vs.
Respondent.
) Case No. 02-4801MPI
A hearing was held pursuant to notice on March 3 and 4, 2003, in Tallahassee, Florida, by Barbara J. Staros, assigned Administrative Law Judge of the Division of Administrative Hearings.
For Petitioner: Paul H. Amundsen, Esquire
For Respondent: Jeffries, H. Duvall, Esquire
Whether Petitioner is liable for overpayment of Medicaid claims for the period of July 1, 1998 through May 31, 2000, as
stated in Respondent's Final Agency Audit dated October 16, 2002.
By Final Agency Audit Report dated October 16, 2002, the Agency for Health Care Administration notified Petitioner, Andrew Justice, that he was liable for overpayment of Medicaid claims in the amount of $82,385.98, for the period from
January 1, 1998, through December 31, 2000.1 Petitioner disputed being liable for reimbursement to Respondent for overpayment of the Medicaid claims and requested a hearing. On December 13, 2002, this matter was referred to the Division of Administrative Hearings.
In a Joint Prehearing Stipulation, the parties stipulated that the $82,385.98 amount had been reduced to $70,470.56 as a result of documentation provided by Petitioner to Respondent. The parties further stipulated that the dispute regarding the alleged overpayment is confined to six Medicaid reimbursement codes as found in the Visual Services Coverage and Limitations
Handbook: V2219, bifocal seg width over 28 millimeters; V2730, Special Base Curve; V2780, oversized lens; V0130, frames, purchasing; V2035, frames, dispensing fee; and V2741, tint, plastic other than rose. However, Petitioner no longer contests the last three codes. Accordingly, the only three codes
remaining in dispute are bifocal seg width over 28 millimeters, special base curve, and oversized lens.
At hearing, Petitioner testified on his own behalf and presented the deposition testimony of Dr. Robert Mauger.
Petitioner offered exhibits lettered A through H. Petitioner's Exhibits lettered A, C, D, F, and G were admitted into evidence. Official recognition was taken of Exhibit lettered B which was Chapter 484, Florida Statutes. Exhibit lettered E was proffered and was rejected. Respondent objected to the admission of Exhibit lettered H, which was the deposition of Dr. Mauger. A ruling was withheld on Respondent's objection. The objection is overruled and Exhibit H is admitted. Respondent presented the testimony of three witnesses: Dr. Michael Walby, Laura Dearborn, and Claire Wendy Cohen.
Respondent's Exhibits lettered C, D, E, J, K, and O were admitted into evidence. Official recognition was taken of Exhibits lettered A and B, which were Section 409.913, Florida Statutes, and relevant rules from the Florida Administrative Code, respectively.
The parties requested more than 10 days in which to file proposed recommended orders. The request was granted.
Respondent filed an unopposed motion for extension of time in which to file proposed recommended orders, which was granted.
2003. The parties timely filed Proposed Recommended Orders which have been considered in the preparation of this
Recommended Order.
The Agency for Health Care Administration (the Agency) is the state agency with Legislative authority to perform Medicaid audits and collect overpayments pursuant to
Section 409.913, Florida Statutes.
Petitioner, Andrew Justice, is an optician licensed by the State of Florida and has operated as an authorized Medicaid provider. He has been issued Medicaid provider number
0866962-00.
During the period July 1, 1998 through May 31, 2000, Petitioner had a valid Medicaid provider agreement with the Agency.
During the audit period, Petitioner provided services to Medicaid recipients, submitted claims for such services, and in turn received compensation from Florida Medicaid for all claims submitted.
Pursuant to a request from the Agency, Petitioner has fully complied with the requirements of Chapter 409, Florida Statutes, and has submitted copies of all records dealing with the recipients who are the subject of this audit.
Facts based upon the evidence of record
The Agency's determination of overpayment was based upon a statistical projection of probable overpayment derived from a random sample of 50 recipients of Petitioner's services and the procedure codes, descriptions, policies, limitations, and exclusions found in the Medicaid provider handbooks. The method of calculation of overpayment is based on the method provided for in Section 409.013(19), Florida Statutes.
The Agency's audit involved a review of a random sample of 50 optical records during the audit period of July 1, 1998 to May 31, 2000. The random sample yielded an alleged overpayment of $977.50. The Agency used a computer program called Qbasic which calculated the amount sought in this proceeding to be
$70,470.56.
As explained by Wendy Cohen, who performed the overpayment calculation for the Agency:
I enter all of the number of claims, the total dollars paid, and the overpayment for each recipient in the sample, and the program automatically calculates all of the numbers that you see on the bottom of the last page from where it says 'total' down through the line that says the total-the overpayment at the 95 percent confidence level. All of that is automatically calculated by the program.
Petitioner does not dispute that the statistical methodology used by the agency is recognized by Section 409.913,
Florida Statutes. However, Petitioner does dispute the manner in which it was applied regarding certain procedure codes.
At all times relevant to this proceeding,
Mr. Justice's practice has consisted virtually exclusively of providing glasses to residents in nursing homes. Nursing home residents typically have ocular conditions which result in a decreased visual acuity. Their visual world is very close.
As a practicing optician, Mr. Justice is not a physician.
The letter notifying Respondent that he was accepted as a Medicaid provider referenced an enclosed handbook which explained how the Medicaid program operates and how to bill Medicaid for services provided. The handbook that was provided to Petitioner is entitled the Visual Services Coverage and
Limitations Handbook.
Three successive versions of the handbook were applicable to and governed Mr. Justice's Medicaid billing practices during the audit period in question. Each of these versions of the Visual Services Coverage and Limitations Handbook [hereinafter "Handbook(s)"] provides that:
The purpose of the Medicaid handbooks is to furnish the Medicaid provider with the policies and procedures needed to receive reimbursement for covered services provided to eligible Florida Medicaid recipients.
The handbooks provide descriptions and instructions on how and when to complete forms, letters or other documentation.
The Handbooks address optician services provided to the population at large and to no particular age group.
The provider agreement between Mr. Justice and the agency specifies:
The provider agrees to comply with all local, state, and federal laws, rules, regulations, licensure laws, Medicaid bulletins, handbooks, and Statements of Policy as they may be amended from time to time.
The May 1997 version of the Handbook under the heading, "Eyeglasses and Lenses" contains a subheading entitled "Documentation," which provides:
Documentation:
The provider must maintain the following documentation in the recipient's medical record:
-the prescription for the eyeglasses;
-documentation for the replacement of eyeglasses, frames or lenses;
-documentation for the medical necessity for polycarbonate lenses.
The January 1999 version of the Handbook contains the above three items under the subheading "Documentation" and adds a provision regarding documentation of required criteria for services provided in a long-term care facility. However, the
parties stipulated that this provision is not part of this controversy. The January 2000 version was unchanged from the 1999 version regarding the subheading "Documentation."
Dr. Michael Walby is an optometric physician and is a consultant for the Agency. He reviewed the 50 recipient records that comprised the random sample used to make the overpayment calculation. In his review of the records, Dr. Walby determined that Mr. Justice had not documented medical necessity for the claims involving oversized lenses, bifocal with a seg width over
28 millimeters, and special base curve.
Oversized Lens
Dr. Walby describes an oversized lens as, "certain prescriptions, certain large eye size dimensions or frame demand a larger blank size to cut out the lens . . . Eye size is the dimension from the temporal rim of the frame to the nasal rim of the frame. . . . It is a calculation; it is not an eye size." It is Dr. Walby's opinion that a provider cannot bill for an oversized lens unless the measurement is 56 millimeters or greater: "We just said if it is 56 or greater, then you can charge for it "
An oversized lens is a reimbursable item under
Code V2780 in all three versions of the Handbook applicable to the audit period. However, a specific standard or definition of oversized lens did not appear until the January 1999 Handbook.
In the January 1999 version, the subheading of "Oversized Lenses" was added under the heading of "Eyeglasses and Lenses" and reads, "[t]he procedure code for oversized lenses may be billed only for lenses 56 mm and greater or a large effective diameter."
Although the date of January 1999 appears at the bottom of the relevant pages, the 1999 version which contained this new standard was sent to Medicaid providers by cover letter from Medicaid dated April 8, 1999. Accordingly, Mr. Justice was not notified until nearly 10 months into the audit period that lenses under 56 millimeters would not be reimbursed as oversized lenses.
Prior to receipt of the 56 millimeter standard for oversized lenses, Mr. Justice used 53 millimeters as the standard for making a claim for oversized lenses. As explained by Mr. Justice, "53 is where I had to make a jump from one lens to another by my lab, and that's where they started charging me extra, and that's what we used." As soon as Mr. Justice received the 56 millimeter standard from Medicaid, Mr. Justice began complying with that standard.
In each instance that Mr. Justice dispensed an oversized lens, he made an individual judgment that it was the appropriate thing to do for the patient in accordance with the
patient's individual needs. It was also consistent with what he would have done for non-Medicaid patients.
The Agency's calculation includes disallowances of claims for oversized lenses for service dates that are prior in time to April 8, 1999. There were no disallowed claims for oversized lenses that post-date the notification to providers of the 56 millimeter standard.
There is no competent evidence in the record that the computerized statistical calculation used by the Agency allowed for or took recognition of the establishment and notification to providers of the 56 millimeter oversized lens standard approximately 10 months into the audit period.
Bifocal Seg Width Over 28 Millimeters
Within the heading "Eyeglasses and Lenses" is the subheading, "Service Requirements for Lenses" which reads in pertinent part: "Bifocals must be flat top 28, which is the standard lens for the bifocals that are available from the Central Optical Laboratory." This requirement remained the same for all three versions of the Handbook that are applicable for this audit period. Bifocals with a seg width over 28 millimeters are not prohibited by Medicaid. Appendix "A" of the Handbooks includes "Code V2219 Bifocal seg width over 28MM." However, according to the Agency's expert, Dr. Walby, medical necessity has to be demonstrated in the patient records if a
provider is to be reimbursed for a wider lens. A wider lens is covered by Medicaid on a case-by-case basis when medical necessity is documented.
Mr. Justice believes that when providing visual services to nursing home residents, it is important to provide a bigger reading window which also provides more light. He has found that the best way to do that is to use flat top 35 millimeter bifocals. Further, many nursing home residents are bedridden and must be examined by Mr. Justice while in their beds. The wider segment accommodates viewing things close to their bed, e.g., items on their bed stand. According to
Dr. Mauger, Petitioner's expert witness, most nursing home residents would benefit from a straight top 35 millimeter bifocal because of their special needs and that standard is consistent with generally accepted professional standards in the optometry profession.
When Mr. Justice made the determination that a nursing home resident needed a 35 millimeter seg width, he made the notation "35" under the column labeled "bifocal". He made no other indication as to why the resident should receive a bifocal with a seg width wider than 28 millimeters.
While the subheading "Documentation" in the Handbooks does not specifically refer to this item, the Handbooks clearly
state that bifocals "must be flat top 28" and that a flat top 28 is the "standard lens."
Despite Mr. Justice's determination that a 35 millimeter bifocal was appropriate for certain residents, his notation of the number 35 under the columns labeled "bifocal" does no more than identify the item and is insufficient.
Mr. Justice asserts that medical documentation regarding medical necessity would be contained in the residents' medical records at the nursing home. These records are not in evidence. While Mr. Justice's argument is well taken that he is not a physician and, therefore, his records are not medical records, it does not remedy the deficiency of documentation to explain the need for an item over what the Handbooks clearly state is standard.
Special Base Curve
A base curve is the front curve of a lens. A special base curve is a reimbursable item under code V2730 in Appendix A of all three applicable Handbooks. According to Dr. Walby, a special base curve is
[T]hat it has to be prescribed for a particular reason . . . special means that it's used when the doctor prescribes a particular set of base curves for a particular reason, like anisometropia, which is an unequal difference between the two eyes. Or another term is anisocoria, where there is an unequal image size.
The Handbooks are silent as to "special base curve," except for the reference in Appendix A of the handbooks as to the reimbursement code. Dr. Walby, however, relies on what is medically necessary:
We only do what is medically necessary. And when you deviate from the standard, you have to document it, preferably in verbiage that an auditor can understand so that we know why you have deviated . . . I believe that it's inherent in medical necessity that you document any deviation from the standard.
Dr. Walby acknowledged, however, that his opinion that documentation showing that a special base curve is medically necessary is implied, as there are no specifics or guidelines as to specific documentation for special base curve.
Mr. Justice recalls receiving a bulletin from the Agency in April 2000 which instructed him that claims for special base curve lenses would no longer be reimbursed by Medicaid. Following receipt of this bulletin, which was near the end of the audit period in question, he stopped billing for the special base curve. While that bulletin is not in evidence, there is reference to it in correspondence from Mr. Justice to the Agency. Moreover, no evidence was presented to rebut his testimony in this regard.
Isolated mistakes
The audit found that in the instance of one resident, Resident 37, plastic frames were dispensed and Medicaid was
billed for metal frames. This was a mistake acknowledged at hearing by Mr. Justice, "[Y]es, I owe that." With respect to the same patient, a claim was billed through a Dr. Schlesinger, which was also a mistake. This happened only during the last 10 or 11 months of the audit period.
With respect to Resident 45, there was another
one-time mistake that involved only one of his glasses tinted, whereas the billing was mistakenly for both lenses.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this case pursuant to Sections 120.569 and 120.57(1), Florida Statutes.
The burden of proof is on Respondent to establish by a preponderance of the evidence that its Final Agency Audit Report should be sustained. South Medical Services, Inc. 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. DCA 1992).
The statutes, rules, and Medicaid Provider Handbooks which were in effect during the period for which the services were provided govern the outcome of the dispute.
Section 409.913, Florida Statutes (1997), reads in pertinent part as follows:
409.913 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:
* * *
"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.
"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.
* * *
(7) When presenting a claim for payment under the Medicaid program, a provider has
an affirmative duty to . . . present a claim that is true and accurate and that is for goods and services that:
* * *
(f) 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.
* * *
When making a determination that an overpayment has occurred, the agency shall prepare and issue an audit report to the provider showing the calculation of overpayments.
The audit report, supported by agency work papers, showing an overpayment to a provider constitutes evidence of the overpayment . . . .2 (Emphasis supplied)
The Visual Services Handbook is incorporated by reference into Rule 59G-4.340(2), Florida Administrative Code, which requires that all visual services practitioners, including opticians, must be in compliance with the provisions of the Handbook.
By introducing the audit report into evidence, the Agency has presented a prima facie case as contemplated by Section 409.913(21), Florida Statutes. However, Petitioner has
presented evidence which rebuts, in part, the overpayment calculations made by the Agency.
While Petitioner does not dispute that the statistical methodology used by the Agency as recognized by Section 409.913, Florida Statutes, Petitioner has demonstrated that the statistical methodology used herein did not take into consideration that some of the documentation requirements were not in effect during the entire audit period.
The Agency relies on the language of Section 409.913(7)(f), Florida Statutes, which requires that the claims be documented by records made at the time the goods and services were provided, demonstrating the medical necessity for the goods and services rendered.
However, implicit in Dr. Walby's testimony regarding all three disputed reimbursement codes is that the Agency is looking for documentation of medical necessity if the requested reimbursement is outside the norm. That is, the Agency did not disallow claims for non-documentation of medical necessity of items that the Agency considers standard, i.e., bifocals with a 28-millimeter seg width.
The Agency has met its burden of proof regarding disallowance of bifocals with a seg width larger than 28 millimeters. While the Handbook gave no guidance as to what documentation was required as contemplated by Section
409.913(7)(f), Florida Statutes, the Handbook clearly stated that a 28-millimeter bifocal was required and was standard.
However, Petitioner established that there was no indication prior to April of 1999 that lenses smaller than 56 millimeters would be disallowed under the reimbursement code for oversized lenses and that there were no such claims filed by Petitioner after that date. Accordingly, the claims and resulting extrapolations for oversized lenses should be removed from the calculation.
Petitioner presented evidence that the Handbooks were silent as to special base curve being considered a "deviation from the standard" or that instructed that documentation of any kind was required. Respondent's expert conceded that it was "implied" and not explicitly set forth in the Handbooks. This is insufficient, particularly when the Agency was not concerned with documentation for medical necessity for standard items submitted for reimbursement. Accordingly, the claims and resulting extrapolations should be removed from the calculation.
However, Petitioner's argument that there were isolated, one-time mistakes which should not have been extrapolated because they were not repeated in the 50 samples, is unpersuasive. He does not dispute these overpayments. It is impossible to know whether or not these mistakes were, indeed, isolated, one-time mistakes.
Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is
That the Agency for Health Care Administration enter a final order sustaining the Final Agency Audit Report in part, recalculating the amount of overpayment as indicated and consistent with this Recommended Order, and requiring Petitioner to repay overpayments in the amount determined by the recalculation.
DONE AND ENTERED this 2nd day of June, 2003, in Tallahassee, Leon County, Florida.
BARBARA J. STAROS
Filed with the Clerk of the Division of Administrative Hearings this 2nd day of June, 2003.
1/ The October 16, 2002, letter contained the incorrect dates for the audit period. The correct dates of the audit period are July 1, 1998 through May 31, 2000.
2/ The statutory language quoted herein remained unchanged during the audit period in question.
Paul H. Amundsen, Esquire Amundsen & Gilroy, P.A.
Jeffries H. Duvall, Esquire
Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3
Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive
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.
