STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MEJI, INC., d/b/a 7TH AVENUE ) PHARMACY, )

)

Petitioner, )

)

vs. ) Case No. 03-1195MPI

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case before Larry J. Sartin, an Administrative Law Judge of the Division of Administrative Hearings, on May 27, 2003, in Tallahassee, Florida.

APPEARANCES

For Petitioner: No Appearance

For Respondent: Debora A. Fridie, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Suite 3431 Fort Knox Building III

Mail Station 3

Tallahassee, Florida 32308

STATEMENT OF THE ISSUE

The issue in this case is whether Petitioner must reimburse Respondent for overpayments totaling $2,851.19 which Petitioner received from the Florida Medicaid Program during the period May 24, 1999 through January 26, 2001.

PRELIMINARY STATEMENT

The Respondent, the Agency for Health Care Administration, is responsible for administering the Florida Medicaid Program. Petitioner, Meji, Inc., d/b/a 7th Avenue Pharmacy, is a licensed pharmacy and is enrolled as a Medicaid provider in Florida.

On March 8, 2002, Respondent issued a Final Agency Audit Report, C.I. No. 01-2091-000-3/H/JDJ, demanding that Petitioner reimburse Respondent $40,062.52 in alleged Medicaid overpayments paid to Petitioner during the period May 24, 1999 through January 26, 2001.

In a letter dated March 20, 2002, Petitioner requested a formal administrative hearing to contest Respondent's determination. Included with the request for hearing, Petitioner provided documentation not previously seen by Respondent. Based upon the new documentation, Respondent issued an Amended Final Agency Action Report on March 19, 2003, demanding that Petitioner reimburse Respondent $2,851.19 in alleged Medicaid overpayments.

On April 1, 2003, Respondent filed a Notice with the Division of Administrative Hearings (hereinafter referred to as the "Division") requesting assignment of the matter to an administrative law judge. The case was designated DOAH Case No. 03-1195MPI and was initially assigned to Administrative Law Judge Florence S. Rivas. The case was subsequently transferred to the undersigned.

By Notice of Hearing entered April 11, 2003, the final hearing was scheduled to commence at 9:00 a.m., May 27, 2003, at the offices of the Division located at the DeSoto Building, 1230 Apalachee Parkway, Tallahassee, Florida.

On May 14, 2003, Respondent filed Respondent's Motion for an Order Deeming Request for Admissions Admitted and Motion for an Order Precluding Petitioner from Presenting Exhibits and Witnesses on its Case in Chief. The Motion was filed due to the failure of Petitioner to respond to Respondent's First Request for Admissions, served April 8, 2003. In response to the Motion, Judge Rivas entered an Order to Show Cause informing Petitioner that, if the relief sought in the Motion were granted, it would have the practical effect of disposing of the case in Respondent's favor. Recognizing that Petitioner was represented pro se, Judge Rivas ordered that Petitioner, no later that noon, May 19, 2003, file a written statement explaining why the Motion should not be granted. Judge Rivas

informed Petitioner that, if it failed to respond timely and sufficiently, the Motion would be granted. Finally, Judge Rivas informed Petitioner that the hearing scheduled for May 27 and 28, 2003, would proceed as scheduled. No response has been filed by Petitioner to the Order to Show Cause.

The final hearing of this case commenced as scheduled. At no time during the hearing, which concluded at approximately 9:35 a.m., did Petitioner make an appearance. The hearing, therefore, proceeded without Petitioner's participation.

At the commencement of the hearing, Respondent's Motion for an Order Deeming Request for Admissions Admitted and Motion for an Order Precluding Petitioner from Presenting Exhibits and Witnesses on its Case in Chief was granted. Respondent then presented the testimony of Dana Kenneth Yon and entered exhibits

1 through 42, inclusive.

A Transcript of the final hearing was filed with the Division on June 17, 2003. The parties were, therefore, informed by Notice of Filing of Transcript that proposed recommended orders were to be filed on or before July 7, 2003. Respondent timely filed a proposed recommended order.

Petitioner did not file any post-hearing argument.

FINDINGS OF FACT

1. Respondent, the Agency for Health Care Administration (hereinafter referred to as the "Agency"), is an agency of the State of Florida. The Agency is responsible for administering the Florida Medicaid Program. See Chapter 409, Florida Statutes. Among other responsibilities, the Agency is authorized "to recover overpayments . . . as appropriate . . .

   ." Section 409.913, Florida Statutes.

   
   

2. Petitioner, Meji, Inc., d/b/a 7th Avenue Pharmacy (hereinafter referred to as "Meji"), was, at all times pertinent to this case, a duly authorized Medicaid provider, having entered into a Medicaid Provider Agreement with the Agency. Meji was assigned Medicaid Provider Number 0165076-00.

3. Meji is also a licensed pharmacy in Florida, having been issued license number PH0016158.

4. As a Medicaid provider, Meji is authorized to dispense drugs and supplies to Medicaid recipients, for which Meji is entitled to reimbursement from the Medicaid Program. In return, Meji has agreed to comply with all governing statutes, rules, and policies, including policies set forth in the Florida Medicaid Prescribed Drug Services Coverage Limitations and Reimbursement Handbook, incorporated by reference into Rule 59G- 4.250(2), Florida Administrative Code.

5. On March 20, 2001, an audit was performed of payments from the Medicaid Program to Meji. On January 24, 2002, a Provisional Agency Audit Report was issued finding that Meji had received $40,062.52 in overpayments from the Medicaid Program and offering Meji an opportunity to respond to the Agency's provisional determination.

6. When Meji failed to respond to the Provisional Agency Audit Report, the Agency issued a Final Agency Audit Report informing Meji that the Agency intended to seek reimbursement of the $40,062.52 in overpayments Meji had received for services provided during the period May 24, 1999 through January 26, 2001. The Final Agency Audit Report was issued March 8, 2002.

7. Meji requested a hearing to contest the Agency's determination and provided documentation not previously provided to the Agency.

8. On March 19, 2003, after reviewing the newly provided documentation, the Agency issued an Amended Final Agency Audit Report in which the Agency informed Meji that it had received overpayments of $2,851.19. In response to this notice, Meji requested a formal administrative hearing by letter dated March 20, 2003.

9. The amount of the overpayments which the Agency seeks to recoup in this proceeding was determined by taking a statistically valid random sample of Meji's submitted Medicaid

   claims submitted during the audit period. The amount of the overpayments found in the random sample was then extended to the total of Meji's claims for the audit period based upon generally accepted statistical formulas and methods. By failing to respond to the Agency's Request for Admissions, Meji is deemed to have admitted the validity of the statistical formula utilized by the Agency.

10. The Amended Final Agency Audit Report, along with the supporting work papers, were offered and accepted in evidence in this case. The Amended Final Agency Audit Report, in an attached Pharmacy Audit-Final Report, sets out the manner in which the overpayments were calculated. Those calculations are further described in proposed finding of fact P.(1) through (6) of the Respondent's Proposed Recommended Order and Incorporated Closing Argument. Those findings are hereby accepted and incorporated into this Recommended Order by reference.

11. The Amended Final Agency Audit Report and supporting work papers admitted in evidence in this case show that Meji received overpayments in the amount of $2,851.19. No evidence to the contrary was offered by Meji.

12. The Agency incurred costs during the investigation of this matter. The amount of those costs was not known at the time the final hearing was conducted.

    CONCLUSIONS OF LAW

    
    

13. 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 (2002).

14. At the times material to this matter, the Agency had the authority and duty to recover overpayments made to providers of goods and services to Medicaid recipients. Section 409.913, Florida Statutes.

15. The Agency has the burden of proving, by a preponderance of the evidence, that Meji received overpayments of Medicaid benefits in this case as alleged by the Agency. South Medical Services, Inc. v. Agency for Health Care Administration, 653 So. 2d 440, 441 (Fla. 3d DCA 1995); and Southpointe Pharmacy v. Department of Health and Rehabilitative Services, 596 So. 2d 106, 109 (Fla. 1st DCA 1992); see also Section 120.57(1)(j), Florida Statutes (2002)("Findings of fact shall be based upon a preponderance of the evidence, except in penal or licensure disciplinary proceedings or except as otherwise provided by statute ").

16. Section 409.913(21), Florida Statutes, provides that "[t]he audit report, supported by agency work papers, showing an overpayment to a provider constitutes evidence of the overpayment." The Agency's Amended Final Agency Audit Report

    and work papers were received into evidence and substantiated that Meji received overpayments of $2,851.19. The Agency, therefore, established a prima facie case to support its determination that Meji received Medicaid overpayments of

    $2,851.19 for services provided by Petitioner from May 24, 1999 through January 26, 2001. See IV Concepts, Inc. v. Agency for

    Health Care Administration, DOAH Case No. 02-0017MPI (Recommended Order June 30, 2003; Andrew Justice, d/b/a Mobile Optical v. Agency for Health Care Administration, DOAH Case No. 02-4801MPI (Recommended Order June 2, 2003); and Choices in

    Support and Services, Inc. v. Agency for Health Care Administration, DOAH Case No. 01-1977MPI (Recommended Order March 13, 2003).

17. Meji did not present any evidence to rebut the Agency's prima facie case.

18. Section 409.913(22), Florida Statutes, authorizes the Agency to recover costs associated with the audit and investigation of Medicaid providers:

    (22)(a) In an audit or investigation of a violation committed by a provider which is conducted pursuant to this section, the agency is entitled to recover all investigative, legal, and expert witness costs if the agency's findings were not contested by the provider or, if contested, the agency ultimately prevailed.

    
    

    1. The agency has the burden of documenting the costs, which include

       salaries and employee benefits and out-of- pocket expenses. The amount of costs that may be recovered must be reasonable in relation to the seriousness of the violation and must be set taking into consideration the financial resources, earning ability, and needs of the provider, who has the burden of demonstrating such factors.

       
       

    2. The provider may pay the costs over a period to be determined by the agency if the agency determines that an extreme hardship would result to the provider from immediate full payment. Any default in payment of costs may be collected by any means authorized by law. [Emphasis added].

       
       

19. In the Agency's Proposed Recommended Order, it has been requested that the Division retain jurisdiction "on the issue of adjudicating the Agency's costs until such time as there may be proper notice to the Petitioner of a hearing on that issue." No such authority is provided or contemplated in Section 409.913(22), Florida Statutes. Rather, the Agency, once it has "ultimately prevailed" in this case, may then determine the amount of its costs associated with this matter and assess those costs against Meji. Should Meji dispute the Agency's determination and raise disputed issues of material fact, the matter may then be referred by the Agency to the Division for hearing.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency enter a final order

requiring Meji's to repay the Agency the principal amount of

$2,851.19 plus interest as provided in Section 409.913, Florida Statutes.

DONE AND ENTERED this 15th day of July, 2003, in Tallahassee, Leon County, Florida.

S

LARRY J. SARTIN

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 15th day of July, 2003.

COPIES FURNISHED:

Debora A. Fridie, Esquire Agency for Health Care

Administration

2727 Mahan Drive, Suite 3431 Fort Knox Building III

Mail Station 3

Tallahassee, Florida 32308

Sola Gafaru, President Meji, Inc.

14812 Northwest 7th Avenue Miami, Florida 33168

Rhonda M. Medows, M.D., Secretary Agency for Health Care

Administration

2727 Mahan Drive, Suite 3116 Fort Knox Building III Tallahassee, Florida 32308

Valda Clark Christian, General Counsel Agency for Health Care

Administration

2727 Mahan Drive, Suite 3431 Fort Knox Building III Tallahassee, Florida 32308

Lealand McCharen, Agency Clerk Agency for Health Care

Administration

2727 Mahan Drive, Mail Station 3 Fort Knox Building III 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: 03-001195MPI

Orders for Case No: 03-001195MPI