STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGENCY FOR HEALTH CARE ADMINISTRATION,

Petitioner,

vs.

CAPE MEMORIAL HOSPITAL, INC., d/b/a CAPE CORAL HOSPITAL,

Respondent.

/

Case No. 14-3606MPI

RECOMMENDED ORDER

On January 20, 2016, an administrative hearing in this case was held in Tallahassee, Florida, before William F. Quattlebaum, Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Daniel Elden Nordby, Esquire

Shutts & Bowen LLP Suite 804

215 South Monroe Street Tallahassee, Florida 32301

For Respondent: Joanne Barbara Erde, Esquire

Donna Stinson, Esquire Duane Morris LLP

Suite 3400

200 South Biscayne Boulevard Miami, Florida 33131

STATEMENT OF THE ISSUE

Whether the Agency for Health Care Administration (Petitioner) is entitled to recover certain Medicaid payments

made to Cape Memorial Hospital, Inc., d/b/a Cape Coral Hospital

(Respondent).

PRELIMINARY STATEMENT

By Final Audit Report (FAR), dated September 14, 2012, the Petitioner alleged that the Respondent, a Medicaid provider, had received overpayments totaling $65,995.35 “for services that in whole or in part are not covered by Medicaid.” The Respondent disputed the alleged overpayments and requested a formal administrative hearing. By Amended Final Audit Report (AFAR), dated July 25, 2014, the Petitioner amended the total amount of the alleged overpayments to $63,305.61.

On August 4, 2014, the Petitioner forwarded the request to the Division of Administrative Hearings (DOAH), which scheduled the hearing to commence on October 21, 2014. The hearing was continued, and the case was subsequently placed in abeyance to permit the conclusion of litigation in related cases. The hearing eventually commenced on January 20, 2016.

Prior to the hearing, the parties submitted a Joint Prehearing Stipulation, including a statement of undisputed facts. To the extent that the stipulated facts are relevant, the facts are adopted and incorporated herein as necessary.

At the hearing, the Petitioner presented the testimony of one witness, and had Exhibits 1 through 28 admitted into evidence. The Respondent had Exhibits 2, 4 through 17,

19 through 24, 26 through 30, 34 through 37, 39, 45, and 47 through 49 admitted into evidence.

Although the AFAR identified eight alleged “overpayment” claims, the Petitioner presented evidence as to only six of the claims, totaling $57,350.67.

A Transcript of the hearing was filed on February 15, 2016. Both parties subsequently filed Proposed Recommended Orders that have been reviewed in the preparation of this Recommended Order.

FINDINGS OF FACT

1. Title XIX of the Social Security Act establishes Medicaid as a collaborative federal-state program in which the state receives federal funding (also known as “federal financial participation” or “FFP") for services provided to Medicaid- eligible recipients in accordance with federal law.

2. The Florida statutes and rules relevant to this proceeding essentially incorporate federal Medicaid standards.

3. The Petitioner is the state agency charged with administering the Medicaid provisions relevant to this proceeding.

4. Section 409.902, Florida Statutes (2015)1/, states that the Petitioner is the “single state agency authorized to make payments” under the Medicaid program. The referenced statute limits such payments to “services included in the program” and only on “behalf of eligible individuals.”

   
   

5. The Respondent is enrolled in the Florida Medicaid Program as a Medicaid Hospital Provider.

6. The Respondent's participation in the Florida Medicaid Program is subject to the terms of a Medicaid Provider Agreement.

7. The Respondent's Medicaid Provider Agreement requires compliance with all state and federal laws governing the Medicaid program, including the state and federal laws limiting Medicaid payments for services provided to undocumented aliens.

8. Eligibility for Medicaid services is restricted to United States citizens, and to specified non-citizens who have been lawfully admitted into the United States.

9. Pursuant to section 409.902(2)(b), Medicaid funds cannot be used to provide medical services to individuals who do not meet the statutory eligibility criteria "unless the services are necessary to treat an emergency medical condition" or are for pregnant women. The cited statute further provides that such services are “authorized only to the extent provided under federal law.”

10. The relevant federal law (42 U.S.C. section 1396b(v)(3)) defines an "emergency medical condition" as:

    1. medical condition (including emergency labor and delivery) manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could

       
       

       reasonably be expected to result in-(A) placing the patient's health in serious jeopardy, (B) serious impairment to bodily functions, or (C) serious dysfunction of any bodily organ or part.

       
       

11. The Florida definition of “emergency medical condition” set forth at section 409.901(10)(a) mirrors the federal definition.

12. Pursuant to section 409.904(4), the Petitioner can make payments to a Medicaid provider on behalf of "a low-income person who meets all other requirements for Medicaid eligibility except citizenship and who is in need of emergency medical services" for “the period of the emergency, in accordance with federal regulations."

13. The Florida Medicaid program requirements relevant to this proceeding were identified in the Florida Hospital Services Coverage and Limitations Handbook (incorporated by reference in Florida Administrative Code Rule 59G-4.160(2),), and in the Florida Medicaid Provider General Handbook (incorporated by reference in Florida Administrative Code Rule 59G-5.020.)

14. The applicable Florida Hospital Services Coverage and Limitations Handbook provided as follows:

    The Medicaid Hospital Services Program reimburses for emergency services provided to aliens who meet all Medicaid eligibility requirements except for citizenship or alien status.

    
    

    Eligibility can be authorized only for the duration of the emergency. Medicaid will not pay for continuous or episodic services after the emergency has been alleviated.

    
    

15. Similar provisions were contained in the Florida Medicaid Provider General Handbook.

16. Section 409.913 requires that the Petitioner monitor the activities of Medicaid providers and to “recover overpayments.”

17. The Petitioner’s Bureau of Medicaid Program Integrity (BMPI) routinely conducts audits to monitor Medicaid providers.

18. Section 409.913(1)(e) defines “overpayment” 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.”

19. The BMPI conducted a review of the Respondent's claims for services rendered to undocumented aliens during the period January 1 through December 31, 2006.

20. The Respondent provided all documentation requested by the Petitioner necessary to review the claims addressed herein.

21. As to each claim, the designated reviewing physician made a determination, based on the medical records, as to whether the claim was related to an emergency medical condition, and, if so, when the emergency medical condition was alleviated.

    
    

22. Based on the evidence, and on the testimony of the physicians identified herein, the determinations of the physicians are fully credited as to the existence of emergency medical conditions and as to when such conditions were alleviated.

    CLAIM #1

    
    

23. Dr. Thomas Wells reviewed Claim #1, which involved a length of stay from March 31 through April 10, 2006.

24. Based upon his review of the medical records,

    
    

    Dr. Wells determined that an emergency medical condition existed on March 31, 2006, and that it had been alleviated as of

    April 6, 2006.

    
    

    CLAIM #3

    
    

25. Dr. Michael Phillips reviewed Claim #3, which involved a length of stay from May 27 through June 12, 2006.

26. Based upon his review of the medical records,

    
    

    Dr. Phillips determined that an emergency medical condition existed on May 27, 2006, and that it had been alleviated as of May 28, 2006.

    CLAIM #4

    
    

27. Dr. Michael Phillips reviewed Claim #4, which involved a length of stay from January 15 through January 20, 2006.

28. Based upon his review of the medical records, Dr. Phillips determined that an emergency medical condition

    
    

    existed on January 15, 2006, and that it had been alleviated as of January 17, 2006.

    CLAIM #5

    
    

29. Dr. Michael Phillips reviewed Claim #5, which involved a length of stay from March 4 through April 10, 2006.

30. Based upon his review of the medical records,

    
    

    Dr. Phillips determined that an emergency medical condition existed on March 4, 2006, and that it had been alleviated as of March 7, 2006.

    CLAIM #6

    
    

31. Dr. Steve Beiser reviewed Claim #6, which involved a length of stay from June 15 through June 18, 2006.

32. Based upon his review of the medical records,

    
    

    Dr. Beiser determined that an emergency medical condition existed on June 15, 2006, and that it had been alleviated as of June 16, 2006.

    CLAIM #7

    
    

33. Dr. Thomas Wells reviewed Claim #7, which involved a length of stay from June 15 through July 6, 2006.

34. Based upon his review of the medical records,

    
    

    Dr. Wells determined that the emergency medical condition existed on June 15, 2006, and that it had been alleviated as of June 28, 2006.

    
    

    CONCLUSIONS OF LAW

    
    

35. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. §§ 120.569 and 120.57, Fla. Stat. (2015).

36. The Petitioner is directed in section 409.913 to monitor the activities of Medicaid providers and to recover “overpayments” of Medicaid claims. Overpayments are defined as “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.”

37. The Respondent is charged with the responsibility for assuring that claims for payment are for services that are medically necessary, and the need for which are “fully and properly” documented. Section 409.913(7) provides, in relevant part, as follows:

    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:

    
    

    * * *

    
    

    (e) Are provided in accord with applicable provisions of all Medicaid rules, regulations, handbooks, and policies and in

    
    

    accordance with federal, state, and local law.

    
    

38. The burden of proof is on the Petitioner to prove the material allegations by a preponderance of the evidence. Southpointe Pharmacy v. Dep't of Health & Rehab. Servs.,

    596 So. 2d 106, 109 (Fla. 1st DCA 1992).

    
    

39. The Petitioner’s audit report, if accompanied by supporting work papers, is "evidence of the overpayment."

    See § 409.913(22), Fla. Stat. Absent credible evidence to the

    
    

    contrary, the audit report and work papers establish the total overpayment.

40. In this case, the evidence establishes that the Respondent collected Medicaid funds for medical services that were provided to specific patients after the emergency medical conditions which precipitated their hospitalizations had been alleviated. The Petitioner has met the burden of establishing that the disputed charges referenced herein were not properly billed to Medicaid and are overpayments that may be recovered.

41. For a variety of reasons fully presented in the record and in the Respondent’s Proposed Recommended Order, the Respondent has asserted that the Petitioner lacks the legal authority to recover the amounts identified as “overpayments” in this case.

    
    

42. The same assertions were previously litigated and ultimately rejected in a similar case, AHCA v. Lee Memorial Health System Gulf Coast Medical Center, Case No. 15-3876MPI

    (Fla. DOAH January 26, 2016), rejected (Fla. AHCA April 4, 2016), hereinafter “Gulf Coast.”

43. The hearing in the instant case occurred after the hearing but prior to entry of the Recommended Order and Final Order in Gulf Coast. All of the evidence relevant to the

    Respondent’s assertions was presented during the Gulf Coast hearing. Upon the Respondent’s request, said evidence was thereafter admitted into the record of the instant case.

44. Although the Final Order issued in Gulf Coast has been

    
    

    appealed by the provider to the First District Court of Appeal (Case No. 1D16-1969,) the filing of the appeal does not stay enforcement of the agency decision. See § 120.68(3), Fla. Stat.

    Accordingly, the Respondent’s assertion that the Petitioner lacks the legal authority to recover the amounts identified as “overpayments” in this case is rejected.

45. Additionally, the Respondent challenged the Petitioner’s implementation of an alleged “alleviation” standard on a variety of grounds. The same challenge was presented and rejected in Bayfront Medical Center, et al. v. Agency for Health Care Administration, Case No. 14-4758RU (Fla. DOAH April 20,

    2015), aff’d, Case 1D15-2299 (Fla. 1st DCA June 28, 2016.)

    
    

    Accordingly, the challenge presented in the instant case is rejected.

46. The Petitioner seeks an award of audit costs of

$697.04 in this proceeding pursuant to section 409.913(23). The cited section provides that the agency may recover such costs “if the agency’s findings were not contested by the provider or, if contested, the agency ultimately prevailed.” The agency has not prevailed in two of the eight claims identified in the AFAR, and accordingly the Petitioner is not entitled to recover the total costs assessed.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order finding a Medicaid overpayment of $57,350.67 related to the six claims identified herein.

Pursuant to section 409.913(23), Florida Statutes, the Petitioner is entitled to recover certain investigative, legal, and expert witness costs. Jurisdiction is retained to determine the amount of appropriate costs if the parties are unable to agree. Within 30 days after entry of the final order, either party may file a request for a hearing on the amount. Failure to request a hearing within 30 days after entry of the final

order shall be deemed to indicate that the issue of costs has been resolved.

DONE AND ENTERED this 27th day of July, 2016, in Tallahassee, Leon County, Florida.

S

WILLIAM F. QUATTLEBAUM

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 27th day of July, 2016.

ENDNOTE

1/ All statutory references are to Florida Statutes (2015).

COPIES FURNISHED:

Joanne Barbara Erde, Esquire Duane Morris LLP

Suite 3400

200 South Biscayne Boulevard Miami, Florida 33131 (eServed)

Donna Stinson, Esquire Duane Morris LLP

Suite 3400

200 South Biscayne Boulevard Miami, Florida 33131 (eServed)

Douglas James Lomonico, Esquire Agency for Health Care Administration Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308 (eServed)

Daniel Elden Nordby, Esquire Shutts & Bowen LLP

Suite 804

215 South Monroe Street Tallahassee, Florida 32301 (eServed)

Andrew E. Schwartz, Esquire Shutts and Bowen, LLP

Suite 2100

200 East Broward Boulevard Fort Lauderdale, Florida 33301 (eServed)

Jacqueline F. Howe, Esquire Shutts and Bowen LLP

Suite 2100

200 East Broward Boulevard Fort Lauderdale, Florida 33301 (eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308 (eServed)

Elizabeth Dudek, Secretary

Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308 (eServed)

Stuart Williams, General Counsel Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308 (eServed)

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.

Docket for Case No: 14-003606MPI

Orders for Case No: 14-003606MPI