STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
AGENCY FOR HEALTH CARE )
ADMINISTRATION, )
)
Petitioner, )
)
vs. ) Case No. 06-5335MPI
) CENTRAL FLORIDA REGIONAL ) HOSPITAL, )
)
Respondent. )
)
RECOMMENDED ORDER
Robert E. Meale, Administrative Law Judge of the Division of Administrative Hearings, conducted the final hearing in Tallahassee, Florida, on March 27-29, 2007.
APPEARANCES
For Petitioner: Daniel M. Lake, Esquire
William Blocker, Esquire Tracy Cooper, Esquire
Agency for Health Care Administration Fort Knox Building III, Mail Stop 3 2727 Mahan Drive
Tallahassee, Florida 32308
For Respondent: Richard M. Ellis, Esquire
Rutledge, Ecenia, Purnell & Hoffman, P.A.
215 South Monroe Street, Suite 420 Tallahassee, Florida 32301
STATEMENT OF THE ISSUES
The issues are whether Petitioner overpaid Medicaid reimbursements to Respondent for inpatient hospital services due
to the lack of medical necessity for such services and, if so, the amount of the overpayment.
PRELIMINARY STATEMENT
By Final Agency Audit Report dated October 19, 2006, Petitioner advised Respondent that Petitioner had overpaid
$286,357.54 in Medicaid claims on behalf of 35 different recipients. The Final Agency Audit Report advises Respondent that Petitioner is entitled, under Section 409.913(23)(a), Florida Statutes, to recover all investigative, legal, and expert witness costs and, under Section 409.913(15), (16), and (17), Florida Statutes, and Florida Administrative Code Rule 59G-9.070, to impose a fine of $1000 for violations of Florida Administrative Code Rule 59G-9.070(7)(e) and to require Respondent to submit a corrective action plan in the form of a provider acknowledgement statement.
By Petition for Formal Administrative Hearing dated November 1, 2006, Respondent requested a formal hearing.
In its Unilateral Statement of the Facts and Issues in Question filed March 19, 2007, Petitioner stated that it had revised its claim for overpayment by reducing the number of inpatient days' service proposed to be denied as follows (all recipient names are reduced to initials to preserve confidentiality): R. B.--9 to 7 days; T. Bo.--4 to 0 days;
G. C.--19 to 14 days; W. M.--19 to 13 days; M. M.--4 to 3 days;
S.--10 to 3 days.
In its Unilateral Pre-Hearing Statement filed March 19, 2007, Respondent stated that it no longer contested the following denials: J. C.--2 days; M. C.--2 days; K. D.--1 day;
I.--1 day; W. M.--14 days; J. M.--15 days; R.O.--1 day; and
P.--1 day.
By the end of the hearing, Respondent conceded additional days of service, as recited on page 61 of its proposed recommended order. It is best to state, by recipient and days denied, the remaining inpatient services still in dispute. When two recipients in the have the same initials, the latter recipient, as shown on the attachment to the Final Agency Audit Report, bears additional letters to identify him or her, unless an earlier recipient has a compound last name. (To avoid confusion, the list adds the second letter of the last name even if the other person with identical initials has been deleted from the case.) All days bear a per diem reimbursement rate of
$833.31, unless marked with an asterisk, in which case the per diem reimbursement rate is $814.74.
E. A. | 10 | days |
A. A. | 10 | days |
T. B. | 10 | days |
R. B. | 7 | days* |
J. B. | 16 | days* |
N. C. | 21 | days* |
N. Ch. | 46 | days |
J. | C. | 6 | days* |
R. | LaB. | 1 | day |
J. | L. | 7 | days |
C. | M. | 31 | days |
M. | M. | 3 | days |
J. | P. S. | 3 | days |
J. | P. | 14 | days* |
W. | P. | 13 | days |
M. | Pr. | 7 | days* |
A. | R. | 14 | days* |
E. | S. | 24 | days |
D. | S. | 3 | days |
J. | W. | 2 | days* |
M. | W. | 7 | days |
At the hearing, Petitioner called two witnesses and offered into evidence 20 exhibits: Petitioner Exhibits 2-20 and 23.
Respondent called two witnesses and offered into evidence 45 exhibits: Respondent Exhibits 1-4, 7-18, and 29-57. All exhibits were admitted except Respondent Exhibits 8 and 9, which were proffered.
The court reporter filed the transcript on April 13, 2007.
The parties filed their proposed recommended orders on May 7, 2007.
FINDINGS OF FACT
Respondent is a 226-bed community hospital in Sanford.
It is an acute-care hospital with an emergency department. At all material times, Respondent has been an authorized Medicaid provider. For inpatient services, Respondent receives, under Medicaid, an all-inclusive per diem rate for all goods and
services provided during a 24-hour period, less any third-party payments.
Petitioner is the state agency responsible for the regulation of the Medicaid program in Florida. Petitioner is required to perform Medicaid audits of providers and to recover any overpayments. Pursuant to this authority, Petitioner conducted an audit of Respondent for the period from January 1, 2001, through March 31, 2002.
Pursuant to its procedures, Petitioner duly informed Respondent of the audit, obtained from Respondent relevant medical and hospital records, issued a Provisional Agency Audit Report on January 24, 2006, obtained additional information from Respondent pertinent to the provisional findings, and issued a Final Agency Audit Report on October 19, 2006, which claimed a total overpayment of $286,357.54 based on Medicaid payments made to Respondent on behalf of 35 different recipients. (The report indicates two separate denials for each of four recipients, so
39 total transactions are listed.)
The dispute in this case concerns the medical necessity of the inpatient hospitalization of each recipient. The Florida Medicaid Hospital Services Coverage and Limitations Handbook (Handbook) states that the purpose of the Medicaid program is "to provide medically necessary inpatient and outpatient services to recipients in the hospital." Handbook, page 1-1.
This case involves paid claims for inpatient, not outpatient, services. The Handbook defines inpatient services as those services "rendered to recipients who are admitted to a hospital and are expected to stay at least 24 hours and occupy a bed, even though a bed is not actually utilized because the recipient is discharged or transferred to another hospital." Handbook, page 1-1.
The Handbook provides that the day of admission is covered, but the day of discharge is not covered, unless it is also the day of admission. Handbook, page 2-22. The Handbook defines "grace days" as
non-medically necessary days following the day of formal discharge when the recipient continues to occupy a hospital bed until an outside facility or residence can be found. These days are not reimbursable by Medicaid except for children under 21 years of age on "Department of Children and Families hold
. . .." Medicaid will pay up to 48 hours of inpatient stay beyond the formal discharge day for these children while an alternative placement is located.
The Handbook incorporates the limitation of medical necessity as follows:
Medicaid reimburses for services that are determined medically necessary, do not duplicate another provider's service, and are:
individualized, specific, consistent with symptoms or confirmed diagnosis of the illness or injury under treatment, and not in excess of the patient's needs;
not experimental or investigational;
reflective of the level of services that can be safely furnished, and for which no equally effective and more conservative or less costly treatment is available statewide;
furnished in a manner not primarily intended for the convenience of the recipient, the recipient's caretaker, or the provider.
The fact that a provider has prescribed, recommended, or approved medical or allied care, goods, or services does not, in itself, make such care, goods or service medically necessary or a covered service.
Note: See Appendix D, Glossary, in the Florida Medicaid Provider Reimbursement Handbook, UB-92, for the definition of medically necessary.
Handbook, pages 2-1 to 2-2.
The Florida Medicaid Provider Reimbursement Handbook, UB-92, Appendix D, defines "medically necessary" as follows:
Means that the medical or allied care, goods, or services furnished or ordered must:
Meet the following conditions:
Be necessary to protect life, to prevent significant illness or significant disability, or to alleviate severe pain;
Be individualized, specific, and consistent with symptoms or confirmed diagnosis of the illness or injury under treatment, and not in excess of the patient's needs;
Be consistent with generally accepted professional medical standards as determined by the Medicaid program, and not experimental or investigational;
Be reflective of the level of service that can be safely furnished, and for which no equally effective and more conservative
or less costly treatment is available; statewide; and
Be furnished in a manner that is not primarily intended for the convenience of the recipient, the recipient's caretaker, or the provider.
"Medically necessary" or "medical necessity" for inpatient hospital services requires that those services furnished in a hospital on an inpatient basis could not, consistent with the provisions of appropriate medical care, be effectively furnished more economically on an outpatient basis or in an inpatient facility of a different type.
The fact that a provider has prescribed, recommended, or approved medical or allied care, goods, or services does not, in itself, make such care, goods or services medically necessary or a medical necessity or a covered service.
The Florida Medicaid Provider Reimbursement Handbook, UB-92, Appendix D, page D-10.
E. A. was admitted on January 6, 2001. Petitioner does not contest the medical necessity of inpatient services to treat
E. A.'s acute exacerbation of chronic bronchitis from January
6-8. The parties' dispute concerns the medical necessity of the remaining ten days of E. A.'s hospitalization. (All calculations of duration of hospitalizations omit the day of discharge, pursuant to the above-cited provision from the Handbook. In this case, for instance, E. A. was discharged on January 19.)
E. A., a 60-year-old male, presented to the emergency department with shortness of breath and a history of chronic
obstructive pulmonary disease (COPD), emphysema, and hypertension. He had been unable to eat for the preceding four days due to respiratory distress. At the time of his admission,
E. A. had been living for a short while with his sister, who was suffering from cancer. His relevant history included a shotgun wound to the left lung 30 years earlier.
Respondent states in its proposed recommended order that E. A.'s chest X-rays showed acute infiltrate demonstrating pneumonia, although the discharge summary reveals that chest
X-rays fail to reveal this condition, but acknowledged that sputum grain stains revealed a polymicrobial infection. More to the point, the X-ray reports dated January 6 and 8 note: "no focal infiltrate." However, the discharge summary described
E. A.'s prognosis as poor because he was in "end-stage lung disease."
In the emergency department, after treatment with bronchodilators, E. A.'s oxygen saturation rate was only 87 percent--not 94-100 percent, as mistakenly stated by Petitioner's expert, Dr. Ellen Silkes, an otolaryngologist whose practice is largely limited to outpatients. This low rate of oxygen saturation evidences hypoxia. E. A.'s arterial blood gases bore a pH of 7.28, evidencing, on the facts of this case respiratory acidosis, which results from excessive retained carbon dioxide due to poor lung function.
E. A. was started on Albuterol and Atrovent by nebulizer at four-hour intervals, as well as a corticosteroid intravenously every six hours to relieve the swelling in the lungs. He received oxygen by nasal cannula.
On January 10, the physician's notes state that E. A. still suffered from "severe COPD" secondary to smoking with bronchospasms. According to the notes, the first day that E. A. showed any improvement was January 12. On January 14 and 16,
E. A. was still retaining excessive carbon dioxide and remained hypoxic, but showed some improvement by January 16 in terms of arterial blood gases. The physician's note for January 17 states that E. A. could be discharged as soon as arrangements for home health care were completed.
E. A.'s hospitalization was medically necessary from January 6-17. His hospitalization after January 17 was not medically necessary. Petitioner improperly denied January 9-16, given that the day of discharge is excluded. Thus, for E. A., Petitioner should have denied two days, not all ten days.
A. A. was admitted on June 19, 2001. Petitioner does not contest the medical necessity of inpatient services to treat
A. A.'s gastrointestinal bleeding from June 19-20. The parties' dispute concerns the medical necessity of the remaining 12 days of A. A.'s hospitalization. (Some of Petitioner's calculations are incorrect. For instance, in this case, Petitioner does not
deny July 2-5, even though, undoubtedly, its position as to the lack of medical necessity as to the earlier dates would mandate the same position as to the later dates. This recommended order does not disturb Petitioner's implicit acceptance of the medical necessity of any dates, even when it appears to be in error.)
A. A., a 51-year-old male, presented to the emergency department with abdominal pain, diarrhea, and black tarry stools. His recent history included bloody vomit and a diagnosis, a few months earlier, of a pulmonary embolism. A. A. had discontinued taking Coumadin, a blood thinner, due to nosebleeds. A. A. had been diagnosed with AIDS in 1998 and had lost 30 pounds in one month.
At admission, A. A.'s hemoglobin and hematocrit levels were critically low at 5.1 and 15.5, respectively, and remained critically low the following day when, after A. A. received transfusions of two units of packed red blood cells, his hemoglobin and hematocrit levels were only 6.8 and 20.0, respectively.
Dr. Silkes denied the hospitalization after June 20 because an upper gastrointestinal endoscopy revealed, on
June 19, no acute bleeding, and a bleeding scan the following day was negative. However, according to the physician's notes,
A. A. was continuing to experience diarrhea on June 20, even though he was starting to feel better. The course of treatment
of A. A. was complicated by his recent history of pulmonary embolism and his inability to report an accurate history.
By June 21, A. A.'s severe anemia had been corrected, but he was diagnosed with candida, an opportunistic fungal infection common in AIDS patients. This diagnosis would explain the vomiting of blood. Generally, the treatment dilemma posed by A. A. was that efforts to increase his clotting time to stop the bleeding raised the risk of pulmonary embolism.
The physicians debated whether to install a Greenfield filter to stop the passage of a blood clot. The filter is introduced under X-ray control through the femoral vein into the inferior vena cava, where it is anchored, so that it allows the passage of blood, but not the passage of a blood clot. But the Greenfield filter is contraindicated in the presence of A. A.'s fever of 101 degrees and elevated white blood counts.
Physicians introduced Coumadin to minimize the risk of clots, but A. A.'s low platelet count required the discontinuation of Coumadin on June 30. A. A.'s International Normalization Ratio (INR) was 4.2, which is well above the range of 2.0-3.0 and thus indicative of the fact that A. A.'s blood was taking too long to clot.
The standard of care in 2001 precluded safe outpatient management of a complicated patient such as A. A., given his twin risks of pulmonary embolism and bleeding, either of which
could result in his death. A. A.'s Coumadin could not safely have been adjusted on an outpatient basis. The physicians restarted the Coumadin on June 24 and doubled its dosage the following day. As they were working on adjusting the blood thinner, though, A. A. continued to suffer nightly fevers of 103 degrees, and the physicians needed to monitor him closely for the next week for this reason too. On June 28, A. A. reported that he was feeling better, but the physicians needed to monitor him for a recent reduction in his Coumadin dosage. A. A. was reported as "alert and comfortable" on July 2.
A. A.'s hospitalization was medically necessary from June 19 through at least July 2. Petitioner improperly denied all ten days of this hospitalization.
T. B. was admitted on May 15, 2001. Petitioner does not contest the medical necessity of inpatient services to treat
T. B.'s esophageal cancer and tuberculosis from May 15-17 and
The parties' dispute concerns the medical necessity of the ten days that Dr. Silkes denied of the remaining 14 days of
T. B.'s hospitalization. (It is unclear why Petitioner denied only ten days when Dr. Silkes denied May 18-20 and May 22-June 1--a total of 14 days, or 13 days exclusive of the day of discharge. But, as noted above, in cases such as this, the recommended order will consider only whether up to ten days within this period are allowable as medically necessary.)
T. B., a 47-year-old male, presented to the emergency department with difficulty swallowing. He had visited a physician in February 2001 with the same complaint, and the physician had recommended an upper gastrointestinal series. Due to financial constraints, T. B. did not undergo this procedure until late April, when he was found to have a high-grade obstruction consistent with a tumor. T. B.'s recent history included the loss of 25 pounds.
An endoscopy with biopsy performed on May 16 revealed a high-grade carcinoma of the esophagus. The physician planned to commence preoperative chemotherapy and radiation therapy to shrink the lesion, but, based on sputum collected on May 18, it was discovered that T. B. had mycobacterium tuberculosis. Physicians had suspected the tuberculosis from the time of admission when they placed T. B. in a negative airflow isolation room.
Treatment of the tuberculosis necessarily preceded the preoperative chemotherapy recommended for T. B.'s carcinoma.
The sputum sample revealed rare acid-fast bacilli, for which the standard of care in 2001 typically required two to three weeks of treatment before isolation precautions could be discontinued.
T. B. remained in isolation at least through May 31.
In addition, T. B. suffered significant pain from the carcinoma. By May 23, he was on patient-controlled analgesia in
the form of a morphine pump, which is not available outside of an acute-care hospital.
T. B.'s hospitalization was medically necessary from May 15 through at least June 1. Petitioner improperly denied all ten days of this hospitalization that it denied.
R. B. was admitted on December 3, 2001. Petitioner does not contest the medical necessity of inpatient services to treat R. B.'s respiratory failure from December 3, 2001, to January 2, 2002, and January 8, 2002. Based on Petitioner's prehearing stipulation, the dispute concerns only seven days' hospitalization.
R. B., a 59-year-old female, presented to the emergency department with acute respiratory distress and respiratory failure. She was immediately intubated. Her family insisted upon aggressive treatment of, among other things, her bilateral pneumonia caused by a virulent staph infection. R. B. required a tracheotomy on December 20 due to the difficulty in weaning her from the ventilator. She required the placement of a percutaneous endoscopic gastrostomy (PEG) tube on January 1. The discharge summary describes R. B. as "very frail and fragile" and her hospitalization as "very prolonged and complicated." On December 23, when R. B. was finally weaned from the ventilator, her family agreed to a do-not-resuscitate (DNR) code for her.
The dispute arises from an incident on January 3 when
R. B. fell when trying to get out of bed. Her mental status deteriorated, probably due to malignant disease. Physicians ruled out sepsis in the bloodstream, but X-rays revealed multiple nodules in the lung and liver. On January 8, a CT- guided lung biopsy of one of the nodules confirmed malignant disease. Two days later, the physician stated that a consultation with hospice was indicated. Upon the agreement of the family, R. B. was discharged to her home under hospice care on January 12.
Dr. Silkes is substantially correct in her opinion.
The diagnostic work after January 2 only supported the poor prognosis that had become obvious to R. B.'s family ten days earlier and certainly was not palliative in nature. R. B.'s hospitalization after January 2, 2002, was not medically necessary--except for January 8, which Dr. Silkes initially conceded, and an additional two days, which Petitioner conceded in its prehearing stipulation. Petitioner properly denied seven days of this hospitalization.
J. B. was admitted on January 5, 2002. Petitioner does not contest a 23-hour observation on January 5, but this would generate a reimbursement considerably smaller than that sought by Respondent for inpatient services for that day, so
Petitioner has essentially denied the entire hospitalization, which consists of 16 days.
J. B., a 59-year-old male, presented to the emergency department with shortness of breath and atrial fibrillation with fast ventricular rate. He had been diabetic for 25 years. He had been laid off from construction work in August 2001, and had arthritic knees which prevented his return to work. Since losing his job, J. B. had been feeling poorly and had lost 20 pounds. J. B.'s pulse at the time of his arrival was 165, and it dropped to 105 within his first six hours at the hospital.
J. B.'s relevant history included congestive heart failure, edema of the extremities, and nocturnal dyspnea. A chest X-ray on the day of admission revealed a dense mass in the left lobe.
Physicians started a calcium channel blocker to regulate J. B.'s rapid heart beat and a diuretic to eliminate his excess fluids and swelling. J. B. was feeling much better by January 7, as the physicians had controlled his rapid heart beat. On that day, J. B. underwent a stress test, which was negative.
However, a CT scan performed on January 8 and reported the following day revealed a left hilum mass that proved to be advanced carcinoma. The physicians decided that J. B. needed a bronchoscopy to biopsy the lung mass and a thoracentesis, in which a needle is inserted between the ribs to extract fluid for
the purpose of determining the fluid's source. However, J. B.'s atrial fibrillation complicated their plans.
On January 8, J. B. remained in atrial fibrillation, and the physicians were considering starting him on Coumadin because patients with atrial fibrillation are at high risk of clotting due to the poor expulsion of blood into the ventricle. Introduction of this blood-thinning agent before other invasive procedures requires first that the physicians stabilize the patient. This dilemma delayed the introduction of the blood- thinning agent and prevented treating J. B. as an outpatient.
Once stabilized on Coumadin, J. B. underwent the two diagnostic procedures on January 11. They revealed that he was suffering from stage IV squamous cell carcinoma, according to a physician's report dictated on January 14 and transcribed the following day. The physician ordered additional CT scans to determine the extent of the metastatic disease before deciding on a course of treatment.
A whole body bone scan was performed on January 15 and was essentially negative. However, the carcinoma had metastasized to the left hilum and, by report dated January 15, a physician noted that J. B. would not benefit from surgery, chemotherapy, or radiation, although palliative radiation could offer him some relief.
An IV port for chemotherapy (not radiation) was placed on January 16--not January 6, as noted by Dr. Silkes in her report. Coumadin had been discontinued in advance of the procedure and resumed on the day of the procedure, but required adjustment for the next several days, as J. B.'s INR was too low, indicative of excessive clotting. Although the administration of the chemotherapy through the IV port could have been done on an outpatient basis, J. B. was comfortable at all times after January 15, and with no effective treatment possible, his hospitalization remained medically necessary until the physicians were able to adjust his Coumadin so that his INR reached the normal range.
J. B.'s hospitalization was medically necessary from January 5 through January 22, on which date he was discharged. Petitioner improperly denied the 16 days of inpatient services.
N. C. was admitted on February 8, 2002. Petitioner does not contest the medical necessity of inpatient services to treat N. C.'s intracranial hemorrhage from February 8-10. The parties' dispute concerns the medical necessity of the remaining
21 days of N. C.'s hospitalization.
N. C., a 40-year-old female, presented to the emergency department with a complaint of passing out and no significant medical history. N. C. was a single mother of a developmentally disabled child. Her father resided in a nursing
home and suffered from dementia, so her siblings were her decisionmakers concerning care.
At admission, N. C. was already in a vegetative state, suffering from a massive intracranial hemorrhage. Her blood pressure was 213/107. She was immediately intubated and given Mannitol to reduce intracranial pressure and Dilantin to prevent seizures.
On February 8, a neurologist evaluated N. C. and found her a poor candidate for surgery to evacuate the intracranial hematoma due to the likelihood of extensive consequent neurological deficits. The neurologist discussed the possibilities and the "extremely poor" prognosis with the siblings, who decided not to pursue surgery and instead allow
N. C. to be "managed medically." The physicians asked the siblings to consider a DNR code for N. C.
N. C. made no meaningful progress in the following days. Respondent was unable to contact her siblings until February 19, and they asked for two days within which to make the decision whether to place N. C. on a DNR code. On February 22, they decided to place N. C. on a DNR code and withdraw the ventilator. Three days later, the physician discussed with the siblings the possibility of placement in a nursing home. Three days after this discussion, the siblings agreed on inpatient hospice care for N. C. On March 4, IV
fluids and medications and the nasogastric feeding tube were withdrawn, and N. C. was transferred to a nursing home under hospice care.
N. C.'s hospitalization was medically necessary through February 22 because a nursing home cannot accept a patient on a ventilator, N. C.'s course following the stroke could reasonably be observed for a couple of weeks to determine if improvement--however unlikely--might take place, and the siblings reasonably required this long to make this difficult decision. From February 23 through discharge, the inpatient services provided N. C. were no longer medically necessary, so Petitioner properly denied nine days of the 21 days that it denied for this recipient.
N. Ch. was admitted on May 23, 2001. Petitioner does not contest the medical necessity of inpatient services to treat
N. Ch.'s cellulitus and osteomyelitis from May 23 to June 24.
The parties' dispute concerns the medical necessity of the remaining 46 days of N. Ch.'s hospitalization.
N. Ch., a 38-year-old male, presented to the emergency department with wounds to both legs and loss of feeling in both feet and a history of fractures to both tibias 20 years ago followed by osteomyelitis four years ago. Despite considerable hospital treatment to both legs, consisting of antibiotics,
hyperbaric oxygen, debridement, and skin grafts, drainage of the wounds persisted.
Four grainy wounds on both legs penetrated to the bone, and N. Ch. had suffered some bony damage from the persistence of these infected wounds. A physician performed a surgical debridement of the wounds on May 26, and a vacuum- assisted closure device was applied to the wound on the following day. This device produces negative air pressure to stimulate a chemical change in the tissues to enhance the migration of new blood vessels and granulation tissue over the area of the wound. The pump was changed often. On June 22,
N. Ch. underwent a second debridement and a pump was reapplied to the wounds on June 24.
The issue in this case involves the use of hyperbaric oxygen treatment on an inpatient basis. On June 7, a physician reasonably recommended 20, 90-minute hyperbaric oxygen treatments. The treatments, which accelerate wound healing, began the next day.
Dr. Silkes correctly finds no medical necessity after
N. Ch. became stable after the second debridement. Although he later suffered some fever, apparently from his reaction to an antibiotic, and gastroesophagael reflux, as well as some adverse reactions to IV and peripherally inserted central catheter lines, N. Ch. could have been managed as an outpatient after
June 24. Nothing suggests that the vacuum-`assisted closure device requires hospitalization, and hyperbaric oxygen treatment clearly does not require hospitalization.
Respondent contends that inpatient services remained medically necessary after June 24 because Medicaid would not pay for hyperbaric oxygen treatment on an outpatient basis. Medical necessity is driven by medical, not legal, considerations. If the sole reason for hospitalization is to obtain a medically necessary good or service that Respondent has restricted to the inpatient setting, then the provider community improperly circumvents Petitioner's restriction. If there is no other reason to continue to hospitalize a recipient, such as N. Ch., the decision to do so in order to obtain for him a concededly medically necessary service--that does not otherwise require hospitalization--is unwarranted.
Petitioner properly denied the 46 days of inpatient services for N. Ch. after June 24.
J. C. was admitted on February 24, 2002. Petitioner does not contest the medical necessity of inpatient services to treat J. C.'s coronary artery disease and lymphoma on February
24 and March 3-8. In its proposed recommended order, Respondent does not contest Petitioner's denial of the "last two days," which apparently are March 9-10. The parties' dispute concerns
the medical necessity of the remaining six days of hospitalization from February 25 through March 2.
J. C., a 61-year-old female, presented to the emergency department with worsening chest pain over the past two weeks and a history of coronary artery disease. She also had an undiagnosed mass on her neck. She had previously failed outpatient treatment and was admitted to the hospital.
Two weeks earlier, J. C. was to have had an outpatient biopsy of the neck mass, but the anesthesiologist declined to administer anesthesia until her unstable angina was addressed.
J. C. went to her primary care physician, who referred her to a cardiologist, but, prior to seeing him, J. C. went to the emergency department.
On February 25, the physician's notes indicate that
J. C. was stable and without chest pain. The cardiologist performed a cardiac catheterization on February 26 and found 100 percent blockage of the left anterior descending artery, 80 percent blockage of the proximal circumflex, and other narrowings that were not amenable to angioplasty and stenting, so he recommended coronary artery bypass grafting.
Heart surgery could not proceed until physicians learned the nature of the neck mass. A biopsy was performed on February 28, which revealed B-cell malignant lymphoma. The oncologist preferred to commence chemotherapy after the bypass
operation, so this was performed on March 3. J. C. was extubated on March 4, but developed acute respiratory distress on March 5 and required a transfusion the following day.
However, Dr. Silkes is correct in finding the hospitalization from February 25 through March 2 medically unnecessary. The procedures performed during this period could have been done on an outpatient basis. The record does not support Respondent's argument that her unstable angina required inpatient management. Petitioner properly denied these six days of inpatient services.
R. LaB. was admitted on April 2, 2001. The parties' dispute concerns the medical necessity of the last day of inpatient service on April 12. This is the first case considered in this recommended order handled by Dr. Alan Yesner, an internist whose practice is more evenly divided between inpatients and outpatients than is Dr. Silkes' practice.
R. LaB., a 47-year-old female, presented to the emergency department with abdominal pain of two days' duration and a history of COPD, hypertension, and diabetes. She was rushed to abdominal surgery to reduce an incarcerated hernia. The surgery was long. R. LaB. suffered respiratory failure and required intubation.
Dr. Yesner is correct in opining that R. LaB.'s hospitalization after April 11 was not medical necessary. She
was stable and on appropriate medication, so Petitioner properly denied one day of inpatient service for R. LaB.
J. L. was admitted on June 12, 2001. The parties' dispute concerns the medical necessity of the seven days of inpatient services.
J. L., a 47-year-old male, presented to the emergency department with complaints of a gradual increase of abdominal girth and was found to have blood in his stool. Lab work indicated an elevated INR, elevated bilirubin, and bacteria in his urine. The physician concluded that J. L. suffered from primary biliary cirrhosis, for which he had been treated since at least 1998. J. L. admitted that he had become noncompliant with his medication after a divorce.
A CT scan revealed a probable stone obstructing the right ureter, causing urine to back up and flood the right kidney. A successful laser lithotripsy was performed on June 17 with the complete fragmentation of the stone and the installation of a stent, which would facilitate drainage, to be removed a few days later. J. L. tolerated the procedure well, and on the next day he reported feeling better without any pain in his flank.
Dr. Yesner notes the "late schedule" of the lithotripsy, but Respondent did not have a lithotripter in 2001 and had to schedule it for use at the hospital. The
hospitalization was medically necessary through June 17 due to the pain, advanced kidney disease, and potential kidney problems presented by the blockage, prior to its surgical fragmentation. Petitioner should have denied two days, not seven days.
C. M. was admitted on April 2, 2001. Petitioner does not contest the medical necessity of admission for 23-hour observation only on April 2 for end-stage sarcoidosis, pneumonia, and gastrointestinal bleeding. The parties' dispute concerns the medical necessity of the remaining 31 days of
C. M.'s hospitalization, which concluded with her death.
C. M., a 55-year-old female, presented to the emergency department with shortness of breath and weakness. She is a Jehovah's Witness, so she declines blood transfusions on religious grounds.
By April 4, C. M.'s blood gases, although not within normal ranges, were out of critical ranges. C. M. suffered respiratory failure and required intubation on April 16. Her hemoglobin gradually dropped after this, but treatment was limited to iron and vitamins due to the refusal of the patient to accept a blood transfusion. This treatment was unsuccessful. The family supported C. M.'s decision not to accept a blood transfusion, but insisted on full, aggressive treatment, including CPR. C. M. went into cardiac arrest on May 3 and CPR failed to revive her.
Dr. Silkes states that Respondent should have arranged for hospice care during the first day of hospitalization. C. M. was not then on a ventilator, so a hospice would not have objected to taking C. M. on that ground, but her respiration was critically impaired for the first three days of her hospitalization and her prognosis was not such as to render hospital care medically unnecessary. It was medically necessary to stabilize C. M.'s respiration during these first three days, but her hemoglobin issues could have been addressed by home health care for the next 11 days. The medical necessity of inpatient services resumes, though, after C. M.'s respiratory failure of April 16 and continues to the end of her hospitalization.
The first three days of inpatient services were medically necessary, the next 11 days of inpatient services were not medically necessary, and the last 17 days of inpatient services were medically necessary, so Petitioner should have denied 11 days, not 31 days.
M. M. was admitted on March 3, 2001. Petitioner does not contest the medical necessity of inpatient services to treat acute asthmatic bronchitis with a history of coronary artery bypass graft, asthma, sarcoidosis of the lung, and diabetes from March 3-12, which Petitioner later extended to March 13. The parties' dispute concerns the medical necessity of the remaining
three days of M. M.'s hospitalization, which Respondent's expert frankly conceded was difficult to justify.
As Dr. Yesner noted, M. M. was stabilized on oral medication by March 11, and he allowed a couple of additional days to monitor her. M. M. experienced hypoglycemia on March 16, but this is a condition that, according to Dr. Yesner, is not unusual with the Prednisone that M. M. was taking, and hypoglycemia is typically managed on an outpatient basis. Petitioner properly denied the last three days of M. M.'s hospitalization.
J. P. S. was admitted on January 4, 2001. Petitioner does not contest the medical necessity of inpatient services to treat J. P. S.'s obstruction of the common bile duct. The parties' dispute concerns the medical necessity of the last three days of his hospitalization.
J. P. S., a 54-year-old male, presented to the emergency department with severe jaundice and a history of diabetes, congestive heart failure, and triple coronary artery bypass graft performed in 1997, although he displayed no significant cardiac abnormalities during this hospitalization. During the initial examination, J. P. S. went into respiratory arrest and required intubation.
The gastroenterologist found J. P. S. ready for discharge, from a gastroenterological perspective, on
January 13. but J. P. S. immediately developed COPD symptoms, including shortness of breath and edema. According to the physician notes, J. P. S. was sufficiently stable for discharge on January 15, but a note for the next day says to hold the discharge pending cardiac evaluation. Respondent discharged
J. P. S. three days later, after physicians could monitor the level of Digoxin to ensure that J. P. S. was safe for discharge.
P. S.'s entire hospitalization was medically necessary. Petitioner improperly denied the last three days of inpatient services.
J. P. was admitted on December 8, 2001. Petitioner does not contest the medical necessity of services to treat
J. P.'s fever from December 8-12. The parties' dispute concerns the medical necessity of the remaining 14 days of J. P.'s hospitalization.
J. P., a 27-year-old male, presented to the emergency
department with high-grade fevers and severe headaches and a history of AIDS. Dr. Silkes approved the treatment of the fever until it ended on December 12.
The fever was likely caused by J. P.'s toxoplasmosis of the central nervous system. This is an opportunistic condition not unusual in immunocompromised patients. Candida fungal infection likely caused J. P.'s complaints of pain on
swallowing, as this too is an opportunistic condition. Additionally, a blood culture revealed a staph infection.
Through December 18, J. P. was continuing to experience fevers of up to 101 degrees. At the same time, it was necessary to address the toxoplasmosis before it extended to other organs. This required the sequential administration of IV antibiotics and careful, continual monitoring of the patient for his clinical response to treatment. On December 20, J. P. underwent a bone marrow biopsy to rule out the extension of toxoplasmosis in the bone marrow or the presence of tuberculosis. This test was negative, which was a precondition for discharge. The pathology report was "received" on
December 21, but not "printed" until December 27. However, J.
P. did not complete his IV administration of Doxycycline until December 23, when the medical necessity for his inpatient services ended.
Petitioner should have denied three days, not 14 days.
W. P. was admitted on June 18, 2001. Dr. Silkes would allow only a 23-hour observation on the day of admission for the treatment of lung cancer and tuberculosis. The parties' dispute concerns the medical necessity of 13 days of his hospitalization from June 18 through July 1 (even though he was not discharged until July 13).
W. P., a 59-year-old male, presented to the emergency department with severe coughing up of blood and a recent loss of
40 pounds. A chest X-ray at admission revealed a large mass in the upper left lobe of the lungs. Lab work suggestive of anemia correlated with a malignancy as its source. Sputum to test for acid fast bacillus was taken, and a consult was immediately arranged with a pulmonary specialist to consider a bronchoscopy and to take a biopsy.
A CT scan of the chest on June 18 revealed abnormal soft tissue density filling the right upper lobe, two tumors, and numerous nodes. The bronchoscopy on June 19 revealed 80 percent obstruction of the right main bronchus secondary to an endobronchial lesion and 100 percent obstruction of the right upper lobe. A biopsy of the right mainstem bronchus revealed a squamous cell carcinoma. A physician noted in his consultation report that W. P. was to complete his metastatic survey on the day of the report--June 22--after which they would discuss palliative treatment. The report states that the patient understands that he will unlikely live more than six months.
Subsequently, acid fast bacillus, which had originally not been detected, was found, so W. P. was placed in isolation on June 26. He had been experiencing elevated white blood counts and fevers. He was placed on antituberculosis treatment, which, as noted above, typically takes two or three weeks until
the patient can be removed from isolation. July 10 was W. P.'s first day without fever. On this date, Respondent sent his records to the Health Department to facilitate a transfer to a tuberculosis hospital. He was discharged on July 13.
W. P.'s entire hospitalization was medically necessary. Petitioner should not have denied any of the 13 days that it denied.
M. Pr. was admitted on December 18, 2001. Petitioner does not contest the medical necessity of inpatient services to treat M. Pr.'s coronary artery disease from December 18-27. The parties' dispute concerns the medical necessity of the remaining seven days of M. Pr.'s hospitalization.
M. Pr., a 58-year-old male, presented to the emergency department with a recent cardiovascular accident while out of state. A cardiac catheterization revealed severe triple vessel coronary artery disease. On December 19, M. Pr. underwent a four-vessel bypass. Post-operatively, however, M. Pr. fell while on the commode.
The dispute in this case arises due to the unavailability of rehabilitation facilities that would take
M. Pr. after his fall. He was suitable for discharge on December 28, but no facility could be found to receive him. These are "grace days," as noted in the Handbook and are available, on a limited basis, for persons under 21 years of
age, but, by negative implication, are unavailable for adults. Thus, medical necessity dictated that Respondent discharge M. Pr. on December 27, so the inpatient services are not reimbursable after December 28, given that the day of discharge is not allowable.
Dr. Silkes' determination was correct in this case.
Petitioner properly denied seven days' inpatient services for
M. Pr.
A. R. was admitted on December 30, 2001. Petitioner has denied the entire 14 days of A. R.'s hospitalization, although Dr. Silkes approved one day's inpatient services, on the day of admission, for the treatment of ovarian cancer.
A. R., a 63-year-old female, presented to the emergency department with vomiting on the day of admission, progressive abdominal distension, anorexia, weight loss over the past month, and a 15-year history of bronchial asthma.
A CT scan of A. R.'s thorax at the time of admission revealed a large collection of fluid in the abdominal cavity. At this time, a physician removed 4.5 liters of fluid from the cavity, and A. R., not surprisingly, began to feel much better. A report on January 3--delayed probably due to the holidays-- indicated the presence of scattered malignant cells in the withdrawn fluid compatible with carcinoma. Metastatic ovarian cancer was subsequently confirmed.
A. R.'s case was complicated by the withdrawal of this large volume of fluids, which required continual monitoring of her electrolytes, and the sudden exacerbation of her dementia on January 2, which would impede outpatient services, as well as the initiation of chemotherapy. The dementia, which had been progressive for the past six months, was likely a reaction to the carcinoma.
By January 11, a physician recommended hospice placement given A. R.'s incurable tumor. A. R.'s daughter agreed on this day to hospice placement. This is the day that medical necessity for inpatient services ended.
Petitioners should have denied three days, not 14 days. The remaining days were medically necessary.
E. S. was admitted on May 4, 2001. Petitioner does not contest the medical necessity of inpatient services to treat
E. S.'s pancreatitis and multisystem failure from May 4-23. The parties' dispute concerns the medical necessity of the remaining
24 days of her hospitalization, which ended with her death.
E. S., a 64-year-old female, presented to the emergency department with nausea and abdominal pain and a history of hypertension and abuse of alcohol and tobacco. She was found to have elevated pancreatic enzymes. On May 8, E. S. underwent a laparoscopic removal of her gallbladder, which she tolerated well, but soon afterwards suffered respiratory
failure. E. S. was then placed on a ventilator. Problems with malnourishment and then kidney failure precluded a successful weaning her off the ventilator. On May 23, the family agreed to a DNR code.
May 23 marks the last day that Dr. Silkes found that
E. S.'s hospitalization was medically necessary. Care after this date was entirely supportive and not medically necessary; however, no hospice or skilled nursing facility would take E. S. because she could not be weaned off the ventilator.
The unavailability of an alternative, less costly setting does not automatically render the inpatient care of a recipient medically necessary. The circumstances dictate whether inpatient services to such a patient are medically necessary. Here, it is impossible to find that services after May 23 were medically necessary.
Dr. Silkes was correct in her opinion. Petitioner properly denied all 24 days of inpatient services for E. S.
D. S. was admitted on March 24, 2001. Petitioner does not contest the medical necessity of inpatient services to treat D. S.'s osteomyelitis of the right foot from March 24-25 and March 30-April 10. (Originally, Dr. Silkes allowed only March 24-25 and March 30-April 6, but, on February 7, 2007, she revised her opinion to allow the additional four days to
April 10.) In its prehearing statement, Petitioner conceded
that only three of the original ten denied days remained at issue, as it was agreeing that an additional seven days were medically necessary. The parties' dispute concerns the medical necessity of the remaining three days, although it is not clear what three days Petitioner is contesting.
D. S., a 57-year-old female, presented at the emergency department with a "hole in the right foot" and a history of diabetes. She dropped a can of juice on her foot on January 1, and the foot had become progressively infected since that time. On the day of admission, she underwent surgery for the removal of fourth and fifth metatarsal bones and toes of the right foot. She did not heal properly and required followup surgery on April 7 to trim some of the necrotic flap, as the physicians considered the possibility of a below-knee amputation. On April 13, the surgeon probed the wound, found no hidden pockets, and discharged D. S.
Regardless what three days that Petitioner continues to find were not medically necessary, the entire hospitalization was medically necessary.
J. W. was admitted on August 20, 2001. Petitioner does not contest the medical necessity of inpatient services to treat J. W.'s multiple organ failure from August 20 to September 14. The parties' dispute concerns the medical
necessity of the remaining two days of J. W.'s hospitalization, at which time he died.
J. W., a 48-year-old male, presented to the emergency department with a two or three-day history of progressive congestive heart failure with pulmonary edema, atypical chest pain, and increasing abdominal girth. His history included nonischemic cardiomyopathy with minimal coronary artery disease, chronic alcohol abuse, pulmonary hypertension, chronic atrial fibrillation requiring anticoagulation therapy, hepatitis B and C, chronic renal insufficiency, and chronic congestive heart failure with multiple hospitalizations. On admission, his INR was 6.6, indicative of very slow clotting.
Despite the care of numerous consultants, J. W. suffered increased respiratory failure on September 5, at which time he was intubated. He received a Greenfield filter on September 7 to prevent further pulmonary clots. Starting September 10, and continuing everyday thereafter, J. W. required dialysis due to renal failure. J. W. was on total parenteral feeding as of September 14.
The family, whose availability had been a problem, agreed to a DNR code on September 17. Respondent claims in its proposed recommended order that a DNR code is a precondition to hospice care, but no competent evidence establishes this fact.
Dr. Silkes and Petitioner properly denied the last two days because they were not medically necessary.
M. W. was admitted on June 10, 2001. Petitioner does not contest the medical necessity of inpatient services to treat
M. W.'s ventricular fibrillation and complications from June 10-
The parties' dispute concerns the medical necessity of the remaining seven days of M. W.'s hospitalization.
M. W., a 31-year-old male, presented to the emergency department with cardiopulmonary arrest after his wife found him slumped on the sofa, seizing. On arrival, he was found to be in ventricular fibrillation, and he was intubated. Physicians restored a normal rhythm, but M. W. suffered a seizure in the emergency department, so he was given large doses of Dilantin.
M. W. had suffered brain damage from cerebral anoxia.
M. W. was extubated on June 13, and his breathing remained stable. He remained in normal sinus rhythm. M. W. began to receive Librium on June 13 to sedate him. The cardiologist proposed a cardiac catheterization, but M. W. refused. An EKG on June 15 found a conduction defect in M. W.'s heart that was suggestive of Wolff Parkinson White syndrome. The cardiologist then determined, on June 16, that M. W. required an electrophysiology study to rule out Wolff Parkinson White syndrome.
In 2001, Respondent lacked the equipment to perform this study, for which M. W. remained too confused to participate on June 18 anyhow. Physicians continued to monitor M. W.'s cardiac rhythm, and, when a bed opened at Florida Hospital, Orlando, which had the necessary equipment, Respondent promptly transferred M. W. on June 22. During the transfer, the cardiac monitor continued to check M. W.'s rhythm due to the risk of another cardiac incident until the underlying cardiac abnormality was assessed and treated.
Petitioner improperly denied the final seven days of
M. W.'s hospitalization. M. W. had suffered a serious cardiac event. Physicians had not yet ruled out all possible reasons for the event and needed to address a promising possibility of Wolff Parkinson White syndrome, so M. W. remained at risk for another event. He was confused from the brain damage. All of these factors militate in favor of finding that the remaining seven days of inpatient services were medically necessary.
E. | A. | $1666.62 |
R. | B. | $5703.18 |
N. | C. | $7332.66 |
N. | Ch. | $38,332.26 |
J. | C. | $4888.44 |
R. | LaB. | $833.31 |
J. | L. | $1666.62 |
C. | M. | $9166.41 |
M. | M. | $2499.93 |
The total overpayment is $104,309.97, which breaks down as follows:
J. P. | $2444.22 |
M. Pr. | $5703.18 |
A. R. | $2444.22 |
E. S. | $19,999.44 |
J. S. | $1629.48 |
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter. §§ 120.569, 120.57(1), and 409.913(31), Fla. Stat. (2006).
Section 409.913(1)(c) and (d), Florida Statutes (2001), provides:
"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.
Although possibly amended since 2001, but tracking the definition from the Handbook, Florida Administrative Code Rule 59G-1.010(166) provides similarly:
“Medically necessary” or “medical necessity” means that the medical or allied care, goods, or services furnished or ordered must:
Meet the following conditions:
Be necessary to protect life, to prevent significant illness or significant disability, or to alleviate severe pain;
Be individualized, specific, and consistent with symptoms or confirmed diagnosis of the illness or injury under treatment, and not in excess of the patient’s needs;
Be consistent with generally accepted professional medical standards as determined by the Medicaid program, and not experimental or investigational;
Be reflective of the level of service that can be safely furnished, and for which no equally effective and more conservative or less costly treatment is available; statewide; and
Be furnished in a manner not primarily intended for the convenience of the recipient, the recipient's caretaker, or the provider.
“Medically necessary” or “medical necessity” for inpatient hospital services requires that those services furnished in a hospital on an inpatient basis could not, consistent with the provisions of appropriate medical care, be effectively furnished more economically on an outpatient basis or in an inpatient facility of a different type.
The fact that a provider has prescribed, recommended, or approved medical or allied care, goods, or services does not, in itself, make such care, goods or services medically necessary or a medical necessity or a covered service.
Section 409.913(11), Florida Statutes (2006), provides:
The agency may deny payment or 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.
As the preceding statute is likely remedial, it applies to this case, but its predecessor, Section 409.913(10), Florida Statutes (2001), is identical, except that it omits the language about denying payment.
As is relevant to administrative proceedings, as distinguished from legal actions, Section 409.913(15), Florida Statutes (2006), which is clearly remedial, provides:
The agency may seek any remedy provided by law, including, but not limited to, the remedies provided in subsection. . . (16)
. . . if:
* * *
The provider or person who ordered or prescribed the care, services, or supplies has furnished, or ordered the furnishing of, goods or services to a recipient which are inappropriate, unnecessary, excessive, or harmful to the recipient or are of inferior quality; [or]
The provider has demonstrated a pattern of failure to provide goods or services that are medically necessary[.]
* * *
Clearly remedial, Section 409.913(16), Florida Statutes (2006), provides:
The agency shall impose any of the following sanctions or disincentives on a provider or a person for any of the acts described in subsection (15):
Suspension for a specific period of time of not more than 1 year. Suspension shall preclude participation in the Medicaid program, which includes any action that results in a claim for payment to the Medicaid program as a result of furnishing, supervising a person who is furnishing, or causing a person to furnish goods or services.
Termination for a specific period of time of from more than 1 year to 20 years. Termination shall preclude participation in the Medicaid program, which includes any action that results in a claim for payment to the Medicaid program as a result of furnishing, supervising a person who is furnishing, or causing a person to furnish goods or services.
Imposition of a fine of up to $5,000 for each violation. Each day that an ongoing violation continues, such as refusing to furnish Medicaid-related records or refusing access to records, is considered, for the purposes of this section, to be a separate violation. Each instance of improper billing of a Medicaid recipient; each instance of including an unallowable cost on a hospital or nursing home Medicaid cost report after the provider or authorized representative has been advised in an audit exit conference or previous audit report of the cost unallowability; each instance of furnishing a Medicaid recipient goods or professional services that are inappropriate or of inferior quality as determined by competent peer judgment; each instance of knowingly submitting a materially false or erroneous Medicaid provider enrollment application,
request for prior authorization for Medicaid services, drug exception request, or cost report; each instance of inappropriate prescribing of drugs for a Medicaid recipient as determined by competent peer judgment; and each false or erroneous Medicaid claim leading to an overpayment to a provider is considered, for the purposes of this section, to be a separate violation.
Immediate suspension, if the agency has received information of patient abuse or neglect or of any act prohibited by s. 409.920. Upon suspension, the agency must issue an immediate final order under s. 120.569(2)(n).
A fine, not to exceed $10,000, for a violation of paragraph (15)(i).
Imposition of liens against provider assets, including, but not limited to, financial assets and real property, not to exceed the amount of fines or recoveries sought, upon entry of an order determining that such moneys are due or recoverable.
Prepayment reviews of claims for a specified period of time.
Comprehensive followup reviews of providers every 6 months to ensure that they are billing Medicaid correctly.
Corrective-action plans that would remain in effect for providers for up to 3 years and that would be monitored by the agency every 6 months while in effect.
Other remedies as permitted by law to effect the recovery of a fine or overpayment.
The Secretary of Health Care Administration may make a determination that imposition of a sanction or disincentive is not in the best interest of the Medicaid program, in which case a sanction or disincentive shall not be imposed.
Also clearly remedial, Section 409.913(23)(a) and (b), Florida Statutes (2006), provides:
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.
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.
The burden of proof is on Petitioner. South Medical
Services, Inc. v. Agency for Health Care Administration, 653 So. 2d 440 (Fla. 3d DCA 1995).
The standard of proof is a preponderance of the evidence. Section 120.57(1)(j), Florida Statutes, states:
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, and shall be based exclusively on the evidence of record and on matters officially recognized.
Petitioner concedes in its proposed recommended order that the standard of proof is a preponderance of the evidence. Counsel discussed at some length during the hearing the meaning of the "final arbiter" language in the statutory definition of "medical necessity" and what, if any, impact it might have on
the standard of proof. It has none. This language emphasizes that, as between the state and federal governments, the state is the final arbiter of what services are medically necessary and, ultimately, what services are covered. See Pharmcare Oklahoma, Inc. v. Oklahoma Health Care Authority, 152 P.3d 267, 272 (Okla. Civ. App. 2006).
The two denials that result in the largest overpayments warrant additional discussion: N. Ch. and E. S. The definition of "medical necessity" in the Handbook and rule clearly establishes that the elements are conjunctive. First, services must treat or alleviate pain. Second, services must be specific to the patient and not in excess of what he needs. Third, services must be in accordance with generally accepted medical standards and not investigational or experimental. Fourth, services must reflect the level of service that can be safely furnished and cannot be substituted by an equally effective and more conservative or less costly service that is available statewide. Fifth, services must not be provided for convenience. For inpatient services, a sixth requirement is that services cannot, consistent with the provisions of appropriate medical care, be provided more economically on an outpatient basis or in another type of inpatient facility.
The case of N. Ch. and his need for hyperbaric oxygen treatment is clear cut. His only "need" for hospitalization is
so that Medicaid would pay for the treatment. Although the hyperbaric oxygen treatment is medically necessary, hospitalization, after the time allowed by Petitioner, was in excess of what N. Ch. needed and could be safely replaced by outpatient services.
E. S. presents a different and more difficult case. (Larry writes that this paragraph could be clearer) After the last date allowed by Petitioner, hospitalization was no longer medically necessary because inpatient services were not treating or palliating E. S. and inpatient services were in excess of E. S.'s needs. This is not to say that an equally effective or less costly alternative was available; there was no alternative to hospitalization. But this element of the definition is only one of five or six--all of which must be satisfied for a service to be medically necessary. Under the rule, Respondent could not obtain Medicaid reimbursement for keeping E. S. in the hospital after May 23. Although Respondent had no other practical alternative, besides turning this dying patient out into the street, Petitioner too is faced with difficult decisions in allocating limited resources through the Medicaid program, and the programmatic choices that Petitioner has made are not subject to question in this case. See, e.g., Shoot v. Indiana
Family and Social Services Administration, 691 N.E. 2d 1290 (Ind. App. 1998) (former Boren amendment).
In its Final Agency Audit Report, Petitioner has sought certain costs, a $1000 administrative fine, a corrective action plan, and repayment of $286,357.54. The statute governing costs requires the determination of whether Petitioner is the prevailing party, which necessarily awaits the issuance of the final order and the resolution of any appeal, as, if the present recommendation were to survive agency and judicial review, Petitioner would be entitled to less than half of what it originally sought. Also, if Petitioner were to be the prevailing party, an order for costs would require evidence of actual costs and the financial resources of Respondent--all of which such evidence is absent from this record. This request is thus denied, without prejudice, as premature. The request for a
$1000 fine and corrective action plan are authorized by statute.
It is
RECOMMENDED that the Agency for Health Care Administration enter a final order finding overpayments totaling $104,309.97 during the audit period and requiring that Respondent repay this amount, imposing an administrative fine of $1000, requiring Respondent to prepare a corrective action plan, and reserving jurisdiction to remand the case to the Division of Administrative Hearing for a determination of Petitioner's entitlement to statutory costs, if any.
DONE AND ENTERED this 6th day of June, 2007, in Tallahassee, Leon County, Florida.
S
ROBERT E. MEALE
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 6th day of June, 2007.
COPIES FURNISHED:
Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308
Craig H. Smith, General Counsel Agency for Health Care Administration Fort Knox Building, Suite 3431
2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308
Dr. Andrew C. Agwunobi, Secretary Agency for Health Care Administration Fort Knox Building 3116
2727 Mahan Drive
Tallahassee, Florida 32308
Richard M. Ellis, Esquire Rutledge, Ecenia, Purnell &
Hoffman, P.A.
215 South Monroe Street, Suite 420 Post Office Box 551
Tallahassee, Florida 32304-0551
William Blocker, Esquire
Agency for Health Care Administration Fort Knox Building III, Mail Stop 3 2727 Mahan Drive, Building 3
Tallahassee, Florida 32308
Daniel Lake, Esquire
Agency for Health Care Administration 2727 Mahan Drive, Suite 3431
Fort Knox Building III, Mail Stop 3 Tallahassee, Florida 32308
Tracy Cooper, Esquire
Agency for Health Care Administration Fort Knox Building III, Mail Stop 3 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 |
|---|---|---|
| Aug. 01, 2007 | Agency Final Order | |
| Jun. 06, 2007 | Recommended Order | Petitioner proved that certain inpatient hospitalization services were not medically necessary. |
