STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PERIPHERAL MEDICAL )

SERVICES, INC., )

)

Petitioner, )

)

vs. ) Case No. 01-1335

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on August 8, 2001, by video teleconference, before Patricia Hart Malono, a duly-designated administrative law judge of the Division of Administrative Hearings. The Petitioner appeared in Miami, Florida, and the Respondent appeared in Tallahassee, Florida.

APPEARANCES

For Petitioner: Marco Burgos, Owner

Peripheral Medical Services, Inc. 760 West 50th Street

Miami, Florida 33140

For Respondent: L. William Porter, II, Esquire

Agency for Health Care Administration 2727 Mahan Drive

Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32080-5403

STATEMENT OF THE ISSUE

Whether the Petitioner must reimburse the Respondent for Medicaid overpayments as set out in the Amended Final Agency Audit Report dated November 13, 2000, and, if so, the amount to be repaid.

PRELIMINARY STATEMENT

In a Final Agency Audit Report dated April 26, 2000, the Agency for Health Care Administration ("Agency") notified Peripheral Medical Services, Inc., ("Peripheral Medical Services") that, after an audit, the Agency had determined that it had received an overpayment of $72,226.32 for medical equipment and services provided to Medicaid recipients. On April 11, 2001, the Agency forwarded the matter to the Division of Administrative Hearings, together with a Motion to Re-Open Case and Set Hearing Date.1 The motion was granted in an order entered April 24, 2001, and the final hearing was duly noticed for August 8 and 9, 2001.

At the hearing, counsel for the Agency made an ore tenus

motion requesting that the Amended Final Agency Audit Report dated November 13, 2000, be substituted for the Final Agency Audit Report dated April 26, 2000. In the amended report, the Agency revised the amount of the alleged Medicaid overpayment down to $49,380.20. The Agency's motion was granted, and the

November 13, 2000, Amended Agency Audit Report was substituted for the April 26, 2000, report.

The Agency presented the testimony of its auditor, Roman Rosario, and Respondent's Exhibits 1 through 8 were offered and received into evidence. Marco Burgos, the owner of Peripheral Medical Services, testified on its behalf, but offered no exhibits into evidence.

The one-volume transcript of the proceedings was filed with the Division of Administrative Hearings on September 14, 2001.

The Agency's Unopposed Motion for Enlargement of Time to File Proposed Recommended Order was granted on September 25, 2001, in an order extending the time for both parties to file proposed findings of facts and conclusions of law until October 4, 2000. The Agency timely filed its proposal; Peripheral Medical Services did not file a proposal.

FINDINGS OF FACT

Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made:

1. The Agency is the state agency responsible for the administration of the Medicaid program in Florida, and, as one of its duties, the Agency is charged with recovering overpayments made to Medicaid providers. Section 409.913, Florida Statutes (2000).

2. At all times material to this proceeding, Peripheral Medical Services provided durable medical equipment and home health services to Medicaid recipients in Florida pursuant to a contract with the Agency, and it was assigned Medicaid provider number 950348000.2

3. The Medicaid Provider Agreement entered into by Peripheral Medical Services provides in pertinent part:

   The Provider agrees to participate in the Florida Medicaid program under the following terms and conditions:

   
   

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   (5) The Medicaid provider shall:

   
   

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   (b) Keep and maintain in a systematic and orderly manner all medical and Medicaid related records as the Agency may require and as it determines necessary; make available for state and federal audits for five years, complete and accurate medical, business, and fiscal records that fully justify and disclose the extent of the goods and services rendered and billings made under the Medicaid program. The provider agrees that only contemporaneously made records of goods and services provided will be admissible in evidence in any proceeding relating to payment for or provision of services for the purpose of supporting any claim submitted to or paid by the Medicaid program.

   
   

4. After the Agency received a routine report from its Medicaid Program Office located in Miami, Florida, the Agency conducted an audit of the claims submitted by Peripheral Medical

   Services for the 27 Medicaid recipients to whom it provided oxygen durable medical equipment and services during the audit period extending from August 5, 1996, to July 6, 1998.

5. Pursuant to certificates of medical necessity, Peripheral Medical Services provided each of the 27 Medicaid recipients with an oxygen concentrator during the audit period, and it submitted Medicaid claims for monthly visits to each of these patients.

6. During the period of time covered by the audit, Peripheral Medical Services received payments for services provided to the 27 Medicaid recipients in an amount totaling

   $76,926.74.

   
   

7. Peripheral Medical Services maintained patient records for these 27 Medicaid recipients, and, during the audit, it provided the Agency with the patient records as documentation to support the claims.

8. At the times material to this proceeding, the DME/Medical Supply Services Coverage and Limitations Handbook

   governing "Oxygen and Oxygen Related Equipment" provided in pertinent part: "Monthly Home Visit Requirements: When the CRTT, RRT or RN conducts a home visit, the following information about the recipient's condition and the condition of the equipment must be documented in the recipient's record:

   . . . the monthly checks of the operation and safety of the equipment."

9. The Agency's inspector compared the patient records to the list of claims submitted by Peripheral Medical Services for which it received payment from Medicaid, and he reached the following conclusions, which were memorialized in the audit work papers and the summary report he prepared:

   1. Peripheral Medical Services made 21 claims for payment for monthly visits to patient M.C., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at 14 of the visits; $3,639.90 of the $6,106.80 paid by Medicaid was not supported by documentation.

   2. Peripheral Medical Services made 12 claims for payment for monthly visits to patient C.M., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at eight of the visits; $2,498.20 of the $3,747.30 paid by Medicaid was not supported by documentation.

   3. Peripheral Medical Services made 14 claims for payment for monthly visits to patient J.P-O., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at eight of

      the visits; $2,498.20 of the $4,340.55 paid by Medicaid was not supported by documentation.

   4. Peripheral Medical Services made 13 claims for payment for monthly visits to patient F.A., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at eight of the visits; $2,361.63 of the $3,915.18 paid by Medicaid was not supported by documentation.

   5. Peripheral Medical Services made 20 claims for payment for monthly visits to patient N.V., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at 12 of the visits; $3,595.18 of the $6,061.98 paid by Medicaid was not supported by documentation.

   6. Peripheral Medical Services made ten claims for payment for monthly visits to patient M.P., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at six of the visits; $1,325.22 of the $2,270.36 paid by Medicaid was not supported by documentation.

   7. Peripheral Medical Services made one claim for payment for a monthly visit to patient M.A., and it provided documentation establishing that a check of the operation and

      safety of the oxygen concentrators was performed at this visit; the payment made by Medicaid was supported by documentation.

   8. Peripheral Medical Services made one claim for payment for a monthly visit to patient M.B., and it provided documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at this visit; the payment made by Medicaid was supported by documentation.

   9. Peripheral Medical Services made 21 claims for payment for monthly visits to patient R.Q., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at 15 of the visits; $4,172.69 of the $6,015.04 paid by Medicaid was not supported by documentation.

   10. Peripheral Medical Services made 19 claims for payment for monthly visits to patient M.P., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at 12 of the visits; $3,975.64 of the $5,833.64 paid by Medicaid was not supported by documentation.

   11. Peripheral Medical Services made 11 claims for payment for monthly visits to patient E.D., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at six of the

       visits; $1,813.19 of the $3,366.74 paid by Medicaid was not supported by documentation.

   12. Peripheral Medical Services made 15 claims for payment for monthly visits to patient I.S., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at ten of the visits; $2,679.60 of the $4,233.15 paid by Medicaid was not supported by documentation.

   13. Peripheral Medical Services made five claims for payment for monthly visits to patient R.G., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at any of the visits; the entire $1,522.25 paid by Medicaid was not supported by documentation.

   14. Peripheral Medical Services made one claim for payment for a monthly visit to patient R.B., and it provided documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at this visit; the payment made by Medicaid was supported by documentation.

   15. Peripheral Medical Services made two claims for payment for monthly visits to patient A.A., but it failed to provide documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at one of the

       visits; $320.10 of the $640.20 paid by Medicaid was not supported by documentation.

   16. Peripheral Medical Services made one claim for payment for a monthly visit to patient L.B., and it provided documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at this visit; the payment made by Medicaid was supported by documentation.

   17. Peripheral Medical Services made 20 claims for payment for monthly visits to patient D.C., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at 14 of the visits; $3,868.24 of the $5,726.24 paid by Medicaid was not supported by documentation.

   18. Peripheral Medical Services made one claim for payment for a monthly visit to patient D.M., and it provided documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at this visit; the payment made by Medicaid was supported by documentation.

   19. Peripheral Medical Services made one claim for payment for a monthly visit to patient K.R., and it provided documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at this visit; the payment made by Medicaid was supported by documentation.

   20. Peripheral Medical Services made 16 claims for payment for monthly visits to patient D.G., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at ten of the visits; $2,954.88 of the $4,812.88 paid by Medicaid was not supported by documentation.

   21. Peripheral Medical Services made 23 claims for payment for monthly visits to patient M.V., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at 15 of the visits; $4,172.69 of the $6,639.59 paid by Medicaid was not supported by documentation.

   22. Peripheral Medical Services made one claim for payment for a monthly visit to patient L.F., and it provided documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at this visit; the payment made by Medicaid was supported by documentation.

   23. Peripheral Medical Services made six claims for payment for monthly visits to patient R.N., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at any of the visits; the entire $1,920.60 paid by Medicaid was not supported by documentation.

   24. Peripheral Medical Services made 22 claims for payment for monthly visits to patient T.P., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at 15 of the visits; $4,172.69 of the $6,335.14 paid by Medicaid was not supported by documentation.

   25. Peripheral Medical Services made nine claims for payment for monthly visits to patient A.V., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at eight of the visits; $1,889.30 of the $2,102.70 paid by Medicaid was not supported by documentation.

   26. Peripheral Medical Services made two claims for payment for monthly visits to patient R.P., and it provided documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at these visits; the payments made by Medicaid were supported by documentation.

       aa. Peripheral Medical Services made one claim for payment for a monthly visit to patient E.R., and it provided documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at this visit; the payment made by Medicaid was supported by documentation.

10. The patient records provided by Peripheral Medical Services do not contain documentation that the required operation and safety checks were performed in the months identified by the Agency in its audit work papers, and the Agency's calculations of the amounts paid by Medicaid that are subject to recoupment are supported by the summary report prepared by the Agency's inspector, as well as by the Agency's summary report.

11. Peripheral Medical Services received payments totalling $49,380.20 from Medicaid on claims not supported by

    documentation.

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and of the parties thereto pursuant to Sections 120.569 and 120.57(1), Florida Statutes (2001).

13. The Agency is seeking to recoup an alleged Medicaid overpayment and has the burden to establish the overpayment by a preponderance of the evidence. South Medical Services v. Agency for Health Care Administration, 653 So. 2d 440 (Fla. 3d DCA 1995); Southpointe Pharmacy v. Department of Health and Rehabilitative Services, 596 So. 2d 106 (Fla. 1st DCA 1992).

14. Section 409.913, Florida Statutes (1998),3 provided in pertinent part:

    Oversight of the integrity of the Medicaid program.--The agency shall operate a program to oversee the activities of Florida Medicaid recipients, and providers and their representatives, to ensure that fraudulent and abusive behavior and neglect of recipients occur to the minimum extent possible, and to recover overpayments and impose sanctions as appropriate.

    
    

    1. For the purposes of this section, the term:

       
       

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       (d) "Overpayment" includes any amount that is not authorized to be paid by the Medicaid program whether paid as a result of inaccurate or improper cost reporting, improper claiming, unacceptable practices, fraud, abuse, or mistake.

       
       

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    2. The agency shall conduct, or cause to be conducted by contract or otherwise, reviews, investigations, analyses, audits, or any combination thereof, to determine possible fraud, abuse, overpayment, or recipient neglect in the Medicaid program and shall report the findings of any overpayments in audit reports as appropriate.

    
    

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    1. When presenting a claim for payment under the Medicaid program, a provider has an affirmative duty to supervise the provision of, and be responsible for, goods and services claimed to have been provided, to supervise and be responsible for preparation and submission of the claim, and

       to present a claim that is true and accurate and that is for goods and services that:

       1. Have actually been furnished to the recipient by the provider prior to submitting the claim.

       2. Are Medicaid-covered goods or services that are medically necessary.

       3. Are of a quality comparable to those furnished to the general public by the provider's peers.

       4. Have not been billed in whole or in part to a recipient or a recipient's responsible party, except for such copayments, coinsurance, or deductibles as are authorized by the agency.

       5. Are provided in accord with applicable provisions of all Medicaid rules, regulations, handbooks, and policies and in accordance with federal, state, and local law.

       6. Are documented by records made at the time the goods or services were provided, demonstrating the medical necessity for the goods or services rendered. Medicaid goods or services are excessive or not medically necessary unless both the medical basis and the specific need for them are fully and properly documented in the recipient's medical record.

          
          

    2. A Medicaid provider shall retain medical, professional, financial, and business records pertaining to services and goods furnished to a Medicaid recipient and billed to Medicaid for a period of 5 years after the date of furnishing such services or goods. The agency may investigate, review, or analyze such records, which must be made available during normal business hours. However, 24-hour notice must be provided if patient treatment would be disrupted. The provider is responsible for furnishing to the agency, and keeping the agency informed of the location of, the provider's Medicaid-related records. The authority of the agency to obtain Medicaid- related records from a provider is neither

    curtailed nor limited during a period of litigation between the agency and the provider.

    
    

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    (10) The agency may require repayment for inappropriate, medically unnecessary, or excessive goods or services from the person furnishing them, the person under whose supervision they were furnished, or the person causing them to be furnished.

    
    

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    (21) The audit report, supported by agency work papers, showing an overpayment to a provider constitutes evidence of the overpayment. . . .

    
    

15. The provisions of the DME/Medical Supply Services Coverage and Limitations Handbook applicable to Peripheral Medical Services require that it document the "monthly checks of the operation and safety of the [oxygen concentrator] equipment" provided to each Medicaid recipient and that it keep this documentation in the recipient's patient records. The Medicaid Provider Agreement under which Peripheral Medical Services received payments for services to Medicaid recipients required it to keep complete records that "fully justify and disclose" the services for which claims were submitted for payment.

16. Based on the findings of fact herein, the Agency has satisfied its burden of proving by a preponderance of the evidence that Peripheral Medical Services received payments from Medicaid in the amount of $49,380.20 for claims that were not

supported by the documentation required under the Medicaid Provider Agreement and the DME/Medical Supply Services Coverage

and Limitations Handbook.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order finding that Peripheral Medical Services, Inc., was overpaid for services provided to Medicaid recipients for the audit period extending from

August 5, 1996, to July 6, 1998, and requiring Peripheral Medical Services, Inc., to repay the Agency for Health Care Administration the principal amount of $49,380.20.

DONE AND ENTERED this 8th day of November, 2001, in Tallahassee, Leon County, Florida.

PATRICIA HART MALONO

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 8th day of November, 2001.

ENDNOTES

1/ This matter was originally transmitted to the Division of Administrative Hearings for assignment of an administrative law judge on July 11, 2000. The matter remained pending until, on December 6, 2000, Peripheral Medical Services filed a Motion to Hold Case in Abeyance. In the motion, Peripheral Medical Services asserted that the parties had settled the matter and that a settlement agreement was being reduced to writing. An order was entered on December 7, 2000, closing the file of the Division of Administrative Hearings and giving the parties leave to request that the file be reopened if the settlement agreement was not finalized.

2/ Peripheral Medical Services was dissolved in February 2001, and is no longer a Florida Medicaid provider.

3/ The relevant portions of Section 409.913 were the same in the 1996 and 1997 editions of the Florida Statutes.

COPIES FURNISHED:

Marco Burgos

Peripheral Medical Services, Inc. 760 West 50th Street

Miami, Florida 33140

L. William Porter, II, Esquire

Agency for Health Care Administration 2727 Mahan Drive

Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308-5403

Diane Grubbs, Agency Clerk

Agency for Health Care Administration 2727 Mahan Drive

Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308

William Roberts, Acting General Counsel Agency for Health Care Administration 2727 Mahan Drive

Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308

Rhonda M. Medows, Secretary

Agency for Health Care Administration 2727 Mahan Drive

Fort Knox Building Three, Suite 3116 Tallahassee, Florida 32308

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this recommended order. Any exceptions to this recommended order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 01-001335

Orders for Case No: 01-001335