STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

COLONNADE MEDICAL CENTER, INC., )

)

Petitioner, )

)

vs. ) Case No. 01-1929

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case on August 29, 2001, in Fort Lauderdale, Florida, before

Claude B. Arrington, a duly-designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Richard Serafini, Esquire

Roy R.Harris, Esquire Broad and Cassel

500 East Broward Boulevard, Suite 1130 Fort Lauderdale, Florida 33394

For Respondent: Kelly A. Bennett, Esquire

Anthony Conticello, Esquire Assistant General Counsel

Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308-5403 STATEMENT OF THE ISSUES

Whether the subject supplemental Medicaid payments to Petitioner for services to patients with acquired

immunodeficiency syndrome (AIDS) during the audit period January 1, 1999 through June 20, 2001, constitute overpayments. Whether Respondent has the authority to recoup such overpayments. If such authority is found, whether the doctrine of unjust enrichment should be applied to prevent Respondent's recouping any overpayment under the facts of this proceeding.

PRELIMINARY STATEMENT

Petitioner, a nursing home Medicaid provider, timely challenged Respondent's assertion that it had been overpaid supplemental Medicaid payments (designated "H" Supplements) for eight AIDS patients for the period January 1, 1999, through June 30, 2001 (the audit period). The asserted overpayments in the total amount of $49,965.30 and a demand for repayment thereof, were set forth in Respondent's Final Agency Audit Report (the audit letter) dated March 28, 2001.

A final hearing was convened in Fort Lauderdale, Florida, on August 29, 2001. During opening statements it became apparent that the parties did not dispute the facts that underlie this proceeding. At the final hearing, the parties entered into factual stipulations, which have been accepted by the undersigned, in lieu of proceeding with the final hearing. The factual stipulations are contained in the Joint Pre-Hearing Statement dated August 28, 2001, and in the Joint Stipulation dated August 29, 2001. Petitioner offered the following pre-

lettered exhibits: A-G, I, K, and L. Respondent offered the following pre-numbered exhibits: 1, 2, 13-27, 33, 36-38, and 40-43. Each of these exhibits was admitted into evidence without objection.

A Transcript of the proceedings was filed on September 10, 2001. Each party filed a Proposed Recommended Order, which has been duly considered by the undersigned in the preparation of this Recommended Order.

FINDINGS OF FACT

1. Petitioner operates a duly-licensed nursing home located in Broward County, Florida. At all times pertinent to this proceeding, Respondent was a Medicaid provider with the following Medicaid provider number: 020695400. As a Medicaid provider, Petitioner agreed to comply with all pertinent state and federal laws and regulations. At the times pertinent to this proceeding Petitioner had a valid Medicaid Provider Agreement with Respondent.

2. Respondent is the agency of the State of Florida responsible for oversight of the integrity of the Medicaid program in Florida. The unnumbered opening sentence of Section 409.913, Florida Statutes, provides as follows:

   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.

   
   

3. During the audit period, Petitioner was subject to all of the duly enacted statutes, laws, rules, and policy guidelines that generally govern Medicaid providers. Petitioner was required to follow all the Medicaid Coverage and Limitation Handbooks and all Medicaid Reimbursement Handbooks in effect, including, the Florida Medicaid Provider Reimbursement Handbook, Institutional 021 (the Institutional Provider Handbook), which is incorporated by reference by Respondent's Rule 59G-4.200, Florida Administrative Code.

4. During the audit period, the applicable statutes, laws, rules, and policy guidelines in effect required Petitioner to maintain all "Medicaid-related Records" and information that supported any and all Medicaid invoices or claims that Petitioner made during the audit period.1

5. During the audit period, the applicable statutes, laws, rules, and policy guidelines in effect required Petitioner at Respondent's request to provide Respondent or Respondent's authorized representatives all Medicaid-related Records and other information that supported all the Medicaid-related invoices or claims that Petitioner made during the audit period.2

6. Section 409.913(7), Florida Statutes, provides, in pertinent part, as follows:

   (7) When presenting a claim for payment under the Medicaid program, a provider has an affirmative duty . . . 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. Are provided in accord with applicable provisions of all Medicaid rules, regulations, handbooks, and policies and in accordance with federal, state, and local law.

   2. 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.

   
   

7. Section 409.913(1), Florida Statutes, defines the terms "medical necessity" and "medically necessary" as follows:

   1. "Medical necessity" or "medically necessary" means any goods or services necessary to palliate the effects of a terminal condition, or to prevent, diagnose, correct, cure, alleviate, or preclude deterioration of a condition that threatens life, causes pain or suffering, or results in illness or infirmity, which goods or services are provided in accordance with generally accepted standards of medical practice. For purposes of determining Medicaid reimbursement, the agency is the final arbiter of medical necessity. Determinations of medical necessity must be made by a licensed physician employed by or under contract with the agency and must be based upon information available at the time the goods or services are provided.

      
      

8. Section 409.913(10), Florida Statutes, provides as follows:

   (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.

9. Section 409.913(1)(d), Florida Statutes, defines the term "overpayment" as follows:

   1. "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.

   
   

10. On March 28, 2001, Respondent sent Petitioner the audit letter for the audit period. The audit letter provided, in pertinent part, as follows:

    The Agency for Health Care Administration, Medicaid Program Integrity office has completed a review of your Medicaid claims for dates of service during the period January 1, 1999, through June 30, 2000. A provisional letter was sent to you indicating you were overpaid $49,965.30 for claims that in whole or in part are not covered by Medicaid. We have received no response from you regarding the provisional letter.

    This review and the determination of overpayment were made in accordance with the provisions of Section 409.913, Florida Statutes (F.S.). In determining payment pursuant to Medicaid policy, the Medicaid program utilizes procedure codes,

    descriptions, policies and the limitations and exclusions found in the Medicaid provider handbooks. In applying for Medicaid reimbursement, providers are required to follow the guidelines set forth in the applicable rules and Medicaid fee schedules, as promulgated in the Medicaid policy handbooks and billing bulletins.

    Medicaid cannot pay for services that do not meet these guidelines.

    
    

11. The audit letter thereafter cited the following from Chapter 7 of the Institutional Provider Handbook (Chapter 7) in asserting there had been an overpayment:

    Nursing facilities may receive a supplemental payment for a recipient with AIDS. The supplemental payment must be prior authorized by the Medicaid office before the facility will be reimbursed for it. The facility where the recipient resides must request the prior authorization. The Medicaid office notifies the provider with a letter of approval or denial.

    An approved authorization is not a guarantee that Medicaid will reimburse the supplemental payment. The provider must be enrolled in Medicaid, and the recipient must be eligible on the date of service for a Medicaid program that reimburses for institutional care.3

12. Chapter 7 provides as follows for the effective date of the supplement:

    If the recipient is approved for the increased supplemental payment, the approval letter will state the effective date of the supplemental payment. The effective date of the supplemental payment is determined by the following criteria:

    If the recipient was ICP eligible when admitted to the facility and met the AIDS

    criteria on the admission date, the effective date will be the same as the admission date.

    If an ICP recipient becomes HIV positive while in the facility and meets the AIDS criteria, the effective date will be the date that the Medicaid office determines the clinical criterion was evidenced.

    For recipients registered through SFAN, the effective date will be the effective date of the SFAN registration or ICP eligibility, whichever is later.

    
    

13. Chapter 7 provides that a nursing home may receive "H" Supplement payments for a recipient who has been diagnosed as being positive for the human immunodeficiency virus (HIV), has laboratory confirmation of a reactive screening test for HIV antibodies, and is receiving active treatment for a condition that meets the Center for Disease Control definition of AIDS. A nursing home may also receive "H" Supplement payments for a recipient who is registered with the South Florida AIDS Network (SFAN).

14. Chapter 7 requires that a request for prior authorization contain a letter from the facility requesting the "H" Supplement payment; a copy of the admission cover sheet; a confirming HIV test (Western Blot or IFA)4; and a signed physician letter or statement documenting current treatment for an opportunistic AIDS-related disease, or if the recipient is registered with SFAN, a letter from the facility stating that

    the recipient was admitted to the registry, the date admitted, and the SFAN registry number.

15. During the audit period, Petitioner billed Respondent for "H" Supplement Payments in the total amount of $49,965.30 for eight separate recipients. Prior to the issuance of the audit letter, Petitioner did not submit, make, or deliver any "H" Supplement prior request for any of the eight recipients at issue.

16. Despite the fact that the "H" Supplement payments were not prior authorized, Respondent made those payments to Petitioner.5

17. The parties stipulated that the eight recipients at issue were patients of Petitioner, suffered from AIDS, and received treatment from Petitioner for AIDS. The parties further stipulated that six of the eight recipients suffered from AIDS opportunistic diseases. There is no dispute as to whether the other two recipients suffered from disease, but there was no stipulation that the diseases were AIDS opportunistic diseases.6

18. There is no issue as to the quality of care rendered the eight recipients. Fraud is not at issue in this proceeding.

19. Subsequent to the issuance of the audit letter, the only recipient for which Petitioner has presented a Western Blot confirmatory test is for the recipient identified with the

    initials J.F. and further identified in Petitioner's Exhibit G. Petitioner has not submit a Western Blot or IFA test for the seven other recipients at issue in this proceeding.

20. Petitioner's medical records do not establish that, but for its failure to obtain prior authorization for each recipient, the subject "H" Supplements would have been paid by Respondent.

21. Section 409.913(10), Florida Statutes, provides as follows:

    (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.

    
    

22. Section 409.913(14), Florida Statutes, provides, in pertinent part, as follows:

    (14) The agency may seek any remedy provided by law, including, but not limited to, the remedies provided in subsections (12) and (15) and s. 812.035, if:

    
    

    * * *

    
    

    1. The provider has failed to maintain medical records made at the time of service, or prior to service if prior authorization is required, demonstrating the necessity and appropriateness of the goods or services rendered;

    2. The provider is not in compliance with provisions of Medicaid provider publications that have been adopted by reference as rules in the Florida

    Administrative Code; with provisions of state or federal laws, rules, or regulations; with provisions of the provider agreement between the agency and the provider; or with certifications found on claim forms or on transmittal forms for electronically submitted claims that are submitted by the provider or authorized representative, as such provisions apply to the Medicaid program . . .

    
    

    CONCLUSIONS OF LAW

    
    

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

24. Respondent established that Petitioner's billing for the subject "H" Supplement payments did not comport with clear Medicaid billing requirements. Consequently, the payments at issue constitute "overpayments" as the term overpayment is defined by Section 409.913(1)(d), Florida Statutes.

25. Section 409.913(14), Florida Statutes, should be construed to confer upon the Respondent the authority to demand a repayment of an overpayment. That construction is consistent with the charge contained in the unnumbered opening sentence of Section 409.913 that the agency operate a program to oversee the integrity of the Medicaid program and to recover overpayments as appropriate. Petitioner's assertion that Respondent lacks the authority to demand repayment of an overpayment based on a billing that does not comport with Medicaid billing requirements

    is based on an overly narrow construction of the statute and should be rejected.

26. Petitioner's argument that the equitable doctrine of unjust enrichment should be applied to prevent Respondent from recouping any overpayment should be rejected. Unless created by the constitution, an administrative agency has only such powers as the legislature chooses to confer upon it by statute. It has no common law powers, and it has very limited authority to apply equitable remedies. See S. T. v. School Board of Seminole County, 783 So. 2d 1231 (Fla. 5th DCA 2001) and Mathis v. Fla.

    Dept. of Corr., 726 So. 2d 389 (Fla. 1st DCA 1999). An agency has no inherent authority to apply the doctrine of unjust enrichment to what Petitioner characterizes as a contractual dispute, and the legislature has conferred no such power upon the undersigned by statute. Any equitable defense should be applied against an agency only in rare instances and in compelling circumstances. State Department of Revenue v.

    Anderson, 403 So. 2d 397, 400 (Fla. 1981). The facts of this case do not constitute a rare instance nor do they constitute compelling circumstances.

27. In its Proposed Recommended Order Petitioner asserts, for the first time in this proceeding, that the provisions set forth in Chapter 7 requiring prior authorization for the "H" Supplement constitute invalid rules. That argument has not been

properly raised by the pleading and is rejected. Section 120.56, Florida Statutes, sets forth the process one must follow in challenging agency statements as unpromulgated rules.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order finding Petitioner received overpayments from the Medicaid Program for "H" Supplement payments during the audit period in the amount of $49,965.30. It is further recommended that Petitioner be required to repay those overpayments.

DONE AND ENTERED this 14th day of November, 2001, in Tallahassee, Leon County, Florida.

CLAUDE B. ARRINGTON

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 14th day of November, 2001.

ENDNOTES

1/ Section 409.907(3)(c), Florida Statutes, requires a Medicaid provider agreement to require the following of the provider:

(C) Retain all medical and Medicaid-related records for a period of 5 years to satisfy all necessary inquiries by the agency.

2/ Section 409.907(3)(e), Florida Statutes, requires Petitioner to allow Respondent or its authorized representatives access to the following:

. . . all Medicaid-related information, which may be in the form of records, logs, documents, or computer files, and other information pertaining to services and goods billed to the Medicaid Program, including access to all patient records and other provider information if the provider cannot easily separate records for Medicaid patients from other records.

3/ A Medicaid program that reimburses a provider for institutional care services is referred to by the acronym ICP.

4/ There was no evidence as to the complete name for the test referred to by the acronym IFA.

5/ These are the payments that Respondent seeks to recoup. In addition, Respondent paid standard per diem payments to Petitioner during the audit period for these recipients.

Respondent is not seeking to recoup payment of those standard per diem payments.

6/ In its Proposed Recommended Order, Respondent points out that although there was no dispute that the eight recipients were in fact in a nursing home and in fact received services, that was no evidence that these eight recipients met the criteria for institutional care and were, consequently, ICP eligible. While that observation may be correct, it should also be noted that the regular per diem payments on behalf of these recipients are not at issue and Respondent did not cite the failure to establish ICP eligibility as the basis for its action prior to its Proposed Recommended Order. It is clear that Respondent has demanded repayment of the overpayments because Petitioner failed to obtain prior approval before billing for the "H" Supplement.

7/ Granting the relief requested by Petitioner would have the practical effect of enabling a provider to circumvent clear Medicaid billing requirements . . . Such a result would undermine Respondent's ability to oversee the integrity of the Medicaid program.

COPIES FURNISHED:

Kelly A. Bennett, Esquire Anthony L. Conticello, Esquire

Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308-5403

Roy R. Harris, Jr., Esquire Broad and Cassel

500 East Broward Boulevard 1130 Broward Financial Centre Fort Lauderdale, Florida 33394

Rhonda M. Meadows, Secretary

Agency for Health Care Administration 2727 Mahan Drive

Fort Knox Building, Suite 3116 Tallahassee, Florida 32308

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

Fort Knox Building, Suite 3431 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: 01-001929

Orders for Case No: 01-001929