STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
CONVAL-CARE, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 92-5935F
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
)
FINAL ORDER
Pursuant to written notice a formal hearing was held in this case before Larry J. Sartin, a duly designated Hearing Officer of the Division of Administrative Hearings, on January 22, 1993, in Tallahassee, Florida.
APPEARANCES
For Petitioner: Samantha D. Boge, Esquire
Stowell, Anton & Kraemer Post Office Box 11059 Tallahassee, Florida 32302
For Respondent: Gordon B. Scott, Esquire
Karel Baarslag, Esquire Department of Health and
Rehabilitative Services 1317 Winewood Boulevard
Building 6, Room 234
Tallahassee, Florida 32399-0700 STATEMENT OF THE ISSUES
Whether Petitioner, Conval-Care, Inc., is entitled to attorney's fees and costs pursuant to Section 120.57(1)(b)5, Florida Statutes; and
Whether Petitioner is entitled to attorney's fees and costs pursuant to Section 57.111, Florida Statutes?
PRELIMINARY STATEMENT
On October 5, 1992, the Petitioner, Conval-Care, Inc. (hereinafter referred to as "Conval Care'), filed a Petition for Attorneys Fees and Costs. The Petition contained two counts. In Count I Conval Care sought an award of attorney's fees and costs pursuant to Section 120.57(1)(b)5, Florida Statutes, incurred by Conval Care in an action initiated by the Respondent, the Department of Health and Rehabilitative Services (hereinafter referred to as the "Department").
In Count II of the Petition Conval Care sought an award of attorney's fees and costs pursuant to Section 57.111, Florida Statutes.
On October 20, 1992, the Department filed a Response in Opposition to Petition for Attorney's Fees and Costs. As to Count I, the Department requested that it be struck. As to Count II, the Department suggested that an evidentiary hearing should be conducted on the issue of the Department's liability pursuant to Section 57.111, Florida Statutes, and then, if the Department was determined to be liable, the Department suggested that an evidentiary hearing should be conducted on the issue of the amount of any attorney's fees and costs to be awarded.
On November 30, 1992, a prehearing conference was conducted. Although the undersigned expressed concern over the appropriateness of Count I, it was determined that Conval Care should be given an opportunity to present evidence on whether an award of attorney's fees and costs should be made under Section 120.57(1)(b)5, Florida Statutes. It was also determined that the final hearing of this case would be bifurcated as suggested by the Department. Based upon the conclusions reached in this Final Order, no evidentiary hearing on the amount of attorney's fees incurred by Conval Care will be necessary.
At the final hearing Conval Care presented the testimony of Ellen Williams and Inez Browning. Conval Care also offered nine exhibits. Petitioner's exhibits 1-7 were accepted into evidence. Petitioner's exhibits 8 and 9 were accepted into evidence, but a determination of the relevancy of these exhibits was reserved.
The Department presented the testimony of John Whiddon, Ellen Williams and Michael Morton. The Department also offered two exhibits which were accepted into evidence.
The undersigned was requested to take official recognition of several pertinent federal and state statutes and rules, and the file in Department of Health and Rehabilitative Services v. Conval-Care, Inc., Division of Administrative Hearings' Case No. 91-4020. The requests for official recognition were granted. The statutes and rules recognized are reflected in the transcript of the final hearing of this case.
A transcript of the hearing was filed on February 9, 1993.
The parties have filed proposed final orders (the Department filed a proposed "Recommended Order"), containing proposed findings of fact. A ruling on each proposed finding of fact has been made either directly or indirectly in this Final Order or the proposed finding of fact has been accepted or rejected in the Appendix which is attached hereto.
FINDINGS OF FACT
The Parties.
The Respondent, the Department of Health and Rehabilitative Services, is a state agency charged with the responsibility for administering Florida's Medicaid program pursuant to Chapter 409, Florida Statutes.
The Petitioner, Conval-Care, Inc., is a home health care agency of the State of Florida.
Conval Care was created by Inez Browning in 1983.
Conval Care is a Small Business Party.
Conval Care has never employed twenty-five or more full-time employees.
Conval Care's net worth has never equaled or exceeded $2,000,000.00.
Medicaid Services Provided by Conval Care to Adult Congregate Living Facilities.
In 1988, Conval Care qualified as a provider of medical services reimbursable pursuant to Florida's Medicaid program.
Subsequent to becoming a Florida Medicaid provider, Conval Care began providing home health services to, among others, residents of three adult congregate living facilities (hereinafter referred to as an "ACLF").
Conval Care received Medicaid reimbursement for the services it provided to residents of the three ACLF's it serviced.
Department Concerns About Services Provided to Residents of ACLFs by Home Health Care Agencies.
Prior to May 1, 1991, various employees of the Department discussed various issues concerning the appropriateness of Medicaid reimbursement for services provided by home health care agencies to residents of an ACLF.
At no time relevant to this proceeding did the Department conclude that under no circumstances would it be appropriate to make Medicaid reimbursements for services provided by a home health care agency to residents of an ACLF.
To the extent that the Department had unresolved legal questions concerning the appropriateness of paying Medicaid reimbursements for services provided by a home health care agency to residents of an ACLF, it would not be reasonable for it to take action against Conval Care, or any other home health agency, based upon those unresolved legal questions. The evidence in this case, however, failed to prove that the actions which the Department ultimately took against Conval Care were based upon unresolved legal questions being discussed by the Department.
The Department's Medicaid Program Integrity Office.
The Department's Medicaid Program Integrity office is charged with responsibility within the Department for overseeing the integrity of the Florida Medicaid program. See Section 409.206, Florida Statutes (1989).
The Department's Medicaid Program Integrity office carries out the Department's responsibility for review of the Medicaid program, including fraud investigations.
Rule 10C-7.060(3), Florida Administrative Code, provides the following:
Any suspected criminal violation or fraudulent activity by any provider shall be referred by the department to the Medicaid Fraud Control Unit in the Office of the Auditor General for investigation.
Rule 10C-7.060(5), Florida Administrative Code, provides the following:
(5) The determination that a violation has occurred is a function of the Medicaid Program Integrity Office. The determination shall be based upon investigations completed by that office or relevant information from other offices and agencies.
Based upon Rule 10C-7.060(5), Florida Administrative Code, the Department is charged with the ultimate responsibility for determining if a violation of Medicaid law has occurred. Therefore, it would be unreasonable for the Department to take action against a Medicaid provider based upon the conclusions of any other agency without independent evaluation by the Department.
Rule 10C-7.060(5), Florida Administrative Code, also requires that the Department, in determining whether a violation of Medicaid law has occurred, base its decision on its own investigation or "relevant information from other offices and agencies." The Department is, therefore, required to consider information provided to it by the Medicaid Fraud Control Unit of the Office of the Auditor General.
Rule 10C-7.060(4), Florida Administrative Code, provides the circumstances pursuant to which the Medicaid Program Integrity office may impose administrative sanctions on providers of Medicaid services in Florida. The specific administrative sanctions which may be imposed, and the procedures to be followed, in imposing sanctions are set out in Rule 10C-7.060, Florida Administrative Code. "Guidelines for Administrative Sanctions" are set out in Rule 10C-7.063, Florida Administrative Code.
The Medicaid Fraud Control Unit.
The Medicaid Fraud Control Unit (hereinafter referred to as "Medicaid Fraud"), is a part of the Florida Office of the Auditor General. See Section 409.2664, Florida Statutes (1989)(repealed effective June 5, 1991, Chapter 91- 282, Laws of Florida).
Section 409.2664, Florida Statutes (1989), provided, in pertinent part, the following:
. . . the Auditor General shall:
Investigate the possible criminal violation of any applicable state law
pertaining to fraud in the administration of the Medicaid program, the provision of medical assistance, or the activities of providers of health care under the state Medicaid program.
. . . .
Refer to the Department of Health and Rehabilitative Services all potential noncriminal abusive activities.
Refer to the Department of Health and Rehabilitative Services for collection all instances of overpayment, discovered during the course of investigation, made to any providers of health care under the state Medicaid program.
. . . .
Pursuant to Section 409.2664, Florida Statutes, investigative reports prepared by Medicaid Fraud are routinely referred to the Department's Medicaid Program Integrity office. The Medicaid Program Integrity office routinely relies on investigative reports prepared by Medicaid Fraud.
The Investigation of Conval Care.
Ellen Williams, a medical health care program analyst for the Medicaid Program Integrity office, first became aware of Conval Care in January or February, 1990, while Ms. Williams was reviewing a "Provider Top 100 Report."
A "Provider Top 100 Report" is a report prepared by the Department on a routine basis which lists the top 100 providers of Medicaid services based upon the amount of Medicaid funds a provider is paid.
The Provider Top 100 Report reviewed by Ms. Williams in early 1990 listed Conval Care as the top home health care services' provider for the first time. Ms. Williams had not seen the name Conval Care before on the list. Ms. Williams was curious about why Conval Care had appeared on the list. Ms. Williams decided to look into the matter further.
Ms. Williams subsequently learned that Medicaid Fraud was involved in an investigation of Conval Care. Ms. Williams, therefore, discontinued her investigation of Conval Care. Ms. Williams referred the matter to Medicaid Fraud in March, 1990, as contemplated by Section 409.2664, Florida Statutes, and Rule 10C-7.060(3), Florida Administrative Code.
The May 1, 1991, Investigative Report.
At some time after May 1, 1991, Ms. Williams received an unsigned Investigative Report dated May 1, 1991, from Medicaid Fraud (hereinafter referred to as the "Investigative Report"). Respondent's exhibit 1.
The Investigative Report includes conclusions concerning various possible violations of Medicaid laws which may have been committed by Conval Care. In support of those alleged violations, the Investigative Report also includes fairly substantial factual bases for the violations.
The evidence in this case failed to prove that the facts recited in the Investigative Report, if proved to be true, would not support a finding that Conval Care had committed serious violations of various Medicaid provisions.
In particular, the Investigative Report concludes that Conval Care has served patients, who reside in and out of ACLFs, that were not "homebound" as required by the Medicaid providers' manual. The Investigative Report also concludes that Conval Care provided services which were rendered "while no valid signed physician's authorization was in effect . . . " as required by the Medicaid providers' manual. Further, the Investigative Report concludes that Conval Care provided services which were not "medically necessary". The facts relied upon by Medicaid Fraud to reach these conclusions are set out in the ten page Investigative Report.
The Investigative Report concludes that Conval Care improperly received $591,082.00 from Medicaid for services to individuals (ACLF residents and non-ACLF residents). It also concludes that $241,582.00 of the $591,082.00 were improperly received for services that were rendered while no valid signed physician's authorization was in effect and the remaining $349,500.00 was improperly received for services that were not "medically necessary".
The Department's Reliance on the Investigative Report.
Based upon a review of the Investigative Report, Ms. Williams applied the provisions of Rule 10C-7.063, Florida Administrative Code, to determine the appropriate administrative sanction to be imposed on Conval Care. The weight of the evidence proved that the Department properly applied the provisions of Rule 10C-7.063, Florida Administrative Code.
Based upon Ms. Williams determination of the appropriate administrative sanction to be applied to Conval Care, Ms. Williams prepared a draft of a letter which she recommended the Department send to Conval Care. The draft letter prepared by Ms. Williams and the Investigative Report were reviewed by appropriate officials of the Department. The draft letter was ultimately approved.
Ms. Williams, and the Department's, only basis for the action the Department took against Conval Care was the Investigative Report.
Ms. Williams also relied on an investigation of what appeared to be a similar home health care agency named Underhill Personnel Services (hereinafter referred to as "Underhill"). Underhill, another home health care agency, was providing home health care services to residents of ACLF's. The services being provided by Underhill were similar to the services reported in the Investigative Report. Ms. Williams, however, had no independent basis for concluding what services Conval Care was, or was not, providing to ACLF's except as reported in the Investigative Report.
The Investigative Report was an interim report. The Department was informed in July, 1991, that Medicaid Fraud's investigation of Conval Care was still ongoing. The evidence failed to prove that the conclusions recited in the Investigative Report, however, were of an interim nature or that the Department should have waited to act on the facts related in the Investigative Report.
The Termination Letter.
The draft letter prepared by Ms. Williams and approved by the Department was dated May 20, 1991, was signed by John M. Whiddon as Chief of the Department's Medicaid Program Integrity office and was sent to Conval Care (hereinafter referred to as the "Termination Letter").
The Termination Letter informed Conval Care that its participation in the Medicaid program in Florida was being terminated "for violation of federal and state laws and regulations respecting the Medicaid program, effective on the date of your receipt of this letter, subject to your right of appeal as discussed below."
The Termination Letter also informed Conval Care that the Department was seeking reimbursement of $591,082.00 in Medicaid funds paid to Conval Care which the Department believed were for services that did not constitute "home care" as defined in Section 11.3 of the Medicaid Home Health provider handbook.
The Termination Letter further informed Conval Care of the following:
$349,500.00 (of the $591,092.00) had been paid to Conval Care for services that were not "medically necessary" as required by Rules 10C- 7.044(1)(e) and (i), (5)(a)3 and (14), Florida Administrative Code;
$241,582.00 (of the $591,092.00) had been paid to Conval Care for services that were rendered while no valid signed physician's authorization was in effect in violation of Rules 10C-7.044(1)(e) and (i) and (5)(a)1-2, Florida Administrative Code;
The Department, in addition to terminating Conval Care's participation in the program, was seeking reimbursement of the $591,092.00 overpayment and imposing an administrative fine of $5,000.00; and
No further Medicaid payments would be made to Conval Care.
The information contained in the Termination Letter was taken by Ms. Williams from the Investigative Report.
For some reason which has not been explained in this case by either party, the Department did not inform Conval Care in the Termination Letter that the $591,092.00 reimbursement was also being sought by the Department because the persons who received the services were not "homebound", as concluded in the Investigative Report, even though Ms. Williams agreed with the conclusions of the Investigative Report concerning the fact that the recipients of services were not homebound.
After Conval Care received the Termination Letter, the Department stopped all Medicaid payments to Conval Care. As a result, Conval Care closed within three months after receiving the Termination Letter. The Department should have been aware of this possible consequence.
The weight of the evidence in this case failed to prove that the conclusions reached by the Department concerning possible violations of Medicaid law by Conval Care as set out in the Termination Letter were not reasonably supported, both factually and legally, by the allegations contained in the Investigative Report. If the alleged facts contained in the Investigative Report proved to be true, it cannot be concluded that the acts which the Department concluded Conval Care may have committed were not in fact violations of Medicaid law.
Conval Care's Attempts to Obtain Advice.
Prior to receiving the Termination Letter, but after the investigation of Conval Care had begun, Inez Browning, the President of Conval Care, attempted to discuss the propriety of providing Medicaid services through Conval Care to residents of ACLFs.
Ms. Browning contacted several Department employees, including Ms. Williams, to discuss the matter. The only concern expressed by Department employees to Ms. Browning about the propriety of a home health care agency providing Medicaid services to residents of an ACLF in response to her inquiries involved the unavailability of Medicaid funds to cover such services.
In light of the fact that the Department was aware that there was an ongoing criminal investigation of Conval Care by Medicaid Fraud, the evidence failed to prove that the Department's actions in failing to warn Ms. Inez of any potential violations Conval Care may have been committing was unreasonable.
The Prosecution of the Termination Letter.
After receiving the Termination Letter, Conval Care filed a request for a formal administrative hearing pursuant to Section 120.57(1), Florida Statutes, to contest the proposed actions of the Department expressed in the letter.
Conval Care's request for hearing was filed by the Department with the Division of Administrative Hearings in June, 1991. The matter was designated case number 91-4020 and was assigned to the undersigned.
Between June, 1991, and December, 1991, the parties pursued discovery and began preparations for the formal hearing in case number 91-4020.
On December 18, 1991, the parties requested that case number 91-4020 be continued to give the parties an opportunity to pursue a possible settlement of their dispute.
Case number 91-4020 was continued from December, 1991, until March, 1992. On March, 18, 1992, a Fourth Notice of Hearing was entered rescheduling the final hearing of case number 91-4020 for July 27-31, 1992.
Between March, 1992, and July, 1992, discovery continued in case number 91-4020.
On July 14, 1992, the Department filed a Motion for Leave to Amend Termination Letter and an Amended Termination Letter. In the Amended Termination Letter, the Department, for the first time, attempted to raise the issue of whether certain recipients of care provided by Conval Care were "homebound". The Department also attempted to add three other "counts" which Conval Care had not previously been put on notice of.
The Department's effort to amend the Termination Letter, in light of the fact that it had been over a year since the original Termination Letter had been issued, and the fact that the final hearing of case number 91-4020 was scheduled for the week after the request to amend was filed, was denied.
The Department requested, and was granted, a continuance of the final hearing scheduled to commence July 27, 1992, due to the hospitalization of
counsel for the Department in case number 91-4020. The hearing was rescheduled to commence August 7, 1992.
On August 5, 1992, only two days before the scheduled commencement of the final hearing in case number 91-4020, the Department filed a "Notice of Voluntary Dismissal". After the undersigned informed the Department that it was not in a position to "voluntarily dismiss" case number 91-4020, the Department informed the undersigned that the filing of the Notice of Voluntary Dismissal by the Department was intended as a notice of withdrawal of the Termination Letter by the Department. Therefore, an Order Closing File in case number 91-4020 was entered on August 13, 1992.
The Department's compliance with discovery requests of Conval Care during the pendency of case number 91-4020, was less than adequate. On more than one occasion, it was necessary to order the Department to respond to reasonable discovery requests of Conval Care. While the Department's failure to reasonably respond to discovery requests may suggest a lack of evidence to support the Department's actions, the evidence failed to support a finding that there were not other reasons for the Department's actions.
The evidence also proved that there were indications to the Department during discovery in case number 91-4020 that there could be problems with some of the facts of the Investigative Report which had been relied upon by the Department. Those problems and alleged problems which Conval Care has suggested in Conval Care's proposed final order in this case are not, however, sufficient to prove that the Department should have known that the alleged facts of the Investigative Report it had relied on in issuing its Termination Letter were insufficient to continue to pursue the charges it had made in case number 91- 4020.
The weight of the evidence in this case, including the file in case number 91-4020, failed to prove why the Department chose not to pursue the charges of the Termination Letter. The evidence failed to prove that the Department "knew by [the time it withdrew the Termination Letter] that it couldn't win."
CONCLUSIONS OF LAW
GENERAL.
Jurisdiction.
The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes (1992 Supp.).
Burden of Proof.
The burden of proof in this proceeding was on Conval Care. See Adam Smith Enterprises v. Department of Environmental Regulation, 553 So.2d 1260, (Fla. 1st DCA 1990); and Agrico Chemical Co. v. Department of Environmental Regulation, 365 So.2d 759 (Fla. 1st DCA 1979).
SECTION 120.57(1)(b)5, FLORIDA STATUTES (1992 SUPP.).
General.
Section 120.57(1)(b)5, Florida Statutes (1992 Supp.), provides the following:
5. All pleadings, motions, or other papers filed in the proceeding must be signed by a party, the party's attorney, or the party's qualified representative. The signature of a party, a party's attorney, or a party's qualified representative constitutes a certificate that he has read the pleading, motion, or other paper and that, to the best of his knowledge, information, and belief formed after reasonable inquiry, it is not interposed for any improper purposes, such as to harass or to cause unnecessary delay or for frivolous purpose or needless increase in the cost of litigation. If a pleading, motion, or other paper is signed in violation of these requirements, the hearing officer, upon motion or his own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay the other party or parties the amount of reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney's fee.
Conval Care has alleged that it is entitled to an award of attorney's fees and costs as a result of the filing of the Termination Letter and the Department's persistence in case number 91-4020 in pursuing the allegations of the Termination Letter
Was the Termination Letter Filed or Prosecuted for an Improper Purpose?
Section 120.57(1)(b)5, Florida Statutes, was construed in Mercedes Lighting & Electrical Supply, Inc. v. Department of General Services, 560 So.2d
272 (Fla. 1st DCA 1990). The court, while noting that the standard for an award pursuant to Section 120.57(1)(b)5, Florida Statutes, is similar to the standard of Rule 11 of the Federal Rules of Civil Procedure, concluded that Section 120.57(1)(b)5, Florida Statutes, only requires that a paper or pleading not be interposed for an improper purpose; it does not require that the paper or pleading be "well grounded in fact" or "warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law."
In determining whether a paper has been filed for an improper purpose, the court in Mercedes cautioned that:
courts should not delve into an attorney's or party's subjective intent or into a good faith-bad faith analysis. Instead, if a reasonably clear legal justification can be
shown for the filing of the paper in question, improper purpose cannot be found and sanctions are inappropriate. As an example . . . improper purpose may be manifested by
excessive persistence in pursuing a claim or defense in the face of repeated adverse rulings, or by obdurate resistance out of proportion to the amounts or issues at stake
. . . .
Mercedes, 560 So.2d at 278.
Conval Care has suggested that the Department's Termination Letter was filed for an improper purpose because the Department had no reasonably clear legal justification for the allegations contained in the Termination Letter. Conval Care has questioned both the factual basis and the legal basis for the Department's actions.
The evidence did prove that the Department conducted very little independent investigation of Conval Care prior to filing the Termination Letter. The Department relied almost exclusively on the Investigative Report provided to it by Medicaid Fraud.
Pursuant to Section 409.2664, Florida Statutes (1989), Medicaid Fraud was required to investigate possible criminal violations by Medicaid providers and to refer to the Department "for collection all instances of overpayment, discovered during the course of investigation "
Pursuant to Rule 10C-7.060(3), Florida Administrative Code, the Department is required to refer suspected criminal violations to Medicaid Fraud for investigation.
Pursuant to Rule 10C-7.060(5), Florida Administrative Code, the ultimate determination of whether a violation of Medicaid law has been committed by a provider is to made by the Department. In making such a determination, the Department should exercise great care, especially in a case where the consequences of its decision could put a Medicaid provider out of business, as has occurred in this matter.
Rule 10C-7.060(5), Florida Administrative Code, also specifically authorizes the Department, in deciding that a possible violation of Medicaid law has taken place, to make its determination "based upon investigations completed by [the Department] or relevant information from other offices and agencies." [Emphasis added]. This provision allows the Department to rely upon investigative reports the Department receives from Medicaid Fraud.
Based upon the provisions of Rule 10C-7.060, Florida Administrative Code, and Section 409.2664, Florida Statutes, the Department is authorized to impose sanctions against Medicaid providers based solely on information provided to it by Medicaid Fraud. This does not mean, however, that the Department may blindly rely upon an investigative report submitted by Medicaid Fraud. The Department may not abuse its great power in these matters by taking action on an investigative report that is obviously legally or factually flawed.
While there is a limit to the Department's reliance on an investigative report from Medicaid Fraud, the evidence in this case failed to prove that the Department's reliance on the Investigative Report in this matter was improper. The weight of the evidence simply failed to prove that the conclusions reached by the Department concerning possible violations of Medicaid law by Conval Care as set out in the Termination Letter were not reasonably reached, both factually and legally, as a result of the allegations contained in
the Investigative Report. If the alleged facts contained in the Investigative Report were proved to be true, it cannot be concluded that the violations which the Department concluded Conval Care may have committed were not in fact violations of Medicaid law.
In support of its argument that the Department lacked a legal basis for the Termination Letter, Conval Care presented evidence concerning discussions within the Department about the appropriateness of paying Medicaid reimbursements for services provided by a home health care agency to residents of an ACLF. While it is true that it would not have been reasonable for the Department to take action against Conval Care, or any other home health agency, based upon those unresolved legal questions, the evidence in this case failed to prove that the actions which the Department ultimately took against Conval Care were based upon any unresolved legal questions being discussed by the Department.
Conval Care has also suggested that the Department acted with an improper purpose because the Department evidenced an "excessive persistence in pursuing a claim or defense in the face of repeated adverse rulings, or obdurate resistance out of proportion to the amounts or issues at stake." Mercedes, 560 So.2d at 278. In particular, Conval Care has pointed to indications during discovery in case number 91-4020 that there may have been problems with some of the facts of the Investigative Report which had been relied upon by the Department. The few problems and alleged problems which Conval Care has suggested in its proposed final order in this case are not, however, sufficient to prove that the Department should have known that the alleged facts of the Investigative Report it had relied on in issuing its Termination Letter were insufficient to continue to persue the charges it had made in case number 91- 4020. The weight of the evidence failed to prove why the Department chose not to pursue the charges of the Termination Letter.
In support of its argument concerning the Department's prosecution of the Termination Letter, Conval Care has quoted comments of the undersigned made during a motion hearing in case number 91-4020. See page 14 of Conval Care's proposed final order. Those comments were not made to imply that the Department lacked a factual basis for, or had not diligently pursued preparation for final hearing on, the Department's allegations as set out in the Termination Letter. The undersigned's comments referred to the apparent lack of diligence in reasonably preparing the newly alleged issues the Department attempted to raise in its Amended Termination Letter.
Finally, Conval Care has suggested that the Department's purpose in filing and pursuing its prosecution of the Termination Letter was to "terminate Conval Care from further participation in the Medicaid program as a short cut method of stopping future claims and of giving retroactive effect to its conclusion that home health care services should not be eligible for reimbursement when provided to Medicaid recipients who reside in ACLFs." Page
16 of Conval Care's proposed final order. This allegation ignores the alleged facts contained in the Investigative Report and is not supported by the weight of the evidence.
Timeliness of Conval Care's Request for Attorney's Fees.
Conval Care's request for attorney's fees and costs was not filed until after case number 91-4020 had been filed. No case, however, has been cited by the Department which indicates that Conval Care's petition was not timely filed. Nor does the evidence in this case support such a conclusion.
See Danik, Inc. v. Hartmarx Corp., 875 F.2d 890 (D.C. Cir. 1989); Szabo Foods Service, Inc. v. Canteen Corporation, 823 F.2d 1073 (7th Cir. 1987); Good Samaritan Hospital v. Department of Health and Rehabilitative Services, 582 So.2d 722 (Fla. 4th DCA 1991); and The Corporation of the President of the Church of Jesus Christ of Latter Day Saints v. St. Johns River Water Management District, 13 FALR 1014 (1991).
Lack of an Order Striking the Termination Letter.
The Department has argued that an order striking the Termination Letter is required in order for Conval Care to be entitled to an award pursuant to Section 120.57(1)(b)5, Florida Statutes. No case has been cited by the Department which supports such an argument. The Department's reliance on Mercedes is misplaced.
SECTION 57.111, FLORIDA STATUTES (1992 SUPP.).
General.
Section 57.111(4)(a), Florida Statutes (1992 Supp.), provides: (4)(a) Unless otherwise provided by law, an
award of attorney's fees and costs shall be made to a prevailing small business party in any adjudicatory proceeding or administrative proceeding pursuant to chapter 120 initiated by a state agency, unless the actions of the agency were substantially justified or special circumstances exist which would make the award unjust.
Small Business Party.
A "small business party" is defined in Section 57.111(3)(d), Florida Statutes, in pertinent part, as follows:
. . . .
b. A partnership or corporation, including a professional practice, which has its principal office in this state and has at the time the action is initiated by a state agency not more than 25 full-time employees or a net worth of not more than $2 million; . . . .
The evidence proved that Conval Care is a "small business party".
Conval Care is a "Prevailing Party".
A "prevailing party" is defined by Section 57.111(3)(c), Florida Statutes.
The Department has conceded, and the evidence proved, that Conval Care was the "prevailing party" in case number 91-4020.
The Department's Actions were "Substantially Justified".
A proceeding is considered "substantially justified" pursuant to Section 57.111(3)(e), Florida Statutes, if ". . . it had a reasonable basis in law and fact at the time it was initiated by a state agency."
Having proved that it is a "prevailing party", the burden concerning whether the proceeding was "substantially justified" shifted to the Department. Department of Professional Regulation v. Toledo Realty, Inc., 549 So.2d 715 (Fla. 1st DCA 1989).
It is concluded that the Department was "substantially justified" in filing the Termination Letter for the same reasons that it has been concluded that the Department did not file the Termination Letter for an improper purpose under Section 120.57(1)(b)5, Florida Statutes.
THIRD PARTY PAYMENTS TO CONVAL CARE.
Although not discussed in its proposed final order, the Department suggested during the pendency of this case that Conval Care may be barred from receiving an award of attorney's fees because it received partial payment of the fees it incurred from a third party. The undersigned is not aware of any case, statute or rule which supports such a conclusion.
ORDER
Based upon the foregoing Findings of Fact and Conclusions of Law, it is ORDERED that Conval Care's request for an award of attorney's fees and
costs pursuant to Sections 57.111 and 120.57(1)(b)5, Florida Statutes, is DENIED
and Conval Care's Petition for Attorneys Fees and Costs is DISMISSED.
DONE AND ENTERED this 17th day of March, 1993, in Tallahassee, Florida.
LARRY J. SARTIN
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 17th day of March, 1993.
APPENDIX
The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Final Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.
Conval Care's Proposed Findings of Fact
Accepted in 2-3.
Accepted in 4-5.
Accepted in 6-8.
Accepted in 22 and 24-25.
Accepted in 26 and 38-39.
Although generally correct, see 11. See also 9-10.
Accepted in 10.
Although generally correct, see 11.
Hereby accepted. But see 11. 10-12 See 44-46.
13 Hereby accepted.
14 See 26 and 33-35.
15 See 44-46.
Accepted in 42.
Accepted in 33 and 40.
See 41. But see 38-39.
Accepted in 26.
20-21 Although these proposed findings are correct, Rule 10C- 7.060(5), Florida Administrative Code, does not require that the Department take these steps before relying on an investigative report from Medicaid Fraud.
22-26 Although generally correct, see 57-59.
27 See 20-21.
28 Not supported by the weight of the evidence. The evidence failed to prove what the Department's case in case number 91-4020 was based upon at any time before or after closure of that case. The evidence also failed to prove the extent of the Department's independent factual basis for its action in case number 91-4020.
29-31 See 57-59.
See 56.
Hereby accepted.
The Department's Proposed Findings of Fact
Accepted in 1.
Accepted in 2.
Accepted in 4-5.
Accepted in 12.
Accepted in 13.
Accepted in 19.
Accepted in 14.
Hereby accepted.
See 21.
10 See 15-17.
See 20. But see 16.
Accepted in 18.
Accepted in 22.
Accepted in 23.
Not supported by the weight of the evidence.
Accepted in 25.
Hereby accepted.
Accepted in 26.
Accepted in 33-34.
Hereby accepted.
Hereby accepted.
Accepted in 29.
Accepted in 30.
See 32.
See 31.
See 31.
See 32.
See 32.
COPIES FURNISHED:
Robert L. Powell, Agency Clerk Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
John Slye, Esquire Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
Samantha D. Boge, Esquire Post Office Box 11059 Tallahassee, Florida 32302
Gordon B. Scott Senior Attorneys
Department of Health and Rehabilitative Services
1317 Winewood Boulevard
Building 6, Room 230
Tallahassee, Florida 32399-0700
A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.
| Issue Date | Proceedings |
|---|---|
| Mar. 19, 1993 | CASE CLOSED. Final Order sent out. Hearing held 1/22/93. |
| Feb. 19, 1993 | Petitioner`s Proposed Final Order filed. |
| Feb. 19, 1993 | Respondent`s Proposed Recommended Order filed. |
| Jan. 22, 1993 | CASE STATUS: Hearing Held. |
| Jan. 15, 1993 | (Petitioner) Response to Request to Produce filed. |
| Jan. 08, 1993 | Order Denying Motion for Protective Order and Granting Request for Extension of Time for Discovery sent out. |
| Jan. 06, 1993 | (Respondent) Response in Opposition to Petitioner`s Motion for Protective Order and Request for Extension of Time for Discovery filed. |
| Jan. 06, 1993 | (Respondent) Notice of Taking Deposition filed. |
| Jan. 06, 1993 | (Respondent) Notice of Taking Deposition filed. |
| Dec. 30, 1992 | (Petitioner) Motion for Protective Order filed. |
| Nov. 02, 1992 | Notice of Hearing sent out. (hearing set for 1/22/93; 9:00am; Tallahassee) |
| Nov. 02, 1992 | Notice of Prehearing Conference sent out. (set for 11/30/92; 1:00pm; Tallahassee) |
| Oct. 21, 1992 | (Petitioner) Notice of Filing Affidavit w/Exhibit-A filed. |
| Oct. 20, 1992 | (Respondent) Response in Opposition to Petition for Attorney`s Fees and Costs; Affidavit filed. |
| Oct. 06, 1992 | DOAH Notification Card sent out. |
| Oct. 05, 1992 | Petition for Attorneys Fees and Costs filed. |
| Issue Date | Document | Summary |
|---|---|---|
| Mar. 17, 1993 | DOAH Final Order | Petitioner failed to prove entitlement to attorney's fees and costs from DHRS. |
