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 The issue in this case is whether notice was accorded the patient, as contemplated by section 766.316, Florida Statutes (2012).
Findings Of Fact Ashley Lamendola first presented to Gulf Coast OB/GYN on the morning of December 16, 2011, for a prenatal visit. This visit constituted the beginning of her professional relationship with the physicians who were part of the Gulf Coast OB/GYN group, which included Dr. Calderon and Dr. Shamas.1/ Violet Lamendola, Ms. Lamendola’s mother, accompanied Ms. Lamendola to that visit. When she arrived at Gulf Coast OB/GYN, Ms. Lamendola was given information and forms to fill out by the receptionist. According to both Ms. Lamendola and her mother, the materials included a NICA brochure in Spanish and an acknowledgment of receipt of the NICA form. While reviewing the materials, Ms. Lamendola, who does not speak Spanish, noted that the NICA brochure given to her was in Spanish. She asked her mother to take the brochure back to the receptionist. When Ms. Lamendola’s mother asked the receptionist about the Spanish brochure, the receptionist told her that the office had run out of NICA brochures printed in English, but that she would obtain one from another office and give it to Ms. Lamendola at the end of her appointment. Ms. Lamendola was instructed to sign and did sign the acknowledgment form so that she could see the physician. The acknowledgment form advised that all physicians in the Gulf Coast OB/GYN, P.A., were participating physicians in the NICA program. Ms. Lamendola received a black-and-white facsimile copy of the NICA brochure on her way out of the office along with other materials relating to prenatal and infant care. The brochure, received by Ms. Lamendola from Gulf Coast OB/GYN, bears a facsimile transmission header dated December 16, 2011, at 9:47 a.m. The brochure prepared by NICA is a color brochure which contains the following text in white letters on a light-to-medium green background on the back of the brochure: Section 766.301-766.316, Florida Statutes, (“NICA Law”) provides rights and remedies for certain birth-related neurological injuries and is an exclusive remedy. This brochure is prepared in accordance with the mandate of Section 766.316, Florida Statutes. A copy of the complete statute is available free of charge to completely inform patients of their rights and limitations under the application provision of Florida law. Since 1989, numerous court cases have interpreted the NICA law, clarifying legislative intent. The above-quoted language is absent from the facsimile copy of the brochure that Ms. Lamendola received from Gulf Coast OB/GYN. Apparently because the letters in the original brochure were white, the letters did not transmit. It is noted that on the front of the brochure, white lettering that appears on the green background of the color brochure did not transmit on the copy that Ms. Lamendola received. The majority of the information contained in Ms. Lamendola’s facsimile copy of the brochure is contained in the color copy of the brochure. The facsimile copy informed Ms. Lamendola that the statutes provide an exclusive remedy and a copy of the statutes may be obtained from NICA. The facsimile outlined the rights and limitations provided in the statutes. The only things that are not contained in the original brochure are that a copy of the statutes is available free of charge, the preparation of the brochure was mandated by section 766.316, and court cases have interpreted the statutes. St. Petersburg General Hospital offers a tour of its obstetrical department to expectant mothers and their families. Ms. Lamendola’s mother called St. Petersburg General Hospital to register for a tour. The hospital employee who was scheduling the tour asked to speak to Ms. Lamendola to obtain pertinent biographical information. Ms. Lamendola provided the information to the hospital employee. The tour is an informational tour and attendance at the tour does not constitute pre-registration at St. Petersburg General Hospital for the delivery of a baby. Ms. Lamendola and her mother, along with 12 other couples, attended the tour on March 22, 2012. During the tour, Ms. Lamendola received a tour packet, which contained a document titled Preadmission and Financial Information. This document instructed Ms. Lamendola to fill out the pre-admission form and return it to the hospital. Ms. Lamendola filled out the pre- admission form, but did not return it to St. Petersburg General Hospital. Ms. Lamendola did not pre-register for admission to the hospital. On April 3, 2012, Ms. Lamendola presented to St. Petersburg General Hospital with complaints of vaginal bleeding. Ms. Lamendola was told by a hospital employee that she was already in the system and that additional information would not be necessary. Ms. Lamendola signed a “Consent to Treat” form and was treated in the labor and delivery unit of the hospital. A short time later, she was given informational materials relating to prenatal and infant care and released. She was not given a NICA brochure during the visit on April 3, 2012. It was the hospital’s policy to give a NICA brochure to a patient only when the patient was being admitted as an inpatient for delivery of her baby. Ms. Lamendola’s professional relationship with St. Petersburg General Hospital relating to her pregnancy began with her visit on April 3, 2012. At 20:19 on June 26, 2012, Ms. Lamendola presented to St. Petersburg General Hospital. She had been experiencing contractions for six hours prior to her arrival at the hospital. She had been placed on bed rest for gestational hypertension five days prior to coming to the hospital. When she arrived at the hospital, she had hypertension. Normally when a patient is 37 to 39 weeks gestation, her physician will bring the prenatal records to the hospital or the physician’s office will send the records to the hospital by facsimile transmission. When Ms. Lamendola arrived at St. Petersburg General Hospital, her prenatal records from her physicians’ office were not on file. Megan Muse, R.N., was on duty when Ms. Lamendola presented at St. Petersburg General Hospital. Because Ms. Lamendola’s records were not on file, Ms. Muse requested that Bayfront Hospital send Ms. Lamendola’s records to St. Petersburg General Hospital. The evidence did not establish how Ms. Muse knew that the prenatal records were at Bayfront Hospital. Ms. Lamendola’s prenatal records, consisting of 11 pages, were sent by facsimile transmission to St. Petersburg General Hospital beginning at 21:35 on June 26, 2012. Ms. Muse recorded in her notes that Ms. Lamendola’s prenatal records were received from Bayfront Hospital at 21:45 on June 26, 2012. Although Ms. Lamendola’s prenatal records may have been sent to Bayfront Hospital, it was never Ms. Lamendola’s intention to deliver her baby at Bayfront Hospital. She took the informational tour offered by St. Petersburg General Hospital and went to St. Petersburg General Hospital in April 2012 when she had a problem related to her pregnancy. At 20:33, Dr. Javate admitted Ms. Lamendola to St. Petersburg General Hospital for the delivery of her infant. Ms. Lamendola was examined by Emanuel Javate, M.D., at approximately 21:35. At 22:02, Ms. Lamendola signed the hospital’s Condition of Admission form. At 22:10 the hospital gave Ms. Lamendola the brochure prepared by NICA, and Ms. Lamendola signed the acknowledgment form, acknowledging that she had received the brochure. Ms. Lamendola gave birth to Hunter Lamendola (Hunter) on June 27, 2012, at St. Petersburg General Hospital, which is a licensed Florida Hospital. At birth, Hunter weighed in excess of 2,500 grams and was a single gestation. Ashley Lamendola received obstetrical care from Guillermo Calderon, M.D. Dr. Calderon was a “participating physician” as defined in section 766.302(7). Christina Shamas, M.D., provided obstetrical services in the course of labor, delivery, and resuscitation in the immediate post-delivery period. Dr. Shamas was a “participating physician” as defined in section 766.302(7).
The Issue The issues are whether Petitioner overpaid Medicaid reimbursements to Respondent for inpatient hospital services due to the lack of medical necessity for such services and, if so, the amount of the overpayment.
Findings Of Fact Respondent is a 226-bed community hospital in Sanford. It is an acute-care hospital with an emergency department. At all material times, Respondent has been an authorized Medicaid provider. For inpatient services, Respondent receives, under Medicaid, an all-inclusive per diem rate for all goods and services provided during a 24-hour period, less any third-party payments. Petitioner is the state agency responsible for the regulation of the Medicaid program in Florida. Petitioner is required to perform Medicaid audits of providers and to recover any overpayments. Pursuant to this authority, Petitioner conducted an audit of Respondent for the period from January 1, 2001, through March 31, 2002. Pursuant to its procedures, Petitioner duly informed Respondent of the audit, obtained from Respondent relevant medical and hospital records, issued a Provisional Agency Audit Report on January 24, 2006, obtained additional information from Respondent pertinent to the provisional findings, and issued a Final Agency Audit Report on October 19, 2006, which claimed a total overpayment of $286,357.54 based on Medicaid payments made to Respondent on behalf of 35 different recipients. (The report indicates two separate denials for each of four recipients, so 39 total transactions are listed.) The dispute in this case concerns the medical necessity of the inpatient hospitalization of each recipient. The Florida Medicaid Hospital Services Coverage and Limitations Handbook (Handbook) states that the purpose of the Medicaid program is "to provide medically necessary inpatient and outpatient services to recipients in the hospital." Handbook, page 1-1. This case involves paid claims for inpatient, not outpatient, services. The Handbook defines inpatient services as those services "rendered to recipients who are admitted to a hospital and are expected to stay at least 24 hours and occupy a bed, even though a bed is not actually utilized because the recipient is discharged or transferred to another hospital." Handbook, page 1-1. The Handbook provides that the day of admission is covered, but the day of discharge is not covered, unless it is also the day of admission. Handbook, page 2-22. The Handbook defines "grace days" as non-medically necessary days following the day of formal discharge when the recipient continues to occupy a hospital bed until an outside facility or residence can be found. These days are not reimbursable by Medicaid except for children under 21 years of age on "Department of Children and Families hold . . .." Medicaid will pay up to 48 hours of inpatient stay beyond the formal discharge day for these children while an alternative placement is located. The Handbook incorporates the limitation of medical necessity as follows: Medicaid reimburses for services that are determined medically necessary, do not duplicate another provider's service, and are: individualized, specific, consistent with symptoms or confirmed diagnosis of the illness or injury under treatment, and not in excess of the patient's needs; not experimental or investigational; reflective of the level of services that can be safely furnished, and for which no equally effective and more conservative or less costly treatment is available statewide; furnished in a manner not primarily intended for the convenience of the recipient, the recipient's caretaker, or the provider. The fact that a provider has prescribed, recommended, or approved medical or allied care, goods, or services does not, in itself, make such care, goods or service medically necessary or a covered service. Note: See Appendix D, Glossary, in the Florida Medicaid Provider Reimbursement Handbook, UB-92, for the definition of medically necessary. Handbook, pages 2-1 to 2-2. The Florida Medicaid Provider Reimbursement Handbook, UB-92, Appendix D, defines "medically necessary" as follows: Means that the medical or allied care, goods, or services furnished or ordered must: Meet the following conditions: Be necessary to protect life, to prevent significant illness or significant disability, or to alleviate severe pain; Be individualized, specific, and consistent with symptoms or confirmed diagnosis of the illness or injury under treatment, and not in excess of the patient's needs; Be consistent with generally accepted professional medical standards as determined by the Medicaid program, and not experimental or investigational; Be reflective of the level of service that can be safely furnished, and for which no equally effective and more conservative or less costly treatment is available; statewide; and Be furnished in a manner that is not primarily intended for the convenience of the recipient, the recipient's caretaker, or the provider. "Medically necessary" or "medical necessity" for inpatient hospital services requires that those services furnished in a hospital on an inpatient basis could not, consistent with the provisions of appropriate medical care, be effectively furnished more economically on an outpatient basis or in an inpatient facility of a different type. The fact that a provider has prescribed, recommended, or approved medical or allied care, goods, or services does not, in itself, make such care, goods or services medically necessary or a medical necessity or a covered service. The Florida Medicaid Provider Reimbursement Handbook, UB-92, Appendix D, page D-10. E. A. was admitted on January 6, 2001. Petitioner does not contest the medical necessity of inpatient services to treat E. A.'s acute exacerbation of chronic bronchitis from January 6-8. The parties' dispute concerns the medical necessity of the remaining ten days of E. A.'s hospitalization. (All calculations of duration of hospitalizations omit the day of discharge, pursuant to the above-cited provision from the Handbook. In this case, for instance, E. A. was discharged on January 19.) E. A., a 60-year-old male, presented to the emergency department with shortness of breath and a history of chronic obstructive pulmonary disease (COPD), emphysema, and hypertension. He had been unable to eat for the preceding four days due to respiratory distress. At the time of his admission, E. A. had been living for a short while with his sister, who was suffering from cancer. His relevant history included a shotgun wound to the left lung 30 years earlier. Respondent states in its proposed recommended order that E. A.'s chest X-rays showed acute infiltrate demonstrating pneumonia, although the discharge summary reveals that chest X-rays fail to reveal this condition, but acknowledged that sputum grain stains revealed a polymicrobial infection. More to the point, the X-ray reports dated January 6 and 8 note: "no focal infiltrate." However, the discharge summary described E. A.'s prognosis as poor because he was in "end-stage lung disease." In the emergency department, after treatment with bronchodilators, E. A.'s oxygen saturation rate was only 87 percent--not 94-100 percent, as mistakenly stated by Petitioner's expert, Dr. Ellen Silkes, an otolaryngologist whose practice is largely limited to outpatients. This low rate of oxygen saturation evidences hypoxia. E. A.'s arterial blood gases bore a pH of 7.28, evidencing, on the facts of this case respiratory acidosis, which results from excessive retained carbon dioxide due to poor lung function. E. A. was started on Albuterol and Atrovent by nebulizer at four-hour intervals, as well as a corticosteroid intravenously every six hours to relieve the swelling in the lungs. He received oxygen by nasal cannula. On January 10, the physician's notes state that E. A. still suffered from "severe COPD" secondary to smoking with bronchospasms. According to the notes, the first day that E. A. showed any improvement was January 12. On January 14 and 16, E. A. was still retaining excessive carbon dioxide and remained hypoxic, but showed some improvement by January 16 in terms of arterial blood gases. The physician's note for January 17 states that E. A. could be discharged as soon as arrangements for home health care were completed. E. A.'s hospitalization was medically necessary from January 6-17. His hospitalization after January 17 was not medically necessary. Petitioner improperly denied January 9-16, given that the day of discharge is excluded. Thus, for E. A., Petitioner should have denied two days, not all ten days. A. A. was admitted on June 19, 2001. Petitioner does not contest the medical necessity of inpatient services to treat A. A.'s gastrointestinal bleeding from June 19-20. The parties' dispute concerns the medical necessity of the remaining 12 days of A. A.'s hospitalization. (Some of Petitioner's calculations are incorrect. For instance, in this case, Petitioner does not deny July 2-5, even though, undoubtedly, its position as to the lack of medical necessity as to the earlier dates would mandate the same position as to the later dates. This recommended order does not disturb Petitioner's implicit acceptance of the medical necessity of any dates, even when it appears to be in error.) A. A., a 51-year-old male, presented to the emergency department with abdominal pain, diarrhea, and black tarry stools. His recent history included bloody vomit and a diagnosis, a few months earlier, of a pulmonary embolism. A. A. had discontinued taking Coumadin, a blood thinner, due to nosebleeds. A. A. had been diagnosed with AIDS in 1998 and had lost 30 pounds in one month. At admission, A. A.'s hemoglobin and hematocrit levels were critically low at 5.1 and 15.5, respectively, and remained critically low the following day when, after A. A. received transfusions of two units of packed red blood cells, his hemoglobin and hematocrit levels were only 6.8 and 20.0, respectively. Dr. Silkes denied the hospitalization after June 20 because an upper gastrointestinal endoscopy revealed, on June 19, no acute bleeding, and a bleeding scan the following day was negative. However, according to the physician's notes, A. A. was continuing to experience diarrhea on June 20, even though he was starting to feel better. The course of treatment of A. A. was complicated by his recent history of pulmonary embolism and his inability to report an accurate history. By June 21, A. A.'s severe anemia had been corrected, but he was diagnosed with candida, an opportunistic fungal infection common in AIDS patients. This diagnosis would explain the vomiting of blood. Generally, the treatment dilemma posed by A. A. was that efforts to increase his clotting time to stop the bleeding raised the risk of pulmonary embolism. The physicians debated whether to install a Greenfield filter to stop the passage of a blood clot. The filter is introduced under X-ray control through the femoral vein into the inferior vena cava, where it is anchored, so that it allows the passage of blood, but not the passage of a blood clot. But the Greenfield filter is contraindicated in the presence of A. A.'s fever of 101 degrees and elevated white blood counts. Physicians introduced Coumadin to minimize the risk of clots, but A. A.'s low platelet count required the discontinuation of Coumadin on June 30. A. A.'s International Normalization Ratio (INR) was 4.2, which is well above the range of 2.0-3.0 and thus indicative of the fact that A. A.'s blood was taking too long to clot. The standard of care in 2001 precluded safe outpatient management of a complicated patient such as A. A., given his twin risks of pulmonary embolism and bleeding, either of which could result in his death. A. A.'s Coumadin could not safely have been adjusted on an outpatient basis. The physicians restarted the Coumadin on June 24 and doubled its dosage the following day. As they were working on adjusting the blood thinner, though, A. A. continued to suffer nightly fevers of 103 degrees, and the physicians needed to monitor him closely for the next week for this reason too. On June 28, A. A. reported that he was feeling better, but the physicians needed to monitor him for a recent reduction in his Coumadin dosage. A. A. was reported as "alert and comfortable" on July 2. A. A.'s hospitalization was medically necessary from June 19 through at least July 2. Petitioner improperly denied all ten days of this hospitalization. T. B. was admitted on May 15, 2001. Petitioner does not contest the medical necessity of inpatient services to treat T. B.'s esophageal cancer and tuberculosis from May 15-17 and The parties' dispute concerns the medical necessity of the ten days that Dr. Silkes denied of the remaining 14 days of T. B.'s hospitalization. (It is unclear why Petitioner denied only ten days when Dr. Silkes denied May 18-20 and May 22-June 1--a total of 14 days, or 13 days exclusive of the day of discharge. But, as noted above, in cases such as this, the recommended order will consider only whether up to ten days within this period are allowable as medically necessary.) T. B., a 47-year-old male, presented to the emergency department with difficulty swallowing. He had visited a physician in February 2001 with the same complaint, and the physician had recommended an upper gastrointestinal series. Due to financial constraints, T. B. did not undergo this procedure until late April, when he was found to have a high-grade obstruction consistent with a tumor. T. B.'s recent history included the loss of 25 pounds. An endoscopy with biopsy performed on May 16 revealed a high-grade carcinoma of the esophagus. The physician planned to commence preoperative chemotherapy and radiation therapy to shrink the lesion, but, based on sputum collected on May 18, it was discovered that T. B. had mycobacterium tuberculosis. Physicians had suspected the tuberculosis from the time of admission when they placed T. B. in a negative airflow isolation room. Treatment of the tuberculosis necessarily preceded the preoperative chemotherapy recommended for T. B.'s carcinoma. The sputum sample revealed rare acid-fast bacilli, for which the standard of care in 2001 typically required two to three weeks of treatment before isolation precautions could be discontinued. T. B. remained in isolation at least through May 31. In addition, T. B. suffered significant pain from the carcinoma. By May 23, he was on patient-controlled analgesia in the form of a morphine pump, which is not available outside of an acute-care hospital. T. B.'s hospitalization was medically necessary from May 15 through at least June 1. Petitioner improperly denied all ten days of this hospitalization that it denied. R. B. was admitted on December 3, 2001. Petitioner does not contest the medical necessity of inpatient services to treat R. B.'s respiratory failure from December 3, 2001, to January 2, 2002, and January 8, 2002. Based on Petitioner's prehearing stipulation, the dispute concerns only seven days' hospitalization. R. B., a 59-year-old female, presented to the emergency department with acute respiratory distress and respiratory failure. She was immediately intubated. Her family insisted upon aggressive treatment of, among other things, her bilateral pneumonia caused by a virulent staph infection. R. B. required a tracheotomy on December 20 due to the difficulty in weaning her from the ventilator. She required the placement of a percutaneous endoscopic gastrostomy (PEG) tube on January 1. The discharge summary describes R. B. as "very frail and fragile" and her hospitalization as "very prolonged and complicated." On December 23, when R. B. was finally weaned from the ventilator, her family agreed to a do-not-resuscitate (DNR) code for her. The dispute arises from an incident on January 3 when R. B. fell when trying to get out of bed. Her mental status deteriorated, probably due to malignant disease. Physicians ruled out sepsis in the bloodstream, but X-rays revealed multiple nodules in the lung and liver. On January 8, a CT- guided lung biopsy of one of the nodules confirmed malignant disease. Two days later, the physician stated that a consultation with hospice was indicated. Upon the agreement of the family, R. B. was discharged to her home under hospice care on January 12. Dr. Silkes is substantially correct in her opinion. The diagnostic work after January 2 only supported the poor prognosis that had become obvious to R. B.'s family ten days earlier and certainly was not palliative in nature. R. B.'s hospitalization after January 2, 2002, was not medically necessary--except for January 8, which Dr. Silkes initially conceded, and an additional two days, which Petitioner conceded in its prehearing stipulation. Petitioner properly denied seven days of this hospitalization. J. B. was admitted on January 5, 2002. Petitioner does not contest a 23-hour observation on January 5, but this would generate a reimbursement considerably smaller than that sought by Respondent for inpatient services for that day, so Petitioner has essentially denied the entire hospitalization, which consists of 16 days. J. B., a 59-year-old male, presented to the emergency department with shortness of breath and atrial fibrillation with fast ventricular rate. He had been diabetic for 25 years. He had been laid off from construction work in August 2001, and had arthritic knees which prevented his return to work. Since losing his job, J. B. had been feeling poorly and had lost 20 pounds. J. B.'s pulse at the time of his arrival was 165, and it dropped to 105 within his first six hours at the hospital. J. B.'s relevant history included congestive heart failure, edema of the extremities, and nocturnal dyspnea. A chest X-ray on the day of admission revealed a dense mass in the left lobe. Physicians started a calcium channel blocker to regulate J. B.'s rapid heart beat and a diuretic to eliminate his excess fluids and swelling. J. B. was feeling much better by January 7, as the physicians had controlled his rapid heart beat. On that day, J. B. underwent a stress test, which was negative. However, a CT scan performed on January 8 and reported the following day revealed a left hilum mass that proved to be advanced carcinoma. The physicians decided that J. B. needed a bronchoscopy to biopsy the lung mass and a thoracentesis, in which a needle is inserted between the ribs to extract fluid for the purpose of determining the fluid's source. However, J. B.'s atrial fibrillation complicated their plans. On January 8, J. B. remained in atrial fibrillation, and the physicians were considering starting him on Coumadin because patients with atrial fibrillation are at high risk of clotting due to the poor expulsion of blood into the ventricle. Introduction of this blood-thinning agent before other invasive procedures requires first that the physicians stabilize the patient. This dilemma delayed the introduction of the blood- thinning agent and prevented treating J. B. as an outpatient. Once stabilized on Coumadin, J. B. underwent the two diagnostic procedures on January 11. They revealed that he was suffering from stage IV squamous cell carcinoma, according to a physician's report dictated on January 14 and transcribed the following day. The physician ordered additional CT scans to determine the extent of the metastatic disease before deciding on a course of treatment. A whole body bone scan was performed on January 15 and was essentially negative. However, the carcinoma had metastasized to the left hilum and, by report dated January 15, a physician noted that J. B. would not benefit from surgery, chemotherapy, or radiation, although palliative radiation could offer him some relief. An IV port for chemotherapy (not radiation) was placed on January 16--not January 6, as noted by Dr. Silkes in her report. Coumadin had been discontinued in advance of the procedure and resumed on the day of the procedure, but required adjustment for the next several days, as J. B.'s INR was too low, indicative of excessive clotting. Although the administration of the chemotherapy through the IV port could have been done on an outpatient basis, J. B. was comfortable at all times after January 15, and with no effective treatment possible, his hospitalization remained medically necessary until the physicians were able to adjust his Coumadin so that his INR reached the normal range. J. B.'s hospitalization was medically necessary from January 5 through January 22, on which date he was discharged. Petitioner improperly denied the 16 days of inpatient services. N. C. was admitted on February 8, 2002. Petitioner does not contest the medical necessity of inpatient services to treat N. C.'s intracranial hemorrhage from February 8-10. The parties' dispute concerns the medical necessity of the remaining 21 days of N. C.'s hospitalization. N. C., a 40-year-old female, presented to the emergency department with a complaint of passing out and no significant medical history. N. C. was a single mother of a developmentally disabled child. Her father resided in a nursing home and suffered from dementia, so her siblings were her decisionmakers concerning care. At admission, N. C. was already in a vegetative state, suffering from a massive intracranial hemorrhage. Her blood pressure was 213/107. She was immediately intubated and given Mannitol to reduce intracranial pressure and Dilantin to prevent seizures. On February 8, a neurologist evaluated N. C. and found her a poor candidate for surgery to evacuate the intracranial hematoma due to the likelihood of extensive consequent neurological deficits. The neurologist discussed the possibilities and the "extremely poor" prognosis with the siblings, who decided not to pursue surgery and instead allow N. C. to be "managed medically." The physicians asked the siblings to consider a DNR code for N. C. N. C. made no meaningful progress in the following days. Respondent was unable to contact her siblings until February 19, and they asked for two days within which to make the decision whether to place N. C. on a DNR code. On February 22, they decided to place N. C. on a DNR code and withdraw the ventilator. Three days later, the physician discussed with the siblings the possibility of placement in a nursing home. Three days after this discussion, the siblings agreed on inpatient hospice care for N. C. On March 4, IV fluids and medications and the nasogastric feeding tube were withdrawn, and N. C. was transferred to a nursing home under hospice care. N. C.'s hospitalization was medically necessary through February 22 because a nursing home cannot accept a patient on a ventilator, N. C.'s course following the stroke could reasonably be observed for a couple of weeks to determine if improvement--however unlikely--might take place, and the siblings reasonably required this long to make this difficult decision. From February 23 through discharge, the inpatient services provided N. C. were no longer medically necessary, so Petitioner properly denied nine days of the 21 days that it denied for this recipient. N. Ch. was admitted on May 23, 2001. Petitioner does not contest the medical necessity of inpatient services to treat N. Ch.'s cellulitus and osteomyelitis from May 23 to June 24. The parties' dispute concerns the medical necessity of the remaining 46 days of N. Ch.'s hospitalization. N. Ch., a 38-year-old male, presented to the emergency department with wounds to both legs and loss of feeling in both feet and a history of fractures to both tibias 20 years ago followed by osteomyelitis four years ago. Despite considerable hospital treatment to both legs, consisting of antibiotics, hyperbaric oxygen, debridement, and skin grafts, drainage of the wounds persisted. Four grainy wounds on both legs penetrated to the bone, and N. Ch. had suffered some bony damage from the persistence of these infected wounds. A physician performed a surgical debridement of the wounds on May 26, and a vacuum- assisted closure device was applied to the wound on the following day. This device produces negative air pressure to stimulate a chemical change in the tissues to enhance the migration of new blood vessels and granulation tissue over the area of the wound. The pump was changed often. On June 22, N. Ch. underwent a second debridement and a pump was reapplied to the wounds on June 24. The issue in this case involves the use of hyperbaric oxygen treatment on an inpatient basis. On June 7, a physician reasonably recommended 20, 90-minute hyperbaric oxygen treatments. The treatments, which accelerate wound healing, began the next day. Dr. Silkes correctly finds no medical necessity after N. Ch. became stable after the second debridement. Although he later suffered some fever, apparently from his reaction to an antibiotic, and gastroesophagael reflux, as well as some adverse reactions to IV and peripherally inserted central catheter lines, N. Ch. could have been managed as an outpatient after June 24. Nothing suggests that the vacuum-`assisted closure device requires hospitalization, and hyperbaric oxygen treatment clearly does not require hospitalization. Respondent contends that inpatient services remained medically necessary after June 24 because Medicaid would not pay for hyperbaric oxygen treatment on an outpatient basis. Medical necessity is driven by medical, not legal, considerations. If the sole reason for hospitalization is to obtain a medically necessary good or service that Respondent has restricted to the inpatient setting, then the provider community improperly circumvents Petitioner's restriction. If there is no other reason to continue to hospitalize a recipient, such as N. Ch., the decision to do so in order to obtain for him a concededly medically necessary service--that does not otherwise require hospitalization--is unwarranted. Petitioner properly denied the 46 days of inpatient services for N. Ch. after June 24. J. C. was admitted on February 24, 2002. Petitioner does not contest the medical necessity of inpatient services to treat J. C.'s coronary artery disease and lymphoma on February 24 and March 3-8. In its proposed recommended order, Respondent does not contest Petitioner's denial of the "last two days," which apparently are March 9-10. The parties' dispute concerns the medical necessity of the remaining six days of hospitalization from February 25 through March 2. J. C., a 61-year-old female, presented to the emergency department with worsening chest pain over the past two weeks and a history of coronary artery disease. She also had an undiagnosed mass on her neck. She had previously failed outpatient treatment and was admitted to the hospital. Two weeks earlier, J. C. was to have had an outpatient biopsy of the neck mass, but the anesthesiologist declined to administer anesthesia until her unstable angina was addressed. J. C. went to her primary care physician, who referred her to a cardiologist, but, prior to seeing him, J. C. went to the emergency department. On February 25, the physician's notes indicate that J. C. was stable and without chest pain. The cardiologist performed a cardiac catheterization on February 26 and found 100 percent blockage of the left anterior descending artery, 80 percent blockage of the proximal circumflex, and other narrowings that were not amenable to angioplasty and stenting, so he recommended coronary artery bypass grafting. Heart surgery could not proceed until physicians learned the nature of the neck mass. A biopsy was performed on February 28, which revealed B-cell malignant lymphoma. The oncologist preferred to commence chemotherapy after the bypass operation, so this was performed on March 3. J. C. was extubated on March 4, but developed acute respiratory distress on March 5 and required a transfusion the following day. However, Dr. Silkes is correct in finding the hospitalization from February 25 through March 2 medically unnecessary. The procedures performed during this period could have been done on an outpatient basis. The record does not support Respondent's argument that her unstable angina required inpatient management. Petitioner properly denied these six days of inpatient services. R. LaB. was admitted on April 2, 2001. The parties' dispute concerns the medical necessity of the last day of inpatient service on April 12. This is the first case considered in this recommended order handled by Dr. Alan Yesner, an internist whose practice is more evenly divided between inpatients and outpatients than is Dr. Silkes' practice. R. LaB., a 47-year-old female, presented to the emergency department with abdominal pain of two days' duration and a history of COPD, hypertension, and diabetes. She was rushed to abdominal surgery to reduce an incarcerated hernia. The surgery was long. R. LaB. suffered respiratory failure and required intubation. Dr. Yesner is correct in opining that R. LaB.'s hospitalization after April 11 was not medical necessary. She was stable and on appropriate medication, so Petitioner properly denied one day of inpatient service for R. LaB. J. L. was admitted on June 12, 2001. The parties' dispute concerns the medical necessity of the seven days of inpatient services. J. L., a 47-year-old male, presented to the emergency department with complaints of a gradual increase of abdominal girth and was found to have blood in his stool. Lab work indicated an elevated INR, elevated bilirubin, and bacteria in his urine. The physician concluded that J. L. suffered from primary biliary cirrhosis, for which he had been treated since at least 1998. J. L. admitted that he had become noncompliant with his medication after a divorce. A CT scan revealed a probable stone obstructing the right ureter, causing urine to back up and flood the right kidney. A successful laser lithotripsy was performed on June 17 with the complete fragmentation of the stone and the installation of a stent, which would facilitate drainage, to be removed a few days later. J. L. tolerated the procedure well, and on the next day he reported feeling better without any pain in his flank. Dr. Yesner notes the "late schedule" of the lithotripsy, but Respondent did not have a lithotripter in 2001 and had to schedule it for use at the hospital. The hospitalization was medically necessary through June 17 due to the pain, advanced kidney disease, and potential kidney problems presented by the blockage, prior to its surgical fragmentation. Petitioner should have denied two days, not seven days. C. M. was admitted on April 2, 2001. Petitioner does not contest the medical necessity of admission for 23-hour observation only on April 2 for end-stage sarcoidosis, pneumonia, and gastrointestinal bleeding. The parties' dispute concerns the medical necessity of the remaining 31 days of C. M.'s hospitalization, which concluded with her death. C. M., a 55-year-old female, presented to the emergency department with shortness of breath and weakness. She is a Jehovah's Witness, so she declines blood transfusions on religious grounds. By April 4, C. M.'s blood gases, although not within normal ranges, were out of critical ranges. C. M. suffered respiratory failure and required intubation on April 16. Her hemoglobin gradually dropped after this, but treatment was limited to iron and vitamins due to the refusal of the patient to accept a blood transfusion. This treatment was unsuccessful. The family supported C. M.'s decision not to accept a blood transfusion, but insisted on full, aggressive treatment, including CPR. C. M. went into cardiac arrest on May 3 and CPR failed to revive her. Dr. Silkes states that Respondent should have arranged for hospice care during the first day of hospitalization. C. M. was not then on a ventilator, so a hospice would not have objected to taking C. M. on that ground, but her respiration was critically impaired for the first three days of her hospitalization and her prognosis was not such as to render hospital care medically unnecessary. It was medically necessary to stabilize C. M.'s respiration during these first three days, but her hemoglobin issues could have been addressed by home health care for the next 11 days. The medical necessity of inpatient services resumes, though, after C. M.'s respiratory failure of April 16 and continues to the end of her hospitalization. The first three days of inpatient services were medically necessary, the next 11 days of inpatient services were not medically necessary, and the last 17 days of inpatient services were medically necessary, so Petitioner should have denied 11 days, not 31 days. M. M. was admitted on March 3, 2001. Petitioner does not contest the medical necessity of inpatient services to treat acute asthmatic bronchitis with a history of coronary artery bypass graft, asthma, sarcoidosis of the lung, and diabetes from March 3-12, which Petitioner later extended to March 13. The parties' dispute concerns the medical necessity of the remaining three days of M. M.'s hospitalization, which Respondent's expert frankly conceded was difficult to justify. As Dr. Yesner noted, M. M. was stabilized on oral medication by March 11, and he allowed a couple of additional days to monitor her. M. M. experienced hypoglycemia on March 16, but this is a condition that, according to Dr. Yesner, is not unusual with the Prednisone that M. M. was taking, and hypoglycemia is typically managed on an outpatient basis. Petitioner properly denied the last three days of M. M.'s hospitalization. J. P. S. was admitted on January 4, 2001. Petitioner does not contest the medical necessity of inpatient services to treat J. P. S.'s obstruction of the common bile duct. The parties' dispute concerns the medical necessity of the last three days of his hospitalization. J. P. S., a 54-year-old male, presented to the emergency department with severe jaundice and a history of diabetes, congestive heart failure, and triple coronary artery bypass graft performed in 1997, although he displayed no significant cardiac abnormalities during this hospitalization. During the initial examination, J. P. S. went into respiratory arrest and required intubation. The gastroenterologist found J. P. S. ready for discharge, from a gastroenterological perspective, on January 13. but J. P. S. immediately developed COPD symptoms, including shortness of breath and edema. According to the physician notes, J. P. S. was sufficiently stable for discharge on January 15, but a note for the next day says to hold the discharge pending cardiac evaluation. Respondent discharged J. P. S. three days later, after physicians could monitor the level of Digoxin to ensure that J. P. S. was safe for discharge. P. S.'s entire hospitalization was medically necessary. Petitioner improperly denied the last three days of inpatient services. J. P. was admitted on December 8, 2001. Petitioner does not contest the medical necessity of services to treat J. P.'s fever from December 8-12. The parties' dispute concerns the medical necessity of the remaining 14 days of J. P.'s hospitalization. J. P., a 27-year-old male, presented to the emergency department with high-grade fevers and severe headaches and a history of AIDS. Dr. Silkes approved the treatment of the fever until it ended on December 12. The fever was likely caused by J. P.'s toxoplasmosis of the central nervous system. This is an opportunistic condition not unusual in immunocompromised patients. Candida fungal infection likely caused J. P.'s complaints of pain on swallowing, as this too is an opportunistic condition. Additionally, a blood culture revealed a staph infection. Through December 18, J. P. was continuing to experience fevers of up to 101 degrees. At the same time, it was necessary to address the toxoplasmosis before it extended to other organs. This required the sequential administration of IV antibiotics and careful, continual monitoring of the patient for his clinical response to treatment. On December 20, J. P. underwent a bone marrow biopsy to rule out the extension of toxoplasmosis in the bone marrow or the presence of tuberculosis. This test was negative, which was a precondition for discharge. The pathology report was "received" on December 21, but not "printed" until December 27. However, J. P. did not complete his IV administration of Doxycycline until December 23, when the medical necessity for his inpatient services ended. Petitioner should have denied three days, not 14 days. W. P. was admitted on June 18, 2001. Dr. Silkes would allow only a 23-hour observation on the day of admission for the treatment of lung cancer and tuberculosis. The parties' dispute concerns the medical necessity of 13 days of his hospitalization from June 18 through July 1 (even though he was not discharged until July 13). W. P., a 59-year-old male, presented to the emergency department with severe coughing up of blood and a recent loss of 40 pounds. A chest X-ray at admission revealed a large mass in the upper left lobe of the lungs. Lab work suggestive of anemia correlated with a malignancy as its source. Sputum to test for acid fast bacillus was taken, and a consult was immediately arranged with a pulmonary specialist to consider a bronchoscopy and to take a biopsy. A CT scan of the chest on June 18 revealed abnormal soft tissue density filling the right upper lobe, two tumors, and numerous nodes. The bronchoscopy on June 19 revealed 80 percent obstruction of the right main bronchus secondary to an endobronchial lesion and 100 percent obstruction of the right upper lobe. A biopsy of the right mainstem bronchus revealed a squamous cell carcinoma. A physician noted in his consultation report that W. P. was to complete his metastatic survey on the day of the report--June 22--after which they would discuss palliative treatment. The report states that the patient understands that he will unlikely live more than six months. Subsequently, acid fast bacillus, which had originally not been detected, was found, so W. P. was placed in isolation on June 26. He had been experiencing elevated white blood counts and fevers. He was placed on antituberculosis treatment, which, as noted above, typically takes two or three weeks until the patient can be removed from isolation. July 10 was W. P.'s first day without fever. On this date, Respondent sent his records to the Health Department to facilitate a transfer to a tuberculosis hospital. He was discharged on July 13. W. P.'s entire hospitalization was medically necessary. Petitioner should not have denied any of the 13 days that it denied. M. Pr. was admitted on December 18, 2001. Petitioner does not contest the medical necessity of inpatient services to treat M. Pr.'s coronary artery disease from December 18-27. The parties' dispute concerns the medical necessity of the remaining seven days of M. Pr.'s hospitalization. M. Pr., a 58-year-old male, presented to the emergency department with a recent cardiovascular accident while out of state. A cardiac catheterization revealed severe triple vessel coronary artery disease. On December 19, M. Pr. underwent a four-vessel bypass. Post-operatively, however, M. Pr. fell while on the commode. The dispute in this case arises due to the unavailability of rehabilitation facilities that would take M. Pr. after his fall. He was suitable for discharge on December 28, but no facility could be found to receive him. These are "grace days," as noted in the Handbook and are available, on a limited basis, for persons under 21 years of age, but, by negative implication, are unavailable for adults. Thus, medical necessity dictated that Respondent discharge M. Pr. on December 27, so the inpatient services are not reimbursable after December 28, given that the day of discharge is not allowable. Dr. Silkes' determination was correct in this case. Petitioner properly denied seven days' inpatient services for M. Pr. A. R. was admitted on December 30, 2001. Petitioner has denied the entire 14 days of A. R.'s hospitalization, although Dr. Silkes approved one day's inpatient services, on the day of admission, for the treatment of ovarian cancer. A. R., a 63-year-old female, presented to the emergency department with vomiting on the day of admission, progressive abdominal distension, anorexia, weight loss over the past month, and a 15-year history of bronchial asthma. A CT scan of A. R.'s thorax at the time of admission revealed a large collection of fluid in the abdominal cavity. At this time, a physician removed 4.5 liters of fluid from the cavity, and A. R., not surprisingly, began to feel much better. A report on January 3--delayed probably due to the holidays-- indicated the presence of scattered malignant cells in the withdrawn fluid compatible with carcinoma. Metastatic ovarian cancer was subsequently confirmed. A. R.'s case was complicated by the withdrawal of this large volume of fluids, which required continual monitoring of her electrolytes, and the sudden exacerbation of her dementia on January 2, which would impede outpatient services, as well as the initiation of chemotherapy. The dementia, which had been progressive for the past six months, was likely a reaction to the carcinoma. By January 11, a physician recommended hospice placement given A. R.'s incurable tumor. A. R.'s daughter agreed on this day to hospice placement. This is the day that medical necessity for inpatient services ended. Petitioners should have denied three days, not 14 days. The remaining days were medically necessary. E. S. was admitted on May 4, 2001. Petitioner does not contest the medical necessity of inpatient services to treat E. S.'s pancreatitis and multisystem failure from May 4-23. The parties' dispute concerns the medical necessity of the remaining 24 days of her hospitalization, which ended with her death. E. S., a 64-year-old female, presented to the emergency department with nausea and abdominal pain and a history of hypertension and abuse of alcohol and tobacco. She was found to have elevated pancreatic enzymes. On May 8, E. S. underwent a laparoscopic removal of her gallbladder, which she tolerated well, but soon afterwards suffered respiratory failure. E. S. was then placed on a ventilator. Problems with malnourishment and then kidney failure precluded a successful weaning her off the ventilator. On May 23, the family agreed to a DNR code. May 23 marks the last day that Dr. Silkes found that E. S.'s hospitalization was medically necessary. Care after this date was entirely supportive and not medically necessary; however, no hospice or skilled nursing facility would take E. S. because she could not be weaned off the ventilator. The unavailability of an alternative, less costly setting does not automatically render the inpatient care of a recipient medically necessary. The circumstances dictate whether inpatient services to such a patient are medically necessary. Here, it is impossible to find that services after May 23 were medically necessary. Dr. Silkes was correct in her opinion. Petitioner properly denied all 24 days of inpatient services for E. S. D. S. was admitted on March 24, 2001. Petitioner does not contest the medical necessity of inpatient services to treat D. S.'s osteomyelitis of the right foot from March 24-25 and March 30-April 10. (Originally, Dr. Silkes allowed only March 24-25 and March 30-April 6, but, on February 7, 2007, she revised her opinion to allow the additional four days to April 10.) In its prehearing statement, Petitioner conceded that only three of the original ten denied days remained at issue, as it was agreeing that an additional seven days were medically necessary. The parties' dispute concerns the medical necessity of the remaining three days, although it is not clear what three days Petitioner is contesting. D. S., a 57-year-old female, presented at the emergency department with a "hole in the right foot" and a history of diabetes. She dropped a can of juice on her foot on January 1, and the foot had become progressively infected since that time. On the day of admission, she underwent surgery for the removal of fourth and fifth metatarsal bones and toes of the right foot. She did not heal properly and required followup surgery on April 7 to trim some of the necrotic flap, as the physicians considered the possibility of a below-knee amputation. On April 13, the surgeon probed the wound, found no hidden pockets, and discharged D. S. Regardless what three days that Petitioner continues to find were not medically necessary, the entire hospitalization was medically necessary. J. W. was admitted on August 20, 2001. Petitioner does not contest the medical necessity of inpatient services to treat J. W.'s multiple organ failure from August 20 to September 14. The parties' dispute concerns the medical necessity of the remaining two days of J. W.'s hospitalization, at which time he died. J. W., a 48-year-old male, presented to the emergency department with a two or three-day history of progressive congestive heart failure with pulmonary edema, atypical chest pain, and increasing abdominal girth. His history included nonischemic cardiomyopathy with minimal coronary artery disease, chronic alcohol abuse, pulmonary hypertension, chronic atrial fibrillation requiring anticoagulation therapy, hepatitis B and C, chronic renal insufficiency, and chronic congestive heart failure with multiple hospitalizations. On admission, his INR was 6.6, indicative of very slow clotting. Despite the care of numerous consultants, J. W. suffered increased respiratory failure on September 5, at which time he was intubated. He received a Greenfield filter on September 7 to prevent further pulmonary clots. Starting September 10, and continuing everyday thereafter, J. W. required dialysis due to renal failure. J. W. was on total parenteral feeding as of September 14. The family, whose availability had been a problem, agreed to a DNR code on September 17. Respondent claims in its proposed recommended order that a DNR code is a precondition to hospice care, but no competent evidence establishes this fact. Dr. Silkes and Petitioner properly denied the last two days because they were not medically necessary. M. W. was admitted on June 10, 2001. Petitioner does not contest the medical necessity of inpatient services to treat M. W.'s ventricular fibrillation and complications from June 10- The parties' dispute concerns the medical necessity of the remaining seven days of M. W.'s hospitalization. M. W., a 31-year-old male, presented to the emergency department with cardiopulmonary arrest after his wife found him slumped on the sofa, seizing. On arrival, he was found to be in ventricular fibrillation, and he was intubated. Physicians restored a normal rhythm, but M. W. suffered a seizure in the emergency department, so he was given large doses of Dilantin. M. W. had suffered brain damage from cerebral anoxia. M. W. was extubated on June 13, and his breathing remained stable. He remained in normal sinus rhythm. M. W. began to receive Librium on June 13 to sedate him. The cardiologist proposed a cardiac catheterization, but M. W. refused. An EKG on June 15 found a conduction defect in M. W.'s heart that was suggestive of Wolff Parkinson White syndrome. The cardiologist then determined, on June 16, that M. W. required an electrophysiology study to rule out Wolff Parkinson White syndrome. In 2001, Respondent lacked the equipment to perform this study, for which M. W. remained too confused to participate on June 18 anyhow. Physicians continued to monitor M. W.'s cardiac rhythm, and, when a bed opened at Florida Hospital, Orlando, which had the necessary equipment, Respondent promptly transferred M. W. on June 22. During the transfer, the cardiac monitor continued to check M. W.'s rhythm due to the risk of another cardiac incident until the underlying cardiac abnormality was assessed and treated. Petitioner improperly denied the final seven days of M. W.'s hospitalization. M. W. had suffered a serious cardiac event. Physicians had not yet ruled out all possible reasons for the event and needed to address a promising possibility of Wolff Parkinson White syndrome, so M. W. remained at risk for another event. He was confused from the brain damage. All of these factors militate in favor of finding that the remaining seven days of inpatient services were medically necessary. E. A. $1666.62 R. B. $5703.18 N. C. $7332.66 N. Ch. $38,332.26 J. C. $4888.44 R. LaB. $833.31 J. L. $1666.62 C. M. $9166.41 M. M. $2499.93 The total overpayment is $104,309.97, which breaks down as follows: J. P. $2444.22 M. Pr. $5703.18 A. R. $2444.22 E. S. $19,999.44 J. S. $1629.48
Recommendation It is RECOMMENDED that the Agency for Health Care Administration enter a final order finding overpayments totaling $104,309.97 during the audit period and requiring that Respondent repay this amount, imposing an administrative fine of $1000, requiring Respondent to prepare a corrective action plan, and reserving jurisdiction to remand the case to the Division of Administrative Hearing for a determination of Petitioner's entitlement to statutory costs, if any. DONE AND ENTERED this 6th day of June, 2007, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 6th day of June, 2007. COPIES FURNISHED: Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Craig H. Smith, General Counsel Agency for Health Care Administration Fort Knox Building, Suite 3431 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Dr. Andrew C. Agwunobi, Secretary Agency for Health Care Administration Fort Knox Building 3116 2727 Mahan Drive Tallahassee, Florida 32308 Richard M. Ellis, Esquire Rutledge, Ecenia, Purnell & Hoffman, P.A. 215 South Monroe Street, Suite 420 Post Office Box 551 Tallahassee, Florida 32304-0551 William Blocker, Esquire Agency for Health Care Administration Fort Knox Building III, Mail Stop 3 2727 Mahan Drive, Building 3 Tallahassee, Florida 32308 Daniel Lake, Esquire Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox Building III, Mail Stop 3 Tallahassee, Florida 32308 Tracy Cooper, Esquire Agency for Health Care Administration Fort Knox Building III, Mail Stop 3 2727 Mahan Drive Tallahassee, Florida 32308
The Issue Whether the Division of Administrative Hearings has jurisdiction to conduct a formal hearing, under the provisions of Sections 120.569 and 120.57(1), Florida Statutes, if the Petition for Relief was not timely filed pursuant to Sections 760.11(8) and 760.11(4), Florida Statutes.
Findings Of Fact Petitioner is a 57-year-old male and a former employee of the Respondent. Respondent is an executive agency of the State of Florida with more than 15 full-time employees and is, therefore, an employer under Sections 760.02(6) and (7), Florida Statutes. On May 19, 1995, Petitioner filed a charge of discrimination with the Florida Commission on Human Relations. He charged his former employer, Respondent, with gender and age discrimination for failure to promote him. The Florida Commission on Human Relations conducted an investigation of the charges. It did not issue a Notice of Determination. The staff of the Commission misled or lulled Respondent into inaction, for a period of time, as follows: Day 0000 - 19 May 1995: Charge of Discrimination submitted to Commission. Day 0061 - 19 July 1995: FCHR Notice of Receipt, Docketing and Dual Filing with EEOC. Day 0110 - 6 September 1995: Respondent submitted response to Commission request for information. Day 0255 - 29 January 1996: Petitioner drove from Orlando to FCHR in Tallahassee and met with Iliana Haddock, who advised him that she had just been assigned to investigate the Discrimination Complaint. Haddock took the opportunity to interview the Respondent relative to the complaint. Day 0312 - 26 March 1996: Telephone conversation between Haddock and Petitioner. Haddock stated that she had reviewed all the applications submitted for the Environmental Manager position and had found evidence of age discrimination. Day 0340 - 23 April 1996: Telephone conversation between Haddock and Petitioner. Haddock stated the investigation was almost complete, but they were waiting for Respondent to submit criteria used for determining who would be interviewed for the Environmental Manager position. Day 0431 - 23 July 1996: Petitioner drove from Orlando to FCHR headquarters in Tallahassee and met with Haddock and her supervisor, Harry Lamb. They told Petitioner that Haddock's investigation was completed and that her report would be submitted to Lamb in 30 to 45 days and from there Lamb would submit it to the FCHR legal staff and then it would go to the Executive Director for his approval and determination. Day 0494 - 24 September 1996: Assistant Enforcement Director Singleton sent Petitioner a letter stating that the Commission had not been able to complete the investigation in this case and stated four options of proceeding, (1) file a civil action in civil court; (2) file petition to have case heard by ALJ in DOAH; (3) request a right to sue so I could bring an action in Federal Court; or (4) allow the commission to continue with the processing, investigation and final action in this matter. Day 0509 - 9 October 1996: Petitioner responded to Singleton's letter by pointing out the contradictions between her letter and what Petitioner had been told at the meeting with Haddock and Lamb on 7/23/96. Petitioner requested more information in order to make a decision concerning the future course of this case. Petitioner submitted 11 questions to Singleton. Day 0521 - 21 October 1996: Commission Investigator Iliana Haddock submitted her report to the FCHR Office of General Counsel. Day 0573 - 12 December 1996: Petitioner sent follow-up letter to FCHR Executive Director advising him that he had not received a reply to the 10/9/96 letter to Singleton. Day 0644 - 21 February 1997: Mathis sent Petitioner a letter about the status of the original complaint of discrimination. Mathis stated that Haddock had submitted her report of investigation, with a recommendation for a cause finding to Harry Lamb; that Haddock was no longer with the Commission; that Lamb was no longer with the Commission but had not forwarded the investigation report before he left; and that the report was now in the hands of Otis Mallory. Day 0795 - 22 July 1997: Mathis sent Petitioner a letter advising that the "initial charge is still located in Mr. Mallory's office and will be reviewed." Day 0805 - 1 August 1997: Assistant Director Snell sent Petitioner a letter stating: "The investigation of your first case has been completed and is in the Employment Enforcement Manger's office for review". Day 0809 - 5 August 1997: The EEOC State and Local Coordinator advised Petitioner by letter that the cases were still being processed by the FCHR. Day 0852 - 27 September 1997: Petitioner sent letter to FCHR Executive Director advising him that Otis Mallory had Discrimination Report for almost a year; that Mallory also had received the Retaliation Report in August 1997; and since Mallory now had both reports, he ought to be able to complete his review and move this matter forward. Day 0986 - 29 January 1998: Petitioner sent letter to FCHR Executive Director attempting to get Investigators' Reports through the internal FCHR review system. Day 1076 - 29 April 1998: Commission issued Notice of Determination on Retaliation Complaint. No action on original discrimination complaint. Day 1252 - 22 October 1998: Petitioner mailed Petition for Relief and Administrative Hearing concerning Discrimination Complaint to FCHR. After filing the Complaint of Discrimination with the FCHR, Petitioner actively pursued the progress and status of the Discrimination Complaint with the Commission. In response to his pursuit, the staff of the Commission told the Petitioner throughout the above time-line, that his Complaint was being investigated; the investigation was completed; the report would be submitted; the report was submitted; the report was in for review; and the report would be reviewed. Thus, the Petitioner was misled or lulled into believing by the staff of FCHR not only that the Complaint was going to result in a Determination, but also that the Determination was going to be a cause-finding. On September 24, 1996, a year and four months after filing the Complaint, the Commission advised Petitioner that he had four options relating to the charges, including having the Commission continue with the processing, investigation, and final action in this matter. When Petitioner requested further information so he could make an informed choice, the staff of the Commission failed to respond to his letter. In addition, other staff took no further action on his case. However, Petitioner waited more than two years from issuance of the letter of September 24, 1996, to the filing of his Petition for Relief, dated October 22, 1998. Although Petitioner was misled or lulled into inaction for a period of time by the staff of the FCHR, the Petitioner has failed to demonstrate equitable estoppel or excusable neglect in his failure to file the Petition within a reasonable period of time after the statutorily mandated time limit.
Conclusions The Division of Administrative Hearings has jurisdiction on the parties and the subject matter pursuant to Sections 120.569, 120.57(1) and 760.11, Florida Statutes. The Florida Commission on Human Relations has the authority to investigate a charge of discrimination with alleges that an employee has committed an unlawful employment practice by its failure to promote Petitioner based on his sex and/or age. Section 760.10(1) and 760.11, Florida Statutes. When a complaint has been filed with the Commission, it has the duty to investigate the allegations in the complaint and make a determination within 180 days of the filing of the Complaint, if there is reasonable cause to believe that a discriminatory practice has occurred in violation of the Florida Civil Rights Act of 1992. After a determination is made, the Commission is charged with the duty to notify the aggrieved person and the Respondent of the determination, the date of such determination, and the options available under the law. Section 760.11(3), Florida Statutes. In this case, the Commission failed to make a reasonable cause determination; and three and one-half years after first filing his Complaint, Petitioner requested a formal administrative hearing under Sections 120.569 and 120.57(1), Florida Statutes. Therefore, Sections 760.11(8), (4) and (6), Florida Statutes, applied to this case. These sections read, in pertinent part: In the event that the commission determines that there is reasonable cause to believe that a discriminatory practice has occurred in violation of the Florida Civil Rights Act of 1992, the aggrieved person may either: Bring a civil action against the person named in the complaint in any court of competent jurisdiction; or Request an administrative hearing under ss 120.569 and 120.57. The election by the aggrieved person of filing a civil action or requesting an administrative hearing under this subsection is the exclusive procedure available to the aggrieved person pursuant to this act. * * * (6) Any administrative hearing brought pursuant to paragraph (4)(b) shall be conducted under ss. 120.569 and 120.57. . . . An administrative hearing pursuant to paragraph (4)(b) must be requested no later than 35 days after the date of determination of reasonable cause by the commission. . . . * * * (8) In the event that the commission fails to conciliate or determine whether there is reasonable cause on any complaint under this section within 180 days of the filing of the complaint, an aggrieved person may proceed under subsection (4), as if the commission determined that there was reasonable cause. Although it appears unjust that Petitioner's case should be dismissed because of the failure of a state agency to complete its statutory duty to make a reasonable cause determination, nevertheless, the court in Milano v. Moldmaster, Inc., 703 So. 2d 1093 at 1094 (Fla. 4th DCA 1997) held that the 35-day limitation on requesting an administrative hearing begins to run at the expiration of the 180-day period in which the Commission was to make a reasonable cause determination. Therefore, the Petition for Relief is untimely because it was filed nearly three years after the presumed date of determination of cause by the Commission. See Section 760.11(6), Florida Statutes (1997); Wright v. HCA Central Florida Regional Hospital, Inc., 18 FALR 1160 (1995); Pusey v. George Knupp, Lake County Sheriff's Office, 20 FALR 791 (1997); cf. St. Petersburg Motor Club v. Cook, 567 So. 2d 488 (Fla. 1st DCA 1990) and Milano v. Moldmaster, Inc., 703 So. 2d 1093 (Fla. 4th DCA 1997). This procedure has been determined to be constitutional, under Florida law. McElhath v. Burley, 707 So. 2d 836 (Fla. 1st DCA 1998). The record does establish some evidence of excusable neglect, which might, under certain circumstances, excuse delinquent filing. See, for example, Machules v. Department of Administration 523 So. 2d 1132 (Fla. 1988). In Machules, the Florida Supreme Court described the parameters of the "equitable tolling" doctrine as follows: Generally, the tolling doctrine has been applied when the plaintiff has been misled or lulled into inaction, has in some extraordinary way been prevented from asserting his rights, or has timely asserted his rights mistakenly in the wrong forum. 523 So. 2d at 1134. Petitioner asserts that the staff of the Commission lulled him into inaction. That assertion is accepted as true for purposes of ruling on the Motion for Summary Recommended Order. However, Petitioner is claiming he was lulled into inaction for two additional years after he was advised of his options under the statute. The District Court of Appeal has held that Petitioner may not enjoy a manipulable open-ended time extension which could render the statutory limitation meaningless. It held that a Petitioner should be required to assume some minimum responsibility himself for an orderly and expeditious resolution of his dispute. Milano v. Moldmaster, Inc., supra, at 1095. Although this result is harsh, two other district courts have followed this precedent and it is, therefore, binding on this tribunal. Joshua v. City of Gainesville, So. 2d , 1999 WL 71523 (Fla. 1st DCA, February 17, 1999) and Adams v. Wellington Regional Medical Center, Inc., So. 2d , (Fla. 4th DCA, March 17, 1999).
Recommendation Based on the foregoing facts and conclusions of law, it is RECOMMENDED that a Final Order be entered dismissing with prejudice the petition of Donald A. Garrepy in DOAH Case No. 98-5090; FCHR Case No. 95-5752. DONE AND ENTERED this 9th day of April, 1999, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 9th day of April, 1999. COPIES FURNISHED: Gary C. Smallridge, Senior Attorney Department of Environmental Protection 3900 Commonwealth Boulevard Mail Station 600 Tallahassee, Florida 32399-3000 Donald A. Garrepy Post Office Box 276 Portsmouth, New Hampshire 03802 Sharon Moultry, Clerk Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32303-4149 Dana Baird, General Counsel Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32303-4149
Conclusions THIS CAUSE came on for consideration before the Agency for Health Care Administration (“the Agency”), which finds and concludes as follows: L The Agency issued to Hollywood Pavilion, LLC, the attached Administrative Complaint (Ex. 1), and to Larkin Community Hospital, Inc. d/b/a Larkin Community Hospital, the attached Notice of Intent to Deny Application and Withdrawn From Further Review letter (Ex. 2). The parties entered into the attached Settlement Agreement (Ex. 3), which is adopted and incorporated by reference. 2. The parties shall comply with the terms of the Settlement Agreement. 3. The Administrative Complaint is withdrawn. 4. The Notice of Intent is withdrawn and the Agency shall resume the processing of the change of ownership application. Nothing in this Agreement shall prohibit the Agency from denying the change of ownership application based upon any licensure statute or rule not set forth in the Notice of Filed November 14, 2014 2:23 PM Division of Administrative Hearings Intent. Should the Agency again deny the change of ownership application, the Applicant will be afforded all legal rights under Florida law to contest any subsequent denial. ORDERED in Tallahassee, Florida, on this _(@ dayof _ Get» ber- , 2014. ‘. mK Elizab ras a Agency for He are Administration
Other Judicial Opinions A party that is adversely affected by this Final Order is entitled to seek judicial review which shal! be instituted by filing one copy of a notice of appeal with the agency clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The notice of appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE 1 HEREBY CERTIFY that a true and correct copy pipes Final Oceanis below- named persons/entities by the method designated on this {3 ay of , 2014. Agency for Health Care Administration 2727 Mahan Drive, MS 3 Tallahassee, Florida 32308 Telephone (850) 412-3630 Jon H. Steinmeyer Bradford C. Herter Court Appointed Receiver Assistant General Counsel Hollywood Pavilion, LLC Office of the General Counsel 1201 North 37" Avenue Agency for Health Care Administration Hollywood, Florida 33012 (Interoffice Mail) (U.S. Mail) Jack Plagge, Unit Manager Hospital and Outpatient Services Unit (Interoffice Mail) Jack J. Michel, MD Chairman Larkin Community Hospital 7031 SW 62"! Avenue South Miami, Florida 33143 (U.S. Mail) Jorge Isaac, Esq. Isaac & Salgado Grondin, P.L. 267 Minorca Avenue, Suite 100 Coral Gables, Florida 33134 (U.S. Mail) Gary C. Matzner, Esq. Kopelowitz Ostrow, P.A. 2525 Ponce de Leon Boulevard Coral Gables, Florida 33134 (U.S. Mail) [Jan Mills Facilities Intake Unit Agency for Health Care Administration (Interoffice Mail)
Findings Of Fact On July 31, 1987, DOA mailed a Request for Proposal, (RFP), to various Health Maintenance Organizations, (HMOs), soliciting proposals for the providing of HMO services in the Orlando service area. Petitioner, Cigna, and the various Intervenors herein, submitted proposals which were opened by DOA on August 28, 1987, with a contemplated date of award of September 14, 1987 and an effective date of contract on January 1, 1988. Section 2 of the RFP defined the general purposes of the procurement as being to meet benefit objectives of DOA and to provide high quality benefits and services to state employees. Specifically, the objectives of the RFP were: A proactive approach to cost containment, including an emphasis on aggressive claims management, utilization review, and superior statistical reporting. Quality medical care which encourages health promotion, disease prevention, early diagnosis and treatment. Stability in the financial structure of offered health plans. Professional, high quality service in all administrative areas including claims processing, enrollment, membership services, grievances, and communications. Competitive premium rates which take into account the demographics and, if appropriate, the claims experience of state employees. Other stated objectives included: Have each county or contiguous group of counties be considered one service area. Award no more than two contracts per service area; however, the awards will be based on the HMO's ability to respond to the needs of employees and on accessibility by employees. Have reciprocal agreements between locations, if an HMO has multiple service areas. Enter into a two year, non-experience rates contract. A provision will be included tying renewal action at each of the two renewals to the consumer price index, (CPI), for medical care services. In order to be considered as a "qualified" proposer, an organization had to be licensed by the Department of Insurance pursuant to Part II, Chapter 641, Florida Statutes. Section IX of the RFP listed five major criteria for evaluation of the proposals. They were: Premium Cost Extensiveness of service area - by county and/or contiguous counties. Plan Benefits as follows: Covered services Limitations and exclusions Co-payments, deductibles, and coinsurance features Range of providers including specialists and numbers of hospitals D. Out of service area coverage F. Grievance procedures Accessibility as follows: Reciprocal agreements Provider locations Number of primary care physicians and specialists, in relation to membership Completeness of proposals The first four of the above objectives were called for by the Legislative action providing for these procurements to be effective January 1, 1988. The fifth, completeness of proposals, was not identified by the Legislature but was added by DOA. The Department reviewed and evaluated all the proposals submitted by Petitioner and the various Intervenors. Each proposer was evaluated by three individual evaluators. Two separate sets of evaluations were performed; the second coming upon the direction of the Secretary who, after the first evaluation and recommendation of award, concluded the standards for evaluation had been too subjective and directed a second evaluation utilizing more objective standards. During this second evaluation process, after the actual evaluations had been done but before the recommendation was forwarded to the Secretary, several computer treatments of the raw scores were accomplished by Mr. Nye because of additional unidentified factors brought to his attention. The final computer run identified that Central Florida Physicians, not a party to this action, received the highest point total followed by Health Options, Pru-Care, and Petitioner, Cigna. Mr. Nye, who had designed and supervised the evaluation process, recommended to the Secretary that Central Florida Physicians, Health Options, and Pru-Care receive the award even though the guidelines called for only two recommendees. Central Florida Physicians was recognized to be in financial difficulties though it received the highest rating, and in order to provide two viable candidates in the event that provider should be disqualified, Health Options and Pru-Care were added. Central Florida Physicians was, in fact, subsequently disqualified due to financial insolvency. This left Health Options and Pru-Care as the two providers with the highest evaluations and the Secretary made the award to them. At the final count, Health Options received a point total of 64.635; Pru-Care, 57.415; and Cigna, 56.83, or a difference of .585 between Pru-Care and Cigna. According to Mr. Black, an administrator with the Department of Insurance and responsible for the licensing of HMOs and other health care facilities, as of January 12, 1988, Pru- Care was not licensed in Volusia or Lake Counties and department records show that Pru-Care has never been or requested to be licensed in those counties. Mr. Beckerink, the Director of Planning for Cigna of Florida, who oversaw Cigna's proposal for the Orlando area and who reviewed DOA's evaluation of the various proposals submitted, carefully examined the evaluation forms for both Cigna and Pru- Care and concentrated on scores relating to costs, benefits, accessibility, service area, and completeness. He noted that Pru-Care received 10 points for proposing service in Orange, Seminole, Osceola, Lake, and Volusia Counties though it is not licensed in the latter two, whereas Cigna received only 4 points for Orange and Seminole Counties. Cigna is licensed in all five counties and has hospitals and physicians in Seminole, Osceola, and Orange Counties. He contends Pru-Care received credit by the evaluators for five counties when it is licensed only in three, an unearned award of 4 points, and Cigna was awarded credit for only two counties when it is licensed in five, an improper denial of 6 points. According to Mr. Nye, the award to Pru-Care was based on its representation it would provide service in five counties. The Department of Insurance could not tell him, at the time, in which counties Pru-Care was licensed. As a result, he took the proposal, which indicated the five counties, at face value. Credit was given only for full counties to be served and Cigna's proposal indicated it would deliver service to two full counties and to only portions of three counties. The evidence indicates that Pru-Care's facilities are primarily in Orange and Seminole Counties with some service offered in the extreme northern portion of Osceola County, too far away for those individuals living in the southern portion of that county reasonably to take advantage of it. Mr. Nye indicates that driving time, which would be the problem here, is not a consideration in assessing accessibility, but merely a factor in quality of service. The department is not concerned with whether it is convenient for the employee to get to the service but merely whether the service will be offered to anyone residing in the county. For this reason, Pru-Care was awarded credit for Osceola county since it proposed to enroll any eligible employee living in the county whether service was convenient to that party or not, whereas Cigna, which limited it's enrollment in certain counties to those personnel living in only a part of the county, was not given any credit for those partially served counties. Mr. Nye admits that had he known Pru-Care was not fully licensed, he would have deferred to legal counsel, but would most likely not award points if a provider is not licensed in a county for which it proposes service. Mr. Breckerink identified additional areas in the evaluation wherein he believes errors were made, the correction of which would result in an adjustment of the award of points. For example, in evaluating plan benefits, the evaluator gave Pru- Care 20 points when only 10 points are available for award without a demonstration of additional services. For emergency room availability, Cigna was awarded 5 points when it should have received 10. In the area of co- payments, Cigna was awarded points and should have received 23. Concerning range of providers, Cigna's proposal lists seven hospitals yet the evaluation form only reflects six, resulting in a shortage of 10 points. As to turnaround time, Cigna indicated it would accomplish payment in 60 days whereas Pru-Care indicated it would in "an average" of two weeks. As a result, Mr. Breckerink, who points out Cigna's actual time is 30 days and it therefore should have been given 30 points, contends there is no opportunity for a valid comparison here since Pru-Care's answer is not responsive to the RFP's call for" an "expected" time. His point is well taken. With regard to accessibility, Mr. Breckerink states that Cigna got only 20 points for its two allowed counties but should have received 30 points since it has hospitals in three counties in the service area. DOA's rationale on this point is identical to that on the issue of full counties served. He also alleges that Cigna was shortchanged by at least 2 points on the number of counties in which specialty providers are represented and by at least 1 point on the number of providers. Mr. Nye admits Pru-Care should have received 5 points instead of 10 for benefits. This would reduce its' raw score in this area from 258 to 253 points. Nye contends, however, that the points awarded Pru-Care for its' turnaround time were correct. He does not consider the question to be a bad one since it was asked equally of all providers and each responded as it saw fit realizing that its response might become a part of a contractual obligation. This reasoning is specious at best and does not address the real question of the fairness and appropriateness of the question asked. Further, Mr. Nye also admitted that under certain circumstances, if Pru-Care were to lose credit for those two counties in which it was not shown to be licensed, the change could result in a difference sufficient to reverse the relative standings of Pru-Care and Cigna. Mr. Breckerink alleges, and Mr. Nye admits that multiple computer runs were made utilizing the raw scores developed by the evaluators before the recommendation as to award was forwarded to the Secretary. On the first run for the second evaluation, Cigna was in second place with a point total of 71.1 and Pru-Care was third with 65.86 points. On the second run, which Nye contends was done to make the computer run consistent with what had been said at the pre-bid conference and in the RFP, Cigna dropped from second place to third with 58. 2 points and Pru-Care went from third to fourth with 57.195 points. In the third run, which ultimately formed the basis for the award, the positions of Cigna and Pru-Care reversed with Cigna dropping to 56.83 points and Pru-Care rising to 57.415. Central Florida Physicians remained in first and Health Options in second. When Central Florida Physicians dropped out due to insolvency, Health Options became number one and the other two each went up one place in the standings without changing relative positions. According to Mr. Breckerink when the mistakes were identified and changes made in the raw scores, Cigna got a total of 23 more points but Pru-Care still got 16 more points than it should have. He contends that if the mistakes were accurately corrected, if Cigna were to get all the points it should and Pru- Care lose all it should not legitimately have, Cigna would come out higher in the overall ranking than Pru-Care. However, he admits there are factors involved about which he does not know which may affect the standings. What is clear is that while Mr. Breckerink could not clearly follow the evaluation procedure, neither can others charged with evaluating it. What is more, notwithstanding the direction given in the objectives of the procurement that only two providers be awarded contracts, the department continuously has been unable to abide by this guideline. In its September 11, 1987 recommendation after the first evaluation sequence, Mr. Nye recommended, for the Orlando service area, awards to Central Florida Physicians, Cigna, and Pru-Care for a part of the service area and an additional award to Health Options and Florida Health Care for other counties in the service area. When the Secretary directed the objective second evaluation, no change was made to the number of providers to be recommended (two), but again, on October 6, 1987, Mr. Nye recommended three providers, Central Florida Physicians, Health Options, and Cigna. No evidence was presented as to why this recommendation was not implemented, but it is seen that on October 26, 1987, Mr. Nye submitted his third set of recommendations to the Secretary, this time recommending only Central Florida Physicians, and Health Options. Being still unable to finalize the process, on October 30, 1987, Mr. Nye submitted his fourth set of recommendations to the Secretary recommending, for the most part, three providers, but specifically recommending Pru-Care for award in Lake and Volusia Counties, where it was arguably not even licensed. No justification or explanation for this vacillation was forthcoming from the Department and the exercise appears to have been clearly capricious.
Recommendation In view of the foregoing, it is, therefore: RECOMMENDED that the Department of Administration issue a Final Order rejecting all proposals submitted for the Orlando service area and readvertise for new proposals if deemed appropriate. RECOMMENDED this 19th day of April, 1988 at Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of April, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-5525BID The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. By Petitioner Cigna: 1 - 5. Accepted and incorporated herein. First sentence not a Finding of Fact. Second sentence accepted except for conclusion as to legal license status of Pru-Care. Rejected as a restatement of testimony and not a Finding of Fact. First three sentences rejected as restatements of testimony. Balance accepted with the assumption that "those counties" indicates Lake and Volusia counties. First and second sentences rejected as restatements of testimony. Third sentence accepted. Accepted and incorporated herein. First and second sentences rejected as restatements of testimony. Third sentence accepted as a possibility and, not a fact. First sentence accepted and incorporated herein. Second sentence rejected. Accepted. Accepted. Accepted and incorporated herein. Accepted except for use of word "awarded" in last sentence. Award is a function of the Secretary. A better word would be "recommended". Accepted. Reject Accepted. Rejected. Accepted except for word "significantly". First sentence accepted. Second sentence rejected as not being a proper Finding of Fact. For Respondent, DHRS: 1 - 14. Accepted and incorporated as appropriate. 15 - 16. Accepted. 17 - 19. Accepted. First, second, and fourth sentences accepted. Third sentence rejected as not supported by the evidence. Accepted. Accepted. Accepted except for the last three sub-paragraphs which are not supported by the evidence. Absent. 25 - 26. Accepted except for last sub-paragraph which is rejected as a conclusion. 27. Absent. 28 - 29. Accepted. 30. Accepted. 31 - 37. Absent. 38. Accepted. For Intervenor, Pru-Care: 1 & 2. 3. Rejected as a restatement of testimony and not a Finding of Fact. Accepted. 4 - 5. Accepted. 6 - 7. Rejected as not being a Finding of Fact. 8 - 10. Accepted. 11. Accepted. 12. Rejected as not being a Finding of Fact. 13 - 14. Accepted. 15. Rejected as not being a Finding of Fact except for 16 - 17. last sentence which is accepted. Accepted. 18. Accepted. For Intervenor, Health Options: 1 - 3. Accepted and incorporated herein. 4 - 10. Accepted and incorporated herein. 11. Accepted except for the seventh sentence which is rejected. 12 - 13. Accepted. 14. Rejected as contra to the weight of the evidence. 15 - 16. Accepted. COPIES FURNISHED: David Yon, Esquire 315 South Calhoun Street Suite 800 Tallahassee, Florida 32301 Augustus D. Aikens, Jr., Esquire General Counsel Department of Administration 435 Carlton Bldg. Tallahassee, Florida 32399 John Buchanan, Esquire 118 South Monroe Street Tallahassee, Florida 32301 Jann Johnson, Esquire Post Office Box 391 Tallahassee, Florida 32302 J. Stanley Chapman, Esquire Ervin, Varn, Jacobs, Odom, & Kitchen Post Office Drawer 1170 Tallahassee, Florida 32302 Larry Carnes, Esquire 515 East Park Avenue Tallahassee, Florida 32301 Adis Vila, Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
