Findings Of Fact On March 25, 1991, Fred Huerkamp, who has served as Director of Health Planning Council of Northeast Florida for District IV for approximately eight years, received Mederi's CON application to establish a medicare certified home health agency in District III. Huerkamp telephoned Mederi's representative, Louise Jeroslow, and told her that Mederi's application had been received that morning in his District IV office in Jacksonville, although it should have been sent to the local health council for District III in Gainesville. Jeroslow then telephoned the office of the North Central Florida Health Planning Council, the local health council for HRS District III. A staff member, after consultation with and at the direction of Executive Director Carole Gormley, told Jeroslow that it would not matter if the CON application was mailed from Jacksonville to Gainesville and, therefore received late in District III. Gormley has served as Executive Director of the District III Council for approximately eight years. Prior to January 31, 1991, Gormley and Huerkamp, the Directors of local health councils for Districts III and IV respectively, were aware that HRS checked with their councils to determine the timeliness of filings of letters of intent, but did not check on the timeliness of filings of CON applications with the councils. On January 31, 1991, Rule 10-5.008(1), Florida Administrative Code was substantially amended, and included the following specific provisions: (k) Certificate of Need Application Submission. * * * The application must be actually received by the Office of Regulation and Health Facili- ties by 5 p.m. local time and a copy must actually be received by the local health council by 5 p.m. local time on or before the application due date. An application shall not be deemed complete by the department unless all information requested by the department and provided for in the application form has been submitted on the form by the applicant. An application submitted to the Office of Regulation and Health Facilities shall not be accepted by the department, and the application fee will be returned if a copy of the application is not received by the appropriate local health council as provided above. The Mederi CON application at issue in this proceeding was filed in the February batching cycle, the first cycle following the amendment of the rule. Although the specific language of the rule was clarified, the requirement for submission of CON applications by 5 p.m. on the due date with both HRS and the local health councils was essentially unchanged, having previously been included in an HRS Policy Manual. All potential applicants were informed of the amendment of the rule by notice in the Florida Administrative Weekly on February 1, 1991. All applicants who submitted letters of intent, including Mederi, also received a copy of the rule in their application packages, an HRS number to telephone for additional information, and notice of the requirement by form cover letter, one paragraph of which, stated: According to Section 381.709(2)(a), Florida Statutes, and Chapter 10-5.008(1)(k), Florida Administrative Code, you are advised that certificate of need applications submitted to this department must also be sent concurrently to the local health council that serves the district of your proposed project. At the time Mederi's application was filed, neither Gormley of District III nor Huerkamp of District IV was aware of the specific change in the rule or, more importantly, of the new HRS policy of verifying that CON applications were timely filed with the local health councils. If either had been aware of the new policy or in doubt about the practices of HRS, they would have referred Mederi to HRS, as they routinely do when receiving inquiries from applicants and the public. By letter dated March 29, 1991, HRS rejected Mederi's CON application as untimely for having been received by the local health council for District III on March 26, 1991, one day late. HRS waived enforcement of the rule and accepted an untimely CON application in the same batching cycle in another district because the zip code provided by HRS in the CON application package was incorrect, causing a delay in delivery by Federal Express. The North Central Florida Health Planning Council is a private non- profit corporation established pursuant to Subsection 381.703(1), Florida Statutes, as the local health council for HRS District III. Pursuant to Subsection 381.703(1)(d), local health council personnel "shall not be deemed to be state employees." Pursuant to Subsection 381.703(1), Florida Statutes, certain responsibilities in the CON process are delegated to local health councils. Among others local health councils develop the district health plan, advise HRS on district health resources and needs, conduct public hearings on some CON projects, and monitor construction projects. In addition to the provisions of the statute, HRS used a Standard Contract to establish its relationship with private local health councils, including the councils for District III and District IV. The contract requires the councils to use State Career Service position classifications and compensation, and to have the prior approval of the HRS to reclassify positions. Council employees are also required to comply with the provisions of Chapter 112, Florida Statutes, which governs the conduct of state employees and officers.
Recommendation Based on the foregoing, it is hereby recommended that HRS enter a final order rejecting Mederi's application for a CON to establish a medicare certified home health agency in District III. RECOMMENDED this 31st day of July, 1991, at Tallahassee, Florida. ELEANOR M. HUNTER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of July, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-2924 The following specific rulings are made pursuant to Subsection 120.59(2), Florida Statutes, submitted by the parties in this case: Rulings on Proposed Findings of Fact Submitted by the Petitioner Adopted in Finding of Fact 3. Adopted in Finding of Fact 1. Adopted in Findings of Fact 14, 16 and 17. Covered in Finding of Fact 11. Adopted in Finding of Fact 11. Covered in Finding of Fact 11. Adopted in Finding of Fact 4. First sentence is adopted in Findings of Fact 3 and 4. Second and third sentences are not material or relevant. Adopted in Finding of Fact 7. Adopted in Finding of Fact 10. Adopted in Finding of Fact 5. Adopted in Findings of Fact 8 and 12. Adopted in Finding of Fact 11. Not material or relevant. Adopted in Finding of Fact 13. First three lines are adopted, the last line is not material or relevant. First sentence is adopted in Finding of Fact 13. Second sentence is not material or relevant. Not material or relevant. Covered in Finding of Fact 13 and Conclusion of Law 4. Covered in Conclusion of Law 4. - 25. Not material or relevant. Included in Preliminary Statement. Adopted in Finding of Fact 1. Adopted in Finding of Fact 2. and 30. Adopted in Finding of Fact 3. Adopted in Finding of Fact 11. Adopted in Findings of Fact 1 and 12. Not material or relevant. Rulings on Proposed Findings of Fact Submitted by Respondent Included in Preliminary Statement. and 3. Adopted in Finding of Fact 12. Not material or relevant. Covered in Finding of Fact 10. Included in Preliminary Statement. Adopted in Finding of Fact 5. Adopted in Finding of Fact 9. Adopted in Findings of Fact 1-3 and 12. Adopted in Findings of Fact 1-3. and 12. Adopted in Finding of Fact 11. Not material or relevant. First sentence is adopted in Finding of Fact 17. Second sentence is not material or relevant. Rulings on Proposed Findings of Fact Submitted by Intervenor, Adventist Health System/Sunbelt, Inc. d/b/a Florida Hospital Included in Preliminary Statement. and 3. Adopted in Finding of Fact 10. First three lines are not material or relevant. Last line is adopted in Finding of Fact 5. and 6. Adopted in Findings of Fact 5, 9 and 10. Adopted in Finding of Fact 1. Adopted in Finding of Fact 2. and 10. Adopted in Finding of Fact 3. Covered in Finding of Fact 12. Adopted in Findings of Fact 14 and 15. Adopted in Finding of Fact 17. Adopted in Finding of Fact 11. Adopted in Finding of Fact 6. Covered in Conclusion of Law 6. Covered in Finding of Fact 10. Covered in Finding of Fact 13. and 20. Covered in Conclusions of Law 4 and 5. 21. and 22. Not material or relevant. 23. and 24. Unnecessary. COPIES FURNISHED: Louise T. Jeroslow, Esquire KOSNITZKY, TRUXTON, DE LA GUARDIA & SPRATT, P.A. 3225 Aviation Avenue Penthouse Miami, Florida 33131 Richard Patterson, Esquire Assistant General Counsel Department of Health and Rehabilitative Services 2727 Mahan Drive Fort Knox Executive Center Tallahassee, Florida 32308 C. Alan Lawson, Esquire Steel Hector & Davis 215 South Monroe Street Suite 601 Tallahassee, Florida 32301 Robert T. Klingbeil, Esquire 1001 Avenida del Circo Post Office Box 1596 Venice, Florida 34284 Sam Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Slye, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact Cilla McCray, is a resident of Gadsden County. The parties have stipulated that on December 3, 1977, she was admitted to the Tallahassee Memorial Hospital in an emergency medical condition, and that the treatment performed by the hospital was of an emergency nature. The parties have further stipulated that the Tallahassee Memorial Hospital is a regional referral hospital within the meaning of Section 154.304(4) , Florida Statutes (1977). Cilla McCray was admitted to the Tallahassee Memorial Hospital on December 3, 1977, and was discharged on January 9, 1978. The total bill for her services amounted to $8,753.80. The Hospital submitted a bill to Gadsden County in the amount of $1,521.48 for the services. This latter amount is the maximum allowed to be billed in accordance with the Florida Health Care Responsibility Act. Gadsden County has refused to pay the bill, contending that the patient was not indigent. The patient has not paid the bill. Cilla McCray is married to Lawrence McCray. They have three children but only two of them reside at home. The oldest child is not supported by his parents. During the six months preceding the hospitalization of Cilla McCray her husband had average earnings of $80.00 per week as a logger. Mrs. McCray had earned a total of $732.60 for employment during the six months prior to her hospitalization. The McCray's thus had average monthly earnings during that period in excess of $450.00 per month.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED: That a final order be entered rejecting the bill submitted by the Tallahassee Memorial Hospital for medical services performed for Cilla McCray. RECOMMENDED this 16th day of June, 1978, in Tallahassee, Florida. G. STEVEN PFEIFFER, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: John Shaw Curry, Esquire Post Office Box 706 Quincy, Florida 32351 John D. Buchanan, Jr., Esquire Post Office Drawer 1049 Tallahassee, Florida 32302 Chairman Board of County Commissioners Gadsden County Courthouse Quincy, Florida
Conclusions THIS CAUSE comes before the AGENCY FOR HEALTH CARE ADMINISTRATION (the "Agency"”) concerning co-batched Certificate of Need ("CON") Application Nos. 10069 - 10072 seeking to establish a new hospice program in Orange County, District 7/B. ODYSSEY HEALTHCARE OF COLLIER COUNTY, INC. d/b/a ODYSSEY HEALTHCARE OF CENTRAL FLORIDA (hereinafter “Odyssey Healthcare”) filed CON Application No. 10071 in the Second Batching Cycle of 2009. The application was denied. Thereafter, Odyssey Healthcare timely filed a Petition for Formal Administrative Hearing with respect to its denial. The Petition was Filed August 27, 2010 3:01 PM Division of Administrative Hearings. forwarded by the Agency Clerk to the Division of Administrative Hearing (“DOAH"). On June 8, 2010, Odyssey Healthcare filed its voluntary dismissal of the DOAH Case No. 10-1681CON (Ex. 1). On June 9, 2010, an Order Severing DOAH Case No. 10-1681CON (Ex. 2) and an Order Closing file (Ex. 3) were issued by DOAH as a result of Odyssey Healthcare’s voluntary dismissal. It is therefore ORDERED and ADJUDGED: 1. The voluntary dismissal by Odyssey Healthcare is hereby acknowledged and accepted. 2. CON Application No. 10071 is hereby denied. 3. The above-styled case is hereby closed. DONE and ORDERED this 2) day of August, 2010, in Tallahassee, _y W. ARNOLD, Secretary AGENCY FOR HEALTH CARE ADMINISTRATION Florida. ae eeeneeeeeaeneneneenmmnenneneeennnaaneneieemnenenamemenenneE mat a
The Issue Whether either or both of the certificate of need applications of North Shore Medical Center, Inc., and Victoria Hospital Partnership should be approved.
Findings Of Fact Victoria Hospital's Proposal Victoria Hospital ("Victoria") is an acute care hospital licensed for 300 beds. It is located close to downtown Miami in an area called "Little Havana." It has been in existence as a private hospital in Miami since 1924. Over ninety percent (90 percent) of Victoria's patients and medical staff are Hispanic. One hundred percent (100 percent) of its psychiatrists are Hispanic. The hospital is owned and operated by Victoria Hospital partnership, which is a partnership of a group of one hundred physicians and Columbia Hospital Corporation formed in 1988. Of its three hundred (300) beds, two hundred sixty (260) are acute-care beds, twenty (20) are psychiatric, and twenty (20) are substance abuse beds. In its CON application, Victoria proposes to convert ten (10) acute care beds (which were 47 percent occupied in 1990-91) to ten (10) additional adult psychiatric beds for a capital expenditure of $142,586.30. The existing 20-bed adult psychiatric unit was 88 percent occupied in 1990-91. Victoria Hospital is accredited by the Joint Commission on Accreditation of Health Organizations. North Shore's Proposal North Shore Medical Center, Inc. ("North Shore"), is a private, not- for-profit corporation which owns and operates North Shore Medical Center, a three hundred fifty seven (357) bed acute care facility, which has operated a psychiatric unit since 1985. North Shore is located in an area of Dade County, which is north of Northwest 20th Street and east of the Palmetto Expressway. The total service area population is over 800,000, and ninety percent (90 percent) of North Shore's patients reside in the service area. North Shore's existing twenty (20) bed adult psychiatric unit is a locked or closed unit, which is a designated Baker Act receiving facility. As such, North Shore admits court ordered involuntary patients for examination to determine whether hospitalization is needed. Some Baker Act patients are among the most seriously ill psychiatric patients, therefore, a locked or closed unit is required by the state to prevent involuntary patients from leaving. North Shore meets code requirements for safety in locked units, including break-away shower and curtain rods, protective features on all windows, secure areas, and policies for removing sharp and glass objects from patients. North Shore proposes to convert up to twenty (20) medical/surgical beds (utilized in 1990 at less than 40 percent) to up to twenty (20) additional adult general psychiatric beds for a project cost not to exceed $300,000. The existing twenty (20) adult psychiatric beds were 87 percent occupied in 1990. North Shore proposes to accept a condition to provide 5 percent of its total psychiatric unit patient days to Medicaid patients and 5 percent to indigent care. To serve more physically frail patients, North Shore proposes to use new beds approved as a medical/psychiatric unit to treat psychiatric patients who also need medical care. Currently, psychiatric patients in need of medical care are treated in the psychiatric unit when they do not require intravenous or oxygen therapy, treated on the medical floors of North Shore, or sent to nursing homes. AHCA Review The Agency for Health Care Administration (AHCA) is the single state agency authorized by statute to issue, deny or revoke CONs in Florida. See, Subsection 408.034(1), Florida Statutes (Supp. 1992). The parties have stipulated to the following facts: The applicants' letters of intent, public notices, application fees, applications and omissions responses, were timely received and in proper form The applicants' projections for project completion costs and project completion fore- casts are reasonable. The architectural drawings and floor plan layouts and costs of construction presented by the two applicants are reasonable and adequate. The projects proposed by both applicants are financially feasible in the short and long term, provided that the applicants' projected utilization is proven to be reasonable and attained. The projections concerning the proposed staffing of the project are reasonable and adequate. Each applicant has a history of providing quality of care and has demonstrated an ability to provide such care. Prehearing Stipulation, paragraph 8. On February 7, 1992, the Agency published a fixed need pool for inpatient adult psychiatric beds in its District 11. The published pool reflected a zero net need for additional adult psychiatric beds in the district. The Agency calculation of numeric need for additional adult psychiatric beds was performed in accordance with methodology requirements found in the inpatient psychiatric services rule ("psych rule"), Rule 59C-1.040(4)(c), Florida Administrative Code. The July 1997 planning horizon projection for District 11 showed a need for two beds without adjustment for occupancy. However, since the District 11 occupancy for the applicable period was 73.57 percent, or below the 75 percent occupancy threshold requirement, numeric need defaulted to zero. Subsection (4)(a) of the psych rule provides that additional adult psychiatric beds are not normally approved by the Agency in the absence of a need shown pursuant to the rule methodology. Subsection (4)(d) of the psych rule specifies one example of a condition in which an existing provider of adult psychiatric services may be approved for additional beds without a determination of numeric need and in the absence of district average occupancy requirements. That exception applies to providers with occupancy rates equal to or in excess of 85 percent for the 12 month period ending 6 months prior to the quarter in which the fixed need pool is published. This rule provision is one, but not the sole, factor in considering whether a provider should be granted additional beds. Other factors are those in Section 381.705, Florida Statutes (1991), and in other subsections of the psych rule. AHCA agrees that, for the July 1990 to June 1991 utilization period, both Victoria and North Shore had an average occupancy in their adult psychiatric units which equaled or exceeded eighty-eight percent (88 percent) and eighty-seven percent (87 percent) respectively. Review criteria as applied to the Victoria Hospital Proposal Subsection 381.705(1)(a)--District 11 Plan The 1990 District 11 health plan includes preferences for the review of CON proposals for inpatient psychiatric services which apply to the review of the Victoria application. The first preference is given when a conversion from acute care beds to psychiatric beds is proposed by an applicant which has provided the highest proportion of charity care and Medicaid days, as indicated by reimbursement as a disproportionate share provider. AHCA agrees that for 1990-1991, Victoria was a disproportionate share hospital. Secondly, publicly funded facilities receive a preference when applying for psychiatric beds. Victoria is not a publicly funded facility, and is not entitled to the preference. The third district preference is given to applicants for adult psychiatric beds who have a history of using, or who propose to use, treatment modalities resulting in an average length of stay of twenty days or less, with individualized follow-up care. Victoria is entitled to this preference, having established that its average length of stay is 12.8 days. See, also Finding of Fact 21. The fourth district preference is given to applicants for inpatient psychiatric programs accredited by the Joint Commission on Accreditation of Health Care Organizations ("JCAHO"). Victoria Hospital and its psychiatric programs are accredited by the JCAHO. The fifth district preference applies to applicants who include discharge planning and follow-up case management proposals. Victoria has an extensive discharge planning and follow-up program. Finally, the district plan has a preference for an applicant who will meet a demonstrated need for services for an identified ethnic group. With a showing that its therapies are provided in Spanish and that its psychiatric program takes into consideration cultural differences of some Hispanic persons, Victoria has demonstrated a commitment to serve an identified ethnic group. Subsection 381.705 (1)(a)--State Health Plan The preferences related to inpatient psychiatric services in the 1989 Florida State Health Plan also apply as review criteria in this case. A preference for applicants proposing the conversion of excess acute care hospital beds to establish a separate and distinct psychiatric unit, is supportive of Victoria's CON application. See, Finding of Fact 4. Preference is also given to an applicant who includes among its patients, the most seriously mentally ill people. Even though it does not have a locked unit, Victoria has proposed to treat a wide range of serious mental illnesses, particularly those combined with substance abuse problems. Preference is also given to an applicant who proposes to serve indigent and Baker Act patients. As a for-profit hospital without a locked unit, Victoria is not eligible for Baker Act designation. Victoria also proposed to make no commitment, as a condition for the approval of the CON, to serve indigents. However, Victoria's status as a disproportionate share provider outweighs its failure to commit to charity or medicaid patient days in a 10-bed psych unit. The state health plan also includes a preference for proposals which include a continuum of care, with follow-up outpatient programs. Victoria's proposal meets the preference. By its past participation in Medicaid and its projection of 50.5 percent Medicaid patient days in the psychiatric unit, Victoria meets the preference for providers serving Medicaid patients. Victoria Hospital also qualifies for a separate state preference as a disproportionate share hospital for fiscal year 1990-1991, although the testimony about its subsequent status was inconclusive. The percentage of psychiatric beds located in acute care hospitals in District 11 is .28 per 1,000 population, which exceeds the minimum of .15 per 1,000 favored in the state health plan. Therefore, the preference cannot be met by Victoria. Two other state health plan preferences (1) for the construction of separate structures for children and adolescents, and (2) for services to substance abusing pregnant and postpartum women are not applicable to or included in the programs proposed by Victoria. Subsection 381.705(1)(b), (c) and (d)--increasing access, availability, efficiency, history of quality care, alternatives and need. AHCA preliminarily denied Victoria's application based, in large part, on Victoria's failure to adequately explain why access to the proposed services is not available in other underutilized facilities in the district. At hearing, although it disputed the applicability of the requirement, Victoria showed that most of the underutilized facilities have a mix of patients by payer categories which differs significantly from the norm for the district. In the case of specialty hospitals, for example Medicaid reimbursement is not available, although 22 percent of the psychiatric patients in District 11 are Medicaid patients. In three of five underutilized general acute care hospitals, the Medicaid percentage as compared to the district norm was also low. In another hospital, the payer mix was composed of more than double the district norm for commercially insured patients. The parties, by Prehearing Stipulation, agreed that Victoria has historically provided quality care, and has been appropriately staffed and managed. See, also Subsections 381.705(1)(c) and (h). Victoria's proposal also meets other psych rule requirements which positively impact the quality of care, including minimum unit size, outpatient services, screening procedures, and ancillary therapies. Victoria has demonstrated a need for its service to Hispanic patients and to Medicaid patients. The alternative of having psychiatrists refer patients to other facilities is currently being used by Victoria within the constraints of financial accessibility. See, Finding of Fact 32. Subsection 381.705(1)(i)--Utilization and Financial Feasibility AHCA questioned, in Victoria's financial pro forma, its projected increase in utilization. With a psychiatric unit waiting list averaging 11 patients per week and an increase in admitting staff psychiatrists from 33 in 1991 to 37 in 1992, Victoria's projections of an increase of 2 to 4 additional admissions per week is reasonable. As a result of the finding that Victoria's projected utilization is reasonable, as stipulated, Victoria's proposal is, financially feasible in the immediate and long term. In addition, as stipulated, Victoria's construction plans are reasonable and adequate. Balancing Criteria Of the inpatient psychiatric services preferences in the state health plan, Victoria's application is not supported by the preferences for health maintenance organizations and for facilities serving Baker Act patients. Of the local health plan preferences, Victoria's application is not consistent with the preference for publicly funded facilities. On balance, Victoria's proposal complies with applicable review criteria, and will have a positive institutional effect of shifting beds to a needed, profitable service, thereby increasing cost effectiveness. In addition, there was no evidence of any adverse impact on other providers of inpatient psychiatric services. Review criteria as applied to North Shore's Proposal, Subsection 381.705(1)(a)--District 11 plan The 1990 District 11 plan also applies to the review of the North Shore CON application, which is also the subject of review in this case. North Shore is not a disproportionate share provider and is not a publicly funded facility. See, Findings of Fact 17 and 18. North Shore has an average length of stay of 18.1 days in its psychiatric unit, and is entitled to preference as a provider with an average length of stay below 20 days with appropriate discharge and after care planning. See, Findings of Fact 19 and 21. North Shore's hospital and psychiatric program are JCAHO accredited. See, Finding of Fact 20. North Shore proposes to serve identified ethnic groups, particularly Haitians and Hispanics. All signs and directions in the hospital are in English, Spanish and Creole. Its staff of 291 bilingual employees is able to communicate in 21 languages. See, Finding of Fact 22. Subsection 381.705(1)(a)--State Health Plan North Shore's application meets the preference for conversion of 20 excess acute care beds, with 45.83 percent utilization in 1990-1991, to a 12 or 20 bed adult psychiatric unit. From 1990-1991, the existing 20 psychiatric beds were utilized in excess of 85 percent. See, Finding of Fact 8. North Shore is a non-for-profit hospital, which qualifies for the preferences for serving Baker Act and other seriously mental ill adults. See, Findings of Fact 7, 25 and 26. North Shore is willing to accept a CON conditioned on its providing 5 percent of total patient days in the additional psychiatric beds to indigents. See, Finding of Fact 26. North Shore's proposed medical/psychiatric services will include follow-up and outpatient services. See, Finding of Fact 27. In 1990, HCCB data showed that North Shore provided 6.8 percent total Medicaid patient days, and 2 percent in its existing psychiatric unit, but North Shore does not qualify as a disproportionate share Medicaid provider. The special preference for applicants in districts with fewer than .15 psychiatric beds per 1000 population in acute care hospitals does not apply to this case. See, Findings of Fact 30. North Shore is proposing to coordinate its psychiatric, substance abuse and prenatal programs to pregnant or postpartum women. There is no proposal to serve children and, therefore, no proposal to construct a separate facility for children. See, Finding of Fact 31. Subsection 381.705(1)(b), (c) and (d)--Increasing Access, Availability, Quality of Care; Alternatives and Need Although AHCA conceded that the North Shore proposal will partially improve availability and access without any adverse impact, AHCA preliminarily denied the CON application of North Shore, in large part based on North Shore's failure to explain why facilities operating at 75 percent occupancy or below do not provide adequate alternatives. In March 1990, North Miami Medical Center closed and six of its psychiatrists moved their practices to North Shore. As a result, North Shore's admissions increased 48 percent and occupancy reached 95 percent. North Shore has a policy of delaying patient admissions for 24 hours so that a bed is always available for emergency, suicidal or Baker Act patients. More specifically, in evaluating the availability of alternatives, North Shore noted that the district occupancy is 73.57 percent but is in excess of 75 percent in the five facilities nearest to North Shore. In the district, the psychiatric services at Jackson Memorial Hospital and Palmetto are most like those at North Shore, provided in general acute care hospitals which can accept Medicaid and Baker Act patients. In 1990- 91, Jackson Memorial's occupancy was 77.76 percent and Palmetto's was 80.3 percent. The general acute care hospitals under 75 percent occupancy without Baker Act certification, were considered as possible alternatives for North Shore's voluntary adult patients. They are Deering, Humana-Biscayne, Larkin, Mercy and Mt. Sinai. Deering and Larkin are 45 minutes to 1 hour south of North Shore. Humana-Biscayne and Mt. Sinai are Medicare providers at 78 percent and 94 percent respectively, indicating service to geriatric patients in greater numbers than the norm for the district. Mercy, with a payer mix most comparable to the overall district, had an occupancy rate in excess of the district average threshold of 75 percent (78.87 percent) for the approval of new beds in 1990- 1991. Another alternative considered by North Shore at hearing is Charter Hospital. Charter's occupancy is only 59.66 percent, but its location is approximately an hour west of North Shore. In addition, Charter, Southern Winds, Harbor View and Grant Center are specialty hospitals which cannot accept Medicaid. North Shore has established the need for some medical/psychiatric beds in the district, because there are no beds in the district to meet these combined needs. In addition, alternative providers of adult psychiatric services for comparable payer groups, which are geographically accessible to North Shore's area, exceed 75 percent occupancy. Subsection 381.705(1)(i)--Utilization and Financial Feasibility AHCA contends that North Shore's reliance on its waiting list to support projected admissions is in error, because the waiting list is, in reality, a "reservations" system. In support, AHCA notes that 22 percent of wait listed patients cancel and refuse treatment. AHCA also questioned North Shore's projections of the number of admissions which will result from the waiting list and from the emergency room. North Shore asserted that voluntary mental patients sometimes refuse treatment in locked units. In addition, medically ill patients cannot be accommodated in a locked unit. These were considerations given in planning an "unlocked" medical/psychiatric unit. Between January 1991 and December 1991, 209 patients were placed on the waiting list. As mentioned by AHCA, 22 percent of those reservations were cancelled. The expectation of fewer cancellations for an unlocked unit is reasonable. North Shore was able to establish that fourteen patients on the waiting list were admitted elsewhere, and three to North Shore in a subsequent month. Of the fourteen admitted elsewhere, five had conditions which could be served in medical/psychiatric units, but were admitted to medical/surgical units. North Shore's projection that it could have admitted two to four patients from its waiting list to a medical/psychiatric unit is supported by its analysis of the ultimate placement of patients on the 1991 waiting list. North Shore quantified and reasonably projected these admissions based on the following: one patient a week from the emergency room, approximately two patients a week from the medical floor, additional admissions based on patient referrals by new staff psychiatrists, fewer refusals of voluntary treatment in an unlocked unit, and the ability to serve patients in an unlocked unit who are referred to the existing psychiatric unit but do not meet the current admissions criteria. North Shore will achieve a forty percent (40 percent) occupancy in the first year, if one patient per week is admitted to the unit. North Shore's projected utilization is reasonable and, by stipulation, the project is financially feasible in the immediate and long term. AHCA's Application of Other Rules Comparable to the Eighty-five Percent (85 percent) Occupancy Rules Comparable occupancy exceptions are also included in the substance abuse rule [Rule 59C-1.041(4), Florida Administrative Code], acute care rule [Rule 59C-1.038(7), Florida Administrative Code], the neonatal intensive care rule [Rule 59C-1.042(3), Florida Administrative Code], and the comprehensive medical rehabilitation rule [Rule 59C-1.039(5), Florida Administrative Code]. According to AHCA witness Elizabeth Dudek, there have been several circumstances, probably under five, where the Department has awarded beds when there was no need and the minimum district occupancy standard was not met, but an institution's occupancy exceed the threshold in the rule.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that, alhough Vicotria has otherwise demonstrated its entitlement to Certificate of Need Application No. 6955 to convert ten (10) acute case beds to general adult psychiatric beds, the Agency for Health Care Administration issue a Final Order denying such application due to a change in the identity of the applicant, in violation of Rule 59C-1.008(1)(c), Florida Administrative Code, and granting Certificate of Need Application 6956 to convert up to twenty (20) acute care beds to general adult psychiatric beds at North Shore with the condition that 5 percent of the patient days for the additional 20 beds be dedicated to each Medicaid and indigent care. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 9th day of September 1993. ELEANOR HUNTER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of September, 1993.
The Issue Whether Florida Hospital Medical Center is entitled to reimbursement in the amount preliminarily determined by the Department of Financial Services, Division of Workers’ Compensation, in a reimbursement dispute regarding bills submitted by Florida Hospital Medical Center to Macy’s Claims Services and Amerisure Mutual Insurance Company for medical services provided to two individuals involved in work-related accidents; and Whether Macy’s Claims Services and Amerisure Mutual Insurance Company properly adjusted those bills of Florida Hospital Medical Center in accordance with the requirements of Florida’s Workers’ Compensation law and applicable rules.
Findings Of Fact Florida Hospital is a full-service, not-for-profit hospital system located in Orlando, Florida, that operates a smaller satellite hospital in Winter Park, Florida. Florida Hospital is a “health care provider” within the meaning of Section 440.13(1)(h), Florida Statutes. Macy’s and Amerisure are “carriers” within the meaning of Sections 440.02(4) and 440.02(38), Florida Statutes. The Department has exclusive jurisdiction to resolve disputes between carriers and health care providers regarding payments for services rendered to injured workers, pursuant to Sections 440.13(7) and 440.13(11)(c), Florida Statutes. Qmedtrix is a medical bill review company.3/ Case No. 09-6871 R. P., an employee of Macy’s, slipped and fell at work on May 20, 2009, and presented to Florida Hospital Winter Park for evaluation and treatment where medical personnel documented vomiting, brain attack, and brain trauma. After evaluation and treatment, patient R. P. was diagnosed with a bruise to the head and released the same day. On September 16, 2009, Florida Hospital submitted its bill for services provided to R. P. totaling $5,547.20 to Macy’s for payment, utilizing Form DFS-F5-DWC-90, also known as UB-04 CMS-1450, identifying the charges billed for each line item by revenue code and HCPS or CPT codes. Macy’s forwarded the bill to its workers’ compensation medical bill review agent, Qmedtrix. Qmedtrix reviewed the bill by comparing the procedure codes and diagnosis codes reported by Florida Hospital with examples in the CPT book for billing of emergency department services. Florida Hospital reported ICD diagnosis code 920, which reads “contusion of face, scalp, or neck.” Use of this code means R. P. presented with a bruise or hematoma, but not a concussion. Florida Hospital also reported ICD diagnosis code 959.01 (“head injury, unspecified”) which also means that R. P. did not present with a concussion, loss of consciousness, or intracranial injuries. Florida Hospital’s bill included a charge of $2,417 with CPT code 99285 for emergency department services. The bill also included separate charges for a head CT, and various lab tests, drugs, and IV solutions. According to Mr. von Sydow, the bill was sent through Qmedtrix’s computer program for review, and was flagged for review by a physician. Mr. von Sydow further testified that one of Qmedtrix’s medical director’s suggested that the CPT code of 99285 be reduced. The medical director, who Mr. von Sydow said reviewed the bill, however, did not testify and no documentation of his recommendation was submitted at the final hearing. Qmedtrix determined that Florida Hospital should have used CPT code 99284 when billing for the emergency services rendered instead of CPT code 99285. Qmedtrix found that, while the hospital billed $2,417 with CPT code 99285, its usual charge for an emergency department visit billed with CPT code 99284 is $1,354. Macy’s paid Florida Hospital a total of $2,683.55, which amount included $1,010.24 for the emergency department visit based on [approximately] 75 percent of Florida Hospital’s usual charge for CPT code 99284. The payment was accompanied by an EOBR. The EOBR Macy’s (or its designated entity)4/ issued to Florida Hospital for services rendered to R. P. identifies the amount billed by Florida Hospital as to each line item in a column designated “Billed,” and has columns designated as “BR Red,” “PPO Red,” “Other Red,” and “Allowance,” each containing an amount for each line item in the “Billed” column. There is also a column entitled “Reason Code” which sets forth codes, as required by Florida Administrative Code Rule 69L-7.602(5)(o)3., that are supposed to explain the reason for adjustment of any line item.5/ The “reason code” set forth adjacent to the $2,417.00 billed by Florida Hospital for emergency department services is “82,” which means “Payment adjusted: payment modified pursuant to carrier charge analysis.” There is also another code, “P506” listed in the “Reason Code” column adjacent to the same line item, which, according to the key provided on the EOBR, means “[a]ny questions regarding this Qmedtrix review, please call (800)-833-1993.” “P506,” however, is not a “reason code” listed in Florida Administrative Code Rule 68L- 7.602(5)(o)3. The EOBR does not advise that the bill was adjusted because of a determination that Florida Hospital should have used CPT code 99284 when billing for the emergency services rendered instead of CPT code 99285 as originally billed. Upon receipt of the payment and the EOBR, Florida Hospital timely filed a Petition for Resolution of Reimbursement Dispute with the Department pursuant to Section 440.13(7)(a), Florida Statutes, and Florida Administrative Rule 69L-31, contending that payment should be at 75 percent of its total charges, and citing the Florida Workers’ Compensation Reimbursement Manual for Hospitals, 2006 Edition (Hospital Manual). Qmedtrix timely filed a response to Florida Hospital’s petition on behalf of Macy’s pursuant to Section 440.13(7)(b), Florida Statutes, and Florida Administrative Code Rule 69L-31, asserting that correct payment should be determined based on, first, whether the hospital in fact billed its usual charge for the services and, second, whether the hospital’s charges are in line with the charges of other hospitals in the same community, citing One Beacon Insurance v. Agency for Health Care Administration, 958 So. 2d 1127 (Fla. 1st DCA 2007) for the proposition that “SB-50 amended section 440.13 . . . [revealing] legislative intent to eliminate calculation of a “usual and customary charge” based on the fees of any one provider in favor of a calculation based on average fees of all providers in a given geographic area.” Qmedtrix’s response on behalf of Macy’s also contended that “upcoding” and “unbundling” were additional grounds for adjustment or disallowance that were not identified on the EOBR. The response explained that “upcoding” refers to billing with a procedure code that exaggerates the complexity of the service actually provided; that CPT codes 99281 through 99285 describe emergency department services; that the CPT book includes examples of proper billing with these codes; that the hospital billed $2,417 with CPT code 99285; and that the CPT book describes an “emergency department visit for a healthy, young adult patient who sustained a blunt head injury with local swelling and bruising without subsequent confusion, loss of consciousness or memory deficit” as an example of proper billing with CPT code 99283. The response requested a determination by the Department that Macy’s payment equaled or exceeded the amount usual and customary for CPT code 99283. On November 13, 2009, the Department, through its Office of Medical Services (OMS) issued a determination (Determination in 09-6871) which found, in pertinent part: The petitioner asserts that services provided by Florida Hospital Medical Center to the above-referenced injured employee on May 20, 2009, were incorrectly reimbursed. Florida Hospital Medical Center billed $5,547.20 and the carrier reimbursed $2,683.55. The petition does not address a contract and does not reflect a contract discount in the calculation of requested reimbursement. The Carrier Response to Petition for Resolution of Reimbursement Dispute disputes the reasonableness of the hospital’s “usual and customary charges”, maintains the petitioners’ charges should be based on the average fee of other hospitals in the same geographic area, references a manual not incorporated by rule, and provides CPT codes that the respondent alleges are correct. There are no rules or regulations within Florida’s Workers’ Compensation program prohibiting a provider from separately billing for individual revenue codes. The carrier did not dispute that the charges listed on the Form DFS-F5-DWC-90 (UB-92) or the charges listed on the itemized statement did not conform to the hospital’s Charge Master. Nor did the carrier submit the hospital’s Charge Master in the response or assert that the carrier performed an audit of the Charge Master to verify the accuracy of the billed charges. Therefore, since no evidence was presented to dispute the accuracy of the Form DFS-F5-DWC-90 or the itemized statement as not being representative of the Charge Master, the OMS finds that the charges billed by the hospital are the hospital’s usual and customary charges. Rule 69L-7.602, F.A.C., stipulates the appropriate EOBR codes that must be utilized when explaining to the provider the carrier’s reasons for disallowance or adjustment. The EOBR submitted with the petition conforms to the EOBR code requirements of Rule 69L-7.602(5)(q), F.A.C. Only through an EOBR is the carrier to communicate to the health care provider the carrier’s reasons for disallowance or adjustment of the provider’s bill. Pursuant to s. 440.13(12), F.S., a three member panel was established to determine statewide reimbursement allowances for treatment and care of injured workers. Rule 69L-7.501, F.A.C., incorporates, by reference, the applicable reimbursement schedule created by the panel. Section 440.13(7)(c), F.S., requires the OMS to utilize this schedule in rendering its determination for this reimbursement dispute. No established authority exists to permit alternative schedules or other methodologies to be utilized for hospital reimbursement other than those adopted by Rule 69L-7.501, F.A.C., unless the provider and the carrier have entered into a mutually agreeable contract. Rule 69L-7.501, F.A.C., incorporates, by reference, the Florida Workers’ Compensation Reimbursement Manual for Hospitals, 2006 Edition (Hospital Manual). Since the carrier failed to indicate any of the services are not medically necessary, the OMS determined proper reimbursement applying the above referenced reimbursement guidelines. Therefore, the OMS has determined that the carrier improperly adjusted reimbursement to Florida Medical Center for services rendered to the above- referenced injured employee on May 20, 2009. Based on the above analysis, the OMS has determined that correct reimbursement equals $4,160.40 ($5,547.20 x 75% [Hospital Manual]=$4,160.40). The carrier shall reimburse Florida Hospital Medical Center $4,160.40 for services rendered to the above-referenced employee; and submit proof of reimbursement of the amount determined by the OMS within thirty days of the date the Determination is received. . . . The difference between what Petitioner Macy’s paid Florida Hospital for services rendered to R. P., and the amount the Department determined that Petitioner Macy’s is required to pay for such services, equals $1,476.85. The Determination in 09-6871 did not directly address Macy’s allegation of the alleged billing error of “upcoding.” The Determination in 09-6871 provided a 21-day notice for request of an administrative hearing and, as noted in the Preliminary Statement above, Macy’s timely requested a hearing. Case No. 09-6872 J. L., an employee of Major League Aluminum, was injured in a work-related accident on the evening of May 3, 2009, and visited the emergency department of Florida Hospital Orlando. After evaluation and treatment, J. L. was diagnosed with a bruise to the knee and released the next morning. On September 23, 2009, Florida Hospital submitted its bill for services provided to J. L. totaling $2,851 to Amerisure, Major League Aluminum’s workers’ compensation insurer, for payment, utilizing Form DFS-F5-DWC-90, also known as UB-04 CMS-1450, identifying the charges billed for each line item by revenue code and HCPS or CPT codes. Amerisure forwarded the hospital bill to its medical bill review agent, Qmedtrix for review. Qmedtrix’s medical bill review in this case, as in the companion case, entailed comparing the procedure codes and diagnosis codes reported by the hospital with examples in the CPT book. The hospital reported ICD diagnosis code 924.11, which reads “contusion of . . . knee.” The hospital also reported ICD diagnosis codes 724.2 (“lumbago”), E888.1 (“fall on or from ladders or scaffolding”) and 959.7 (“injury, other and unspecified . . . knee, leg, ankle, and foot.”). Florida Hospital billed $1,354 with CPT code 9924 for emergency department services and also billed for X-rays and various drugs and IV solutions. Comparing procedure codes and diagnosis codes reported by the hospital with examples in the CPT book, Qmedtrix concluded that billing with CPT code 99284 was not appropriate, but that billing with CPT code 99282 was. Qmedtrix also found that, while the hospital billed $1,354 with CPT code 99284, the average charge in the community for a visit to the emergency department billed with CPT code 99282 is $721. Qmedtrix determined the “usual and customary charge” in the community from its own database compiled by entering all of particular hospital bills into Qmedtrix’s database, along with data from the American Hospital Directory. Qmedtrix derives the average charge in the community based upon zip codes of the hospitals. Amerisure paid Florida Hospital a total of $1,257.15, which amount included $524.70 for the emergency department visit codes based on 75 percent of what Qmedtrix determined to be the average charge in the community for CPT code 99282. The payment was accompanied by an EOBR. The EOBR Petitioner Amerisure (or its designated entity)6/ issued to Florida Hospital for services rendered to J. L. identifies the amount billed by Florida Hospital as to each line item in a column designated “Billed Charges,” and has columns designated as “FS/UCR Reductions,” “Audit Reductions,” “Network Reductions,” and “Allowance,” each containing an amount for each line item in the “Billed Charges” column. There is also a column entitled “Qualify Code” which sets forth reason codes that are supposed to explain the reason for adjustment of any line item.7/ The code set forth adjacent to the $1,354.00 billed by Florida Hospital for emergency department services is “82,” which means “Payment adjusted: payment modified pursuant to carrier charge analysis.” The EOBR does not advise that the bill was adjusted because of a determination that Florida Hospital should have used CPT code 99282 when billing for the emergency services rendered instead of CPT code 99284 as originally billed. Upon receipt of the payment and the EOBR, Florida Hospital timely filed a Petition for Resolution of Reimbursement Dispute with the Department pursuant to Section 440.13(7)(a), Florida Statutes, and Florida Administrative Code Rule 69L-31, contending that payment should be at 75 percent of its total charges, and citing the Hospital Manual. Qmedtrix timely filed a response to Florida Hospital’s petition on behalf of Amerisure pursuant to Section 440.13(7)(b), Florida Statutes, and Florida Administrative Code Rule 69L-31, asserting that correct payment should be determined based on, first, whether the hospital, in fact, billed its usual charge for the services and, second, whether the hospital’s charges are in line with the charges of other hospitals in the same community, citing One Beacon, supra. Qmedtrix’s response on behalf of Amerisure contended “upcoding” as an additional ground for adjustment or disallowance that was not identified on the EOBR. As in the companion case, the response explained “upcoding,” that CPT codes 99281 through 99285 describe emergency department services, and that the CPT book includes examples of proper billing with these codes. The response further stated that the hospital billed $1,354 with CPT code 99284, and that the CPT book describes an “emergency department visit for a patient with a minor traumatic injury of an extremity with localized pain, swelling, and bruising” as an example of proper billing with CPT code 99282. The response requested a determination by the Department that Amerisure’s payment equaled or exceeded the usual and customary charge for CPT code 99282. On October 20, 2009, the Department’s OMS issued a determination (Determination in 09-6872) which found, in pertinent part: The petitioner asserts that services provided by Florida Hospital Medical Center to the above-referenced injured employee on May 3, 2009, and May 4, 2009, were incorrectly reimbursed. Florida Hospital Medical Center billed $2,851.00 and the carrier reimbursed $1,257.15. The petition does not address a contract and does not reflect a contract discount in the calculation of requested reimbursement. The Carrier Response to Petition for Resolution of Reimbursement Dispute disputes the reasonableness of the hospital’s “usual and customary charges”, maintains the petitioners’ charges should be based on the average fee of other hospitals in the same geographic area, and references a manual not incorporated by rule. There are no rules or regulations within Florida’s Workers’ Compensation program prohibiting a provider from separately billing for individual revenue codes. Therefore, the charges, as billed by the hospital, did not constitute billing errors. The carrier did not dispute that the charges listed on the Form DFS-F5- DWC-90 (UB-92) or the charges listed on the itemized statement did not conform to the hospital’s Charge Master. Nor did the carrier submit the hospital’s Charge Master in the response or assert that the carrier performed an audit of the Charge Master to verify the accuracy of the billed charges. Therefore, since no evidence was presented to dispute the accuracy of the Form DFS-F5- DWC-90 or the itemized statement as not being representative of the Charge Master, the OMS finds that the charges billed by the hospital are the hospital’s usual and customary charges. Rule 69L-7.602, F.A.C., stipulates the appropriate EOBR codes that must be utilized when explaining to the provider the carrier’s reasons for disallowance or adjustment. The EOBR submitted with the petition conforms to the EOBR code requirements of Rule 69L-7.602(5)(q), F.A.C. Only through an EOBR is the carrier to communicate to the health care provider the carrier’s reasons for disallowance or adjustment of the provider’s bill. Pursuant to s. 440.13(12), F.S., a three member panel was established to determine statewide reimbursement allowances for treatment and care of injured workers. Rule 69L-7.501, F.A.C., incorporates, by reference, the applicable reimbursement schedule created by the panel. Section 440.13(7)(c), F.S., requires the OMS to utilize this schedule in rendering its determination for this reimbursement dispute. No established authority exists to permit alternative schedules or other methodologies to be utilized for hospital reimbursement other than those adopted by Rule 69L-7.501, F.A.C., unless the provider and the carrier have entered into a mutually agreeable contract. Rule 69L-7.501, F.A.C., incorporates, by reference, the Florida Workers’ Compensation Reimbursement Manual for Hospitals, 2006 Edition (Hospital Manual). Since the carrier failed to indicate any of the services are not medically necessary, the OMS determined proper reimbursement applying the above referenced reimbursement guidelines. Therefore, the OMS has determined that the carrier improperly adjusted reimbursement to Florida Medical Center for services rendered to the above- referenced injured employee on May 3, 2009, and May 4, 2009. Based on the above analysis, the OMS has determined that correct reimbursement equals $2,138.25 ($2,851.00 x 75% [Hospital Manual]=$2,138.25). The carrier shall reimburse Florida Hospital Medical Center $2,138.25 for services rendered to the above-referenced employee; and submit proof of reimbursement of the amount determined by the OMS within thirty days of the date the Determination is received. . . . The difference between what Petitioner Amerisure paid Florida Hospital for services rendered to J. L. and the amount the Department determined that Petitioner Amerisure is required to pay for such services equals $881.10. The Determination in 09-6872 did not directly address Amerisure’s allegation of the alleged billing error of “upcoding.” The Determination in 09-6872 provided a 21-day notice for request of an administrative hearing and, as noted in the Preliminary Statement above, Amerisure timely requested a hearing. Alleged “Upcoding” for Emergency Department Services The Petitioners’ responses in both cases allege that Florida Hospital “upcoded” its bill for emergency department evaluation and management services. Neither EOBR submitted to Florida Hospital, however, reported alleged “upcoding” as an explanation for the Petitioners’ adjustment or disallowance of reimbursement. While the Dispute Determinations by the Department do not directly address the carrier’s allegation of the alleged billing error of “upcoding” raised in the Petitioners’ responses, they found that “Rule 69L-7.602, F.A.C., stipulates the appropriate EOBR codes that must be utilized when explaining to the provider the carrier’s reasons for disallowance or adjustment[, and that] [o]nly through an EOBR is the carrier to communicate to the health care provider the carrier’s reasons for disallowance or adjustment of the provider’s bill.” According to Mr. von Sydow, who was offered by Petitioners as an expert in billing, coding, reimbursement, and payment issues,8/ the “reason codes” that workers’ compensation carriers are to use pursuant to Florida Administrative Code Rule 69L-7.602, do not mention “upcoding,” and therefore an EOBR could not be generated with a reason code explaining reduction or disallowance based on “upcoding.” The following reason codes, however, are included in Florida Administrative Code Rule 69L-7.602: 23 – Payment disallowed: medical necessity: diagnosis does not support the services rendered. – Payment disallowed: insufficient documentation: documentation does not substantiate the service billed was rendered. – Payment disallowed: insufficient documentation: level of evaluation and management service not supported by documentation. Neither EOBR submitted to Florida Hospital includes reason code 23, 40, or 41. And neither EOBR explains or otherwise suggests that that Florida Hospital’s level of billing was not supported by medical necessity, services rendered, or sufficient documentation. In fact, Petitioners did not disallow reimbursement and do not contend that reimbursement should be denied for any services rendered by Florida Hospital to R. P. and J. L. on the grounds that the billed services were not medically necessary for the injured employees’ compensable injuries. In addition, Petitioners did not adjust or disallow payment for any of the billed procedures on the grounds that the procedures were not provided. In sum, the EOBR’s did not give Florida Hospital notice that alleged “upcoding” was an issue. Even if Petitioner’s EOBR’s gave Florida Hospital notice that it was asserting “upcoding” as a reason to reduce or adjust the hospital’s bill, the evidence does not support a finding that Florida Hospital utilized the wrong code in its billing for emergency department evaluation and management services. The CPT® 2009 Current Procedural Terminology Professional Edition, (Copyright 2008), (CPT book), is adopted by reference in Florida Administrative Code Rule 69L-7.602(3)(d) and Florida Administrative Code Rule 60L-7.020(2). The CPT book sets forth the procedure codes for billing and reporting by hospitals and physicians. The CPT book sets forth CPT codes ranging from 99281 through 99285 used to report evaluation and management services provided in a hospital’s emergency department, described as follows: 99281: Emergency department visit for the evaluation and management of a patient, which requires these 3 key components: A problem focused history; A problem focused examination; and Straightforward medical decision making. Counseling and/or coordination of care with other providers or agencies and provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the presenting problem(s) are self limited or minor. 99282: Emergency department visit for the evaluation and management of a patient, which requires these 3 key components: An expanded problem focused history; An expanded problem focused examination; and Medical decision making of low complexity. Counseling and/or coordination of care with other providers or agencies and provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the presenting problem(s) are of low to moderate severity. 99283: Emergency department visit for the evaluation and management of a patient, which requires these 3 key components: An expanded problem focused history; An expanded problem focused examination; and Medical decision making of moderate complexity. Counseling and/or coordination of care with other providers or agencies and provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the presenting problem(s) are of moderate severity. 99284: Emergency department visit for the evaluation and management of a patient, which requires these 3 key components: A detailed history; A detailed examination; and Medical decision making of moderate complexity. Counseling and/or coordination of care with other providers or agencies and provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the presenting problem(s) are of high severity, and require urgent evaluation by the physician but do not pose an immediate significant threat to life or physiologic function. 99285: Emergency department visit for the evaluation and management of a patient, which requires these 3 key components: A comprehensive history; A comprehensive examination; and Medical decision making of high complexity. Counseling and/or coordination of care with other providers or agencies and provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the presenting problem(s) are of high severity and pose an immediate significant threat to life or physiologic function. Mr. von Sydow testified that a Qmedtrix “medical director,” reviewed Florida Hospital’s bill for services rendered to R. P., but not the medical records, and recommended that the hospital’s charge for emergency department services under CPT 99285 be “re-priced” to Qmedtrix’s determination of the “usual and customary charge” for CPT 99284. Mr. von Sydow acknowledged the need for physician review for some cases (as opposed to review by non-physician coders) by testifying, “The more complicated the medicine, the more likely it is that he [a medical director at Qmedtrix] wants to see it.” Despite Qmedtrix’s original determination to “reprice” the bill from CPT code 99285 to CPT code 99284 (reflected in the reduced payment but not explained in the EOBR), Mr. von Sydow opined that the correct CPT code for emergency department services provided to patient R. P. was 99283, as opposed to 99285 billed by the hospital. Mr. von Sydow testified that his opinion was based upon his own review of the medical records, without the assistance of a medical director or medical expert, and review of examples for the CPT codes for emergency department services from the CPT book, and various provisions of ICD-9 and CPT book coding resources. Aside from the fact that Mr. von Sydow’s opinion differed from the purported recommendation of a Qmedtrix “medical director,” Mr. von Sydow is not a physician. Moreover, Qmedtrix failed to provide the testimony of the medical director, or anyone else with medical expertise to evaluate the medical records and services provided or to validate either the opinion of Mr. von Sydow or the original recommendation to “re- price” Florida Hospital’s use of CPT Code 99285 in its bill for emergency department services rendered to patient R. P. Mr. von Sydow offered similar testimony and examples to explain Qmedtrix’s “re-pricing” of Florida Hospital’s bill from CPT code 99284 to CPT code 99282 for emergency services rendered to patient J. L. on behalf of Amerisure. According to Mr. von Sydow, an internal Qmedtrix coder (not a medical director) reviewed the bill for emergency services rendered to J. L. and determined it should be re-priced to the usual and customary charge, as determined by Qmedtrix, using that CPT code 99282. While knowledgeable of the various codes and their uses, given the manner in which preliminary diagnostics under emergency circumstances drives Florida Hospital’s determination of the appropriate CPT code for billing emergency department services, without the testimony of a medical expert familiar with the medical records generated in these cases in light of the facts and circumstances surrounding the emergency care rendered to patients R. P. and J. L., Mr. von Sydow’s testimony was unpersuasive. Ross Edmundson, M.D., an employee, vice-president, and medical manager for Florida Hospital, explained that, unlike other settings, hospitals generally do not have the medical histories of patients presenting for emergency hospital services. When a patient comes to Florida Hospital for emergency services, they are triaged by a nurse to determine the level of urgency, then a doctor sees the patient, conducts a differential diagnosis to rule out possible causes, obtains the patient’s history, and then performs a physical examination. While emergency room physicians at Florida Hospital do not decide which CPT code is utilized for the evaluation and management services provided by its emergency department, the various tests and procedures they undertake to evaluate and treat emergency department patients do. James English, the director of revenue management for Florida Hospital explained the process through his deposition testimony. Florida Hospital, like over 400 other hospitals, uses the “Lynx System” – a proprietary system for creating and maintaining medical records electronically. The program captures each medical service, supply, and physician order that is inputted into the electronic medical record. The hospital’s emergency evaluation and management CPT code is generated from the electronic record. A “point collection system” in the Lynx System translates physician-ordered services, supplies it to a point system, and then assigns the CPT code that is billed based upon the total number of “points” that are in the system at the time the patient is discharged from the emergency department. The level of the evaluation and management CPT code (99281 to 99285) that is reported on Florida Hospital’s bill is a direct reflection of the number and types of medical services that a patient receives from his or her arrival through discharge. In light of evidence showing the manner in which emergency services are provided and the importance of medical records in generating the appropriate billing code for emergency evaluation and management services, it is found that Petitioners failed to provide an adequate analysis of the medical records of either R. P. or J. L. to show that the appropriate CPT codes were not utilized by Florida Hospital in billing for those services. On the other hand, both Petitions for Resolution of Reimbursement Dispute filed by Florida Hospital with the Department attached appropriately itemized bills utilizing Form DFS-F5-DWC-90, also known as UB-04 CMS-1450, identifying the charges billed for each line item by revenue code and HCPS or CPT codes. In addition, medical records for the evaluation and treatment provided by Florida Hospital for both patients R. B. and J. L. supporting the itemized bills were submitted to the Department. These documents were also received into evidence at the final hearing. Florida Hospital’s bills at issue correctly identified the hospital’s usual charges for each individual and separately chargeable item, service or supply, with the corresponding code assigned to such billable items as maintained in Florida Hospital’s “charge master.” In addition, Petitioners concede the compensability of both patients’ work-related injuries and do not dispute whether any service or supply rendered and billed by Florida Hospital for these two cases were “medically necessary.”9/ Unbundling As noted above, in Case No. 09-6871, Qmedtrix’s response to Florida Hospital’s petition for resolution of reimbursement dispute contended “unbundling” as a ground for adjustment or disallowance of reimbursement. At the final hearing, Arlene Cotton, the nurse who issued the Dispute Determinations, explained that reason code 63 regarding “unbundling” is inapplicable to hospital billing, as there is no rule that requires hospitals to bundle bill for its services. Mr. von Sydow agreed that reason code 63 was inapplicable. In addition, footnote 2 of Petitioners’ Proposed Recommended Order states, “they did not pursue the allegations of unbundling.” Therefore, it is found that Petitioners did not prove and otherwise abandoned their claim of “unbundling” as a ground to adjust or disallow reimbursement to Florida Hospital. Usual and Customary Charges The Dispute Determinations issued by the Department found that correct payment in both cases equaled 75% of billed charges, citing “Rule 69L-7.501, F.A.C., [which] incorporates, by reference, the Florida Workers’ Compensation Reimbursement Manual for Hospitals, 2006 Edition (Hospital Manual). Both Section 440.13(12)(a), Florida Statutes, and the Hospital Manual provide that hospital services provided to patients under the workers’ compensation law “shall be reimbursed at 75 percent of usual and customary charges.” The Department interprets the term “usual and customary charges” as set forth in the Hospital Manual and Section 440.13(12)(a), Florida Statutes, quoted above, to mean a hospital’s usual charges of the hospital, whereas Petitioners contend that “usual and customary charges” means the average fee of all providers in a given geographical area. While apparently not contending that Petitioners failed to raise the issue of “usual and customary” charges in their EOBR’s,10/ at the final hearing, the Department argued that “nowhere in [either Macy’s or Amerisure’s] response is the issue of customary charges raised.” A review of the responses filed by Qmedtrix to Florida Hospital’s reimbursement dispute petitions filed with the Department reveal that both raise the issue of “usual and customary charges.” Paragraphs 3 and 4 of Mr. von Sydow’s letter attached to both responses state: As you may know, the proposed adoption of Medicare’s Outpatient Prospective Payment System as a methodology for reimbursing hospitals 60% and 75% of “usual and customary charges” follows from the decision of the First District Court of Appeals in One Beacon Insurance v. Agency for Health Care Administration, No. 1D05-5459 (Fla. 1st DCA 2007) (SB-50 amended section 440.13 to remove all reference to the charges of any individual service provider; this amendment reveals the legislative intent to eliminate calculation of a “usual and customary charge” based on the fees of any one provider in favor of a calculation based on average fees of all providers in a given geographical area). This court decision requires DFS to define payment rates for out patient service that are uniformly applicable to all hospitals in a given geographic area. In addition, at the final hearing, the Department argued that the petitions for administrative hearing did “not raise as a disputed issue of fact or law whether or not usual and customary charges should apply in this case.” Indeed, a review of the request for relief set forth in the petitions for administrative hearings filed by Petitioners do not mention the issue of “usual and customary charges.” Rather, the relief requested by both petitions for administrative review of the Dispute Determinations, as summarized in the Joint Prehearing Stipulation, is: Petitioner[s] seeks reversal of OMS’ Determination(s) and the matters remanded for the Department to: direct payment based upon the actual treatment required/provided and pursuant to the correct CPT code; find that the hospital upcoded and that Petitioner properly reimbursed (or exceeded amount due); and determine that the hospital has the burden of proof to substantiate its billing and the use of the chosen CPT code. Contrary to the Department’s argument, however, both petitions for administrative hearing raise the issue of “usual and customary charges.” Page 9 of Macy’s petition, in pertinent part states: Petitioner submits that in issuing the above findings OMS failed to consider the holding in One Beacon Insurance v. Agency for Health Care Administration (wherein the Court determined that reimbursement should not be based solely upon a mathematical equation [as found within the Reimbursement Manual] and applying it to the fee charged by a particular provider; and that by eliminating the reference to any one facility’s charges, the legislature intended that the charges be based on average fees of all providers in a geographical area as opposed to the fees of the particular provider in question). Likewise, review of Amerisure’s petition for administrative hearing reveals that the issue of “usual and customary charges” was raised. Pages 7 and 8 of Amerisure’s petition state, in pertinent part: Further, if the Hospital is permitted to utilize incorrect revenue codes it would be impossible to determine whether the charges are consistent with the Hospital’s own [usual and customary] charges for the service, procedure or supplies in question and, further, whether such charges are consistent with charges by other like facilities (in the same geographical area) for the same services, procedures, or supplies. See One Beacon Insurance, supra. In addition, Amerisure’s petition on page 12 states with regard to the Department’s determination: Such finding was issued without consideration of . . . the amounts charged for the same services in the Orlando area where this hospital is located. Petitioners further preserved the issue of “usual and customary charges” in the first paragraph of their statement of position on page 3 of the Joint Prehearing Statement, as follows: Petitioners, Macy’s and Amerisure, take the position that the Determinations must be reversed as the Department has the duty to scrutinize the bills in question in order to determine, first, whether the hospital, in fact, charged its usual charge for the services provided, and second, whether the billed charges are in line with the customary charges of other facilities in the same community (for the same or similar services) and that the Department failed to do so. As such, Petitioners contend that payment for services provided by Florida Hospital should have been based upon 75% of usual and customary charges, not 75% of billed charges. Therefore, it is found that Petitioners have preserved the issue of “usual and customary charges” for consideration in this administrative proceeding. Although preserved, Petitioners failed to demonstrate that their interpretation of “usual and customary charges” should prevail. The Department has consistently interpreted the term “usual and customary charges” as used in the Hospital Manual, Section 440.13(12)(a), Florida Statutes, and rules related to hospital reimbursement under the workers’ compensation law as the “usual and customary charges” of the hospital reflected on the hospital’s “charge master.” The Hospital Manual requires each hospital to maintain a charge master and to produce it “when requested for the purpose of verifying its usual charges. . . .” (Emphasis added). Petitioners did not conduct or request to conduct an audit to verify whether the charges billed by Florida Hospital corresponded with the Florida Hospital’s charge master. In fact, Mr. von Sydow conceded at the final hearing that Florida Hospital’s bills at issue were charged in accordance with Florida Hospital’s charge master. Nor did Petitioners institute rule challenge proceedings against the Department regarding the Hospital Manual, incorporated by reference into Florida Administrative Code Rule 38F-7.501. Instead, Petitioners assert that they should be able to reduce Florida Hospital bills based upon a different interpretation of the phrase “usual and customary charges” to mean the average charge in the community as determined by Qmedtrix. Qmedtrix is not registered with the Florida Department of State, Division of Corporations, and does not employ any Florida-licensed insurance adjuster, physician, or registered nurse. Qmedtrix earns 12 to 15 percent of “savings” realized by carriers utilizing their bill review services. For example, if a bill is reduced by $100, Qmedtrix is paid $12.11/ Qmedtrix uses a proprietary bill review system called “BillChek.” According to Qmedtrix’s website: BillChek reviews out-of-network medical charges for all bill types in all lines of coverage, including group health, auto, medical, and workers’ compensation. BillChek is a unique specialty cost- containment service that determines an accurate and reasonable reimbursement amount for non-network facility and ancillary medical charges. BillChek incorporates historical data to help determine reasonable payment recommendations across all sectors of the health care industry. All BillCheck recommendations are backed by extensive medical and legal expertise, and supported by Qmedtrix’s experienced Provider Relations and Dispute Resolution teams. According to the testimony of Mr. von Sydow, Qmedtrix collects and maintains data from various sources, including Florida’s Agency for Health Care Administration (AHCA), the American Hospital Directory (AHD.com), and HCFA 2552’s (data reported to the Centers of Medicare and Medicaid Services on HCFA 2522) in order to construct a database of health care providers’ usual charges. Mr. von Sydow advised that AHD.com data was a principle source for constructing the database. He also advised that AHCA data was included in the database even though Qmedtrix found the AHCA data defective. Examples of data downloaded from AHD.com for Florida Hospital showing a profile of the facility was received into evidence as P-5. The data did not, however, show usual charges for the CPT codes for emergency department services at issue in this case. Petitioners also introduced into evidence Exhibits P-6 and P-7, which contained AHD.com data showing average charges for Florida Regional Medical Center and Florida Hospital, respectively, for Level 1 through Level 5 emergency room visits (corresponding to CPT codes 99281 through 99285). Mr. von Sydow explained that the data was part of the information Qmedtrix used to construct the average charge in the community. Petitioners failed to provide similar AHD.com data for other hospitals in the area Qmedtrix determined to be the “community.” In addition, Petitioners introduced AHCA’s Florida Health Finder Web-site, as Exhibit P-8, which ostensibly included average charges for all hospitals in Florida for the subject emergency department CPT codes (99281 through 99285). Mr. von Sydow explained, however, “[w]e find that [the AHCA data] is not refreshed very often, unfortunately, and some other defects in the scrubbing of the data by the agency, which they know, I will say. But this is incorporated in our database to a large extent.” The exhibit was received into evidence for the purpose of helping to explain how Qmedtrix constructed its database, with the recognition that it was largely composed of hearsay. In sum, while Petitioners showed their methodology of constructing the database, other than the AHD.com data for Orlando Regional Medical Center and Florida Hospital, Petitioners failed to introduce reliable evidence sufficient to show the “usual and customary charge” of all providers in a given geographical area as determined by Qmedtrix. In addition, the AHCA data, though characterized by Mr. von Sydow as unreliable, indicates that there is a wide range of differences in emergency room charges between hospitals in Florida. Petitioners’ interpretation of “usual and customary charge” to mean the average fee of all providers in a given geographical area does not take into account an individual hospital’s indigent care, cost of labor, overhead, number of beds, size, age, or various other differences between facilities that could affect amounts each hospital charges for emergency department and other services; the Department’s interpretation does.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Workers’ Compensation, enter a Final Order consistent with this Recommended Order that: Directs Macy’s Claims Services to reimburse Florida Hospital Medical Center $4,160.40 for services rendered to patient R. P., and to submit proof of reimbursement of that amount within 30 days from the date the Final Order is received; Directs Amerisure Mutual Insurance Company to reimburse Florida Hospital Medical Center $2,138.25 for services rendered to patient J. L., and submit proof of reimbursement of that amount to the Department within 30 days from the date the Final Order is received. DONE AND ENTERED this 17th day of June, 2010, in Tallahassee, Leon County, Florida. S JAMES H. PETERSON, III Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of June, 2010.
The Issue Whether J. Glenn Brown, Jr., was an "employee" of Northwest Florida Community Hospital for purposes of the State of Florida retirement system?
Findings Of Fact The Parties. Petitioner, Board of Trustees of the Northwest Florida Community Hospital (hereinafter referred to as the "Board of Trustees"), is the governing body of the Northwest Florida Community Hospital. Petitioner, Board of County Commissioners of Washington County, Florida (hereinafter referred to as the "County Commissioners"), is the governing body of Washington County, Florida, and the owner of the Northwest Florida Community Hospital. The Respondent, the Department of Management Services, Division of Retirement (hereinafter referred to as the "Division"), is the agency charged with responsibility for administering the Florida retirement system established by Chapter 121, Florida Statutes. Operation of Northwest Florida Community Hospital Prior to February of 1988. The Northwest Florida Community Hospital (hereinafter referred to as the "Hospital"), is a small, rural acute-care hospital located in Chipley, Washington County, Florida. During the mid-1980's, the Hospital suffered from a financial crisis that threatened its continued existence. As a consequence thereof, it was concluded that the Hospital should be sold. A contract was negotiated and entered into for the sale of the Hospital to National Healthcare, Inc. (hereinafter referred to as "NHI"). As a part of the contract entered into with NHI, NHI was to operate the Hospital before the contract for sale was completed. J. Glenn Brown was an employee of NHI. NHI assigned Mr. Brown to the Hospital to act as the administrator of the Hospital. As administrator of the Hospital, Mr. Brown was the top manager of the Hospital. Mr. Brown, while employed by NHI, acted as the administrator of the Hospital from September 1986, until approximately September or October of 1987. At some time prior to February 1988, the contract for sale of the Hospital to NHI was cancelled and the Board of Trustees began to operate the Hospital. The Consulting Contracts. On or about February 1, 1988 the Hospital and Mr. Brown entered into a Consulting Contract (hereinafter referred to as the "First Contract"). Petitioner's exhibit 1. Mr. Brown agreed in the First Contract to operate the Hospital. Mr. Brown operated the Hospital pursuant to the First Contract until its expiration. Although the term of the First Contract ended January 31, 1991, Mr. Brown continued to operate the Hospital. A second Consulting Contract (hereinafter referred to as the "Second Contract"), was entered into on or about May 29, 1992 between Mr. Brown and the Hospital. The Second Contract applied to the period February 1, 1992, through February 1, 1993. Mr. Brown continued to perform services for the Hospital between the end of the First Contract and the beginning of the Second Contract. The differences between the First Contract and the Second Contract (hereinafter referred to jointly as the "Consulting Contracts"), were not substantial other than the amount of the annual fee to be paid to Mr. Brown. The Treatment of Mr. Brown for Purposes of the Florida Retirement System. During the period of time that Mr. Brown operated the Hospital from February 1, 1988 until he departed in the fall of 1992, the Hospital treated Mr. Brown as an "independent contractor" and not an "employee" for purposes of the Florida retirement system. Although the Hospital could have requested a determination of Mr. Brown's status for purposes of the Florida retirement system, the Hospital was not required to do so. The Hospital, as it was authorized to do pursuant to Chapter 121, Florida Statutes, made the initial decision to treat Mr. Brown as an independent contractor. After Mr. Brown had left the Hospital, an audit of the Hospital was conducted by the management review section of the Division. As a result of the audit, the Division raised a question about the status of Mr. Brown for purposes of the Florida retirement system. As a result of the audit of the Hospital, the Division required the Hospital to submit a Florida Retirement System Employment Relationship Questionnaire form requesting a determination of Mr. Brown's status as an employee or independent contractor. The Hospital did so. See Respondent's exhibit 2. The Division reviewed the Questionnaire and determined that Mr. Brown was an "employee" for purposes of the Florida retirement system, and so notified the Hospital. The Hospital filed a request for a formal administrative hearing to contest the Division's determination that Mr. Brown was an employee. Based upon the foregoing, it is the Division that is attempting to change the status quo in this matter. But for the Division's audit and requirement that the Hospital file a Questionnaire, the Hospital's treatment of Mr. Brown as an independent contractor for purposes of the Florida retirement system would have been final. Services to be Provided by Mr. Brown Pursuant to the Consulting Contracts and Mr. Brown's Relationship with the Board of Trustees. Mr. Brown, referred to as the "consultant" in the Consulting Contracts, agreed to provide the following services: 1:1 The Hospital hereby contracts with Consultant to provide services to the Hospital to perform such services as may be necessary to properly and efficiently run the Hospital for the purpose of providing quality healthcare to the citizens of Washington County and a more productive business operation. 1:2 Consultant hereby contracts with the Hospital to perform such services as may be necessary to provide the Hospital advice, expertise and a more efficient and productive business operation. The Consulting Contracts also contained the following provision pertaining to Mr. Brown's operation of the Hospital: 2:1 Consultant agrees to devote such of his time and efforts to the performance of such services as are necessary to perform and achieve the objectives set forth in Article I above. Consultant agrees that he will not directly or indirectly render any service of a business, commercial or professional nature to any other Hospital in Northwest Florida, whether for compensation or otherwise, during the term of this Agreement without the prior written consent of the Board of Trustees of the Hospital. Consultant agrees to comply with the Hospital's policies, rules and regulations as determined from time to time by the Board of Trustees of the Hospital. It was the intent of the Hospital and Mr. Brown that he would act as an independent contractor, and not an employee, in performing the services contemplated by the Consulting Contracts. Mr. Brown was to, and did, provide his services personally. Mr. Brown did not operate through a corporation or other business entity. Between February 1988 and the Fall of 1992, Mr. Brown administered the Hospital in essentially the same manner that he had prior to 1988 while employed by NHI. The Board of Trustees established policies for the operation of the Hospital during the term of the Consulting Contracts. Mr. Brown carried out policies adopted by the Board of Trustees. Mr. Brown was involved in the formulation of policies by the Board of Trustees and he advised the Board of Trustees concerning policies it adopted. The Board of Trustees had little experience in operating the Hospital. The day- to-day operations of the Hospital had been handled by NHI prior to entering into the First Contract. Prior to NHI's operation of the Hospital, the Hospital was administered by Hospital Corporation of America (hereinafter referred to as "HCA"). HCA had operated the Hospital through an employee, Buel Sapp. The Board of Trustees, therefore, relied heavily on Mr. Brown and his expertise in developing polices and for his efficient operation of the Hospital. The manner in which Mr. Brown administered the Hospital was also largely the same as the manner in which the Hospital has been administered by the person who replaced by Mr. Brown. The new administrator has been treated as an "employee" by the Hospital. Training. Mr. Brown was a professional hospital administrator with a number of years of experience operating hospitals, including the Hospital. In light of Mr. Brown's experience, especially at the Hospital, training was not required when Mr. Brown undertook the services contemplated by the First Contract. Integration. The services to be performed pursuant to the Consulting Contacts were integral to the operation of the Hospital. Mr. Brown performed services normally performed by an "administrator" or top manager of any hospital. Manner In Which Mr. Brown Performed Services. Mr. Brown did not hire any assistants or employees to assist him in the performance of the services required by the Consulting Contracts. The Consulting Contracts did not prevent Mr. Brown from using the services of others to carry out the services to be provided. Although Mr. Brown was ultimately obligated to insure that the services contemplated by the Consulting Contracts were provided, the manner in which services required by the Consulting Contracts were to be carried out was not specified. Continuing Relationship. Mr. Brown was required, as a condition of the Hospital entering into the First Contract, to move to Washington County. Pursuant to the First Contract, Mr. Brown was obligated to perform services for the Hospital for a period of four years. The First Contract expired February 1, 1991. The Second Contract obligated Mr. Brown to perform services for the Hospital for a period of one year. The Second Contract was effective February 1, 1992. Mr. Brown continued to perform services for the Hospital between February 1, 1991 and February 1, 1992, although the First Contract had expired and the Second Contract had not yet been entered into. The evidence failed to prove why Mr. Brown continued to perform services for the Hospital between February 1, 1991, and February 1, 1992. Mr. Brown performed services for the Hospital after he left NHI for between 3 and 4 years. Mr. Brown's Working Hours. Mr. Brown's working hours were not specified in the Consulting Contracts. Mr. Brown, therefore, was not legally required to perform services during any set period of time. Mr. Brown generally performed services for the Hospital from the early morning until the early evening. Mr. Brown's hours were consistent with the hours worked by employees of the Hospital. Mr. Brown did not keep time-sheets indicating the hours he worked. Nor did Mr. Brown use, or "punch," a time-clock which employees of the Hospital used. Full-Time or Part-Time Work. Mr. Brown was not required to work any set amount of hours pursuant to the Consulting Contracts. The services expected of Mr. Brown pursuant to the Consulting Contracts reasonably contemplated that Mr. Brown would perform services full- time, only if necessary. The Consulting Contracts also provided that Mr. Brown was not required to perform services on days he attended seminars or meetings to improve his position. The Consulting Contracts also required that Mr. Brown make himself available "for all reasonable meetings, engagements, and any and all other reasonable attempts by the Hospital to promote the Hospital." Mr. Brown did not receive annual or sick leave. Mr. Brown did not work at the Hospital every day of the week. During some weeks, he only worked three or four days. Where Mr. Brown Performed Services. Although not specifically required to do so, Mr. Brown performed the services contemplated by the Consulting Contracts essentially on the premises of the Hospital. In order to effectively administer the Hospital, it was necessary that Mr. Brown be available at the Hospital. Reports from Mr. Brown to the Hospital. Mr. Brown regularly reported to the Board of Trustees and kept the Board informed of his actions. Compensation for Mr. Brown's Services. Pursuant to the First Contract, Mr. Brown was paid an annual fee of $70,555.00. The annual fee was paid biweekly in twenty-six equal installments. Payments were made on the last day of every other week. The annual fee to be paid to Mr. Brown pursuant to the First Contract was agreed upon during negotiations based upon the average salary paid to administrators of similarly sized hospitals who were serving as employees, and adding thereto the amount of withholding tax, retirement contributions and other amounts which would be paid on behalf of an "employee." Had Mr. Brown been hired as an "employee", presumably he would have only been paid an amount based upon the average salary of other employee/administrators. Pursuant to the Second Contract Mr. Brown was paid an annual fee of $98,770.00. The annual fee was paid monthly on the first day of each month and upon the submission of an invoice from Mr. Brown. The Consulting Contracts also provided the following: Consultant hereby acknowledges and agrees that he is an independent contractor individually liable for self employment and all other taxes of any nature due on the fees paid by the Hospital to Consultant. Payments of Mr. Brown's annual fee were made to him by the Hospital out of a separate account and not the Hospital's "payroll" account from which Hospital employees were paid. Payments were made at the same time that Hospital employees were paid. The Hospital also paid for group health insurance for Mr. Brown. Health insurance benefits provided to Mr. Brown were the same benefits provided to Hospital employees. The Hospital also paid for disability insurance for Mr. Brown and a life insurance policy larger than provided to Hospital employees. Mr. Brown's Expenses; Tools and Materials; Investment. Pursuant to the Consulting Contracts, the Hospital paid dues Mr. Brown was required to pay to maintain "membership in applicable organizations or associations deemed necessary for promotion of the Hospital " The Hospital paid expenses incurred by Mr. Brown to attend meetings and seminars on new federal and state health care regulations which impacted the operation of the Hospital. The Hospital paid Mr. Brown a vehicle allowance of $250.00. The Hospital also provided Mr. Brown with an office, furniture, office supplies, a secretary (who was an employee of the Hospital) and with telephone and other services necessary to operate as the administrator of the Hospital. The office provided to Mr. Brown was the office used by the Hospital administrator. Other then Mr. Brown's education, Mr. Brown did not have any substantial investment in his position with the Hospital. Capital investment necessary for Mr. Brown to carry out his duties was provided by the Hospital. Profit and Loss Potential. In light of the fact that Mr. Brown was guaranteed payment for his services and the lack of investment and expenses Mr. Brown was required to provide, there was no reasonable potential Mr. Brown would incur a loss. Mr. Brown operated as an individual. Offer of Services to the General Public. The Consulting Contracts prohibited Mr. Brown from providing his services to others in "Northwest Florida." Mr. Brown was, therefore, free to perform services elsewhere. During the term of the Consulting Contracts, Mr. Brown did perform services for other companies located outside of Florida. Article X of the Consulting Contracts provided, in pertinent part, the following: . . . . Consultant further agrees that he shall not participate, directly or indirectly, individually or as a partner, shareholder, employee, agent, consultant, officer, director or otherwise, in any other business where such participation will in any manner interfere (as reasonably determined by the Board of Trustees and Consultant) with the business of the Hospital or which ultimately, in the final opinion of the Board of Trustees, could result in the integrity of the Hospital being subject to doubt. Right to Terminate Mr. Brown and Mr. Brown's Right to Quit. Pursuant to the Consulting Contracts, the Hospital had the right to terminate Mr. Brown's services for "good cause" as determined by majority vote of the Board of Trustees and "upon sixty (60) calendar days written notice of termination to the Consultant." The Hospital was required, however, to pay Mr. Brown for four months of service. The Hospital also had the right to terminate Mr. Brown's services if he were convicted of a felony, required to take treatment for drug or alcohol abuse, engaged in activity harmful to the reputation of the Hospital or failed to comply with the terms of the Consulting Contract. Mr. Brown was authorized by the Consulting Contracts to terminate his services upon sixty days written notice. The Consulting Contracts provide that the agreement terminated upon the death of Mr. Brown. Weighted Consideration of the Facts. Several of the facts in this case indicate that Mr. Brown was an independent contractor of the Hospital and several of the facts indicate that he was an employee. Based upon a weighted consideration of the facts in this case, it is concluded that Mr. Brown operated as an independent contractor, and not an employee, for the Hospital.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of Retirement, enter a Final Order concluding that J. Glenn Brown, Jr., was not a compulsory member of the Florida retirement system pursuant to Section 121.051, Florida Statutes. DONE AND ENTERED this 18th day of November, 1993, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of November, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-1635 The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Hospital's Proposed Findings of Fact Accepted in 1. Accepted in 2 and hereby accepted. Accepted in 7-8. Accepted in 28. Accepted in 10. See 11-13 and 38-39. The First Contract expired January 31, 1991, and not January 31, 1992. Accepted in 16 and 24. Accepted in 35. Accepted in 54 and hereby accepted. The last sentence is not relevant. 9 Accepted in 26, 42-43, 52, 57 and 63. Hereby accepted. Accepted in 68. Accepted in 48. Accepted in 50. Accepted in 30-31. Accepted in 3. The Division's Proposed Findings of Fact Accepted in 4-6. Accepted in 7. Accepted in 9 and hereby accepted. 4 Accepted in 10,53-54, 58-59 and 62. Accepted in 28. Accepted in 23. Accepted in 23 and 69. The first sentence is not relevant. 8 Accepted in 41-42, 44, 47, 52-53 and 63. See 41-43 and hereby accepted. Although Ms. Ward did testify consistent with this finding of fact, the testimony was not sufficiently detailed to conclude that Mr. Brown and Mr. Mason provided services in exactly the same manner. Accepted in 61. 12 Accepted in 11-14, 38-39 and 55. Accepted in 14, 25 and 66. Accepted in 23. Accepted in 60-61. See 73. See 53-62. The conclusion on page 10 is not supported by the weight of the evidence. COPIES FURNISHED: Gerald Holley, Esquire Post Office Box 268 Chipley, Florida 32428 William S. Howell, Jr., Esquire Post Office Box 187 Chipley, Florida 32428 Stanley M. Danek, Esquire Division of Retirement Department of Management Services 2639 North Monroe Street, Building C Tallahassee, Florida 32399-1560 A. J. McMullian, III, Director Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560 Sylvan Strickland, Esquire Department of Management Services Knight Building, Suite 309 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact At all times relevant hereto Respondent was licensed as a physician in the State of Florida having been issued license number ME0040318. Respondent completed a residency in internal medicine and later was a nephrology fellow at Mayo Clinic. He was recruited to Florida in 1952 by Humana. In 1984 he became associated with a Health Maintenance Organization (HMO) in an administrative position but took over treating patients when the owner became ill. This HMO was affiliated with IMC who assimilated it when the HMO had financial difficulties. At all times relevant hereto Respondent was a salaried employee of IMC and served as Assistant Medical DIRECTOR in charge of the South Pasadena Clinic. On October 17, 1985, Alexander Stroganow, an 84 year old Russian immigrant and former cossack, who spoke and understood only what English he wanted to, suffered a fall and was taken to the emergency Room at a nearby hospital. He was examined and released without being admitted for inpatient treatment. Later that evening his landlady thought Stroganow needed medical attention and again called the Emergency Medical Service. When the ambulance with EMS personnel arrived they examined Stroganow, and concluded Stroganow was no worse than earlier when he was transported to the emergency Room, and refused to again take Stroganow to the emergency Room. The landlady then called the HRS hotline to report abuse of the elderly. The following morning, October 18, 1985, an HRS case worker was dispatched to check on Stroganow. Upon arrival, she was admitted by the landlady and found an 84 year old man who was incontinent, incoherent, and apparently paralyzed from the waist down, with whom she could not engage in conversation to determine his condition. She called for a Cares Unit team to come and evaluate Stroganow. An HRS Cares Unit is a two person team consisting of a social worker and nurse whose primary function is to screen clients for admission to nursing homes and adult congregate living facilities (ACLF). The nurse on the team carries no medical equipment such as stethoscope, blood pressure cuff, or thermometer, but makes her evaluation on visual examination. Upon arrival of the Cares Unit, and, after examining Stroganow, both members of the team agreed he needed to be placed where he could be attended. A review of his personal effects produced by his landlady revealed his income to be above that for which he could qualify for medicaid placement in a nursing home; that he was a member of IMC's Gold-Plus HMO; his social security card; and several medications, some of which had been prescribed by Dr. Dayton, Respondent, a physician employed by IMC at the South Pasadena Clinic. The Cares team ruled out ACLF placement because Stroganow was not ambulatory, but felt he needed to be placed in a hospital or nursing home and not left alone with the weekend approaching. To accomplish this, they proceeded to the South Pasadena HMO clinic of IMC to lay the problem on Dr. Dayton, who was in charge of the South Pasadena Clinic, and, they thought, was Stroganow's doctor. Stroganow had been a client of the South Pasadena HMO for some time and was well known at the clinic as well as by EMS personnel. There were always two, and occasionally three, doctors on duty at South Pasadena Clinic between 8:00 and 5:00 daily and, unless the patient requested a specific doctor he was treated by the first available doctor. Stroganow had not specifically requested to be treated by Respondent. When the Cares unit met with Respondent they advised him that Stroganow had been taken to Metropolitan General Hospital Emergency Room the previous evening but did not advise Respondent that the EMS squad had refused to return Stroganow to the emergency Room when they were recalled for Stroganow the same evening. Respondent telephoned the Metropolitan General Emergency Room and had the emergency Room medical report on Stroganow read to him. With the information provided by the Cares unit and the hospital report, Respondent concluded that Stroganow needed emergency medical treatment and the quickest way to obtain such treatment would be to call the EMS and have Stroganow taken to an emergency Room for evaluation. When the Cares unit arrived, Respondent was treating patients at the clinic. A clinic, or doctors office, is not a desirable or practical place to have an incontinent, incoherent, and non-ambulatory patient brought to wait with other patients until a doctor is free to see him. Nor is the clinic equipped to perform certain procedures that may be required for emergency evaluation of an ill patient. At a hospital emergency Room such equipment is available. EMS squads usually arrive within minutes of a call being placed to 911 for emergency medical treatment and it was necessary that someone be with Stroganow when the EMS squad arrived. Accordingly, Respondent suggested that the Cares team return to Stroganow and call 911 to transport Stroganow to an emergency Room for an evaluation. Upon leaving the South Pasadena clinic the Cares team returned to Stroganow. Enroute they stopped to call a supervisor at HRS to report that the HMO had not solved their problem with Stroganow. The supervisor then called the Administrator at IMC Tampa Office to tell them that one of their Gold-Plus HMO patients had an emergency situation which was not being property handled. Respondent left the South Pasadena Clinic around noon and went to IMC's Tampa Office where he was available for the balance of the afternoon. There he spoke with Dr. Sanchez, the INC Regional Medical Director, but Stroganow was not deemed to be a continuing problem. By 2:00 p.m. when no ambulance had arrived the Cares Unit called 911 for EMS to take Stroganow to an emergency Room. Upon arrival shortly thereafter the EMS squad again refused to transport Stroganow. The Cares team communicated this to their supervisor who contacted IMC Regional Office to so advise. At this time Dr. Sanchez authorized the transportation of Stroganow to Lake Seminole Hospital for admission. Although neither Respondent nor Sanchez had privileges at Lake Seminole Hospital, IMC had contracted with Lake Seminole Hospital to have IMC patients admitted by a staff doctor at Lake Seminole Hospital. Subsequent to his meeting with the Cares team Respondent received no further information regarding Stroganow until well after Stroganow was admitted to Lake Seminole Hospital. No entry was made on Stroganow's medical record at IMC of the meeting between Respondent and the Cares Unit. Respondent was a salaried employee whose compensation was not affected by whether or not he admitted an IMC Gold-Plus patient to a hospital.
Findings Of Fact 1. On or about April 25, 2006, Heartland Services of Florida, Inc. withdrew its CON application No. 9846 and then filed a Notice of Voluntary Dismissal of its Petition at DOAH, attached hereto as Ex. A. 8. On or about May 01, 2006, Hospice of the Palm Coast, Inc. withdrew its CON application No. 9844 and then filed a Notice of Voluntary Dismissal of its Petition at DOAH, attached hereto as Ex. B. 3. On or about June 1, 2006, North Central Hospice, Inc. (“NCFH”), and Hospice of Citrus County, Inc. (“HOCC”), filed a Joint Motion for Remand, based upon serious settlement negotiation, attached hereto as Ex. C. 4, On or about April 28, 2006, the Administrative Law Judge assigned to the case issued an Order Closing File based on the Notice of Voluntary Dismissal (Heartland Services of Florida, Inc.), attached hereto as Ex. D. 5. On May 03, 2006, the Administrative Law Judge assigned to the case issued an Order Closing File based on the Notice of Voluntary Dismissal (Hospice of the Palm Coast, . Inc.), attached hereto as Ex. E. 6. On June 08, 2006, the Administrative Law Judge assigned to the case issued an Order Remanding without Prejudice based on North Central Hospice, Inc.’s (“NCFH”), and Hospice of Citrus County, Inc.’s (“HOCC”), Joint Motion for Remand, attached hereto as Ex. F. 7. On or about December 29, 2006, North Central Hospice, Inc. (“NCFH”), and . Hospice of Citrus County, Inc. (“HOCC”), withdrew their Petitions with respect to CON application No. 9843 and then filed a Notice of Voluntary Dismissal of its Petition at DOAH, attached hereto as Ex. G. 8. The Agency hereby adopts and incorporates by reference the attached Notices of: Voluntary Dismissals; Order Closing Files, Joint Motion for Remand, and Order Remanding Without Prejudice. 9. There are no remaining disputed issues of fact or law.
