STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

OUR LADY HEALTH CARE SERVICES, )

)

Petitioner, )

)

vs. ) CASE NOS. 92-1419

) 92-2280

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER OF DISMISSAL

Pursuant to notice, a formal hearing was conducted in these consolidated cases on June 8, 1992, in Tallahassee, Florida, before Stuart M. Lerner, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Dr. Imo J. Akpaeti

561 N.E. 79th Street Suite 233

Miami, Florida 33138

For Respondent: Gordon B. Scott, Esquire

Department of Health and Rehabilitative Services

1317 Winewood Boulevard Building 6, Room 234A Tallahassee, Florida 32399-0700

STATEMENT OF THE ISSUES

1. Whether the petitions for formal administrative hearing filed by Petitioner in these consolidated cases should be dismissed as contended by Respondent?

   
   

2. If not, whether Petitioner should be granted the relief sought in these petitions?

PRELIMINARY STATEMENT

On February 17, 1992, Petitioner, a Medicaid provider, filed a petition for a formal administrative hearing with the Department of Health and Rehabilitative Services (Department) alleging that, as a result of the Department's wrongful conduct in connection with the handling and processing of Petitioner's claims for reimbursement, Petitioner was entitled to receive from the Department an award of "damages in excess of $10,000.00, exclusive of interest and costs."

The petition was referred to the Division of Administrative Hearing on March 3, 1992. It was docketed as DOAH Case No. 92-1419.

On March 19, 1992, after receiving written notification that, "[i]n accordance with 42 CFR 455.23, the Department [was] withholding payments for Medicaid claims submitted by [Petitioner]," Petitioner filed a petition with the Department requesting a formal administrative hearing on the matter. This second petition was also referred to the Division of Administrative Hearings.

It was docketed as DOAH Case No. 92-2280. At the request of the parties Case Nos. 92-1419 and 92-2280 were consolidated for purposes of hearing by order issued by the Hearing Officer on May 4, 1992.

On June 4, 1992, the Department filed a Suggestion of Mootness/Motion to Dismiss in Case No. 92-2280. Argument on the motion was heard at the outset of the final hearing held on June 8, 1992. 1/ Immediately thereafter the Department made an ore tenus motion requesting that the Hearing Officer enter a recommended order of dismissal in Case No. 92-1419 on the ground that Petitioner was seeking relief "in the wrong forum." Argument was then heard on this motion.

The Hearing Officer reserved ruling on both motions and gave the parties an opportunity to present evidence on the factual issues raised by the petitions.

A total of five witnesses testified at the hearing: Dr. Imo J. Akpaeti, Petitioner's representative; John M. Whiddon, Chief of the Department's Medicaid Program Integrity Unit (Unit); Ellen Williams, one of Whiddon's subordinates; Sherry Lange, a former Unit employee; and William M. Massey, a quality control supervisor with Consultec. In addition to the testimony of these witnesses, a total of 17 exhibits were offered and received into evidence.

At the conclusion of the evidentiary portion of the final hearing, the Hearing Officer advised the parties on the record that their post-hearing submittals had to be filed no later than 15 days following the Hearing Officer's receipt of the transcript of the hearing. The Hearing Officer received the hearing transcript on July 2, 1992. Petitioner and Respondent filed proposed recommended orders on July 9, 1992, and July 15, 1992, respectively. The proposed findings of fact set forth in the parties' post-hearing submittals have been carefully considered and are specifically addressed in the Appendix to this Recommended Order of Dismissal.

FINDINGS OF FACT

Based upon the record evidence and the factual stipulations entered into by the parties, the following Findings of Fact are made:

1. Petitioner is a Florida Medicaid provider. Its provider number is 027856400. Paragraph 8 of the provider agreement that it entered into with the Department provides that it and "the Department agree to abide by the Florida Administrative Code, Florida Statutes, policies, procedures, manuals of the Florida Medicaid Program and Federal laws and regulations."

   
   

2. The Department is the state agency that administers the Florida Medicaid program.

   
   

3. The Department's Medicaid Program Integrity Unit audits and investigates claims for reimbursement submitted by Florida Medicaid providers.

   
   

4. John M. Whiddon is Chief of the Unit.

   
   

5. Ellen Williams is one of his subordinates.

6. In November, 1991, Whiddon received a letter from the Director of the Auditor General's Fraud Control Unit. The body of the letter read as follows:

   
   

   The Florida Medicaid Fraud Control Unit is currently in the process of conducting a criminal investigation of [Petitioner]. Our investigation has established that there is a basis for criminal prosecution for the billing of services not rendered and for providing treatment that was not prescribed (there were no treatment plans).

   
   

   As of today's date the provider's YTD earnings are in excess of $444,000. I believe that a review of the claims submitted the last 90-120 days will indicate a high volume of the claims being false and that you may want to proceed administratively to stop the improper claims.

   
   

7. Shortly after receiving this letter, Whiddon ordered that each of Petitioner's claims be subjected to prepayment review.

   
   

8. On February 17, 1992, Petitioner filed with the Department his petition requesting an award of "damages in excess of $10,000.00."

   
   

9. The petition contains four counts.

   
   

10. Count I of the petition alleges that "[i]n refusing to reimburse [Petitioner] for services rendered, [the Department] has violated Section 409.266, et seq., Fla. Stat."

    
    

11. Count II of the petition alleges that "[i]n refusing to reimburse [Petitioner] for services rendered and failing to notify [Petitioner] of [the Department's] intent to withhold any payment due [Petitioner], [the Department] has violated Rule 10C-7.060, et seq., Fla. [Admin. Code]."

    
    

12. Count III of the petition alleges that "[b]y withholding monies due and owing to [Petitioner] for services rendered without prior notice to [Petitioner], in violation of its own rules and regulations, and failing to provide for any procedure for a post-deprivation hearing, [the Department] violated [Petitioner's] due process rights."

    
    

13. Count IV of the petition alleges that "[the Department] has breached its agreement to reimburse [Petitioner] for services rendered."

    
    

14. Each of the foregoing counts contained the following prayer for relief:

    
    

    WHEREFORE, Our Lady requests this Court enter judgment against HRS for compensatory damages, attorneys' fees, costs and interest and such other relief as the Court deems just and proper.

15. On March 7, 1992, Petitioner received a letter from Whiddon, dated January 28, 1992. The body of the letter read in part as follows:

    
    

    In accordance with 42 CFR 455.23, the Department of Health and Rehabilitative Services is withholding payments for Medicaid claims submitted by Our Lady Health Care Services.

    
    

    Based on our review of a sample of your home health records for the period February 1, 1991-November 30, 1991, we find evidence of willful misrepresentation on your part. Your home health records revealed that:

    
    

    1. You billed for services for which there was not a valid treatment plan, and

    2. You billed for nursing and aide services that were not documented as having been provided.

       
       

       As stated in 42 CFR 455.23, this action is temporary and will not continue after:

       
       

       1. the department determines that there is insufficient evidence of willful misrepresentation by the provider; or

       2. legal proceedings related to the provider's alleged willful misrepresentation are completed.

       
       

       In accordance with 42 CFR 455.23, you have the right to submit written evidence for consideration by the department. If you have such evidence, please send it to Ms. Ellen D. Williams, 2002 Old St. Augustine Road, Suite B-10, Tallahassee, Florida 32301.

       
       

       Pursuant to Section 120.57, Florida Statutes (F.S.) and Rule Section 10- 2.056, Florida Administrative Code (F.A.C.) you may request either a formal or informal hearing on the department's action.

       
       

       Your request for such hearing must be received by the department within 30 days of the date you received this letter. A request for informal hearing must be in writing and a request for formal hearing must be in the form of a petition in compliance with Rule Section

       28-5.201, F.A.C. Either request must be substantive and state clearly the specific actions to which you object and why you object to them. . . .

       
       

       The purpose of either a formal or informal hearing is to determine

       whether the action taken in this letter is within the authority of the Department

       of Health and Rehabilitative Services and in accordance with the department's applicable rules and policies. . . .

       
       

       If a hearing request is not received within 30 days from the date of receipt of this letter, the right to such hearing is waived.

       
       

16. On March 19, 1992, Petitioner filed a petition with the Department requesting a formal hearing on the matter.

    
    

17. On June 4, 1992, Whiddon sent Petitioner a letter. The body of the letter read as follows:

    
    

    Please be advised that this office has concluded its investigation of Our Lady Health Services, pursuant to 42 CFR 455.23.

    
    

    Based upon this investigation, your claims are now pended for medical review pursuant to Section 409.913(2), Florida Statutes.

    
    

    Please forward copies of all supporting documentation for those claims which are now in pend status. Attached hereto are the claims which are the subject of this review. The supporting documentation must be received by this office within

    30 days of receipt of this letter.

    
    

    If you have any questions, please contact Ms. Ellen Williams at (904) 488- 3588.

    
    

18. As of June 8, 1992, the date of the final hearing in these cases, the Department had not made any official determination regarding overpayments made to Petitioner, nor had it decided to pay or deny the pended claims. These matters were still under review and investigation.

    
    

    CONCLUSIONS OF LAW

    
    

    Case No. 92-1419

    
    

19. Administrative bodies like the Department and the Division of Administrative Hearings are "mere creatures of statute." As such, their

    "powers duties and authority are those and only those that are conferred expressly or impliedly by statute of the State." City of Cape Coral v. GAC Utilities, Inc. of Florida, 281 So.2d 493, 495-96 (Fla. 1973).

    
    

20. There is no State statute authorizing a Florida administrative body to award the "damages" and other relief sought by Petitioner in its petition filed in Case No. 92-1419. In the absence of such statutory authority, the petition must be dismissed on the ground that the relief sought therein is unavailable in an administrative forum. 2/ See Laborers' International Union of North America, Local 478 v. Burroughs, 541 So.2d 1160, 1161-62 (Fla. 1989)("[i]n order to determine the propriety of the various damages awarded [by the Metropolitan Dade County Fair Housing and Appeals Board] in this case, it is necessary to consider whether the ordinance [creating this local administrative board] authorized such an award and, if so, whether it was of the kind constitutionally authorized"); Broward County v. LaRosa, 505 So.2d 422, 423-24 (Fla. 1987)(administrative agency may not constitutionally be authorized to award unliquidated common law damages; such award is "purely judicial function"); Canney v. Board of Public Instruction of Alachua County, 278 So.2d 260, 262 (Fla. 1973)("a]s a general rule administrative agencies have no general judicial powers").

    
    

    Case No. 92-2280

    
    

21. The agency action which is the subject of the petition filed in Case No. 92-2280 has been rescinded. Accordingly, Petitioner's challenge to such action is moot and therefore should be dismissed. See Extra Health Care Services v. Department of Health and Rehabilitative Services, No. 92-34PH (Florida Department of Health and Rehabilitative Services July 21, 1992).

RECOMMENDATION

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

RECOMMENDED that the Department of Health and Rehabilitative Services enter a final order dismissing the petitions filed by Petitioner in these consolidated cases.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 4 day of August, 1992.

STUART M. LERNER

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 of Administrative Hearings this 4 day August, 1992.

ENDNOTES

1/ Petitioner also submitted a written response to this motion. It was was filed on June 10, 1992, after the conclusion of the hearing.

2/ While a Medicaid provider may administratively challenge a determination of overpayment or a decision to deny a claim, the Department, as of the date of the final hearing in these cases, had made no such determination or decision with respect to Medicaid payments made to, or sought by, Petitioner. It was still in the process of reviewing and investigating these matters and therefore was not required to afford Petitioner the opportunity to have a formal hearing on these subjects. See Section 120.57(4), Fla. Stat.)("[t]his section does not apply to agency investigations preliminary to agency action"); Commission on Human Relations v. Bentley, 422 So.2d 964, 965-66 (Fla. 1st DCA 1982)(Section 120.57 not applicable to proceedings relating to petition to redetermine executive director's finding of no reasonable cause).

3/ The document referenced in this proposed finding was neither offered nor received into evidence at hearing.

4/ The document referenced in these proposed findings was neither offered nor received into evidence at hearing.

5/ Petitioner's proposed recommended order contains two findings of fact (f).

6/ The documents referenced in this proposed finding were neither offered nor received into evidence at hearing.

APPENDIX TO RECOMMENDED ORDER IN CASE NOS. 92-1419 and 92-2280

The following are the Hearing Officer's specific rulings on what are labelled as "findings of fact" in the parties' proposed recommended orders:

Petitioner's Proposed Findings of Fact

1. First, second and third sentences: Rejected as findings of fact because they are more in the nature of legal arguments than factual findings; Fourth sentence: Rejected because it is not supported by competent substantial record evidence. 3/

   
   

2. First sentence: Rejected as a finding of fact because it is more in the nature of a summary of the legal argument advanced by Petitioner's representative at hearing than a factual finding; Second and third sentences: Rejected because they are not supported by competent substantial record evidence. 4/ Fourth sentence: Rejected as a finding of fact because it is more in the nature of a statement of law than a factual finding; Fifth through ninth sentences: Rejected as findings of fact because they are more in the nature of legal arguments than factual findings; Tenth and eleventh sentences: Rejected because they are irrelevant and immaterial to the dispositive issues in these cases.

   
   

3. First sentence: Rejected as a finding of fact because it is more in the nature of a summary of the legal argument advanced by Petitioner's representative at hearing than a factual finding; Second sentence: Rejected because the referenced letter does not indicate "the amount of money HRS is withholding from Our Lady;" Third sentence: Accepted and incorporated in

   substance, although not necessarily repeated verbatim, in this Recommended Order; Fourth and fifth sentences: Rejected because they are irrelevant and immaterial to the dispositive issues in these cases; Sixth sentence: Rejected because it is more in the nature of argument regarding the weight to be given evidence adduced at hearing than a finding of fact.

   
   

4. Rejected because it is more in the nature of argument regarding the weight to be given evidence adduced at hearing than a finding of fact.

1. Rejected as a finding of fact because it is more in the nature of legal argument than a factual finding.

   
   

2. Second and third sentences: Accepted and incorporated in substance in the Preliminary Statement of this Recommended Order; Remaining sentences: Rejected as findings of fact because they are more in the nature of legal arguments than factual findings

(f). 5/ First and fifth sentences: Rejected as findings of fact because they are more in the nature of legal arguments than factual findings; Remaining sentences: Rejected because they are not supported by competent substantial record evidence. 6/

The Department's Proposed Findings of Fact

1-8. Accepted and incorporated in substance.

9. Rejected because it would add only unnecessary detail to the factual findings made by the Hearing Officer.

10-12. Accepted and incorporated in substance.

Copies furnished:

Dr. Imo J. Akpaeti

561 N.E. 79th Street Suite 233

Miami, Florida 33138

Gordon B. Scott, Esquire Department of Health and

Rehabilitative Services 1317 Winewood Boulevard Building 6, Room 234A

Tallahassee, Florida 32399-0700

R.S. Power, Agency Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard Building One, Suite 407

Tallahassee, Florida 32399-0700

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS: ALL PARTIES HAVE THE RIGHT TO SUBMIT WRITTEN EXCEPTIONS TO THIS RECOMMENDED ORDER. ALL AGENCIES ALLOW EACH PARTY AT LEAST 10 DAYS IN WHICH TO SUBMIT WRITTEN EXCEPTIONS. SOME AGENCIES ALLOW A LARGER PERIOD OF TIME WITHIN WHICH TO SUBMIT WRITTEN EXCEPTIONS. YOU SHOULD CONTACT THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THESE CASES CONCERNING AGENCY RULES ON THE DEADLINE FOR FILING EXCEPTIONS TO THIS RECOMMENDED ORDER. ANY EXCEPTIONS TO THIS RECOMMENDED ORDER SHOULD BE FILED WITH THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THESE CASES.

Docket for Case No: 92-001419

Orders for Case No: 92-001419