD Handbook, p. 2- 5, June 2005 (documentation
requirements)(Ex. 8 at 453)]
Documentation is a written record that supports the fact that a service has been rendered . . . . All documentation must be dated and signed by the individual rendering the service. [Id.]
If the provider fails to meet service standards, to properly document delivery of services or to receive [sic] reimbursement for services not properly authorized or delivered, these payments are considered overpayments and may result in recoupment of funds by . . . the Agency for Health Care Administration. [DD Handbook, p. 3-4, June 2005 (reimbursement information)(Ex. 8 at
461)]
The provider and its employees will ensure they receive the specific training required to successfully serve each recipient including the following topics:
* * *
All direct service providers are required to complete training in [the Agency‟s] Direct Care Core Competencies Training . . . within
120 days of the effective date of this rule. [DD Handbook, p. C-8, June 2005 (reimbursement information)(Ex. 8 at 463)]
Direct service provider applicants . . . must comply with the requirements of a Level 2 background screening in accordance with section 435.04, F.S. [DD Handbook, p. 1-10, June 2005 (provider qualifications)(Ex. 8 at
446)]
Proof of training in areas of Cardiopulmonary Resuscitation (CPR), AIDS and infection control is required [of In-Home Support Services Providers] within 30 days of initially providing in-home supports. Proof of annual or required updated training shall be maintained on file for review. [DD Handbook, p. 1-23, June 2005 (In-Home Support Services Provider Requirements)(Ex. 8 at 449)]
Proof of training in areas of Cardiopulmonary Resuscitation (CPR), AIDS and infection control is required [of Personal Care Assistance Providers] within 30 days of initially providing personal care assistance. Proof of annual or required updated training shall be maintained on file for review. [DD Handbook, p. 1-25, June 2005 (Personal Care Assistance Provider Requirements)(Ex. 8 at 450)]
Companion services consist of non-medical care, supervision and socialization activities provided to an adult on a one-on- one basis. The service must be provided in direct relation to the achievement of the recipient‟s goals per his support plan. [DD Handbook, p. 2-27, June 2005 (Companion
Services description)(Ex. 8 at 455)]
Recipients living in licensed residential settings . . . are not eligible to receive [companion] services. [DD Handbook, p. 2-28, June 2005 (Companion Services limitations)(Ex. 8 at 456)]
Personal care assistance is a service that assists a recipient with eating and meal preparation, bathing, dressing, personal
hygiene, and other self-care activities of daily living. . . . Personal care assistance is limited to the amount, duration and scope of the services described in the recipient‟s support plan and current approved cost plan. [DD Handbook, p. 2-28, June 2005 (Personal Care Assistance)(Ex. 8 at 458)]
Providers may not bill for service when a recipient is not in attendance. [DD Handbook, p. 3-5, June 2005 (Reimbursement
Information)(Ex. 8 at 462)]
The cited provisions from the DD Handbook effective June 23, 2005, remained essentially unchanged in the July 2007 version which was in effect during portions of the audit period. Burden of Proof and Prima Facie Case
The burden of establishing an alleged Medicaid overpayment by a preponderance of the evidence falls on the Agency. S. Med. Servs., Inc. v. Ag. for Health Care Admin, 653 So. 2d 440, 441 (Fla. 3d DCA 1995); Southpointe Pharmacy v. Dep‟t of HRS, 596 So. 2d 106, 109 (Fla. 1st DCA 1992). The burden of proof with respect to the imposition of fines or
sanctions is by clear and convincing evidence. Dep't of Banking & Fin. v. Osborne Stern & Co., 670 So. 2d 932, 935 (Fla. 1996).
Although the Agency bears the ultimate burden of persuasion and thus must present a prima facie case,
section 409.913(22) provides that "[t]he audit report, supported by agency work papers, showing an overpayment to a provider constitutes evidence of the overpayment." Further,
section 409.913(20), Florida Statutes, provides that "[i]n meeting its burden of proof . . . the agency may introduce the results of [accepted and valid] statistical methods as evidence of overpayment."
The Agency made out its prima facie case of overpayment through the introduction into evidence of the Preliminary and Final Audits, as well as the supporting work papers, as adjusted following Dr. Huffer‟s review. In addition, it is concluded that the Agency's adjusted overpayment calculation was based upon an accepted and valid statistical method of cluster sampling which was properly applied to determine the amount of overpayments.
Respondent did not overcome the Agency's prima facie case and was otherwise ineffective in attempting to discredit the statistical sampling method used by the Agency to determine the total amount of overpayments.
Further, the Agency demonstrated, by a preponderance of the evidence, that documentation provided by Respondent to the Agency was insufficient to support the services for which he billed Medicaid. A preponderance of evidence also demonstrated that Respondent was not in compliance with the Medicaid documentation and record retention policies for any of his claims submitted during the audit period, that services were rendered by untrained or unqualified individuals, and that, as a
result, all amounts claimed by Respondent during the audit period resulted in overpayments.
In accordance with the Findings of Fact and Conclusions of Law, above, it is found that the Agency established, by a preponderance of evidence, that Respondent received payment for multiple Medicaid claims that, in whole or in part, did not comply with applicable law and rules for Medicaid reimbursement purposes and that, as a result, Respondent was overpaid at least $559,881.65 for the DD Program and $161,881.64 for the FSL Program, amounts which the Agency is entitled to recover from Respondent.
Overpayments owed to the Agency bear interest at the rate of 10 percent per annum from the date of determination of the overpayment. § 409.913(25)(c).
Sanctions
In addition to recovery of overpayments set forth above, section 409.913(16) provides that “the agency shall impose any of the following sanctions or disincentives on a provider or a person for any of the acts described in subsection
(15) . . . [including] imposition of a fine of up to $5,000 for each violation."
The pertinent facts described in subsection (15) include, inter alia:
(e) The provider is not in compliance with provisions of Medicaid provider publications that have been adopted by reference as rules in the Florida Administrative Code; [or] with provisions of the provider agreement between the agency and the provider; . . . .
§ 409.913(15), Fla. Stat.
Florida Administrative Code Rule 59G-9.070, promulgated in 2005, provided notice as to how the Agency would normally exercise its sanction authority.
Rule 59G-9.070(7)(e), recited in the Final Audits, corresponds to subsection 409.913(15)(e), Florida Statutes. The 2008 version of the rule, which was in effect during the majority of the audit period, states:
(7) SANCTIONS: Except when the Secretary of the Agency determines not to impose a sanction . . . sanctions shall be imposed for the following:
* * *
(e) Failure to comply with the provisions of the Medicaid provider publications that have been adopted by reference as rules, Medicaid laws, the requirements and provisions in the provider's Medicaid provider agreement, or the certification found on claim forms or transmittal forms for electronically submitted claims by the provider of authorized representative. [Section 409.913(15)(e), F.S.]
Rule 59G-9.070(10)6/ fixes the amount of the sanction for violation of subsection 409.913(15)(e) as follows:
A $500 fine per provision, not to exceed
$3,000 per agency action. For a pattern: a
$1,000 fine per provision, not to exceed
$6,000 per agency action.
A "pattern," defined in rule 59G-9.070(2)(s)2.a., is when the number of individual claims found to be in violation is greater than 6.25 percent of the total claims reviewed. The evidence submitted by the Agency in this case clearly and convincingly showed that substantially more than 6.25 percent of the claims reviewed did not comply with the Medicaid laws, rules, and provider handbooks. Therefore, under the facts and the law, imposition of the $6,000 sanction sought by the Agency in each case for violation of subsection 409.913(15)(e) and corresponding rule is appropriate.
Costs
As to costs, section 409.913(23)(a), Florida Statutes,
provides:
In an audit or investigation of a violation committed by a provider which is conducted pursuant to this section, the agency is entitled to recover all investigative, legal, and expert witness costs if the agency's findings were not contested by the provider or, if contested, the agency ultimately prevailed.
In support of the Agency's claim for costs, the Agency filed a Notice of Costs on March 7, 2013, detailing investigative costs for Ms. Koelle and expert witness costs for Dr. Huffer.
At final hearing, the Agency requested that the record be held open for submission of evidence as to the Agency‟s costs, inasmuch as final costs could not be calculated until the conclusion of the hearing. The undersigned agreed that the record would be held open for said purpose, but failed to fix a date for submission of said evidence.
Respondent has raised no objection to the Agency‟s submittal. The Agency met its burden of proof and established investigatory and expert witness costs in the amount of
$3,405.71.
Amnesty Program
At the final hearing, Respondent argued that the Agency had committed error by not allowing Respondent to enter an amnesty program. The undersigned requested that both parties address the issue in their proposed recommended orders.
Respondent did not address the issue in his Proposed Order and may have abandoned the argument. However, in an abundance of caution, the undersigned addresses the issue as follows.
Section 409.913(25)(e), Florida Statutes, provides simply, “[t]he Agency may institute amnesty programs to allow Medicaid providers the opportunity to voluntarily repay overpayments. The Agency may adopt rules to administer such programs.”
The Medicaid Handbook, which is incorporated by reference in Florida Administrative Code Rule 59G-5.020, provides:
If, as a result of a self-audit, a provider determines that a claim was paid by the Medicaid program in error, the provider shall have the opportunity to report the violation and repay the overpayment without resulting in the imposition of sanctions under Rule 59G-9.070, F.A.C. [Medicaid Handbook, p. 5-8, July 2008 (Ex. 7 at 442)].
Neither of the parties referenced any other statutory or rule provision addressing an amnesty program in administration of Medicaid, nor has the undersigned discovered any applicable statutory or rule provisions.
The “amnesty” provision quoted above clearly applies to Medicaid provider self-audits. The case at hand involves a comprehensive audit conducted by the Agency based on a field office referral, not a self-audit.
Further, the alleged “amnesty” provision allows for waiver of sanctions upon the provider‟s voluntary repayment of an overpayment discovered during a self-audit. The provision does not waive the obligation to repay the overpayment amount.
Respondent did not establish that the Agency has adopted an amnesty program which applies to the case at hand or which would have relieved him of the duty to repay the overpayment amounts found herein. Even if such a program
existed, Respondent did not prove that he had applied for and been rejected from participation in said program.
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner, Agency for Health Care Administration, enter a final order requiring Respondent, Kenneth O. Harden, d/b/a Ken Care, Inc., to:
Repay the sum of $559,881.65 for claims in the Medicaid Development Disability Waiver Program that did not comply with the requirements of Medicaid laws, rules, and provider handbooks;
Repay the sum of $161,881.64 as recoupment of claims in the Medicaid Family and Supported Living Waiver Program which did not comply with the requirements of Medicaid laws, rules, and provider handbooks;
Pay interest on the sums of $559,881.65 and
$161,881.64 at the rate of 10 percent (10%) per annum from the date of the overpayment determination;
Pay a fine of $6,000 per agency action (for a total of
$12,000) for violations of the requirements of Medicaid laws, rules, and provider handbooks; and
Pay allowable costs of $3,405.71, pursuant to section 509.913(23), Florida Statutes.
DONE AND ENTERED this 20th day of March, 2013, in Tallahassee, Leon County, Florida.
S
SUZANNE VAN WYK
Administrative Law Judge
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(850) 488-9675
Fax Filing (850) 921-6847 www.doah.state.fl.us
Filed with the Clerk of the Division of Administrative Hearings this 20th day of March, 2013.
ENDNOTES
1/ There is some evidence of record that Respondent attempted to conduct business in the name of Ken Care, Inc. However, both of Respondent‟s Medicaid Provider Agreements are executed by Kenneth O. Harden personally and not on behalf of any other entity.
2/ The cases were consolidated on September 12, 2012, and are referred to in the singular.
3/ For purposes of brevity, Respondent‟s post-hearing submissions will be referred to as “Proposed Order(s).”
4/ Unless otherwise specified herein, all citations to the Florida Statutes are to the 2011 version.
5/ Section 409.913(2), Florida Statutes, requires the Agency to conduct at least five percent of the audits on a random basis.
6/ Rule 59G-9.070, as amended effective October 29, 2008, was in effect during the majority of the audit period.
COPIES FURNISHED:
Elizabeth Dudek, Secretary
Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 1
Tallahassee, Florida 32308
Stuart Williams, General Counsel Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308
Richard J. Shoop, Agency Clerk
Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308
David W. Nam, Esquire
Agency for Health Care Administration Fort Knox Building 3, Mail Stop 3 2727 Mahan Drive, Suite 3431
Tallahassee, Florida 32308
William Johnson, Qualified Representative 2545 Northeast 11th Place
Gainesville, Florida 32641
Kenneth O. Harden Ken Care, Inc.
Suite 10
102 Northeast 10th Avenue Gainesville, Florida 32601
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 |
|---|---|---|
| Apr. 25, 2013 | Agency Final Order | |
| Mar. 20, 2013 | Recommended Order | Provider of Medicaid Waiver Program services is liable for repayment of claims when services were rendered not in compliance with Medicaid provider publications adopted by reference as administrative rules. |
