STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
THE CHILDREN'S OFFICE, INC.,
Petitioner,
vs.
AGENCY FOR HEALTH CARE ADMINISTRATION,
Respondent.
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) Case No. 05-0807MPI
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RECOMMENDED ORDER
This case came before Administrative Law Judge John G. Van Laningham for final hearing by video teleconference on
September 15 and 16, 2005, at sites in Tallahassee and West Palm Beach, Florida.
APPEARANCES
For Petitioner: Joy A. Bartmon, Esquire
The Law Offices of Bartmon & Bartmon, P.A. 1515 North Federal Highway, Suite 300
Boca Raton, Florida 33432
For Respondent: Jeffries H. Duvall, Esquire
Agency for Health Care Administration Fort Knox Building III, Mail Station 3 2727 Mahan Drive
Tallahassee, Florida 32308
STATEMENT OF THE ISSUE
The issue for determination is whether Petitioner must reimburse Respondent an amount up to $1,048,242.62, which sum
Petitioner received from the Florida Medicaid Program in payment of claims arising from Petitioner's treating of pediatric patients between October 28, 2000 and October 25, 2002.
Respondent alleges that the amount in controversy represents an overpayment arising from Petitioner's submission of claims that were not covered by Medicaid, in whole or in part.
PRELIMINARY STATEMENT
Respondent Agency for Health Care Administration is the agency responsible for administering the Florida Medicaid Program. Petitioner The Children's Office, Inc. is a Medicaid provider.
After auditing Petitioner's claims-payment history and selected medical records, Respondent issued a Final Agency Audit Report on November 30, 2004, wherein it alleged that Petitioner had been overpaid $1,048,242.62 for Medicaid claims arising from Petitioner's treating of pediatric patients. By letter dated December 14, 2004, Petitioner requested an administrative hearing on the overpayment assessment. Later, on February 16, 2005, Petitioner submitted a more detailed Petition for Hearing, which latter pleading was referred to the Division of Administrative Hearings on March 3, 2005.
At the final hearing, which took place as scheduled on September 15 and 16, 2005, with both parties present, Respondent presented three witnesses, namely its employees Eva Marie
Shiver-Kiger, R.N.; and Theresa Mock, together with Larry Deeb, M.D., who testified (by deposition) as an expert. Respondent also offered 15 exhibits, identified as Respondent's Exhibits 1 through 12, 13-A, 13-B, and 14, which were admitted into evidence. Included in these exhibits were the medical records for 30 of Petitioner's patients.
Petitioner called three witnesses: Beverly Armstrong, A.R.N.P.; Barbara Chamberlain, M.D.; and Francis R. Colavecchio. In addition, Petitioner tendered exhibits numbered 1 through 6, and these were received into evidence.
The undersigned agreed to take official recognition of all Florida Statutes, Florida Administrative Code Rules, and Medicaid handbooks asserted to be relevant.
The final hearing transcript comprises four volumes, which were filed on September 30, 2005. The parties timely filed proposed recommended orders ahead of the established deadline, which (after an extension) was December 5, 2005. These papers were carefully considered in the preparation of this Recommended Order.
Unless otherwise indicated, citations to the Florida Statutes refer to the 2005 Florida Statutes.
FINDINGS OF FACT
Respondent Agency for Health Care Administration ("AHCA" or the "Agency") is the state agency responsible for administering the Florida Medicaid Program ("Medicaid").
Petitioner The Children's Office, Inc. ("TCO") was, at all relevant times, a Medicaid provider authorized to receive reimbursement for covered services rendered to Medicaid beneficiaries. From time to time, therefore, TCO had entered into various written contracts with the Agency, which will be referred to collectively as the "Provider Agreement."
Exercising its statutory authority to oversee the integrity of Medicaid, the Agency conducted a review or audit of TCO's medical records to verify that claims paid by Medicaid during the period from October 28, 2000 to October 25, 2002 (the "Audit Period") had not exceeded authorized amounts.
During the Audit Period, TCO had submitted 30,193 claims for services rendered to 3,148 patients (or recipients), on which Medicaid had paid a total of $1,593,881.86. Rather than examine the records of all 3,148 recipients served, the Agency selected a sample of 30 patients, whose records were reviewed first by a nurse consultant, and then by a physician "peer reviewer."
TCO had submitted 260 claims during the Audit Period in connection with the 30 patients in the sample population.
Medicaid had paid a total of $13,582.78 on these claims. The Agency's reviewers determined that, for various reasons, TCO had received a total of $9,740.10 in reimbursement of claims in the sample for services not covered by Medicaid, in whole or in part.
Having discovered this "empirical overpayment" of
$9,740.10, the Agency employed a statistical formula to ascertain the "probable total overpayment" that TCO had received from Medicaid in connection with the 30,193 claims presented during the Audit Period.1 (TCO does not dispute the methodology that AHCA used in determining the probable total overpayment based on the empirical overpayment associated with the sample population. The parties agreed at hearing that if the undersigned were to find that the empirical overpayment should be adjusted, then the Agency——not the undersigned——would recalculate the probable total overpayment using the same statistical formula.) The statistical analysis revealed a probable total overpayment of $1,048,242.62. This is the amount that AHCA seeks to recoup from TCO.
TCO's resistance to the Agency's proposed action proceeds along two main fronts. One involves systemic or global challenges to the audit as a whole, the aim being to land a knockout blow that would preclude that Agency from recouping any amount. The other entails fact-specific disputes about the
reimbursement of individual claims in the sample, the goal being to reduce the empirical overpayment——and thereby reduce the probable total overpayment.2
The Systemic Challenges
TCO's systemic challenges to the audit are largely, if not exclusively, legal in nature. Indeed, the relevant facts are not in dispute. The factual bases (including the pertinent statutory and regulatory language) for TCO's arguments are set forth below.
1.
Florida Administrative Code Rule 59G-1.010(22) provides as follows:
(22) "Audit" means:
an examination of "records for audit" supporting amounts reported in the annual cost report or in order to determine the correctness and propriety of the report; or
an analysis of "records for audit" supporting a provider's claim activity for a recipient's services during a year or less of claims activity in order to determine whether Medicaid payments are or were due and the amounts thereof, with claim activity for each separate year constituting a separate audit.
The term "audit" also comprehends discussions and interviews related to said examination or analysis. Also see "records for audit."[3]
(Emphasis added.) TCO asserts that the foregoing definition of the term "audit" limits AHCA to reviewing periods of no greater
than one year at a time, per provider, when investigating possible fraud, abuse, or overpayment as part of its Medicaid oversight responsibility. Because the Audit Period is approximately two years, TCO argues that the audit should be deemed void.4
2.
Section 409.9131(5)(a), Florida Statutes, requires that the Agency, in making a determination of overpayment to a physician, must, among other things, "make every effort to consider the physician's patient case mix, including, but not limited to, patient age and whether individual patients are clients of the Children's Medical Services Network." Many of TCO's patients were clients of the Children's Medical Services Network ("CMS"), a fact that, TCO contends, the Agency's reviewers failed adequately to take into account.
Though the evidence on this issue is limited, the undersigned agrees with TCO——and finds——that, in general, AHCA's reviewers placed little weight on whether a particular patient participated in CMS. The Agency did, however, consider TCO's overall "case mix" and factors relevant thereto. The undersigned determines, as a matter of fact, that the Agency put forth a reasonable effort under the circumstances to "consider [TCO's] patient case mix" in accordance with the statute. The undersigned further determines that, in any event, "case mix"
considerations are not dispositive of the disputed reimbursement issues at hand.
3.
Section 409.913(5), Florida Statutes, provides that all Medicaid providers are
subject to having goods and services that are paid for by the Medicaid program reviewed by an appropriate peer-review organization designated by the agency. The written findings of the applicable peer- review organization are admissible in any court or administrative proceeding as evidence of medical necessity or the lack thereof.
(Emphasis added.) Section 409.9131(5)(b), Florida Statutes, adds that "when the agency's preliminary analysis indicates that an evaluation of the medical necessity, appropriateness, and quality of care needs to be undertaken to determine a potential overpayment" to a physician, the Agency must refer the claims at issue for "peer review."
The term "peer review" is defined, for purposes of Section 409.9131, as follows:
"Peer review" means an evaluation of the professional practices of a Medicaid physician provider by a peer or peers in order to assess the medical necessity, appropriateness, and quality of care provided, as such care is compared to that customarily furnished by the physician's peers and to recognized health care standards, and, in cases involving determination of medical necessity, to
determine whether the documentation in the physician's records is adequate.
§ 409.9131(2)(d), Fla. Stat. (emphasis added).
TCO argues that Section 409.913(5) "clearly requires" the use of a peer-review organization (rather than an individual peer) when auditing "non-physician claims," and it contends that this "requirement" should be held applicable, as well, to the review of physician service claims pursuant to Section 409.9131(5). In this case, the peer review of physician service claims was performed, not by an organization, but by Dr. Larry Deeb, a Florida-licensed pediatrician. Thus, TCO urges that the audit be declared invalid in its entirety.
4.
It is undisputed that approximately four years elapsed from the beginning of the Audit Period to the issuance, on November 30, 2004, of the Final Agency Audit Report, which latter gave TCO a clear point of entry to challenge the Agency's overpayment determination. TCO contends that this four-year "delay" was prejudicial to TCO's ability to defend against AHCA's recoupment effort. Thus, TCO argues that this proceeding should be deemed time-barred.
5.
TCO asserts, and AHCA did not genuinely dispute, that the medical records provided to the Agency during the audit
reveal a number of Medicaid compensable services for which TCO never submitted claims. TCO argues that if an investigation into possible Medicaid overpayments yields information demonstrating the existence of valid, yet unmade claims, then the Agency is under a legal duty either to pay those claims or set them off against any overpayment that might be found.
The Fact-Specific Disputes
In addition to challenging the validity of the audit as a whole, TCO disputes, in the alternative, the Agency's determinations regarding 13 specific claims; it also urges that several miscellaneous adjustments be made as well.5 These will be examined below. First, however, it is necessary to make some preliminary findings, to place the disputed claims in context.
The disputed claims involve what are known as "evaluation and management services" ("E/M services") provided in the doctor's office or other outpatient setting to new or established patients. E/M services are billed to Medicaid using codes that reflect the intensity level of service provided. The codes are called "CPT codes"——"CPT" being short for Current Procedural Terminology.
Medicaid reimburses providers for E/M services pursuant to fee schedules that specify the amount payable for each level of service according to the CPT codes. It is the provider's responsibility, in presenting a claim to Medicaid for
payment, to determine the appropriate CPT code for the service provided. Medicaid generally pays claims upon receipt, without second-guessing the provider's judgment regarding the level of care.
When the Agency conducts an investigation to determine possible overpayment to a provider, however, one thing it might review is whether the provider's claims were properly "coded"—— that is, whether the CPT codes on the bills accurately reflected the level of service provided to the patients, as documented in the medical records. If the Agency determines that the level of service provided was lower than that claimed, then it will "downcode" the claim to the proper level and seek to recoup from the provider, as an overpayment, the difference between what Medicaid paid on the claim as originally coded and what it would have paid on the claim as downcoded. In this case, each of the
13 disputed claim determinations involves a downcode with which TCO disagrees.
The following CPT codes are relevant to the claims in
dispute:
Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs.
Usually, the presenting problems are self limited or minor.
Physicians typically spend 10 minutes face-to-face with the patient and/or family.
Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs.
Usually, the presenting problems are low to moderate severity.
Physicians typically spend 20 minutes face-to-face with the patient and/or family.
Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs.
Usually, the presenting problems are of moderate severity.
Physicians typically spend 30 minutes face-to-face with the patient and/or family.
Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs.
Usually, the presenting problems are low to moderate severity.
Physicians typically spend 45 minutes face-to-face with the patient and/or family.
Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs.
Usually, the presenting problems are moderate to high severity.
Physicians typically spend 60 minutes face-to-face with the patient and/or family.
5 minutes are spent performing or supervising these services.
Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs.
Usually, the presenting problems are self limited or minor.
Physicians typically spend 10 minutes face-to-face with the patient and/or family.
Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs.
Usually, the presenting problems are low to moderate severity.
Physicians typically spend 15 minutes face-to-face with the patient and/or family.
Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s)
and the patient's and/or family's needs.
Usually, the presenting problems are of moderate severity.
Physicians typically spend 25 minutes face-to-face with the patient and/or family.
Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs.
Usually, the presenting problems are low to moderate severity.
Physicians typically spend 40 minutes face-to-face with the patient and/or family.
American Medical Association, Evaluation and Management (E/M)
Services Guidelines at 9-10 (2001).
Turning now to the 13 disputed claims, the following is a summary discussion of each, sorted by recipient and date of service.
Recipient No. 2
Date of Service ("DOS") 03/05/01. Nurse Practitioner Beverly Armstrong saw this patient, then aged 10, on March 5, 2001, because he was experiencing nasal drainage and a cough. Ms. Armstrong diagnosed sinusitis and bronchitis and prescribed appropriate medications for those conditions. The child is profoundly developmentally delayed, which complicated the examination and medical decision-making process.
TCO billed this visit to Medicaid under CPT Code 99215——the highest level of E/M services for an established patient——and was reimbursed $60.95. It is undisputed, however, that Medicaid does not permit an advanced registered nurse practitioner ("ARNP") to bill any visit at the 99215 level. (If a physician co-signs the medical record, then the claim can be properly submitted as a 99215 visit, but that did not happen on this claim or any other disputed claim here involving the services of an ARNP.) Thus, there is no dispute that this claim must be downcoded.
The Agency contends that the claim properly should be reimbursed as a 99213 visit; TCO contends that 99214 is the correct level of service. It is concluded that this visit met the criteria for reimbursement at the 99214 level. The Medicaid fee for ARNP services in connection with a 99214-level visit was
$32.82 in March 2001, which is $28.13 less than Medicaid paid on
this claim. The Agency based its probable total overpayment determination on an alleged overcharge of $35.90. Thus, the empirical overpayment should be reduced by $7.77.
DOS 05/16/02. This patient was seen by Dr. Barbara Chamberlain on May 16, 2005, because he was having difficulty sleeping and was waking up scared. TCO submitted the claim for this visit to Medicaid under CPT Code 99214 and was reimbursed the established fee for that level of service. During the instant audit, the Agency downcoded the visit to 99213, resulting in an alleged overpayment of $15.71 on the claim. At hearing, however, the Agency's counsel conceded that, in view of Dr. Deeb's deposition testimony, the claim had been properly coded as a 99214 visit. Therefore, the empirical overpayment should be reduced by $15.71.
Recipient No. 13
DOS 11/01/00. This patient, aged 4, presented on November 1, 2000, with a cough and fever, and was seen by Nurse Armstrong, who diagnosed bronchitis and prescribed treatment therefor. TCO presented this claim to Medicaid as a 99215 visit, which was improper because ARNP services are not authorized for payment at such level, and was reimbursed $59.43. AHCA contends that the claim should be downcoded to 99213, giving rise to an alleged overpayment of $34.38. The undersigned determines, however, that 99214 is the proper code,
based on the overall complexity of the case as reflected in the medical records. The appropriate reimbursement, therefore, is
$31.85, resulting in an overpayment on this claim of $27.58. The empirical overpayment should, accordingly, be reduced by
$6.80.
DOS 04/27/01. The patient was seen by Nurse Armstrong on April 27, 2001, complaining of fever and a recent history of vomiting and diarrhea. He was diagnosed with a middle ear infection and allergic rhinitis. After the visit, on the night of April 27, a call was made on this patient's behalf to the on- call nurse to report an ongoing high fever; the patient was encouraged to go to the emergency room for treatment.
TCO improperly billed this claim for nursing services as a 99215 visit and was paid $60.95. The undersigned is persuaded by Dr. Deeb's deposition testimony that the appropriate service level on this claim is 99213, as the Agency contends. When it calculated the probable total overpayment, however, the Agency assumed, incorrectly, that the fee for ARNP services on a 99213 claim in April 2001 was $25.05. In fact, such claims were reimbursed at the rate of $21.03 per visit. Thus, for this claim, the empirical overpayment should be increased by $4.02.
DOS 04/30/01. The patient presented again on
April 30, 2001, with a high fever and nasal congestion. He was seen by Nurse Armstrong, who ordered blood and urine tests and prescribed additional treatment. TCO billed the visit, improperly, as a 99215 and was paid $60.95.
Based on the medical records, which document a high fever that was not responding as expected to treatment, the undersigned determines that 99214 is the proper code for this visit. The applicable fee for such a visit, at the time, was
$32.82. Thus, the overpayment on this claim is $28.13, not
$35.90 as AHCA alleged. The empirical overpayment should be reduced by $7.77.
Recipient No. 17
Nurse Armstrong saw this three-year-old on November 29, 2000. The patient came in with redness and swelling of the eyelid. The ARNP referred the patient to an ophthalmologist.
TCO submitted a claim to Medicaid, reporting the visit under CPT Code 99215, which was improper because, to repeat for emphasis, nursing services cannot be billed at this level——a point that TCO conceded at hearing. Medicaid paid TCO $59.43 for the visit.
The Agency asserts, and the undersigned finds, that this claim should be reimbursed at the 99213 level. The key
fact here is that the patient was referred to a specialist. While this was no doubt an appropriate disposition, deciding to make a routine referral to an eye doctor for evaluation of a possible eye infection or injury should be a relatively easy medical task.
The fee for ARNP services on a 99213 claim was $20.80 in November 2000. In calculating the probable total overpayment, the Agency incorrectly assumed that the applicable fee was $25.05. Thus, the empirical overpayment should be increased by $4.25 to account for this claim, properly adjusted.
Recipient No. 18
DOS 07/17/02. This patient, aged 5, was seen by Dr.
Chamberlain on July 17, 2002, for treatment of a cough and low- grade fever. The doctor diagnosed pharyngitis and prescribed an antibiotic. TCO billed Medicaid for a 99215 visit and was reimbursed $63.37.
The Agency contends that this claim should be downcoded to 99213. The undersigned agrees, because the medical record documents a routine visit involving a straightforward diagnosis and plan of treatment. Thus, there should be no change to the empirical overpayment on account of this claim.
DOS 08/08/02. Dr. Chamberlain saw this patient on August 8, 2002, because he had a fever. The doctor again diagnosed pharyngitis and offered an antibiotic injection, which
the patient's mother refused. Dr. Chamberlain spent additional time counseling the mother, but she continued to decline the recommended treatment, against medical advice.
TCO presented a claim to Medicaid for a 99214 visit.
The Agency urges that this visit be downcoded to 99213, creating an alleged overpayment of $15.71. The undersigned finds, however, that 99214 was the appropriate code for this claim, primarily because of the need for additional counseling as a result of the mother's refusal of treatment. Thus, the empirical overpayment should be reduced by $15.71 for this
claim.
Patient No. 19
DOS 05/17/02. Nurse Armstrong saw this medically complex three-year-old as a new patient on May 17, 2002. The medical record does not document the specific medical complaint that drove the visit, but states that the patient wanted a nebulizer machine. The nurse examined the patient in some detail and decided to stay the course charted by other providers, directing that the patient continue taking the same medications.
TCO reported the visit to Medicaid as a 99205 claim and received $85.00. This was improper on its face because nursing services cannot be billed at this level. The Agency contends that the claim should be downcoded to 99203, and the
undersigned agrees. Based on the evidence presented, it is found that the medical decision-making required for this visit should not have exceeded a low level of complexity, especially since no material changes were made to the preexisting treatment plan.
The fee for ARNP services on a 99203 visit was $40.23 in May 2002, not $38.70 as shown in the Agency's work papers. Consequently, the empirical overpayment should be reduced by
$1.53 to reflect the adjustment of this claim.
DOS 06/05/02. Dr. Chamberlain saw the patient on June 5, 2002, because she was vomiting, sleeping too much, and experiencing a loss of appetite. The doctor ordered emergency blood work, which revealed that one of the medications that the
patient was taking had reached a toxic level in her bloodstream. This was a potentially life-threatening situation that required prompt medical attention.
TCO billed this visit at the 99215 level. AHCA argues that the claim should be downcoded to 99213, at which level an alleged overpayment of $30.81 would result. The undersigned agrees with TCO, however, that 99215 was the proper code under the circumstances. The empirical overpayment should be reduced by $30.81 for this claim.
DOS 07/08/02. The patient was seen by Dr. Chamberlain on July 8, 2002, for a "pre-op" examination ahead of a scheduled
surgery to repair a hernia. The visit was billed to Medicaid as a 99215 claim, and TCO received $63.37. In this proceeding, TCO has conceded that 99215 was excessive, but it presses for a downcode only to 99214. The Agency asserts that 99213 is the proper code for this claim.
The undersigned is persuaded that this focused pre-op examination should not have required a level of care beyond 99213. In July 2002, the fee for a physician's services on a 99213 visit was $32.56. The overpayment on this claim therefore is $30.81. Because the Agency mistakenly recorded the overpayment as $37.32 in its work papers and used that figure in calculating the probable total overpayment, the empirical overpayment should be reduced by $6.51.
DOS 07/25/02. On this day, the medical records show that the patient was seen by Nurse Armstrong for "labs only" and to have a form completed for school. TCO submitted a claim to Medicaid for a 99215 visit (which was facially improper) and was reimbursed $63.37. AHCA now seeks to deny the claim in its entirety based on the absence of a medical record.
Yet, as TCO points out, there is a record of this visit. It reflects that minimal services were performed and no examination of the patient was conducted. Thus, the claim should be downcoded to 99211. For ARNP services at this level, Medicaid paid $10.37 at the relevant time. Thus, the empirical
overpayment should be reduced by $10.37 to account for this claim.
DOS 09/04/02. Nurse Armstrong saw the patient, who presented with a fever and cough, on September 4, 2002. This visit took place a couple of weeks after the patient's hernia had been surgically repaired. The nurse diagnosed pharyngitis or tonsillitis.
TCO presented the claim to Medicaid, improperly, as a level 99215 visit and received $63.37. AHCA contends that the claim should be downcoded to 99213. This would have been the appropriate code, the undersigned believes, but for the fact that the child had recently undergone surgery, which added an element of complexity to the case. The undersigned finds that the proper code for this claim is 99214.
At the time, Medicaid paid $34.52 for ARNP services on a 99214 claim. Thus, the overpayment on this claim is $28.85. Because AHCA based its determination of the probable total overpayment on an alleged overpayment of $37.32 on this claim, the empirical overpayment should be reduced by $8.47.
Miscellaneous Adjustments
TCO has identified a number of alleged errors in the Agency's work papers, which will be discussed below.
Recipient No. 15, DOS 12/07/00. This claim for a doctor's services was coded 99664. Medicaid paid TCO $8.00 on
the claim. As part of the audit, AHCA reduced the allowable fee to $6.40, because the services at issue were in fact performed by an ARNP. This created an alleged overpayment on the claim of
$1.60.
TCO does not dispute that an ARNP performed the services; it asserts that the applicable fee is more than $6.40. TCO is correct. The fee for ARNP services on a 99664 claim was, in December 2000, $8.57. Thus, the empirical overpayment should be reduced by $2.17 (0.57 + 1.60).
Recipient No. 30, DOS 05/03/02. TCO billed Medicaid for a doctor's services at the 99203 level and was reimbursed
$50.30. AHCA determined in the audit that an ARNP actually performed the services in question and reduced the allowable fee to $40.24, resulting in an alleged overpayment of $10.06.
The applicable ARNP fee schedule shows an allowable fee of $40.23. Thus, the empirical overpayment should be increased by 0.01 to account for this claim.
Recipient No. 18, DOS 08/09/02. TCO correctly notes that, contrary to the Agency's allegation, there is a medical record for this visit, which shows that the ARNP gave the patient a shot of antibiotic medicine. Thus, while the Agency properly determined that TCO's claim for a physician's services at level 99215 resulted in an overpayment, it should have downcoded the claim to 99211, rather than denied the claim in
its entirety, and allowed reimbursement at the ARNP fee of
$10.37. Accordingly, the empirical overpayment should be reduced by $10.37.
Recipient No. 17, DOS 07/10/01. TCO has identified a typographical error in a one of the Agency's work papers, where the date of service for this claim incorrectly was recorded as July 10, 2000, instead of July 10, 2001. This error did not affect the overpayment calculations, however, and thus no adjustment to the empirical overpayment is required.
Recipient No. 22, DOS 09/03/02. TCO alleges that the allowed fee of $48.27 "is wrong." According to the applicable fee schedule, however, this is indeed the correct figure. Therefore, no change in the Agency's calculations is warranted.
Recipient No. 23, DOS 08/07/02. TCO points out that a work paper of the Agency fails to mention the allowed CPT Code for this claim. The omission had no effect on the Agency's overpayment calculations.
Recipient No. 26, DOS 07/20/01. TCO notes a typographical error in a work paper that had no effect on the Agency's overpayment calculations.
Recipient No. 26, DOS 03/13/01. TCO notes a typographical error in a work paper that had no effect on the Agency's overpayment calculations.
Other Discrepancies
In the course of reviewing the Agency's work papers and the medical records in evidence, the undersigned discovered several minor discrepancies that should be corrected in recalculating the probable total overpayment.
Recipient No. 2. The total alleged overpayment for this patient, before making any of the adjustments described above, is $1,571.93, not $1,594.42, which latter figure was used by the Agency in determining the probable total overpayment. Therefore, the empirical overpayment should be reduced by
$22.49.
Recipient No. 5. The total alleged overpayment for this patient, before making any of the adjustments described above, is $27.63, not $26.38, which latter figure was used by the Agency in determining the probable total overpayment. Therefore, the empirical overpayment should be increased by
$1.25.
Recipient No. 15. The total alleged overpayment for this patient, before making any of the adjustments described above, is $367.35, not $372.44, which latter figure was used by the Agency in determining the probable total overpayment. Therefore, the empirical overpayment should be reduced by $5.09.
Recipient No. 30. The total alleged overpayment for this patient, before making any of the adjustments described
above, is $42.62, not $44.16, which latter figure was used by the Agency in determining the probable total overpayment.
Therefore, the empirical overpayment should be reduced by $1.54.
Summary
The Agency based its determination of the probable total overpayment on an empirical overpayment of $9,740.10. In accordance with the foregoing findings, it is determined that this figure should be increased by a total of $9.53, and reduced by a total of $153.11, making a net empirical overpayment of
$9,596.52.
In other words, the undersigned finds that, of the
$13,582.78 which TCO received from Medicaid for the 260 total claims submitted during the Audit Period in connection with medical services provided to the sample population of 30 patients, $9,596.52 constituted an overpayment. Thus, it is this figure——$9,596.52——that should be used in calculating the probable total overpayment arising from the 30,193 claims presented during the Audit Period, for which Medicaid paid TCO a grand total of $1,593,881.86.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has personal and subject matter jurisdiction in this proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes.
The Agency is empowered to "recover overpayments . . . as appropriate." § 409.913, Fla. Stat. An "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." § 409.913(1)(e), Fla. Stat. Specifically, as well, the Agency is authorized to "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." § 409.913(11), Fla. Stat.
The burden of establishing an alleged Medicaid overpayment by a preponderance of the evidence falls on the Agency. South Medical Services, Inc. v. Agency for Health Care
Admin., 653 So. 2d 440, 441 (Fla. 3d DCA 1995); Southpointe Pharmacy v. Department of Health and Rehabilitative Services, 596 So. 2d 106, 109 (Fla. 1st DCA 1992).
Although the Agency bears the ultimate burden of persuasion and thus must present a prima facie case through the introduction of competent substantial evidence before the provider is required to respond, Section 409.913(22), Florida Statutes, provides that "[t]he audit report, supported by agency work papers, showing an overpayment to the provider constitutes evidence of the overpayment." Thus, the Agency can make a prima
facie case merely by proffering a properly supported audit report, which must be received in evidence. See Maz
Pharmaceuticals, Inc. v. Agency for Health Care Administration, DOAH Case No. 97-3791, 1998 Fla. Div. Adm. Hear. LEXIS 6245, *6-
*7 (Mar. 20, 1998); see also Full Health Care, Inc. v. Agency for Health Care Administration, DOAH Case No. 00-4441, 2001 WL 729127, *8-9 (Fla.Div.Admin.Hrgs. June 25, 2001)(adopted in toto, Sept. 28, 2001, AHCA Rendition No. 01-262-FOF-MDO).
Section 409.913(7), Florida Statutes, spells out the duties of providers who make claims under Medicaid:
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:
Have actually been furnished to the recipient by the provider prior to submitting the claim.
Are Medicaid-covered goods or services that are medically necessary.
Are of a quality comparable to those furnished to the general public by the provider's peers.
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.
Are provided in accord with applicable provisions of all Medicaid rules, regulations, handbooks, and policies and in accordance with federal, state, and local law.
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.
The agency may deny payment or require repayment for goods and services that are not presented as required in this subsection.
Based on the foregoing principles, as applied to the specific facts of this case, the undersigned has determined that TCO is liable to the Agency for an empirical overpayment of
$9,596.52.
TCO has raised several legal challenges to the audit's validity that merit further consideration. These will be taken up in turn.
The definition of the term "audit." The Agency is required to "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." See § 409.913(2), Fla. Stat. In view of this legislative mandate, the undersigned cannot agree with TCO that Florida Administrative Code Rule 59G-1.010(22), which defines
the term "audit" (see paragraph 9, supra), should be interpreted as a limitation on the Agency's power and duty to ascertain whether an overpayment has been made to a Medicaid provider.
First, the undersigned concludes that the labels given to the Agency's activities with regard Medicaid oversight do not control the Agency's authority and responsibilities in this area. Indeed, under Section 409.913(2), Fla. Stat., the "audit" to which TCO objects could as readily be called an "investigation," "review," or "analysis." The important substantive question is whether the Agency has the power to investigate a provider's multiyear claim activity in determining whether Medicaid overpaid the provider. It is concluded that the legislature clearly granted the Agency such authority under Section 409.913.6
Second, Rule 59G-1.010(22) does not purport expressly to circumscribe the Agency's authority to investigate possible Medicaid overpayments. And while the undersigned is not sure what exactly was the regulatory intent underlying the Rule's references to one-year periods,7 he is reasonably certain that the Agency did not intend to limit its power (and duty) to investigate Medicaid overpayments.8 Accordingly, the undersigned declines to construe Rule 59G-1.010(22) so as to restrict the Agency's ability to carry out its statutorily prescribed duty to investigate possible overpayments.
It is concluded that the instant audit is not invalid for failure to comply with Rule 59G-1.010(22).
The peer review. TCO's position on the necessity of using a peer-review organization in a Medicaid overpayment investigation stems from a misreading of Section 409.913(5), Florida Statutes. The statute (quoted in paragraph 12, supra) does not say, as TCO would have it, that providers are entitled to have their claims reviewed by a peer-review organization; the statute says, rather, that providers are subject to having their claims so reviewed. This plainly means that providers are exposed to the possibility of having their claims reviewed by a peer-review organization; that is, they must submit to such a review upon the Agency's request. In this instance, the Agency elected not to subject TCO to a claims review by a peer-review organization, which decision was fully consistent with Section 409.913(5).
Further, it is above reasonable dispute, in view of the definition of "peer review" in Section 409.9131(2)(d), Florida Statutes ("an evaluation . . . by a peer or peers"), that the peer review required in connection with the investigation of a possible overpayment to a physician may be conducted, as it was here, by a single peer. And even if Section 409.9131 were in conflict with Section 409.913 on this point, which it is not, the legislature enacted into law its
"intent . . . that the provisions of [Section 409.9131] shall control" in the event of such conflict. See § 409.9131(1), Fla. Stat.
Consequently, it is concluded that the subject audit is not invalid for the Agency's failure to use a peer-review organization.
The four-year "delay." TCO's argument that this proceeding should be barred due to prejudicial delay is a nonstarter. There is, to begin, no express limitation period applicable to the initiation of administrative proceedings for recoupment of Medicaid overpayments. Moreover, Section 409.913(9) requires providers to retain all records relating to Medicaid compensable services "for a period of 5 years after the date of furnishing" such services, and it explicitly authorizes the Agency to obtain and review all "such records" during normal business hours. (The Provider Agreement similarly obligates the provider to "[k]eep, maintain, and make available in a systematic and orderly manner all medical and Medicaid-related records as AHCA requires for a period of at least five (5) years.") Because all of the claims at issue, which TCO submitted to Medicaid during the Audit Period, were for services furnished within five years prior to the commencement of the instant investigation, the undersigned concludes as a matter of
law that there was no prejudicial delay associated with this audit.
The alleged unmade claims. AHCA conducted the subject investigation pursuant to its responsibility under Section 409.913(2), Florida Statutes, "to determine possible fraud, abuse, overpayment, or recipient neglect in the Medicaid Program." Neither this provision nor any other of which the undersigned is aware charges AHCA with the duty to determine whether a provider furnished services for which it could have billed Medicaid but did not. See Minkes v. Agency for Health
Care Administration, DOAH Case No. 03-1186MPI, 2003 Fla. Div. Adm. Hear. LEXIS 1077, *101 n.18 (Dec. 31, 2003). TCO's
argument that the Agency must set off valid, yet unmade claims against the empirical overpayment is without support in law and hence must be rejected.9
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency recalculate the probable total overpayment using the statistical formula previously employed but substituting $9,596.52 in place of $9,740.10 as the empirical overpayment, and enter a final order requiring TCO to repay the Agency the principal amount determined through such recalculation.
DONE AND ENTERED this 3rd day of February, 2006, in Tallahassee, Leon County, Florida.
S
JOHN G. VAN LANINGHAM
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 3rd day of February, 2006.
ENDNOTES
1/ The undersigned will use the term "empirical overpayment" to reference the sum of all amounts received by TCO in excess of Medicaid-authorized amounts on the claims made during the Audit Period in connection with the 30 patients in the sample population. The term "probable total overpayment" will refer to the total amount by which TCO was likely overpaid on claims made during the Audit Period in connection with the entire population of 3,148 patients served, as determined through the use of a statistical formula.
2/ An empirical overpayment of $9,740.10 produces a probable total overpayment of $1,048,242.62. Thus, seemingly small adjustments in the empirical overpayment can meaningfully affect the probable total overpayment.
3/ The term "records for audit" is defined in Rule 59G- 1.010(244) to mean "those records, business records, medical records, professional records, documents and files, on whatever media, that the department finds necessary in order to determine
the correctness and propriety of cost reports or to determine whether Medicaid payments are or were due and the amounts thereof. Such records must be furnished by providers in accordance with the provisions of ss. 1128(b) and 1902(p) of the federal Social Security Act."
4/ Rule 59G-1.010(22)(b) refers to "claim activity" relative to a single recipient as opposed to the provider's total patient population. Therefore, the relevant inquiry might be, not whether the Audit Period can permissibly exceed one year, but whether the Agency is authorized to analyze more than a year's worth of claim activity with respect to any given patient in the population under review. In this instance, although the Audit Period was two years, the claim activity for all but eight of the 30 recipients whose records were reviewed was, in fact, less than one year in duration. The respective periods of claim activity for Recipient Nos. 2, 3, 6, 13, 15, 24, 25, and 26 only exceeded one year.
5/ TCO does not take issue with the rest of the Agency's claim- specific determinations, which, accordingly, are deemed undisputed and accepted as true based on the evidence presented, including the Agency's work papers.
6/ The legislature specifically has curbed the Agency's authority to investigate pharmacies; the period covered by an audit of a pharmacy "may not exceed 1 calendar year." See § 465.188(h), Fla. Stat. TCO is not a pharmacy, however, so this statutory limitation on the Agency's investigative authority is inapposite.
7/ The Agency did not explain to the undersigned the purpose and import of Rule 59G-1.010(22).
8/ The Agency routinely investigates multiyear periods in performing its duty to determine possible overpayments, as a quick Westlaw or Lexis search will confirm. While this practice obviously is not self-authorizing, it suggests that the Agency (which is responsible for the Rule in question) does not consider itself limited by the Rule to examining periods of one year or less in determining possible Medicaid overpayments.
9/ The distinction between unmade claims and underpaid claims should be noted. If in the course of an audit the Agency determines (or the provider proves at hearing) that Medicaid
mistakenly underpaid a properly submitted claim, then the amount by which the claim was underpaid should be a setoff against any overpayment, because the Agency is obligated to reimburse providers for properly presented claims. See, e.g., §§ 409.907(2) and 409.908, Fla. Stat. In contrast, the Agency is not required to pay a claim that was not presented. See § 409.913(7), Fla. Stat. ("The agency may deny payment or require repayment for goods or services that are not presented as required in this subsection.")
COPIES FURNISHED:
Joy A. Bartmon, Esquire
The Law Offices of Bartmon & Bartmon, P.A. 1515 North Federal Highway, Suite 300
Boca Raton, Florida 33432
Jeffries H. Duvall, Esquire
Agency for Health Care Administration Fort Knox Building III, Mail Station 3 2727 Mahan Drive
Tallahassee, Florida 32308
Richard Shoop, Agency Clerk
Agency for Health Care Administration 2727 Mahan Drive, Mail Station 3
Tallahassee, Florida 32308
Christa Calamas, General Counsel Agency for Health Care Administration Fort Knox Building, Suite 3431
2727 Mahan Drive
Tallahassee, Florida 32308
Alan Levine, Secretary
Agency for Health Care Administration Fort Knox Building, Suite 3116
2727 Mahan Drive
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.
| Issue Date | Document | Summary |
|---|---|---|
| Dec. 22, 2006 | Agency Final Order | |
| Feb. 03, 2006 | Recommended Order | Petitioner must reimburse Respondent for amounts received from the Florida Medicaid Program in payment of claims for treatment of pediatric patients between October 28, 2000 and October 25, 2002, for services not covered by Medicaid in whole or in part. |
