STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
ALTON OCHSNER MEDICAL FOUNDATION ) AND OCHSNER CLINIC, )
)
Petitioners, )
)
vs. ) CASE NO. 88-6158
) DEPARTMENT OF HEALTH AND REHABILITATIVE ) SERVICES and ALL CHILDREN'S MEDICAL ) SERVICES, )
)
Respondents. )
)
RECOMMENDED ORDER
Pursuant to notice, this cause came on for formal hearing before P. Michael Ruff, the duly-designated Hearing Officer, on October 18, 1989, in Tallahassee, Florida. The appearances were as follows:
APPEARANCES
FOR PETITIONERS: Carol Ann Ruebsamen, Esq.
CARLTON, FIELDS, ET AL
25 West Cedar Street
P.O. Box 12426 Pensacola, FL 32582
FOR RESPONDENTS: John Miller, Esq.
General Counsel Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, FL 32399-0700 STATEMENT OF THE ISSUE
The general issue to be resolved in this proceeding concerns whether the Petitioners should be paid for medical services rendered to a baby, William Murrell ("Baby M"). Embodied within that general issue is the question of whether the Respondent, children's Medical Services ("CMS"), agreed to pay the Petitioners ("Ochsner"); whether CMS is estopped to deny such reimbursement to Ochsner; whether CMS's pre-authorization requirements are conditions precedent to reimbursement; and whether reimbursement is precluded for experimental procedures and, indeed, whether the procedure involved herein was experimental at all.
PRELIMINARY STATEMENT
The Petitioners have fiied a Petition against the Respondents alleging that CMS is obligated to reimburse Ochsner for the medical services it provided to
Baby M. The Petition was filed pursuant to Chapter 10-J, Florida Administrative Code, Section 391.041, Florida Statutes, and Chapter 120, Florida Statutes, as well as pursuant to certain policies and guidelines enumerated in HRS Manual 145-3.
The Petitioners proceed on three theories. Firstly, they assert that CMS agreed to pay Ochsner for the services rendered and, therefore, is bound to do so. Secondly, Petitioners maintain that CMS's acts or those of its agents or employees estop it from denying that it is obligated to pay for the medical services in question. Finally, the Petitioners argue that the decision to refuse to reimburse Ochsner was an invalid one to the extent that CMS based its decision not to reimburse Ochsner on the basis that pre-authorization approval had not been obtained for the transfer of Baby M to Ochsner, an out-of-state facility, and to the extent that CMS deemed the procedure performed by Ochsner to be experimental in nature.
Specifically, this dispute arose concerning medical complications attendant to the birth of Baby M, who was born on January 12, 1986 at Broward General Hospital in Fort Lauderdale, Flor.ida. Due to his family's financial status, he became a client of CMS upon his birth because he was born with certain severe medical deficiencies. His physician at Broward General Hospital was Dr. Brian Udell. Dr. Udell's diagnosis concerning Baby M's respiratory problem resulted in his being scheduled for a medical procedure known as extracorporeal membrane oxygenation or "ECMO." Since no hospital in Florida provided this procedure at this time in 1986, Dr. Udell arranged for Baby M to be transferred to Ochsner, in New Orleans, Louisiana, which provided the ECMO therapy needed.
Baby M was transferred to Ochsner late on January 12th or early on January 13, 1986, in the middle of that night. He underwent the subject treatment from January 12, 1986 to February 6, 1986 and then was returned to Broward General' Hospital. Ochsner has billed CMS the sum of $65,372.28 for the services rendered.
CMS disputed this bill on the bases mentioned hereinabove, involving its view that proper authorization and authority had not been obtained from the proper officials of CMS to justify Baby M's referral out of state for the treatment and that the treatment was experimental in nature and, under policies of CMS, was not reimbursable.
The cause came on for hearing as noticed, at which the Petitioners presented two witnesses and fourteen exhibits. The Respondents presented two witnesses and five exhibits. The parties elected to transcribe the proceedings and requested an extended briefing schedule, which was granted pursuant to their agreement. The proposed findings of fact which have been filed herein have been treated in this Recommended Order and ruled upon again in the Appendix attached hereto and incorporated by reference herein.
FINDINGS OF FACT
CMS is a program office within HRS. Petitioners are medical facilities located in New Orleans, Louisiana. For purposes of this proceeding, they are referred to collectively as Ochsner or as Petitioners. CMS, in the conduct of its operations contracts with various hospitals in Florida to provide Regional Perinatal Intensive Care Centers (RPICCs). Broward General Hospital contractecd with CMS to become such a RPICC and provided RPICC services during the time of the events in question. Baby M was born in Broward General Hospital on January 12, 1986 and became a client of CMS due to his family's financial status and the
severe medical deficiencies attendant to his birth. His physician at Broward General Hospital was Dr. Brian Udell. Dr Udell diagnosed Baby M as having a respiratory difficulty or deficit which required him to undergo ECMO. No Florida hospital provided this procedure. Therefore, Dr. Udell arranged for Baby M to be transferred to Ochsner, which did provide that treatment at the time and since. Baby M was transferred to Ochsner and underwent that treatment from January 12, 1986 through February 6, 1986, whereupon he was returned to Broward General Hospital. Ochsner has billed CMS the sum of $65,372.28 for these services.
Dr. Udell was a neonatal consultant for CMS and treating physician of Baby M at Broward General Hospital. Linda Lasso Reynolds was the CMS nursing director at the time. The contract between CMS and Broward General Hospital requires Broward General Hospital to have a neonatal director, who CMS looks to for accountability when it monitors the particular quality of care at a particular hospital. Dr. Udell was that neonatal director at Broward General Hospital. Broward General Hospital contracted with CMS to provide those neonatal services. Dr. Udell, in turn, contracted with Broward General Hospital, along with his group of physicians, to provide the neonatal or RPICC services that Broward General Hospital had contracted with CMS to provide. Dr. Udell was the director of the neonatal component of RPICC, which was a CMS program.
Appropriate expertise regarding ECMO was not available in Florida. The condition from which Baby M suffered had at least an 80% mortality rate and was clearly an immediate, life-threatening, emergency situation. If the ECMO procedure had not been performed by Ochsner when it was, Baby M would have died. Therefore, the ECMO procedure was clearly necessary to preserve the life of Baby
M. Accordingly, he was transferred to Ochsner and underwent the treatment. The expenses incurred have not yet been paid, hence this dispute.
Concerning the issue of Ochsner's entitlement to payment by CMS, Dr. Ausbon, the Assistant Secretary and Program Director for CMS; Dr. Udell, the CMS consultant and treating physician of Baby M; Ms. Linda Lasso Reynolds, the CMS Nursing Director; Ms. Denice Eshleman, the Supervisor of Financial Counseling at Ochsner; and Ms. Darlene Jones Bourgeois, the Patient Administration Coordinator at Ochsner, testified concerning the issue of whether there was an agreement by which CMS was bound to pay Ochsner for the treatment at issue. Baby M was transferred to Ochsner by Dr. Udel1 on the specific representation that CMS would pay in full for the services rendered by Ochsner. Dr. Udell, as well as Denice Eshleman, established that Dr. Udell told Ms. Eshleman that he had authority to commit CMS to pay for the treatment. Ms. Eshleman inquired whether it would be a medicaid-type of reimbursement, and she was assured that it was not and that reimbursement would be in full by CMS. Dr. Udell's job description includes the right to determine the medical eligibility of children for the program and provided that his authority was not limited to the specific authority stated in the job description. See, Petitioners' Exhibit 1, pages 1- 3.
Dr. Udell established that this was an emergency, nighttime situation and that the guidelines of CMS only required him to attempt to contact his superior, which he did prior to committing CMS funding to the out-of-state transfer of the baby for treatment. Dr. Udell's testimony is corroborated by the language of the pertinent regulation, 10J-1, Section 1.006, Florida Administrative Code, which provides:
In the event of absence or unavailability of both the District Medical Director and
the District Assistant Medical Director, the Nurse Director will assume all responsibilities for the direction of the local office. At such times all matters requiring immediate medical decisions will be referred to a CMS consultant physician designated by the District Medical Director.
Dr. Udell attempted to contact a CMS official regarding transfer of Baby M to Ochsner for the ECMO treatment and was unable to find the appropriate superior to approve the transfer. It was established that Dr. Udell was a "designated CMS consultant physician". Consequently, he was empowered to make the decision to transfer Baby M and commit the CMS funding.
Additionally, CMS had followed a practice of allowing him the authority to make out-of-state transfers of patients. The testimony of Linda Lasso Reynolds showed that prior to the subject transfer of Baby M, Dr. Udell had sent several clients out-of-state for research or experimental types of procedures, some of whom were RPICC neonatal patients. Since RPICC is a program of the CMS office, some of the babies involved in these transfers were CMS babies. This testimony by Ms. Reynolds was corroborated by that of Dr. Udell, himself. He recalled previously transferring a baby out of state on his own initiative and having the services reimbursed by CMS.
The fact of Dr. Udell's authority to order the transfer and commit CMS funding was supported by the acts of Ms. Reynolds, the Nurse Director of CMS, around the time bf the transfer and acceptance of the patient by Ochsner. She called Ochsner and told an Ochsner official, Ms. Darlene Jones Bourgeois, that Dr. Udell had the authority to authorize the transfer and admission of Baby M at Ochsner. She indicated to Ochsner that Dr. Udell was eligible to make that decision, but that the only question she had concerned whether the procedure and treatment was experimental in nature. She related this to Ochsner during the conversation with Ms. Bourgeois by telephone on January 21, 1986, when the issue of Dr. Udell's authority to make the transfer to Ochsner arose. Ms. Reynolds assured Ms. Bourgeois that he was eligible to make that decision but that she had a concern regarding whether the experimental nature of the program allowed payment or not.
Dr. Udell had the authority, as shown by the evidence of record, under the pertinent regulation, to transfer Baby M due to the fact, also, that it was an emergency situation. Dr. Ausbon, in his deposition, agreed with Dr. Udell that there was an 80% mortality factor for Baby M in the emergency respiratory situation which occurred.
Certain CMS guidelines are contained in Exhibit 3, which provide that: "Out-of-state hospitals may be utilized upon the recommendation of the local CMS Medical Director and approval of the CMS program staff director, when the appropriate expertise is not available within the state." Dr. Udell established that this immediately necessary procedure was definitely not available in Florida in 1986.
Under the CMS guidelines for "types of services" which can be provided by CMS, it is provided:
Services to be provided or purchased include, but are not limited to, the following:...
(d) provision of services at an out-of- state facility may be approved if the specialized expertise is unavailable in the state. Approval for out-of-state
services *may* be granted in advance by the local CMS medical director with the concurrence of the CMS program staff director that the expenditures are reasonably necessary to maintain established standards. (emphasis
supplied between *)
This section, thus, indicates that approval "may" be granted in advance. This provision, and the preponderant evidence, does not establish that failure to obtain advanced approval precludes reimbursement for resulting transfers and treatment.
In any event, in an emergency situation, there is a specific exception to the pre-authorization requirement. This emergency exception is contained in Section 10J-2.006 and 3.006, Florida Administrative Code, which provides that in emergency situations CMS must be notified the next business day for reimbursement to be granted, contingent upon available funding. Indeed, next day notice was provided here, as shown by the testimony of Ms. Reynolds to the effect that the perinatal nurse, a CMS employee, was informed about the transfer the next day. Additionally, it was established that Dr. Udell called Dr. Fannizi, the Medical Director of CMS, the day after Baby M was transferred to Ochsner, informed Dr. Fannizi of the situation and the emergency requirement to transfer Baby M. Additionally, there was no showing that reimbursement could be precluded because CMS did not have available funding. Thus, the required next- day notice occurred here, as is further corroborated by the fact that on a patient data card, an entry was made indicating that CMS was aware of the transfer of Baby M to Ochsner for treatment on the following day. It was thus shown that Dr. Udell had authority to bind CMS in this emergency situation to provide funding for the out-of-state transfer. CMS did not establish that the basis for its denial of reimbursement for this claim was for lack of available funding. In fact, Dr. Ausbon acknowledged that the only reason Baby M's treatment was not paid was the alleged lack of pre-authorization and the experimental nature of the out-of-state treatment.
Even if Dr. Udell was not shown to have authority to order the transfer and treatment out of state at Ochsner, the facts of the case establish without question that this was an emergency situation and that without the transfer and treatment at Ochsner, Baby M would have died. Under these circumstances, there is no doubt, given the totality of testimony and evidence of record considered herein, that had Dr. Ausbon or Dr. Fannizi been located and contacted by Dr. Udell late that night when the transfer was contemplated, they would doubtless have approved the transfer under these undisputed, emergency circumstances. The evidence reveals that, in reality, the objection by the Respondents to reimbursement for the treatment provided by Ochsner really relates to the view of CMS that it was experimental in nature and that CMS had a policy guideline that it would not reimburse for out-of-state treatment of an
experimental nature. In any event, it was established that Dr. Udell had the authority to make the commitment under the circumstances delineated above.
The Petitioners assert that in addition to Dr Udell's authority to transfer Baby M and to bind CMS in such an emergency situation to fund the out- of-state transfer and treatment of Baby M, CMS is estopped to deny reimbursement to Ochsner for the services rendered. The Petitioners base this position on alleged affirmative action and inaction of CMS, representations of material fact made by it and reliance upon the same by Ochsner in incurring the costs of its treatment efforts.
In this regard, there is no doubt that the documentation of Baby M's admission to the CMS program shows that Baby M was enrolled as a CMS funded baby and that the RPICC records show that CMS was aware of the transfer of Baby M to Ochsner and back as a "sponsored infant" throughout the time he was being treated at Ochsner. Thus, affirmative acts were made by CMS to enroll Baby M and, through its agents or employees, to refer Baby M to Ochsner for treatment. Express representations of material fact were also made by Dr. Udell, who had authority to transfer Baby M for the reasons found above and who represented that CMS would pay for the services in full. Also, the nursing director of CMS, Linda Lasso Reynolds, represented to Ochsner, shortly after the transfer, that Dr. Udell was eligible to make the transfer decision and referral. Ms. Reynolds did, however, raise the question of whether the procedure was experimental in nature and indicated, as a representative of CMS, that that agency had a question about funding the procedure and the transfer, if it was an experimental procedure. Thus, Ochsner was informed that there was some question or contingency with regard to whether CMS would, indeed, fund the treatment. Ochsner's representative, in that telephone conversation, informed Ms. Reynolds that the procedure, in its view, was not experimental and, indeed, Ochsner went ahead to undertake the treatment of Baby M after that communication with Ms. Reynolds.
According to Ms. Eshleman, Ochsner screens the financial situation when expensive procedures such as ECMO are involved to make sure it will be reimbursed for the services rendered. Ms. Reynolds, in communication with Ms. Bourgeois, assured them that Dr. Udell had authority to refer Baby M but raised the question regarding the experimental nature of the procedure. Ochsner did change its position by incurring the medical costs and services rendered to Baby M in the amount of $65,372.28. It has not been established, however, that Ochsner relied upon that representation entirely in providing the treatment and services. The evidence rather reveals that Ms. Reynolds raised the question about whether the procedure was experimental and was assured by Ms. Bourgeois that it was not. What followed was that Ochsner immediately accepted Baby M for treatment. It has not been proven that Ochsner accepted Baby M merely upon Dr. Udell's and Ms. Reynolds' representations about reimbursement.
In fact, the "exceptional circumstances" which the Petitioners raise as a basis for estopping the state agency and which it concedes are necessary before a government agency can be held to estoppel, really relate to the reason Ochsner actually accepted Baby M for treatment or at least a substantial portion of the reason. That is, Baby M was in a life-threatening situation, late at night, with an 80% mortality rate. Thus, Ochsner was placed in a position, as was CMS, that an immediate and quick decision had to be made since any delay would likely result in Baby M's death. This must be considered to have been the prevailing influence on Ochsner accepting Baby M, rather than any representation made by Ms. Reynolds or Dr. Udell regarding payment. In other words, although the representation was made by Ms. Reynolds and Dr. Udell regarding
reimbursement, this was not the primary reason treatment was accorded Baby M by Ochsner, especially in the face of Ms. Reynolds' raising of the question of the experimental nature of the procedure as that relates to whether CMS would pay for it. Ochsner, at that point in the conversation, made a representation to CMS that it was not experimental, thus, by its own representation, assisting in cementing the treatment arrangement for Baby M.
It is true that Dr. Udell and Ms. Reynolds knew that Baby M was transferred and that Ochsner had been told that CMS would pay for the services rendered. Dr. Ausbon also knew that Ochsner had been informed that CMS would pay for the services rendered. Further, Dr. Udell informed Dr. Fannizi on January 14, 1986, the day after the transfer was completed, of the transfer. Thus, the appropriate CMS personnel were aware of the transfer, the reason for it, and that Ochsner had been informed that CMS would pay for it. It is also true that Ochsner was not notified, according to the testimony of Ms. Eshleman, which is accepted, that the services would not be reimbursed until February 7, 1986, one day after Baby M was transferred back to CMS at Broward General Hospital.
The Petitioners maintain that the decision not to reimburse had actually been made on January 14, 1986, the day Dr. Udell informed Dr. Fannizi of the situation. The Petitioners, thus, allege that CMS purposely and wrongfully waited to inform Ochsner that it would not be paid until after the treatment was completed and Baby M was transferred back to Broward General Hospital in order to deceitfully induce Ochsner to render the full treatment without its knowing that reimbursement was not forthcoming. This motive, however, has not been proven in this record and is not an "exceptional circumstance" as that relates to the estoppel issue. Although it is true that CMS did not actually inform Ochsner that no reimbursement was forthcoming until after the treatment was completed, it is just as likely that the treatment was allowed to be completed before the monetary dispute was raised because if the treatment were not carried through to completions Baby M would not receive the full benefit of it and would likely die. It must be remembered that this was an extreme, life-threatening situation and time for both parties to deliberate and consider their legal options and alternatives was not afforded either of them. The transfer had to be arranged by telephone call in the middle of the night and Baby M flown to New Orleans on a very expedited basis in order to save his life. Once Baby M was installed in the treatment facility, it would not have been practical nor in accordance with good health-care principles to transfer Baby M back to Broward General Hospital before his treatment was completed merely on account of a monetary dispute. It is, therefore, found that CMS did not harbor a motive of wrongfully withholding information regarding reimbursement from Ochsner in order to induce it to complete the treatment. Both parties obviously wanted the treatment to be successfully completed in order to safeguard the health of Baby M, and this was the primary consideration, rather than the question of payment for it.
While Ochsner obviously wanted advanced information as to whether it would be reimbursed in order to safeguard the financial viability of its ECMO program and received a representation from Dr. Udell that payment would be in full, it also received the representation of Ms. Reynolds that some question might arise as to the experimental nature of the program, as that relates to the likelihood of reimbursement. Thus, Ochsner did not prove that it changed its position to its detriment on the representations made by Dr. Udell and Ms. Reynolds. Ochsner's representation that the treatment was not considered experimental might be said to have induced Ms. Reynolds to authorize the
transfer in her capacity and Nurse Director of CMS and any representation made regarding payment.
Finally, the other basis for denial of reimbursement was the alleged experimental nature of the treatment. Dr. Ausbon, himself, indicated in his testimony that although the lack of prior authorization had been an initial factor in denying reimbursement, it was not the real basis upon which he denied it. Rather, he denied it based upon his view of CMS policy to the effect that experimental procedures could not be paid for by the CMS program. The CMS rules and regulations pertaining to out-of-state transfers are contained in Exhibit 3, Section 11-3, pages 5 and 6. The only condition precedent to an out-of-state transfer is contained in the precatory language which states: "Occasionally, children's medical services authorize services for children in other states because such services are not available in Florida and the provisions of these services are necessary to preserve the life of the CMS patient." It is undisputed that at the time in question, the ECMO procedure was not available in Florida, and Dr. Udell established that the ECMO was necessary to preserve the life of Baby M. Thus, the two regulatory bases for out-of-state transfers, as permitted under Section 11-3, were met in this instance.
The testimony of Dr. Ausbon and other testimony adduced by the Respondents indicates that there is a policy espoused by the Respondents to the effect that out-of-state transfers for experimental procedures shall not be reimbursed. The Petitioners attack this putative policy as an improperly promulgated rule adopted, in effect, without following the procedures for rule enactment, citing Amos v. HRS, 444 So.2d 43 (Fla. 1st DCA 1983). 1/ Even though there may be a policy by CMS precluding payment for experimental procedures performed outside the State of Florida, the evidence in this record establishes that the ECMO treatment at the time in question, and under the circumstance's, was not experimental. Therefore, that is an invalid basis upon which to deny reimbursement to the Petitioners.
The Respondents' position that ECMO was experimental in nature was based upon the opinion of Dr. Curran, a neonatal consultant employed by CMS. Dr. Curran considered this question at the behest of Dr. Ausbon, the staff director of CMS. He based his opinion upon his view of the medical literature. His opinion was shown to be in error, in part because he testified that there were no Ochsner studies published concerning ECMO at the time he made his decision in 1986. In fact, the evidence shows that Ochsner's studies concerning this procedure had been published prior to that time and were available. He also indicated in his testimony that ECMO had been well documented in medical literature at the time he testified, but did not agree that ECMO had been so well documented prior to August of 1985. In fact, this was not correct.
Exhibit 10 is an article entitled "Long Term Follow-up of Infants and Children Treated with Ecmo". This article was contained in the Journal of Pediatric Surgery, Vol. 20, August 1985, at page 410, and states: "The ecmo technique has been well documented in other reports." This and other literature referenced in the Petitioners' evidence establishes that the procedure was well documented in United States medical literature at the time in question in 1986. In fact, in his decision that the procedure was experimental, as reflected by his opinion that the procedure was not well documented in medical literature commonly relied upon by experts in his field, Dr. Curran relied upon the so-called "Bartlett Studies." These studies, however, were performed in 1977, almost nine years prior to the time when Dr. Curran rendered his opinion to Dr. Ausbon. They were clearly no longer current at the time in question. Moreover, Dr. Curran was not familiar with a commonly-accepted, learned treatise entitled "Pulmonary Diseases and Disorders" by Alfred S. Fishman, published in 1980. This treatise was
published by an author affiliated with the same medical school attended by Dr. Curran. The treatise revealed that there had been ten-year studies regarding the use of ECMO in the treatment of acute respiratory insufficiencies, as shown in Exhibit 10 in evidence; however, Dr. Curran was not familiar with that literature.
Additionally, Dr. Curran acknowledged that he did not disagree with the conclusion reached in the literature which was contrary to his conclusion that ECMO was experimental. For example, he could not disagree that since 1973, ECMO had been used successfully to treat infants and children, as shown by the above-referenced publication in the Journal of Pediatric Surgery, Vol. 20, August 1985, at page 410. Dr. Curran also testified as to his familiarity with the article entitled "Extracorporeal Circulation and Neonatal Respiratory Failure, A Prospect of Random Study", Pediatrics, Vol. 6, October 1985. This article is referenced in Exhibit 10 in evidence, and Dr. Curran acknowledged that he was unable to disagree with the conclusion reached in that study; that moribund infants can recover, with normal growth and development, when treated with ECMO and that the study proves that it improves survival rates when compared to conventional treatment. It is equally noteworthy that Dr. Curran testified that he later changed his mind about the experimental nature of ECMO and concluded that it was no longer experimental, based upon the so-called "Ann Arbor Studies". In fact, however, the Ann Arbor studies were performed much earlier than the situation at bar and were available in recognized medical literature in 1982 and in 1985, as shown by Petitioners' Exhibit 10. Dr. Curran simply was unaware of them or ignored them.
Thus, Dr. Curran's conclusion of the experimental nature of the ECMO procedure was impeached sufficiently to establish the error of that conclusion. Moreover, the Petitioners proved, by independent evidence, that ECMO was not experimental. Dr. Udell established that in 1986, ECMO had already been written of extensively in the most important medical journals, including the Journal of Pediatrics, and that medical specialists in the field in various parts of the nation, including at Ochsner, had treated many patients with this method. Moreover, Dr. Udell established that it was the only treatment readily available which would be efficacious in treating Baby M's disease. Dr. Udell established that he was familiar with the literature on the subject and opined that based upon his familiarity with the literature and his experience, the procedure was not experimental at the time Baby M was referred to undergo it. His opinion is accepted.
Additionally, Dr. Arensman, the pediatric surgeon at Ochsner who treated Baby M, testified that the procedure was not experimental in 1986. Although the number of facilities providing ECMO has greatly increased since that time, the evidence shows that the relatively low number of medical facilities providing that treatment in 1986 was not due to the fact that it was experimental in nature but rather that the equipment, facilities and training necessary to render the service were very expensive, which tended to retard the rapid attainment of the capability to provide that treatment by hospitals across the country. Moreover, it is noteworthy that, as established by Ms. Eshleman, ECMO was being taught to residents at the Ochsner Medical Foundation, a teaching hospital, in 1986 and that the procedure was being fully reimbursed by insurance companies and other third-party payors at that time, all of which shows that the procedure was not then considered experimental. In summary, the evidence establishes that the therapy performed on Baby M in early 1986 was not at that time an experimental procedure.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding, by authority of subsection 120.57(1), Florida Statutes (1989).
Rule 10J-3.006, Florida Administrative Code, provides as follows:
Except in emergencies, all provider services will be preauthorized by district staff providing CMS services, or authorized designee....
This principle is repeated and elaborated on in the HRS Manual for Children's Medical Services, dated April 1, 1985, in evidence as Exhibit 3, wherein it states, at page 5-15, paragraph D, as follows:
All services provided to CMS patients must be prior authorized. The only exception to this policy will be emergency situations. CMS must be notified of emergency/unanticipated needed services the next business day in order to reimburse a provider for such services. Reimbursement for emergency/unanticipated services is contingent upon available funding.
Rule 10J-1.006, Florida Administrative Code, in turn, provides In the event of absence or unavailability
of both the District Medical Director and the District Assistant Medical Director, the Nurse Director will assume all responsibilities for the direction of the local office. At such times, all matters requiring immediate medical decisions will be referred to a CMS consultant physician designated by the District Medical Director.
The evidence establishes that Dr. Udell, who made the decision, in the emergency situation with which he was confronted, on the night of January 12 and 13, 1986, was a designated CMS consultant and neonatal specialist. Because of this and because this was an emergency situation, as referenced in the above policy and rule guidelines, it has been established that Dr. Udell had the requisite authority, given the emergency nature of the situation, to avoid the preauthorization requirement and refer Baby M immediately to Ochsner. This is especially true since the evidence reflects that, in accordance with the written policy from the CMS manual referenced, Dr. Udell attempted to notify Dr. Ausbon the next morning and actually was able to reach him the following day, January 14, 1986, and also informed Dr. Fannizi of the transfer and the reason therefor that day. Further, Ms. Reynolds knew about the referral on the following day as did the nurse on duty. The transfer was also reflected in CMS records as being entered therein on January 13, 1986. Thus, the above policy was complied with in that, although preauthorization was not obtained, the situation was of an emergency nature and therefore preauthorization was not required. It has also
been established that under the circumstances delineated in the above Findings of Fact, Dr. Udell had authority to evaluate Baby M's condition, the emergency nature of it and the mortality rate attendant to Baby M's situation and to secure the referral out-of-state, since no such service was then available within the State of Florida.
It is also true that, given the reasons delineated in the above Findings of Fact, chiefly concerning Ochsner's failure to prove that it strictly relied upon any representations made by Dr. Udell and Ms. Reynolds concerning assurances of full reimbursement, that a necessary element to establish estoppel against the state agency has not been established. That is, it has not been demonstrated by the Petitioners that their reason for retaining Baby M in their care and providing the full term of ECMO treatment was due solely to reliance upon the representations about payment made by Dr. Udell and Ms. Reynolds. Rather, the evidence reflects that Ochsner quite likely retained Baby M for the full range of treatment because Baby M's life would have been severely endangered and likely terminated if treatment had been suspended in mid-course, which is likely the same reason that CMS did not attempt to terminate the treatment on the payment issue before Baby M completed the treatment and was referred back to Broward General Hospital. There has simply been proven no willful or deceitful misrepresentation of a material fact or other exceptional circumstances justifying raising an estoppel against the state agency involved herein, even in consideration of the cases of Ida Salz v. Division of Retirement, 432 So.2d 1376 (Fla. 3rd DCA 1983) and Fraga v. HRS, 464 So.2d 144 (Fla. 3rd DCA 1984), cited by the Petitioners in their brief. Given the qualification made in the representation by Ms. Reynolds concerning reimbursement, related to the issue of the experimental nature of the therapy, and given the urgent, rapid decisions that had to be made by both CMS representatives and Ochsner on the night in question in order to transport Baby M to Louisiana and save his life, it cannot be concluded that Ochsner totally relied upon the representations that the treatment would be reimbursed. If so, they were not entitled to rely on it entirely because it was qualified with the admonition that the reimbursement hinged on the experimental, non-experimental dichotomy. Further, as found above, Ochsner may have induced the transfer and treatment of Baby M by its representation that it deemed the treatment non- experimental. Thus, for these considerations, as more particularly described in the above Findings of Fact, it is not deemed that CMS is estopped to deny reimbursement, although reimbursement is in order for the other reasons found and concluded herein.
Finally, for the reasons stated in the above Findings of Fact, it has not been established that this was an experimental treatment, even in 1986 when Baby M underwent the procedure. Even if it is deemed that CMS proved that approximately one week before this incident arose, it had decided upon a policy, through its program director, Dr. Ausbon, that ECMO was an experimental, nonreimbursable procedure, it was not established that ECMO was then experimental. The evidence reflects that it was well-documented in medical literature generally available to physicians throughout the nation, including neonatal specialists; that it was quite efficacious in treating severe respiratory failure in newborns; and that, even in 1986, third-party payors, including insurance companies, were routinely reimbursing claims therefor. This indicates, for the reasons stated in the above Findings of Fact, that the procedure was not viewed any longer by medical specialists in the field, as experimental in nature. This, therefore, obviates the other reason CMS had for denying reimbursement to Ochsner.
Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, and the candor and demeanor of the witnesses, it is, therefore,
RECOMMENDED that a Final Order be entered by the Department of Health and Rehabilitative Services awarding the sum of $65,372.28 to the Petitioners as reimbursement for medical services rendered to Baby M.
DONE and ENTERED this 1st day of May, 1990, in Tallahassee, Leon County, Florida.
P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division Administrative Hearings this 1st day of May, 1990.
ENDNOTES
1/ The Petitioners cite the Amos decision, as well as MacDonald v. Department of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977), and State v. Harvey,
356 So.2d 323 (Fla. 1st DCA 1977), as authority for the principle that a "rule" is an agency statement of general applicability that implements, interprets or prescribes law or policy which affects private interests, as well as procedures important to the public. The Petitioners cite these decisions for the proposition that an agency action based upon an improperly promulgated rule which was not established through proper publication and notice and other enactment procedures is an invalid act. This position is inapposite in this proceeding, however, since this is not a properly noticed rule challenge proceeding pursuant to Section 120.56, Florida Statutes. The issue of whether or not the supposed policy concerning experimental procedures should have proceeded beyond the "incipient policy" stage and been codified into a rule is not properly before the Hearing Officer. This proceeding was noticed and conducted by the parties, through hearing, as a Section 120.57(1), Florida Statutes, proceeding. Accordingly, the issue concerning the experimental nature of the ECMO procedure is dealt with in this Recommended Order as a putative policy concerning that subject matter and will be considered in the context of whether, as a matter of fact, the proceeding involved herein was indeed "experimental."
APPENDIX TO RECOMMENDED ORDER CASE NO. 88-6158
Petitioner's Proposed Findings of Fact:
1-39 Accepted.
Rejected as subordinate to the Hearing Officer's findings on this subject matter.
Rejected as immaterial.
42-45 Rejected as subordinate to the Hearing Officer's findings on this subject matter.
46-50 Accepted.
51-53 Accepted, but not material.
54 Accepted.
55-56 Rejected as subordinate to the Hearing Officer's findings on this subject matter.
Accepted, but not itself material.
Rejected as contrary to the weight of the evidence.
Accepted, but not itself dispositive.
60-61 Rejected as contrary to the weight of the evidence and subordinate to the Hearing Officer's findings on this subject matter.
Rejected as immaterial.
Rejected as subordinate to the Hearing Officer's findings on this subject matter.
Accepted, but subordinate to the Hearing Officer's findings of fact on this subject matter.
65-66 Rejected as immaterial.
67-68 Rejected as immaterial in this de novo proceeding.
Accepted.
Accepted as to the first clause. The remainder is immaterial in this de novo proceeding.
Respondent's Proposed Findings of Fact:
1-3 Accepted.
4 Accepted, but not materially dispositive. 5-8 Accepted.
Rejected as subordinate to the Hearing Officer's findings on this subject matter.
Accepted, but not materially dispositive.
Rejected as subordinate to the Hearing Officer's findings on this subject matter and as not in accordance with the greater weight of the evidence.
Accepted, but not as to its material import.
Accepted, but not itself material.
Accepted.
Rejected as subordinate to the Hearing Officer's findings on the subject matter.
Accepted, but not in itself materially dispositive.
Accepted, but not materially dispositive and subordinate to the Hearing officer's findings on the subject matter.
Accepted, but subordinate to the Hearing Officer's findings on the subject matter.
Accepted.
Accepted, but subordinate to the Hearing Officer's
findings on the subject matter.
Rejected as subordinate to the Hearing Officer's findings on the subject matter.
22-24 Accepted, but not materially dispositive.
Rejected as subordinate to the Hearing Officer's findings on the subject matter and as not, in itself, materially dispositive.
Rejected as not constituting a finding of fact.
Rejected as not in accordance with the greater weight of the evidence and as subordinate to the Hearing Officer's findings.
Accepted, but not itself materially dispositive and subordinate to the Hearing Officer's findings.
Accepted, but not itself materially dispositive and subordinate to the Hearing Officer's findings and really a recitation of testimony and not a proposed finding of fact.
Rejected as to its purported material import in this proceeding and as subordinate to the Hearing Officer's findings on the subject matter.
Rejected as contrary to the preponderant weight of the evidence. Further, the issue of arbitrary, capricious or unreasonable agency action is a review standard and is not relevant in this de novo proceeding.
COPIES FURNISHED:
Sam Power, Agency Clerk Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, FL 32399-0700
John Miller, Esq. General Counsel Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, FL 32399-0700
Carol Ann Ruebsamen, Esq. CARLTON, FIELDS, ET AL.
P.O. Box 12426 Pensacola, FL 32582
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES
ALTON OCHSNER MEDICAL FOUNDATION, AND OCHSNER CLINIC,
Petitioner,
CASE NO.: 88-6158
vs.
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES AND
ALL CHILDREN'S MEDICAL SERVICES,
Respondents.
/
FINAL ORDER
This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (DOAH) in the above- styled case submitted a Recommended Order to the Department of Health and Rehabilitative Services (HRS). A copy of that Recommended Order is attached hereto.
RULING ON EXCEPTIONS FILED BY OCHSNER CLINIC
Section 120.59(2), Florida Statutes (1989) provides that the Recommended Order shall include a ruling upon each proposed finding. A citation was not made to any applicable Florida law upon which the department could award attorneys fees. Therefore, the error on the part of the Hearing Officer is harmless. Health Care Management, Inc. vs. Department of Health and Rehabilitative Services, 479 So2d 193 (Fla. 1st DCA 1985).
Because this Order finds in favor of the petitioner, it is not necessary for the department to rule on any alternative ground for relief.
RULING ON EXCEPTIONS FILED BY THE DEPARTMENT
The Hearing Officer's findings of fact are entitled to the same weight as the verdict of a jury. Gruman vs. State, 379 So2d 1313 (Fla. 2nd DCA 1980). It is the Hearing Officer's function to resolve conflicts in the evidence, judge the credibility of witnesses, draw permissible inferences from the evidence, and make findings of fact; and the agency may not reject a finding unless there is no competent, substantial evidence from which the finding could reasonably be inferred. Heifetz vs. Department of Business Regulation, 475 So2d 1277 at 1281 (Fla. 1st DCA 1985). where there is conflicting evidence, the department has no authority to reweigh the evidence.
As to finding of fact number 6, Dr. Udell's testimony provides that he attempted to reach a CMS official regarding the transfer of Baby M to Ochsner, but could contact no one. (Deposition of Dr. Udell, page 15 and 19), and that he was the designated CMS consultant physician (Deposition of Dr. Udell, page 16). It was established that Dr. Udell was empowered under the emergency circumstances to make the decision to transfer Baby M and to commit CMS funding pursuant to Sections 10J - 1.006 and 3.006, Florida Administrative Code.
Section 10J - 3.006 specifically exempts emergencies from the pre- authorization procedures.
As to finding of fact number 7, the testimony of Linda Reynolds at the final hearing indicates that Dr. Udell had previously transferred RPICC babies out of state (Hearing transcript, page 59 - 60). Dr. Udell's deposition corroborates Linda Reynold's testimony. (Deposition of Dr. Udell, page 11). This evidence is competent and substantial and supports the finding inference that CMS had previously allowed Dr. Udell to make out of state transfers.
Regarding finding of fact number 8, Darlene Jones Bourgeois testified that Linda Reynolds told her that Dr. Udell had the authority to authorize the admission (Deposition of Darlene Bourgeois, page 7). This testimony is corroborated by Ochsner's inpatient billing file, Petitioner's Exhibit 7, and is thus competent evidence on which to base the finding that Linda Reynolds' acts supported the existence of Dr. Udell's authority to order the transfer and commit CMS funding in the emergency situation. The department rejects as a conclusion of law any finding or implication that Dr. Udell's authority extended to non-emergencies. In non-emergencies prior approval is required for reimbursement.
Regarding finding of fact number 9, Dr. Ausbon agreed that Baby Boy M was past the 80% mortality risk (Deposition of Dr. Ausbon, page 32). The fact that this situation occurred in the middle oil the night on a weekend further establishes that Dr. Udell acted in an emergency. Taken in conjunction with HRS manual for CMS, page 5 - 15, paragraph D; and with Sections 10J- 1.006 and 3.006, Florida Administrative Code, it is found Dr. Udell had the authority to transfer Baby M in an emergency situation.
As to findings of fact number 11 and 12, the department rejects any finding or implication that prior approval is not required in non-emergency cases.
In this case, the emergency exception to the pre- authorization procedure applies. CMS was notified the next day (Transcript of Hearing, page 60); Dr.
Udell attempted to notify CMS prior to transfer of the child for treatment (Deposition of Dr. Udell, pages 15 and 19), and he attempted to notify Dr. Ausbon, the Assistant Secretary for CMS, on Sunday, the next day (Petitioner's Exhibit 4).
There is evidence that the department refused payment due to the department's opinion that the treatment was experimental. (Transcript of Hearing, page 155). The record contains conflicting evidence on whether ECMO was an experimental procedure. There was sufficient literature available prior to 1986 for a reasonable person to conclude that ECMO was not experimental.
Further, there was evidence adduced by Dr. Udell (Deposition of Dr. Udell, page
10) and by Dr. Arensman (Deposition of Dr. Arensman, page 9 and Petitioner's Exhibit 6) that ECMO was not considered experimental in 1986. See also Petitioner's Composite Exhibit 10. Moreover, Denise Eschleman testified that
ECMO was being reimbursed by third party providers at Ochsner (Transcript of Hearing, page 29). Competent, substantial evidence supports the finding that ECMO was not experimental in 1986.
While there is conflicting testimony supporting the exceptions, the department has no authority to reweigh the evidence at this level of review. The department is obligated to accept the challenged findings of fact because the record contains competent, substantial evidence supporting those findings.
Section 120.57(1)(b)10, Florida Statutes (1989). The findings rejected in this Order are conclusions of law.
FINDINGS OF FACT
The Department hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order except where inconsistent with the ruling on the exceptions.
CONCLUSIONS OF LAW
The Department hereby adopts and incorporates by reference the conclusions of law set forth in the Recommended Order except where inconsistent with the ruling on the exceptions.
Based upon the foregoing, it is
ADJUDGED, that the department is obligated to pay $65,372.28 to petitioners as reimbursement for medical services rendered to Baby M.
DONE and ORDERED this 10 day of August 1990, in Tallahassee, Florida.
Gregory L. Coler Secretary
Department of Health and Rehabilitative Services
Deputy Secretary for Programs
A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF HRS, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED
Copies furnished to:
Carol Ann Ruebsamen, Esquire CARLTON, FIELDS & et al.
25 West Cedar Street Post Office Box 12426 Pensacola, FL 32582
Peter A. Lewis, Esquire Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Blvd.
Building One, Room 407 Tallahassee, FL 323990?00
P. Michael Ruff Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, FL 323991550
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing was sent to the above-named people by U.S. Mail this 22 day of August, 1990.
R. S Power, Agency Clerk Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407
Tallahassee, Florida 32399-0700 904/488-2381
| Issue Date | Proceedings |
|---|---|
| May 01, 1990 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 15, 1990 | Agency Final Order | |
| May 01, 1990 | Recommended Order | Evidence showed Doctor who made decision in emergency situation to transfer infant to out of state hospial had authority as Emergency Medicine Specialist consultant, Neonatal specialist. |
