STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
AGENCY FOR HEALTH CARE ADMINISTRATION,
Petitioner,
vs.
LEELAND ER SVCS PARTNERSHIP,
Respondent.
/
Case No. 15-3496MPI
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was held in this case on November 12, 2015, before Lawrence P. Stevenson, a duly- designated Administrative Law Judge of the Division of Administrative Hearings, in Tallahassee, Florida.
APPEARANCES
For Petitioner: Ephraim Durand Livingston, Esquire
Willis F. Melvin, Jr., Esquire
Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308-5403
For Respondent: Richard B. Robins, Esquire
Brach Eichler, LLC
101 Eisenhower Parkway Roseland, New Jersey 07068
STATEMENT OF THE ISSUES
The following are the issues presented:
Whether Respondent, Leeland ER SVCS Partnership (“Leeland”), is liable to the Agency for Health Care
Administration (“AHCA”) for Medicaid overpayments in the amount of $12,377.17, during the audit period of March 1, 2009, through August 31, 2011;
Whether Leeland should be required to pay an administrative fine of $2,475.43, pursuant to Florida Administrative Code Rule 59G-9.070(7)(e); and
Whether Leeland is liable to AHCA for the agency’s investigative, legal, and expert witness costs pursuant to section 409.913(23)(a), Florida Statutes.
PRELIMINARY STATEMENT
AHCA conducted an audit of Leeland’s Medicaid billing and payment records for dates of service from March 1, 2009, through August 31, 2011. AHCA’s Preliminary Audit Report (“PAR”), issued on June 20, 2013, found that Leeland had been overpaid
$200,349.16 for claims not covered by Medicaid. On August 16, 2013, AHCA issued a Final Audit Report (“FAR”) that revised the alleged overpayment downward to $33,111.52, imposed a fine for failure to comply with Medicaid rules in the amount of
$6,622.30, and further imposed on Leeland the agency’s costs incurred as a result of the audit.
Leeland disputed the proposed agency action of the FAR and timely filed a Petition for Formal Administrative Hearing. AHCA forwarded the Petition to the Division of Administrative Hearings (“DOAH”) for the assignment of an Administrative Law
Judge (“ALJ”) and the conduct of a formal hearing. The matter was assigned DOAH Case No. 13-3888MPI.
On October 17, 2013, AHCA filed an Agreed Motion to Remand and Relinquish Jurisdiction Without Prejudice, stating that the parties believed they could settle the matter without need for a hearing, but retaining the option of bringing the case back to DOAH should their negotiations fail. On October 17, 2013,
ALJ F. Scott Boyd entered an Order Closing File and Relinquishing Jurisdiction of the case to AHCA, without prejudice.
During the settlement negotiations, additional documentation submitted by Leeland led to AHCA’s further reducing the claimed overpayment amount to $12,377.17 and the administrative fine to $2,475.43.
On June 18, 2015, AHCA filed with DOAH a Motion to Reopen Proceedings stating that the parties had been unable to settle the matter and requesting that the DOAH case be reopened. The case was assigned to the undersigned and given DOAH Case No. 15- 3496MPI. The case was originally scheduled for August 20
and 21, 2015. One continuance was granted and the case was convened and completed on November 12, 2015.
At the hearing, AHCA presented the testimony of
Robi Olmstead, supervisor of the Practitioner Care Unit in AHCA’s Office of Medicaid Program Integrity (“MPI”);
Lisa Robinson, an investigator for MPI; and Fred W. Huffer, Ph.D., a professor in the Florida State University Department of Statistics, who was accepted as an expert in statistics, statistical analysis, and calculation, including random sampling. AHCA’s Exhibits 1 through 8 were admitted into evidence. Leeland presented no witnesses. Leeland’s Exhibits 1 through 6 were admitted into evidence.
The one-volume Transcript of the final hearing was filed at DOAH on November 30, 2015. One extension of the time for filing proposed recommended orders was granted. In accordance with the modified schedule, all parties timely filed their Proposed Recommended Orders and accompanying memoranda on January 8, 2016.
Unless otherwise stated, all statutory references are to the 2015 edition of the Florida Statutes.
FINDINGS OF FACT
Based on the oral and documentary evidence adduced at the final hearing, and the entire record in this proceeding, the following Findings of Fact are made:
ACHA is designated as “the single state agency authorized to make payments for medical assistance and related services under Title XIX of the Social Security Act,” i.e., the “Medicaid program.” § 409.902(1), Fla. Stat. Among its duties as the Medicaid agency, AHCA is required to conduct audits of
medical providers participating in the Medicaid program, and to “recover overpayments and impose sanctions as appropriate.”
§ 409.913, Fla. Stat.
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."
The Medicaid provider agreement is a voluntary contract between AHCA and the provider. An enrolled Medicaid provider must comply fully with all state and federal laws pertaining to the Medicaid Program, including the Medicaid provider handbooks incorporated by reference into AHCA’s rules, as well as all federal, state, and local laws pertaining to licensure to receive payment from the Medicaid program.
This case involves an AHCA Medicaid audit conducted of Leeland’s paid Medicaid claims as to the dates of service from March 1, 2009, through August 31, 2011, hereinafter referenced as the “audit period.” Leeland was randomly selected for audit and had no prior violations of Medicaid law. Therefore, any sanction imposed on Leeland in this proceeding would constitute a “first offense” under the operative rule discussed in the Conclusions of Law below.
During the audit period, Leeland was an enrolled Medicaid provider and had a valid Medicaid provider agreement with AHCA. As an enrolled provider, Leeland was subject to all relevant federal and state statutes, rules, policy guidelines, and Medicaid handbooks incorporated by reference into rule.
AHCA issued a PAR, dated June 20, 2013, alleging that Leeland was overpaid $200,349.16 for certain claims that in whole, or in part, were not covered by Medicaid.
AHCA later issued a FAR, dated August 16, 2013, alleging that Leeland was overpaid $33,111.52 for certain claims that in whole, or in part, were not covered by Medicaid. The FAR further informed Leeland that AHCA intended to impose a fine of $6,622.30 (20% of the total overpayment) as a sanction for violation of rule 59G-9.070(7)(e) and to impose costs pursuant to section 409.913(23).
Leeland received the FAR on August 23, 2013. Leeland timely filed a Petition for Formal Administrative Hearing on September 24, 2013. On October 9, 2013, Leeland tendered payment to AHCA in the amount of $33,111.52, as requested in the FAR, to be held in escrow pending the administrative hearing.
The FAR set forth the basis for the overpayment determination as follows:
Medicaid policy defines the varying levels of care and expertise required for the evaluation and management procedure codes for office visits. The documentation you provided supports a lower level of office visit than the one for which you billed and received payment. This determination was made by a peer consultant in accordance with Sections 409.913 and 409.9131, F.S. The difference between the amounts you were paid and the correct payment for the appropriate level of service is considered an overpayment.
The FAR also stated that the overpayment calculation was based on a statistical formula by which a random sample of the claims submitted by Leeland was selected and extrapolated to the total number of claims in order to arrive at the amount of the total overpayment:
A random sample of 63 recipients respecting whom you submitted 134 claims was reviewed. For those claims in the sample, which have dates of service from March 1, 2009, through August 31, 2011, an overpayment of $308.96 or $2.30567164 per claim, was found. Since you were paid for a total (population) of 26,060 claims for that period, the point estimate of the total overpayment is 26,060 x $2.30567164 = $60,085.80. There is a 50
percent probability that the overpayment to you is that amount or more.
We used the following statistical formula for cluster sampling to calculate the amount due the Agency:[1/]
All of the claims relating to a recipient represent a cluster. The values of overpayment and number of claims for each recipient in the sample are shown on the attachment entitled “Overpayment Calculation Using Cluster Sampling.” From this statistical formula, which is generally accepted for this purpose, we have calculated that the overpayment to you is
$33,111.52 with a ninety-five percent (95%) probability that it is that amount or more.
After issuance of the FAR, Leeland provided additional information and documentation to MPI, which conducted a peer review of the new material. AHCA subsequently reduced the alleged overpayments in the sample to $171.38. Overpayments were found on claims involving seven of the 63 recipients.2/
AHCA concluded that this overpayment amounted to 2.45 percent of the total payments of $6,987.99 made to Leeland for the claims
in the sample. The overpayment amount of $171.38 was extrapolated to the entire population of claims using the formula set forth above. AHCA concluded that the total amount of overpayments to Leeland for all Medicaid recipients in the population was $12,377.17, with a 95 percent confidence level.
This reduction in the alleged overpayment led AHCA to make a proportional reduction in the proposed fine, to
$2,475.43.
Leeland does not challenge the agency’s conclusion that the actual overpayment found in the sample amounted to
$171.38. Leeland does challenge the method by which AHCA used that actual overpayment to extrapolate an overall overpayment amount of $12,377.17 for the entire body of Medicaid claims submitted by Leeland during the audit period.
AHCA is required by statute to use an “accepted and valid statistical calculation” to determine Medicaid overpayments. ACHA submitted its audit report and work papers into evidence. To support the validity of the cluster sampling method used in this case, AHCA presented the testimony of
Dr. Fred Huffer, a professor in the Statistics Department at Florida State University, as well as the AHCA employees who provided the data to which the formula was applied.
Robi Olmstead, supervisor of MPI’s Practitioner Care Unit, testified that Leeland was randomly selected for audit.
Once the selection was made, Ms. Olmstead assigned the case to an investigator. Her office applied a computerized claim sampling program to select the recipients and claims to be audited. The program pulled all claims for the provider during the audit period. Ms. Olmstead sorted the claims, selecting only those that were fee-for-service, then generated the “seed” and selected the cluster sample.
Ms. Olmstead testified that the program tells her how many recipients should be reviewed to make a statistically valid sample. In Leeland’s case, the program stated that 62.6 recipients should be used, so the number was rounded up to 63.
Lisa Robinson, the MPI investigator who handled the Leeland audit, testified that the claim sampling program selected the list of 63 recipients to be audited. Ms. Robinson sent a request for medical records to Leeland. Once Leeland submitted the records for the 63 recipients, Ms. Robinson reviewed the records. The claim sampling program generated a worksheet listing each billed claim for each recipient.
Ms. Robinson attached the worksheets to the records and prepared them for the nurse reviewer.
The nurse reviewer reviewed and organized the records for a peer review by a physician. After the physician reviewed and determined any disallowed amounts, the records were returned to Ms. Robinson, who entered the disallowed amounts into the
claim sampling program to determine the amount of the overpayment.
Ms. Olmstead testified that she has no statistical expertise and that she relied on Dr. Huffer to review and validate the results obtained by the claim sampling program. Ms. Robinson likewise claimed no statistical expertise or any real knowledge of how the claim sampling program works.
Ms. Robinson simply enters data into the program and accepts the results it generates.
Dr. Huffer, who has consulted with MPI since 2004, testified that when he received the overpayment calculation results, he first checked the calculations. Next, he constructed hypothetical populations based on MPI’s sample to test the confidence level of 95 percent asserted in the FAR.
Dr. Huffer explained that a confidence level is a probability attached to the correctness of some statement or procedure. The 95 percent confidence level in this case means that if MPI runs its audit procedure repeatedly, the number that it states as the overpayment from a sample of the population will be less than the “true” overpayment in the overall recipient population 95 percent of the time. The “true” overpayment value remains unknown, but the simulations performed
by Dr. Huffer lead to a “reasonably confident” conclusion that the assessed overpayment is an underestimate of that “true” value.
Dr. Huffer stated that the simplest type of sampling scheme is a simple random sample, in which units are selected at random and audited. He noted that sometimes the units are naturally grouped into clusters, and much sampling effort can be saved by sampling the clusters of units rather than the units individually.
In this case, AHCA was interested in auditing a population of claims, but the claims were naturally grouped by recipients. Therefore, to conserve resources, AHCA used single- stage cluster sampling, with each selected resident constituting a cluster of claims to be audited. Dr. Huffer noted the practical advantages of this method:
[T]here’s a lot less effort in accessing the records of a smaller number of recipients, and also there’s a lot less effort in making decisions about medical necessity for a small number of recipients versus, say, a large number of recipients. So there’s a lot of savings in sampling effort by doing a cluster sampling based upon clusters, which are the recipients.
Dr. Huffer testified that a sample size of 63 was valid, independent of the size of the population from which the sample was taken. He stated that “it is a well-known fact in statistics that it is the sample size which primarily governs
the accuracy of the result, not the population size.” He noted, for instance, that a sample size of 35 could be validly used for a population of one million.
Dr. Huffer explained that he constructed a hypothetical population that is “like a large scaled-up version of the sample.” He “cloned” every recipient and every claim for all recipients about 208 times to make a hypothetical population of approximately 13,000 recipients. From this population, he sampled 63 recipients at random and performed the same calculation that AHCA did on its sample. He performed the calculation procedure on two million samples of 63 recipients drawn from his hypothetical population.
Dr. Huffer’s two million simulations yielded an empirical confidence level of 97.7 percent, meaning that “we’re even more confident in this case that the number we announce as the overpayment is less than the true overpayment . . . in the population.”
Dr. Huffer explained the extrapolation of the sample to the population. By taking the $171.38 of total overpayments found in the 134 claims for the population of 63 residents in the sample, MPI derived an average overpayment per sample claim of $1.27.3/ There were 26,060 claims in the entire population. Multiplying the total number of claims by the $1.27 average
overpayment yielded a “point estimate” of the total overpayment of a little more than $33,000.
Dr. Huffer stated that while the overpayments in the population may be “in the neighborhood” of the point estimate, there is never an expectation that the point estimate will be exactly correct. Every random sample of recipients would yield a somewhat different total. Therefore, a standard error of the overpayment was introduced as an estimate of how far wrong the point estimate might be.
The standard error in this case was $12,547.82. The true overpayment could be plus or minus some multiple of the standard error. Dr. Huffer testified that to reach the lower bound of the 95 percent confidence level, MPI subtracted about one and one-half times the standard error from the point estimate to arrive at an overpayment value of $12,377.17.
Dr. Huffer concluded that there was “strong evidence” that the true overpayments exceeded $12,377.17, because that figure was an “intentional underestimate.”
Counsel for Leeland questioned Dr. Huffer about the validity of the statistically derived overpayment, given that the actual overpayment drawn from the sample, $171.38, was so small compared to the total Medicaid payments for those
recipients. Dr. Huffer testified that the 95 percent confidence rate is “totally unrelated” to the magnitude of the actual overpayments.
To counter Dr. Huffer’s testimony on the irrelevancy of the size of the actual overpayment to the validity of the sampling method, counsel for Leeland presented a federal Medicare statute, 42 U.S.C. § 1395ddd(f)(3), which provides as follows, in relevant part:
Limitation on use of extrapolation A medicare contractor may not use extrapolation to determine overpayment amounts to be recovered by recoupment, offset, or otherwise unless the Secretary determines that—
there is a sustained or high level of payment error; or
documented educational intervention has failed to correct the payment error . . . .
Dr. Huffer responded that the federal statute does not imply that extrapolation is not allowed for statistical reasons. He believed that the reason for the Medicare law’s disallowance of extrapolation in smaller cases could be simply to forgive errors below a certain threshold.
Counsel for Leeland offered another example, an “Open Letter to Health Care Providers” issued by the Office of Inspector General of the U.S. Department of Health and Human Services in 2001. The letter sets forth new claims review procedures, including a statement that if the net financial
error rate in a discovery sample is below five percent, the provider is not required to perform any further audit work and only the actual identified overpayments must be refunded.
Dr. Huffer pointed out that the letter, like the statute, does not question the statistical validity of extrapolation. “They do not give any statistical reason for saying that it would be wrong to proceed in this case. As far as I know, they’re just saying if you [have] a small error rate, we’ll forgive it.” Dr. Huffer agreed that there was not a “sustained or high level of payment error” in this case, but observed that this case was not being decided under the federal Medicare statute.
Dr. Huffer opined that the sampling method used in this case was reasonable and comported with generally accepted statistical methods. His opinions and explanation were credible, were unrebutted, and are accepted. Leeland's attempt to undermine Dr. Huffer’s opinions through cross-examination was ineffective and lacked the support of contradictory expert testimony regarding generally accepted statistical methods.
AHCA seeks to recover its investigative, legal, and expert witness costs pursuant to section 409.913(23)(a). AHCA has established its right to recover these costs. At the outset of the final hearing, the parties agreed that if AHCA prevailed in the case-in-chief, and was found to be entitled to costs,
then this tribunal would retain jurisdiction for the limited purpose of allowing AHCA to document its costs in the manner provided by section 409.913(23)(b).
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to this proceeding. §§ 120.569 and 120.57(1), Fla. Stat.
AHCA is empowered to "recover overpayments . . . as appropriate." § 409.913, Fla. Stat. 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.
Payments are not "authorized to be paid by the Medicaid program" when the provider has not complied with section 409.913(7), which provides as follows, in relevant part:
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.
* * *
The agency shall deny payment or require repayment for goods or services that are not presented as required in this subsection.
Section 409.913(11) provides:
The agency shall deny payment or 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.
Section 409.913(15) provides as follows, in relevant part:
The agency shall seek a remedy provided by law, including, but not limited to, any remedy provided in subsections (13) and (16) and s. 812.035,[4/] 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 . . . .
AHCA has the burden of establishing an alleged Medicaid overpayment by a preponderance of the evidence. 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 is by clear and convincing evidence. Dep't of Banking and Fin. v. Osborne Stern & Co., 670 So. 2d 932, 935
(Fla. 1996).
Although AHCA bears the ultimate burden of persuasion, and thus must present a prima facie case, section 409.913(20) provides that "[i]n meeting its burden of proof . . . the agency may introduce the results of [generally accepted and valid] statistical methods as evidence of overpayment.” Section 409.913(22) provides that "[t]he audit report, supported by agency work papers, showing an overpayment to the provider constitutes evidence of the overpayment." Thus, AHCA can make a prima facie case by proffering a properly-supported audit report, which must be received in evidence.
For the reasons set forth in the Findings of Fact above, the undersigned concludes that AHCA made a prima facie case by presenting its properly-supported audit report, including work papers. AHCA's overpayment calculation was based on generally accepted statistical methods, properly applied to this provider.
Leeland did not contest AHCA’s peer review findings that overpayments were made on the sample claims. Leeland’s
challenge to the AHCA audit was limited to its contention that the $171.38 in overpayments found in the sample claims could not be extrapolated to the entire body of Medicaid claims submitted by Leeland during the audit period.
Leeland’s effort to discredit AHCA’s sampling methodology was ineffective. Dr. Huffer was a credible and persuasive expert witness. Leeland presented no expert testimony to contest Dr. Huffer’s opinions. Leeland attempted to undercut the “generally accepted” aspect of AHCA’s sampling method by reference to a federal Medicare statute that places a floor on the level of claims errors for which extrapolation from sample to entire claim population is allowed. However,
Dr. Huffer effectively parried this thrust by observing that none of the federal sources cited by Leeland (to the extent they are relevant at all) raised any statistical objection to the
kind of sampling method employed in the instant case.
It is concluded that the single-stage cluster sampling method employed by AHCA in this case met the criterion set forth in section 409.913(20) for “appropriate statistical methods.”
AHCA has established by a preponderance of the evidence that Leeland is liable for overpayments in the amount of $12,377.17, pursuant to section 409.913(7)(e), including interest as set forth in section 409.913(25)(c).
As set forth in Conclusion of Law 42, section 409.913(15) requires AHCA to pursue remedies for overpayments, such as those proven in this case. Section 409.913(16)(c) provides as follows:
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):
* * *
(c) Imposition of a fine of up to $5,000 for each violation. Each day that an ongoing violation continues, such as refusing to furnish Medicaid-related records or refusing access to records, is considered a separate violation. Each instance of improper billing of a Medicaid recipient; each instance of including an unallowable cost on a hospital or nursing home Medicaid cost report after the provider or authorized representative has been advised in an audit exit conference or previous audit report of the cost unallowability; each instance of furnishing a Medicaid recipient goods or professional services that are inappropriate or of inferior quality as determined by competent peer judgment; each instance of knowingly submitting a materially false or erroneous Medicaid provider enrollment application, request for prior authorization for Medicaid services, drug exception request, or cost report; each instance of inappropriate prescribing of drugs for a Medicaid recipient as determined by competent peer judgment; and each false or erroneous Medicaid claim leading to an overpayment to a provider is considered a separate violation.
Rule 59G-9.070 sets forth the specific administrative sanctions for the violations described by the statute.
Subsection (7) of the rule provides as follows, in relevant
part:
(7) Sanctions: In addition to the recoupment of the overpayment, if any, the Agency will impose sanctions as outlined in this subsection. Except when the Secretary of the Agency determines not to impose a sanction, pursuant to Section 409.913(16)(j), F.S., sanctions shall be imposed as follows:
* * *
(e) For failure to comply with the provisions of the Medicaid laws: For a first offense, $1,000 fine per claim found to be in violation. For a second offense,
$2,500 fine per claim found to be in violation. For a third or subsequent offense, $5,000 fine per claim found to be in violation (Section 409.913(15)(e), F.S.)
Because at least seven claims were found to have constituted overpayments, Leeland would be subject to a fine of at least $7,000 as a first offender under subsection (7). However, subsection (4) of the same rule provides the following relevant limitations on sanctions:
(4) Limits on sanctions.
(a) Where a sanction is applied for violations of Medicaid laws (under paragraph (7)(e) of this rule), for a pattern of erroneous claims (under paragraph (7)(h) of this rule), or shortages of goods (under paragraph (7)(n) of this rule) and the violations are a “first offense” as set forth in this rule, if the cumulative amount of the fine to be imposed as a result of the violations giving rise to that overpayment exceeds twenty-percent of the amount of the overpayment, the fine shall be adjusted to
twenty-percent of the amount of the overpayment.
Because the cumulative amount of the fine would exceed
20 percent of the amount of overpayment and because Leeland’s violations are a first offense, AHCA has properly adjusted the amount of the proposed fine to $2,475.43.
As noted above, AHCA had to prove the overpayments by a preponderance of the evidence. To impose an administrative fine, AHCA must establish by clear and convincing evidence the factual grounds for doing so.
In Evans Packing Co. v. Department of Agriculture and
Consumer Services, 550 So. 2d 112, 116 n.5 (Fla. 1st DCA 1989), the Court defined clear and convincing evidence as follows:
[C]lear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the evidence must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact the firm belief of conviction, without hesitancy, as to the truth of the allegations sought to be established. Slomowitz v. Walker, 429 So.
2d 797, 800 (Fla. 4th DCA 1983).
Judge Sharp, in her dissenting opinion in Walker v.
Florida Department of Business and Professional Regulation, 705 So. 2d 652, 655 (Fla. 5th DCA 1998)(Sharp, J., dissenting),
reviewed recent pronouncements on clear and convincing evidence:
Clear and convincing evidence requires more proof than preponderance of evidence, but less than beyond a reasonable doubt. In re Inquiry Concerning a Judge re Graziano, 696 So. 2d 744 (Fla. 1997). It is an intermediate level of proof that entails both qualitative and quantative [sic] elements. In re Adoption of Baby E.A.W., 658 So. 2d 961, 967 (Fla. 1995), cert.
denied, 516 U.S. 1051, 116 S. Ct. 719, 133
L.Ed.2d 672 (1996). The sum total of evidence must be sufficient to convince the trier of fact without any hesitancy. Id.
It must produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established. Inquiry Concerning Davey, 645 So. 2d 398, 404 (Fla. 1994).
AHCA’s rule defines a “sanction” in terms of a “disincentive” to a provider. Fla. Admin. Code R. 59G- 9.070(3)(n). Under the facts of this case, AHCA has not demonstrated by clear and convincing evidence that such a disincentive is warranted. The overpayments to Leeland were relatively small and were discovered in the course of a random audit, not a referral. It did not appear that Leeland was engaged in a pattern or practice of upcoding claims. Leeland cooperated with the audit at every step of the way, providing documentation that lowered the alleged overpayments from over
$200,000 to the present amount of $12,377.17. Leeland readily conceded that the actual overpayments found by the audit were valid. Leeland’s only dispute sprang from a layman’s understandable confusion about the arcana of statistical
sampling. No salutary purpose would be served by adding an administrative fine to the overpayment refund to which AHCA has established entitlement.
Section 409.913(23)(a) provides that AHCA “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.” AHCA prevailed in demonstrating its entitlement to a refund of the overpayments made to Leeland and is therefore also entitled to recover its investigative, legal, and expert witness costs. Jurisdiction is retained as to this issue, should the parties be unable to agree on the amount to which AHCA is entitled.
Based on the foregoing, it is, therefore,
RECOMMENDED that the Agency for Health Care Administration enter a final order requiring Leeland ER SVCS Partnership to repay the sum of $12,377.17 for overpayments on claims that did not comply with the requirements of Medicaid laws, rules, and provider handbooks, including interest.
Jurisdiction is retained to determine the amount of costs and attorney's fees, if the parties are unable to agree to the amount, and either party may file a request for a hearing within
30 days after entry of the final order to determine the appropriate amounts.
DONE AND ENTERED this 11th day of April, 2016, in Tallahassee, Leon County, Florida.
S
LAWRENCE P. STEVENSON
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 11th day of April, 2016.
ENDNOTES
1/ AHCA’s statistical expert, Dr. Fred Huffer, testified that the set of formulas used by AHCA were standard cluster sampling formulas that can be found in any sampling textbook. Dr. Huffer stated that he had checked their validity on many occasions.
2/ Under rule 59G-9.070(7)(e), the fine is calculated on a per claim, not a per recipient, basis. No evidence was presented establishing the number of claims that were found to involve overpayments. However, it is safe to assume that there must have been at least seven such claims, which would yield a fine of $7,000 for a first offense under the rule. Even this conservative number is sufficient to trigger the 20 percent sanction limitation of rule 59G-9.070(4)(a), thus explaining why AHCA seeks a fine of only $2,475.43.
3/ The actual number was $1.27895522, which yielded a point estimate of $33,329.57 when multiplied by 26,060, the total number of claims.
4/ Sections 409.913(13) and 812.035 contemplate criminal actions by providers that are not relevant to this proceeding.
COPIES FURNISHED:
Willis F. Melvin, Jr., Esquire
Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308-5403 (eServed)
Ephraim Durand Livingston, Esquire Agency for Health Care Administration Mail Stop 3
2727 Mahan Drive
Tallahassee, Florida 32308-5403 (eServed)
Leilani M. Dornfeld, Esquire Brach Eichler, LLC
2875 South Ocean Boulevard Palm Beach, Florida 33480 (eServed)
Richard B. Robins, Esquire Brach Eichler, LLC
101 Eisenhower Parkway Roseland, New Jersey 07068 (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.
| Issue Date | Document | Summary |
|---|---|---|
| May 27, 2016 | Agency Final Order | |
| Apr. 11, 2016 | Recommended Order | Agency for Health Care Administration proved by a preponderance of the evidence the sufficiency of its statistical sampling method and the overpayments made to Petitioner. |
KERNON`S SU CASA, INC. vs. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, 15-003496MPI (2015)
THE CHILDREN`S OFFICE, INC. vs AGENCY FOR HEALTH CARE ADMINISTRATION, 15-003496MPI (2015)
BILLY BEEKS vs AGENCY FOR HEALTH CARE ADMINISTRATION, 15-003496MPI (2015)
AGENCY FOR HEALTH CARE ADMINISTRATION vs LOVE AND CARE PHARMACY, 15-003496MPI (2015)
