STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

UNIVERSITY PARK CONVALESCENT ) CENTER, )

)

Petitioner, )

)

vs. ) CASE NO. 78-1008

) 78-1009

FLORIDA DEPARTMENT OF HEALTH ) 78-1219

AND REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, G. Steven Pfeiffer, conducted a final hearing in this case on September 19, 1979, in Tampa, Florida.

APPEARANCES

For Petitioner: W. Kirk Brown

Tallahassee, Florida,

For Respondent: Amelia M. Park

Tampa, Florida

These matters involve the amount of compensation that the Petitioner should receive under the "Medicaid Program" for services that the Petitioner provided to nursing home patients. The Respondent, Department of Health and Rehabilitative Services ("Department" hereafter), originally contended that the University Park Convalescent Center ("Petitioner" hereafter) was overpaid

$137,376 for the fiscal year ending September 30, 1972 (Case No. 78-1008);

$22,134 for the fiscal year ending September 30, 1973 (Case No. 78-1009); and

$124,946 for the fiscal year ending September 30, 1976 (Case No. 78-1219). The Department made these claims as a result of audits that it performed on the Petitioner's books. The Petitioner contested the audits, and requested a formal hearing in accordance with the provisions of Section 120.57(1), Florida Statutes. The Department forwarded the matters to the office of the Division of Administrative Hearings during June and July, 1978 for the assignment of a Hearing Officer and the scheduling of hearings.

Prehearing proceedings were rather protracted. The matters were not formally consolidated; however, the same motions were filed in each case, and prehearing conferences were conducted at the same time. The matters were originally scheduled to be heard on August 22, 1978. That, and three subsequent schedulings were continued upon motion of one party or the other. At a prehearing conference conducted on January 29, 1979, it became apparent that the parties could resolve many, if not all, issues in these matters. Thereafter the matters were held in abeyance until June 21, 1979, while the parties negotiated a settlement. The parties did successfully resolve all of the issues in the

case, except the issue of whether certain costs incurred by the Petitioner in providing medically necessary prescription drugs to Medicaid patients should be disallowed as Medicaid reimbursement expenses for the fiscal year ending September 30, 1972. A final hearing on that issue was conducted as set out above.

At the final hearing the Department called the following witnesses: Terrance Thomas Hayes, an Auditor II employed by the Administrative Services Division of the Department; and Orville Roark, the supervisor of the St.

Petersburg office of the Department Audit Services Division. The Petitioner called the following witnesses: Ben C. Heines, the Petitioner's Comptroller; and Robert L. Patrick, the Petitioner's independent accountant. Petitioner's Exhibits 1 and 2 and Department, or Respondent's, Exhibits 1-5 were received into evidence. The parties have submitted post hearing legal memoranda, and the Petitioner has submitted a proposed recommended order.

FINDINGS OF FACT

1. The petitioner participates in Florida's Medical Assistance Program (Medicaid) as a provider of skilled nursing home care and intermediate care facilities. The Petitioner had contracts with the Department to provide such services for Medicaid eligible persons during the years 1971 and 1972, including all times during the Petitioner's fiscal year which ended September 30, 1972. The contracts provided inter alia as follows:

   
   

   For each patient eligible for Medicaid, it is understood the payment agreed upon will include room, board, laundry and services as defined in the Division's

   [the Division of Health of the Department] information pamphlet regarding skilled nursing home care., Handling, administra tion and recording of drugs will be in accord with the requirements of the Division of Health [of the Department].

   Each recipient will have a specified amount of personal income or an assistance grant to meet the cost of personal needs and clothing which will not be used to meet the cost of care. Skilled nursing care shall be based on medical orders,

   where required, standard nursing practices, and care which will assure the patient's privacy, independence, and mobility within their capabilities including the right to choose their own physician, pharmacy and/or other providers of medical care.

   
   

   The Petitioner agreed under the contracts to maintain adequate financial records, and to make them available to the Department upon request.

   
   

2. For the fiscal year ending September 30, 1972, the Petitioner received

   $25,839.38 as a Medicaid reimbursement expense for certain drug and pharmaceutical items. During 1976 the Department performed an audit on the Petitioner's books, and based on the audit, is seeking to recover $24,196.00 of that amount. The Petitioner has actually recovered $7,660.66 of its drug expenses from sources other than Medicaid funds. The Petitioner has made some

   effort to recover the remaining $16,535.34 directly from patients or their relatives. While a precise audit has not been made to determine how much of that money was actually recovered, it appears from past experience, and from an examination of approximately fifteen percent of the total accounts that the Petitioner recovered ten percent of the funds, or $1,653.53. The remaining

   $14,881.81 was not recovered from any source other than Medicaid reimbursement funds.

   
   

3. The Department sought to offer into evidence its rules Chapter 10C-9, Florida Administrative Code. These rules assertedly were in effect during the year in question. Nothing on the face of the rules reveals what their effective date might have been, and no other evidence was introduced to establish when these rules were in effect, or if they were in effect at the relevant time. It is apparent that the present rules of the Department set out at Chapter 10C-9, Florida Administrative Code were not in effect during the relevant fiscal year. The proffered rules have not been accepted as having been in effect during the relevant year.

   
   

   CONCLUSIONS OF LAW

   
   

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

   
   

5. The Department contends that the Petitioner has recovered all of the

   $24,196.00 that it disallowed from sources other than Medicaid reimbursement funds. The evidence does establish that the Petitioner actually received

   $7,660.66 of that amount from other sources; and based on history and a partial examination of the files, received ten percent of the remainder directly from patients or their relatives. The basis of the Department's contention that the Petitioner received the remaining $14,881.81 from sources other than Medicaid reimbursement funds is the fact that the total amount was listed on certain books of the Petitioner as having been collected. It is apparent that the Department's accountant misconstrued the nature of the entry. The amount was being carried not as having been received, but as a receivable that had been written off. The Petitioner has not received $14,881.81 of the drug and pharmaceutical expenses at issue in this proceeding from any source other than Medicaid reimbursement funds.

   
   

6. The Department contends further that the drugs and pharmaceuticals involved in this proceeding all represented amounts above the maximum amount set by the Respondent's rules for monthly reimbursement for patients' prescriptions. The Department contends that such amounts can only be recovered through a program other than the Medicaid reimbursement program of the Department's Division of Family Services which makes the reimbursements involved in this proceeding. In support of this contention the Respondent contended that its rules in effect during the relevant period provided an alternate method for recovering drug expenses; beyond a twenty dollar per month per patient limit. The Department failed in its burden of establishing that such rules were in effect.

   
   

7. The Petitioner is entitled to $14,881.81 in Medicaid reimbursement funds for the drug and pharmaceutical expenses at issue in this proceeding. The Petitioner has received $24,196.00 and therefore should be required to reimburse the Department the amount of $9,314.19.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED:

That a final order be entered finding the Petitioner entitled to $14,881.81 of Medicaid reimbursement funds for expenses that it made for medically necessary drugs and pharmaceuticals for the fiscal year ending September 30, 1972. Since the Petitioner has received $24,196.00 in reimbursement funds, it should remit $9,314.19 to the Department in a mutually acceptable manner of payment.

DONE and ORDERED this 30th day of October, 1979, in Tallahassee, Florida.

G. STEVEN PFEIFFER Hearing Officer

Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

COPIES FURNISHED:

W. Kirk Brown, Esquire

313 Williams Street, Suite 10 Post Office Box 4075 Tallahassee, Florida 32303

Amelia M. Park, Esquire District VI Legal Counsel Department of Health and

Rehabilitative Services 4000 West Buffalo Avenue Tampa, Florida 33614

Allan M. Dabrow, Esquire PECHNER, DORFMAN, WOLFE,

ROUNICK & CABOT

Suite 1300, 1845 Walnut St.

Philadelphia, Pennsylvania 19103

APPENDIX

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

)

APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 78-1008,

78-1009,

78-1219.

The Petitioner has submitted a Proposed Recommended Order which includes proposed findings of fact and conclusions of law. Rulings upon the proposed findings of fact and conclusions of law are set out herein in accordance with Section 120.59(2), Florida Statutes.

Findings of Fact No. 1 through 10 proposed by the Petitioner have been substantially adopted in the Recommended Order, except that the proposed findings do not reflect the testimony that ten percent of the $16,535.34 was collected from patients or their families.

The Petitioner's Proposed Conclusions of Law 1, 2, 3, 5, and 6 have been substantially adopted in the Recommended Order, and are hereby adopted except that the conclusions do not reflect that the Petitioner was reimbursed ten percent of the $16,535.34 directly from patients or their families.

Paragraph 4 is rejected as not material due to the fact that the Department failed to establish rules through which the Petitioner could recover drug and pharmaceutical expenses during the pertinent period.

DONE and ENTERED this 30th day of October, 1979, in Tallahassee, Florida.

G. STEVEN PFEIFFER Hearing Officer

Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

COPIES FURNISHED:

W. Kirk Brown, Esquire

313 Williams Street, Suite 10 Post Office Box 4075 Tallahassee, Florida 32303

Amelia M. Park, Esquire District VI Legal Counsel Department of Health and

Rehabilitative Services 4000 West Buffalo Avenue Tampa, Florida 33614

Allan M. Dabrow, Esquire PECHNER, DORFMAN, WOLFE,

ROUNICK & CABOT

Suite 1300, 1845 Walnut St.

Philadelphia, Pennsylvania 19103

Docket for Case No: 78-001008

Orders for Case No: 78-001008