The Issue The issues in this case are whether Respondent applied the proper reimbursement principles to Petitioners' initial Medicaid rate setting, and whether elements of detrimental reliance exist so as to require Respondent to establish a particular initial rate for Petitioners' facilities.
Findings Of Fact There are nine Petitioners in this case. Each of them is a long-term health care facility (nursing home) operated under independent and separate legal entities, but, generally, under the umbrella of a single owner, Tzvi "Steve" Bogomilsky. The issues in this case are essentially the same for all nine Petitioners, but the specific monetary impact on each Petitioner may differ. For purposes of addressing the issues at final hearing, only one of the Petitioners, Madison Pointe Rehabilitation and Health Center (Madison Pointe), was discussed, but the pertinent facts are relevant to each of the other Petitioners as well. Each of the Petitioners has standing in this case. The Amended Petition for Formal Administrative Hearing filed by each Petitioner was timely and satisfied minimum requirements. In September 2008, Bogomilsky caused to be filed with AHCA a Change of Licensed Operator ("CHOP") application for Madison Pointe.1 The purpose of that application was to allow a new entity owned by Bogomilsky to become the authorized licensee of that facility. Part and parcel of the CHOP application was a Form 1332, PFA. The PFA sets forth projected revenues, expenses, costs and charges anticipated for the facility in its first year of operation by the new operator. The PFA also contained projected (or budgeted) balance sheets and a projected Medicaid cost report for the facility. AHCA is the state agency responsible for licensing nursing homes in this state. AHCA also is responsible for managing the federal Medicaid program within this state. Further, AHCA monitors nursing homes within the state for compliance with state and federal regulations, both operating and financial in nature. The AHCA Division of Health Quality Assurance, Bureau of Long-Term Care Services, Long-Term Care Unit ("Long-Term Care Unit") is responsible for reviewing and approving CHOP applications and issuance of an operating license to the new licensee. The AHCA Division of Health Quality Assurance, Bureau of Health Facility Regulation, Financial Analysis Unit ("Financial Analysis Unit") is responsible for reviewing the PFA contained in the CHOP application and determining an applicant's financial ability to operate a facility in accordance with the applicable statutes and rules. Neither the Long-Term Care Unit nor the Financial Analysis Unit is a part of the Florida Medicaid Program. Madison Pointe also chose to submit a Medicaid provider application to the Medicaid program fiscal agent to enroll as a Medicaid provider and to be eligible for Medicaid reimbursement. (Participation by nursing homes in the Medicaid program is voluntary.) The Medicaid provider application was reviewed by the Medicaid Program Analysis Office (MPA) which, pursuant to its normal practices, reviewed the application and set an interim per diem rate for reimbursement. Interim rate-setting is dependent upon legislative direction provided in the General Appropriations Act and also in the Title XIX Long-Term Care Reimbursement Plan (the Plan). The Plan is created by the federal Centers for Medicare and Medicaid Services (CMS). CMS (formerly known as the Health Care Financing Administration) is a federal agency within the Department of Health and Human Services. CMS is responsible for administering the Medicare and Medicaid programs, utilizing state agencies for assistance when appropriate. In its PFA filed with the Financial Analysis Unit, Madison Pointe proposed an interim Medicaid rate of $203.50 per patient day (ppd) as part of its budgeted revenues. The projected interim rate was based on Madison Pointe's expected occupancy rate, projected expenses, and allowable costs. The projected rate was higher than the previous owner's actual rate in large part based on Madison Pointe's anticipation of pending legislative action concerning Medicaid reimbursement issues. That is, Madison Pointe projected higher spending and allowable costs based on expected increases proposed in the upcoming legislative session. Legislative Changes to the Medicaid Reimbursement System During the 2007 Florida Legislative Session, the Legislature addressed the status of Medicaid reimbursement for long-term care facilities. During that session, the Legislature enacted the 2007 Appropriations Act, Chapter 2007-72, Laws of Florida. The industry proposed, and the Legislature seemed to accept, that it was necessary to rebase nursing homes in the Medicaid program. Rebasing is a method employed by the Agency periodically to calibrate the target rate system and adjust Medicaid rates (pursuant to the amount of funds allowed by the Legislature) to reflect more realistic allowable expenditures by providers. Rebasing had previously occurred in 1992 and 2002. The rebasing would result in a "step-up" in the Medicaid rate for providers. In response to a stated need for rebasing, the 2007 Legislature earmarked funds to address Medicaid reimbursement. The Legislature passed Senate Bill 2800, which included provisions for modifying the Plan as follows: To establish a target rate class ceiling floor equal to 90 percent of the cost- based class ceiling. To establish an individual provider- specific target floor equal to 75 percent of the cost-based class ceiling. To modify the inflation multiplier to equal 2.0 times inflation for the individual provider-specific target. (The inflation multiplier for the target rate class ceiling shall remain at 1.4 times inflation.) To modify the calculation of the change of ownership target to equal the previous provider's operating and indirect patient care cost per diem (excluding incentives), plus 50 percent of the difference between the previous providers' per diem (excluding incentives) and the effect class ceiling and use an inflation multiplier of 2.0 times inflation. The Plan was modified in accordance with this legislation with an effective date of July 1, 2007. Four relevant sentences from the modified Plan are relevant to this proceeding, to wit: For a new provider with no cost history resulting from a change of ownership or operator, where the previous provider participated in the Medicaid program, the interim operating and patient care per diems shall be the lesser of: the class reimbursement ceiling based on Section V of this Plan, the budgeted per diems approved by AHCA based on Section III of this Plan, or the previous providers' operating and patient care cost per diem (excluding incentives), plus 50% of the difference between the previous providers' per diem (excluding incentives) and the class ceiling. The above new provider ceilings, based on the district average per diem or the previous providers' per diem, shall apply to all new providers with a Medicaid certification effective on or after July 1, 1991. The new provider reimbursement limitation above, based on the district average per diem or the previous providers' per diem, which affects providers already in the Medicaid program, shall not apply to these same providers beginning with the rate semester in which the target reimbursement provision in Section V.B.16. of this plan does not apply. This new provider reimbursement limitation shall apply to new providers entering the Medicaid program, even if the new provider enters the program during a rate semester in which Section V.B.16 of this plan does not apply. [The above cited sentences will be referred to herein as Plan Sentence 1, Plan Sentence 2, etc.] Madison Pointe's Projected Medicaid Rate Relying on the proposed legislation, including the proposed rebasing and step-up in rate, Madison Pointe projected an interim Medicaid rate of $203.50 ppd for its initial year of operation. Madison Pointe's new projected rate assumed a rebasing by the Legislature to eliminate existing targets, thereby, allowing more reimbursable costs. Although no legislation had been passed at that time, Madison Pointe's consultants made calculations and projections as to how the rebasing would likely affect Petitioners. Those projections were the basis for the $203.50 ppd interim rate. The projected rate with limitations applied (i.e., if Madison Pointe did not anticipate rebasing or believe the Plan revisions applied) would have been $194.26. The PFA portion of Madison Pointe's CHOP application was submitted to AHCA containing the $203.50 ppd interim rate. The Financial Analysis Unit, as stated, is responsible for, inter alia, reviewing PFAs submitted as part of a CHOP application. In the present case, Ryan Fitch was the person within the Financial Analysis Unit assigned responsibility for reviewing Madison Pointe's PFA. Fitch testified that the purpose of his review was to determine whether the applicant had projected sufficient monetary resources to successfully operate the facility. This would include a contingency fund (equal to one month's anticipated expenses) available to the applicant and reasonable projections of cost and expenses versus anticipated revenues.2 Upon his initial review of the Madison Pointe PFA, Fitch determined that the projected Medicaid interim rate was considerably higher than the previous operator's actual rate. This raised a red flag and prompted Fitch to question the propriety of the proposed rate. In his omissions letter to the applicant, Fitch wrote (as the fourth bullet point of the letter), "The projected Medicaid rate appears to be high relative to the current per diem rate and the rate realized in 2006 cost reports (which includes ancillaries and is net of contractual adjustments). Please explain or revise the projections." In response to the omissions letter, Laura Wilson, a health care accountant working for Madison Pointe, sent Fitch an email on June 27, 2008. The subject line of the email says, "FW: Omissions Letter for 11 CHOW applications."3 Then the email addressed several items from the omissions letter, including a response to the fourth bullet point which says: Item #4 - Effective July 1, 2007, it is anticipated that AHCA will be rebasing Medicaid rates (the money made available through elimination of some of Medicaid's participation in covering Medicare Part A bad debts). Based on discussions with AHCA and the two Associations (FHCA & FAHSA), there is absolute confidence that this rebasing will occur. The rebasing is expected to increase the Medicaid rates at all of the facilities based on the current operator's spending levels. As there is no definitive methodology yet developed, the rebased rates in the projections have been calculated based on the historical methodologies that were used in the 2 most recent rebasings (1992 and 2002). The rates also include the reestablishment of the 50% step-up that is also anticipated to begin again. The rebasing will serve to increase reimbursement and cover costs which were previously limited by ceilings. As noted in Note 6 of the financials, if something occurs which prevents the rebasing, Management will be reducing expenditures to align them with the available reimbursement. It is clear Madison Pointe's projected Medicaid rate was based upon proposed legislative actions which would result in changes to the Plan. It is also clear that should those changes not occur, Madison Pointe was going to be able to address the shortfall by way of reduced expenditures. Each of those facts was relevant to the financial viability of Madison Pointe's proposed operations. Madison Pointe's financial condition was approved by Fitch based upon his review of the PFA and the responses to his questions. Madison Pointe became the new licensed operator of the facility. That is, the Long-Term Care Unit deemed the application to have met all requirements, including financial ability to operate, and issued a license to the applicant. Subsequently, MPA provided to Madison Pointe its interim Medicaid rate. MPA advised Madison Pointe that its rate would be $194.55 ppd, some $8.95 ppd less than Madison Pointe had projected in its PFA (but slightly more than Madison Pointe would have projected with the 50 percent limitation from Plan Sentence 1 in effect, i.e., $194.26). The PFA projected 25,135 annual Medicaid patient days, which multiplied by $8.95, would equate to a reduction in revenues of approximately $225,000 for the first year of operation.4 MPA assigned Madison Pointe's interim Medicaid rate by applying the provisions of the Plan as it existed as of the date Madison Pointe's new operating license was issued, i.e., September 1, 2007. Specifically, MPA limited Madison Pointe's per diem to 50 percent of the difference between the previous provider's per diem and the applicable ceilings, as dictated by the changes to the Plan. (See Plan Sentence 1 set forth above.) Madison Pointe's projected Medicaid rate in the PFA had not taken any such limitations into account because of Madison Pointe's interpretation of the Plan provisions. Specifically, that Plan Sentence 3 applies to Madison Pointe and, therefore, exempts Madison Pointe from the new provider limitation set forth in Plan Sentences 1 and 2. However, Madison Pointe was not "already in the Medicaid program" as of July 1, 2007, as called for in Plan Sentence 3. Rather, Madison Pointe's commencement date in the Medicaid program was September 1, 2007. Plan Sentence 1 is applicable to a "new provider with no cost history resulting from a change of ownership or operator, where the previous operator participated in the Medicaid program." Madison Pointe falls within that definition. Thus, Madison Pointe's interim operating and patient care per diems would be the lesser of: (1) The class reimbursement ceiling based on Section V of the Plan; (2) The budgeted per diems approved by AHCA based on Section III of the Plan; or (3) The previous provider's operating and patient care cost per diem (excluding incentives), plus 50 percent of the difference between the previous provider's per diem and the class ceiling. Based upon the language of Plan Sentence 1, MPA approved an interim operating and patient care per diem of $194.55 for Madison Pointe. Plan Sentence 2 is applicable to Madison Pointe, because it applies to all new providers with a Medicaid certification effective after July 1, 1991. Madison Pointe's certification was effective September 1, 2007. Plan Sentence 3 is the primary point of contention between the parties. AHCA correctly contends that Plan Sentence 3 is not applicable to Petitioner, because it addresses rebasing that occurred on July 1, 2007, i.e., prior to Madison Pointe coming into the Medicaid system. The language of Plan Sentence 3 is clear and unambiguous that it applies to "providers already in the Medicaid program." Plan Sentence 4 is applicable to Madison Pointe, which entered the system during a rate semester, in which no other provider had a new provider limitation because of the rebasing. Again, the language is unambiguous that "[t]his new provider reimbursement limitation shall apply to new providers entering the Medicaid program. . . ." Madison Pointe is a new provider entering the program. Detrimental Reliance and Estoppel Madison Pointe submitted its CHOP application to the Long-Term Care Unit of AHCA for approval. That office has the clear responsibility for reviewing and approving (or denying) CHOP applications for nursing homes. The Long-Term Care Unit requires, as part of the CHOP application, submission of the PFA which sets forth certain financial information used to determine whether the applicant has the financial resources to operate the nursing home for which it is applying. The Long-Term Care Unit has another office within AHCA, the Financial Analysis Unit, to review the PFA. The Financial Analysis Unit is found within the Bureau of Health Facility Regulation. That Bureau is responsible for certificates of need and other issues, but has no authority concerning the issuance, or not, of a nursing home license. Nor does the Financial Analysis Unit have any authority to set an interim Medicaid rate. Rather, the Financial Analysis Unit employs certain individuals who have the skills and training necessary to review financial documents and determine an applicant's financial ability to operate. A nursing home licensee must obtain Medicaid certification if it wishes to participate in the program. Madison Pointe applied for Medicaid certification, filing its application with a Medicaid intermediary which works for CMS. The issuance of a Medicaid certification is separate and distinct from the issuance of a license to operate. When Madison Pointe submitted its PFA for review, it was aware that an office other than the Long-Term Care Unit would be reviewing the PFA. Madison Pointe believed the two offices within AHCA would communicate with one another, however. But even if the offices communicated with one another, there is no evidence that the Financial Analysis Unit has authority to approve or disapprove a CHOP application. That unit's sole purpose is to review the PFA and make a finding regarding financial ability to operate. Likewise, MPA--which determines the interim Medicaid rate for a newly licensed operator--operates independently of the Long-Term Care Unit or the Financial Analysis Unit. While contained within the umbrella of AHCA, each office has separate and distinct duties and responsibilities. There is no competent evidence that an applicant for a nursing home license can rely upon its budgeted interim rate--as proposed by the applicant and approved as reasonable by MPA--as the ultimate interim rate set by the Medicaid Program Analysis Office. At no point in time did Fitch tell Madison Pointe that a rate of $203.50 ppd would be assigned. Rather, he said that the rate seemed high; Madison Pointe responded that it could "eliminate expenditures to align them with the available reimbursement." The interim rate proposed by the applicant is an estimate made upon its own determination of possible facts and anticipated operating experience. The interim rate assigned by MPA is calculated based on the applicant's projections as affected by provisions in the Plan. Furthermore, it is clear that Madison Pointe was on notice that its proposed interim rate seemed excessive. In response to that notice, Madison Pointe did not reduce the projected rate, but agreed that spending would be curtailed if a lower interim rate was assigned. There was, in short, no reliance by Madison Pointe on Fitch's approval of the PFA as a de facto approval of the proposed interim rate. MPA never made a representation to Madison Pointe as to the interim rate it would receive until after the license was approved. There was, therefore, no subsequent representation made to Madison Pointe that was contrary to a previous statement. The Financial Analysis Unit's approval of the PFA was done with a clear and unequivocal concern about the propriety of the rate as stated. The approval was finalized only after a representation by Madison Pointe that it would reduce expenditures if a lower rate was imposed. Thus, Madison Pointe did not change its position based on any representation made by AHCA.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Respondent, Agency for Health Care Administration, approving the Medicaid interim per diem rates established by AHCA and dismissing each of the Amended Petitions for Formal Administrative Hearing. DONE AND ENTERED this 23rd day of February, 2009, in Tallahassee, Leon County, Florida. R. BRUCE MCKIBBEN 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 23rd day of February, 2009.
The Issue The issue is whether Petitioner, Utopia Home Care, Inc. (Utopia or Petitioner), is entitled to payment of $38,432.71 for the services it provided to Medicaid recipients during the period of January 1, 2000, through December 31, 2000.
Findings Of Fact At all times relevant to this proceeding, Utopia was an authorized Medicaid provider in the State of Florida. Pursuant to a valid Medicaid provider agreement, Utopia was authorized to provide home and community-based services to Medicaid recipients. The Agency is charged with the administration and oversight of the Medicaid Program and funds throughout the State of Florida. One of the Agency's responsibilities is to monitor the provision of Medicaid services and make payments to providers for services which have been appropriately provided and for which claims have been correctly processed. During the period of January 1, 2000, through December 31, 2000 (the audit period), Utopia rendered services to Medicaid recipients who receive home care services through the Medicaid Program. The cost of these services, for which Utopia has not received payment, is $38,432.71. There is no dispute that these services were authorized and provided by Utopia. Robert Fritz is vice president of Utopia and works in Utopia's St. Petersburg, Florida, office. In or about February 2002, while Mr. Fritz was participating in an accounts receivable project, he discovered that Utopia had not been paid for some of the services it had provided to Medicaid recipients during the audit period. Mr. Fritz contacted the Agency soon after he discovered that Utopia had not received payment for the services it rendered during the audit period. Over a period of several months, Utopia, through Mr. Fritz, provided the Agency with documentation that the services were authorized and had been invoiced at or near the time the services were provided. Additionally, at the request of the Agency, Utopia completed numerous 081 Forms, Request for Payment Forms for the Florida Medicaid Program, to establish a baseline as to what claims were unpaid. Utopia completed the 081 Forms for the services which were provided during the audit period and for which it had not received payment in or about February 2002. In addition to the completed 081 Forms, dated February 2002, Utopia also provided to the Agency documentation generated from Utopia's computer system in Florida. The documents, created by the computer system on a weekly basis, included payroll checks for employees and invoices for services rendered. As part of Utopia's contractual requirements with the lead agency, which oversees the Medicaid Program at the local level, a monthly Medicaid Expenditure Tracking Report (Expenditure Tracking Report) is created by Utopia's St. Petersburg, Florida, office. The Expenditure Tracking Report lists anticipated expenditures from the Medicaid system to Utopia for services rendered in a particular month. Many of these documents were provided to the Agency in seeking to establish that the services had been provided during the audit period and to obtain payment for the services. The documents created by Utopia's computer system and discussed in paragraph 6 above were created at or near the time services were rendered. Due to the documentation provided by Utopia, the Agency stipulated that Utopia provided authorized services to Medicaid recipients and that the cost of these services was $38,432.71. Nonetheless, the Agency has refused to pay Utopia for the services because the claims were not filed in accordance with Medicaid procedures, as established in the Medicaid Provider Reimbursement Handbook, Non-Institutional 081 (Reimbursement Handbook). Based on the Agency's review of its records, it determined that Utopia had not filed the claims within 12 months of the services being rendered. The procedures for filing claims for Medicaid payments are outlined in the Reimbursement Handbook, which is referenced and incorporated by reference in Florida Administrative Code Rule 59G-8.200(6). Also, for purposes of this case, the Reimbursement Handbook sets forth the applicable Medicaid requirements for processing claims. The Reimbursement Handbook, pages 6-2 and 6-3, provides in relevant part the following: Medicaid providers should submit claims timely so that any problems with a claim can be corrected and the claim resubmitted before the filing deadline. * * * A clean claim for services rendered must be received by the agency or its fiscal agent no later than 12 months from the date of service. * * * The date electronically coded on the provider's electronic transmission by the Medicaid fiscal agent is the recorded date of receipt for an electronic claim. At all times relevant to this proceeding, Consultec was the company responsible for receiving claims from and paying those claims to Medicaid providers in the State of Florida. The Reimbursement Handbook indicates that the processing time for claims "under normal circumstances" is within 10 to 30 days after the claim is filed. The Reimbursement Handbook also provides that a "remittance voucher" is mailed each week if Consultec processed any claims or put any claims in "Suspend" status. With regard to the remittance voucher, the Reimbursement Handbook, page 8-4, states in relevant part the following: The remittance voucher plays an important role in communications between the provider and Medicaid. It tells what happened to the claims submitted for payment--whether they were paid, suspended, or denied. It provides a record of transactions and assists the provider in resolving errors so that denied claims can be resubmitted. The provider must reconcile the remittance voucher with the claim in order to determine if correct payment was received. Utopia filed all its claims electronically. Therefore, to determine whether Utopia was entitled to payment for services rendered during the audit period, the Agency searched its data warehouse. The data warehouse allows the Agency to review claims that have been electronically filed and the status of those claims. Based on the Agency's review, which compared claims filed by Utopia in February 2002 for services rendered during the audit period, the Agency found that 36 claims had been submitted by Utopia and paid and 108 claims had not been paid. With regard to the 108 claims that were not paid, the Agency found no evidence that the claims had ever been filed. Utopia's St. Petersburg, Florida, office provided the services in question. Staff members in that office generate and enter data into the computer system that creates the documents described in paragraph 6 above and provide billing information to the local lead agency. Utopia provides this information to the local lead agency, Neighborly Senior Services (Neighborly), pursuant to a contractual arrangement which authorizes Utopia to provide services to Medicaid recipients. Utopia's staff at the St. Petersburg, Florida, office prepares and compiles billing information regarding the services it has provided and electronically transmits the information to Utopia's corporate office in Kingsburg, New York. The practice of Utopia is that the corporate office in New York then finalizes the billing information and transmits the claims to the entity designated by the Agency to process and pay claims. At all times relevant to this proceeding, that entity was Consultec. Once the St. Petersburg, Florida, office transmits the billing information to the corporate headquarters in New York, it has no further responsibility or control over the billing information sent to Medicaid. Utopia's St. Petersburg, Florida, office also has no responsibility to reconcile the services actually billed to Medicaid by the corporate office with the services provided in Florida. At this proceeding, no evidence was presented to establish that Utopia's corporate office in New York ever filed claims for the services during the audit period for which no payment has been made. Likewise, Utopia never provided the Agency with documentation or evidence that claims for the services provided during the audit period were ever filed within 12 months of the services being provided. Similarly, no such evidence was ever produced at this proceeding. The Reimbursement Handbook provides for exceptions to the 12-month time limit if the claim meets one or more of the following conditions: (1) original payment voided, (2) court or hearing decision, (3) delay in recipient eligibility determination, (4) agency delay in updating eligibility file, (5) court ordered or statutory action, and (6) system error on a claim that was originally filed within 12 months from the date of service. Upon consideration of the applicable provisions of the Reimbursement Handbook, the Agency properly determined that Utopia did not file the claims within 12 months from the date of the service and that none of the conditions were present which warranted granting an exception.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Agency enter a final order finding that the disputed claims were not filed within the required 12-month period and denying reimbursement of those services. DONE AND ENTERED this 29th day of December, 2003, in Tallahassee, Leon County, Florida. S CAROLYN S. HOLIFIELD 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 29th day of December, 2003. COPIES FURNISHED: Jeffries H. Duvall, Esquire Agency for Health Care Administration Fort Knox Building III, Mail Station 3 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308-5403 Robert C. Fritz Utopia Home Care, Inc. 215 Second Avenue, North St. Petersburg, Florida 33701 Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308
The Issue The issues are whether Petitioner received a Medicaid overpayment for claims paid during the audit period, August 1, 1997, through August 25, 1999, and if so, what is the amount that Petitioner is obligated to reimburse to Respondent.
Findings Of Fact Respondent is the agency responsible for administering the Florida Medicaid Program. One of its duties is to recover Medicaid overpayments from physicians providing care to Medicaid recipients. Petitioner is a licensed psychiatrist and an authorized Medicaid provider. His Medicaid provider number is No. 048191200. Chapter Three of the Limitations Handbook describes the procedure codes for reimbursable Medicaid services that physicians may use in billing for services to eligible recipients. The procedure codes are Health Care Financing Administration Common Procedure Coding System (HCPCS), Levels 1-3. The procedure codes are based on the Physician's Current Procedural Terminology (CPT) book, published by the American Medical Association. The CPT book, includes HCPCS descriptive terms, numeric identifying codes, and modifiers for reporting services and procedures. The Limitations Handbook further provides that Medicaid reimburses physicians using specific CPT codes. The CPT codes are listed on Medicaid's physician fee schedule. The CPT book includes a section entitled Evaluation and Management (E/M) Services Guidelines. The E/M section classifies medical services into broad categories such as office visits, hospital visits, and consultations. The categories may have subcategories such as two types of office visits (new patient and established patient) and two types of hospital visits (initial and subsequent). The subcategories of E/M services are further classified into levels of E/M services that are identified by specific CPT codes. The classification is important because the nature of a physician's work varies by type of service, place of service, and the patient's status. According to the CPT book, the descriptors for the levels of E/M services recognize seven components, six of which are used in defining the levels of E/M services. They are history, examination, medical decision making, counseling, coordination of care, nature of presenting problem, and time. The most important components in selecting the appropriate level of E/M services are history, examination, and medical decision making. However, since 1992, the CPT book has included time as an explicit factor in selecting the most appropriate level of E/M services. At all times relevant here, Petitioner provided services to Medicaid patients pursuant to a valid Medicaid provider agreement. Therefore, Petitioner was subject to all statutes, rules and policy guidelines that govern Medicaid providers. The Medicaid provider agreement clearly gives a Medicaid provider the responsibility to maintain medical records sufficient to justify and disclose the extent of the goods and services rendered and billings made pursuant to Medicaid policy. This case involves Respondent's Medicaid audit of claims paid to Petitioner for Medicaid psychiatric services during the audit period August 1, 1997, through August 25, 1999 (the audit period). Petitioner provided these services to his Medicaid patients, which constituted approximately 85 to 90 percent of his practice, at his office and at hospitals in the Jacksonville, Florida, area. During the audit period, Petitioner billed Medicaid for services furnished under the following CPT codes and E/M levels of service: (a) 99215, office or other outpatient visit for the evaluation and management of an established patient; (b) 99223, initial hospital care per day for the evaluation and management of a patient; (c) 99232, subsequent hospital care per day for the evaluation and management of a patient; (d) 99233, subsequent hospital care per day for the evaluation and management of a patient; (e) 99238, hospital discharge day management; (f) 99254, initial inpatient consultation for a new or established patient; and (g) 90862, other psychiatric service or procedures, pharmacologic management. Except for CPT code 90862, the E/M levels of services billed by Petitioner require either two or all three of the key components as to history, examination, and medical decision- making. The CPT book assigns a typical amount of time that physicians spend with patients for each level of E/M service. The CPT book contains specific psychiatric CPT codes. CPT codes 90804-90815 relate to services provided in the office or other outpatient facility and involve one of two types of psychotherapy. CPT codes 90816-90829 relate to inpatient hospital, partial hospital, or residential care facility involving different types of psychotherapy. CPT codes 90862- 90899 relate to other psychiatric services or procedures. CPT code 90862 specifically includes pharmacologic or medication management; including prescription, use, and review of medication with no more than minimal medical psychotherapy. CPT code 90862 is the only psychiatric procedure code that Petitioner used in billing for the psychiatric services he provided. CPT code 90862 does not have specific requirements as to history, examination, and medical decision-making or a specified amount of time. Most of Petitioner's hospital patients were admitted to the hospital for psychiatric services through the emergency room. As part of the admission process, Petitioner performed psychiatric and physical examinations. However, testimony at hearing that Petitioner generally performed the psychiatric evaluations and the physical examinations on separate days is not persuasive. The greater weight of the evidence indicates that the hospital physical examinations were conducted as part of the routine admission process and appropriately included in claims for the patients' initial hospital care. Some of Petitioner's hospital patients had complicated conditions. Some patients required crisis intervention and/or lacked the ability to perform activities of daily living. The initial hospital care of new hospital patients required Petitioner to take an extensive medical and psychiatric history. Petitioner attended his hospital patients on a daily basis. However, there is no persuasive evidence that Petitioner routinely spent 20-25 minutes with his hospital patients for each subsequent daily visit until the day of discharge. Petitioner used a team approach when attending his hospital patients. On weekdays, the team consisted of Petitioner, a social worker, a music therapist, and the floor nurses. On weekends, Petitioner generally made his rounds with the floor nurses. Petitioner's use of the team approach to treat hospital patients did not change the level of service he provided in managing their medication. Petitioner did not document the time he spent with patients during hospital visits. However, his notations as to each of these visits indicate that, excluding admissions and discharges, the hospital visits routinely involved medication management. Petitioner's testimony that his treatment during subsequent hospital visits involved more than mere medication management is not persuasive. Petitioner also failed to document the time he spent with patients that he treated at his office. He did not present his appointment books as evidence to show the beginning and ending time of the appointments. Petitioner's notes regarding each office visit reflect a good bit of thought. However, without any notation as to time, the office progress notes are insufficient to determine whether Petitioner provided a level of service higher than medication management for established patients. Petitioner and his office manager agreed in advance that, unless Petitioner specified otherwise, every office visit for an established patient would be billed as if it required two of the following: a comprehensive history; a comprehensive examination; and a medical decision making of high complexity. With no documented time for each appointment, Petitioner's records do not reflect that he provided a level of service higher than medication management for the office visits of established patients. Petitioner's testimony to the contrary is not persuasive. Petitioner treated some patients at their place of residence in an adult congregate living facility (ACLF). Respondent does not pay for psychiatric services in such facilities. Instead of entirely denying the claims for ACLF patients, Respondent gave Petitioner credit for providing a lower level of service in a custodial care facility. Sometime in 1999, Respondent made a decision to audit Petitioner's paid claims for the period of time at issue here. After making that decision, Respondent randomly selected the names of 30 Medicaid patients that Petitioner had treated. The 30 patients had 282 paid claims that were included in the "cluster sample." Thereafter, Respondent's staff visited Petitioner's office, leaving a Medicaid provider questionnaire and the list of the 30 randomly selected patients. Respondent's staff requested copies of all medical records for the 30 patients for the audit period. Petitioner completed the Medicaid questionnaire and sent it to Respondent, together with all available medical records for the 30 patients. The medical records included Petitioner's progress notes for office visits. Petitioner did not send Respondent all of the relevant hospital records for inpatient visits. The original hospital records belonged to the hospitals where Petitioner provided inpatient services. Petitioner had not maintained copies of all of the hospital records even though Medicaid policy required him to keep records of all services for which he made Medicaid claims. When Respondent received Petitioner's records, one of Respondent's registered nurses, Claire Balbo, reviewed the records to determine whether Petitioner had provided documentation to support each paid claim. Ms. Balbo made handwritten notes on the records of claims that were not supported by documentation. Ms. Balbo reviewed the documentation in the records between February 10, 2000, and March 7, 2000. Next, one of Respondent's investigators, Art Williams, reviewed the records. Mr. Williams made his review on or about January 23, 2001. In some instances, Mr. Williams changed some of Petitioner's CPT codes from an inappropriate hospital inpatient or office visit procedure code to a psychiatric procedure code with a lower reimbursement rate. Additionally, Mr. Williams noted Petitioner's visits in ACLF's that, according to Medicaid policy, were not reimbursable. Finally, Mr. Williams noted that Petitioner occasionally made several claims on one line of the claim form contrary to Medicaid policy. Mr. Williams made these changes to the CPT codes based on applicable Medicaid policy. His review of the audit documents and patient records did not involve a determination as medical necessity or the appropriate level of service. A peer reviewer makes determinations as to medical necessity and the appropriate level of service for each paid claim in the random sample of 30 patients. Respondent then sent the records to Dr. Melody Agbunag, a psychiatrist who conducted a peer review of Petitioner's records. Dr. Agbunag's primary function was to determine whether the services that Petitioner provided were medically necessary and, if so, what the appropriate level of service was for each paid claim. Dr. Agbunag conducted the peer review between June 8, 2001, and August 29, 2001. She agreed with Respondent's staff regarding the adjustments to the procedure codes that corresponded with the level of service reflected in the medical records. When Dr. Agbunag returned the records to Respondent, Ms. Balbo calculated the monetary difference between the amount that Medicaid paid Petitioner for each claim and the amount that Medicaid should have paid based on Dr. Agbunag's review. The difference indicated that Respondent had overpaid Petitioner for claims that in whole or in part were not covered by Medicaid. Respondent sent Petitioner a Preliminary Agency Audit Report (PAAR) dated December 27, 2001. The PAAR stated that Petitioner had been overpaid $54,595.14. The PAAR stated that Petitioner could furnish additional information or documentation that might serve to reduce the overpayment. Petitioner responded to the PAAR in a letter dated February 28, 2001. According to the letter, Petitioner challenged the preliminary determinations in the PAAR and advised that he was waiting on additional patient records from a certain hospital. In a letter dated June 30, 2002, Petitioner advised Respondent that he generally spends 15-20 minutes with his hospital inpatients. The letter does not refer to any additional hospital records. Petitioner's office manager sent Respondent a letter dated August 1, 2002. The letter discusses every service that Petitioner provided to the 30 patients during the audit period. Some of these services were not included in the random "cluster sample" because Medicaid had not paid for them during the audit period. According to the August 1, 2002, letter, Petitioner's office manager attached some of the patient records that Petitioner had not previously provided to Respondent. The additional documentation related to multiple claims involving several of Petitioner's hospital and office patients. Sometime after receiving the additional documentation, Dr. Agbunag conducted another peer review. She did not change her prior determination regarding the level of service as to any paid claim. In 2003, Vicki Remick, Respondent's investigator, reviewed the audit, the patient records, and all correspondence. Her review included, but was not limited to, the determination of the appropriate CPT code and amount of reimbursement, taking into consideration Medicaid policy and Dr. Agbunag's findings regarding medical necessity and the level of care for each paid claim. On or about October 1, 2003, Respondent issued the Final Agency Audit Report (FAAR). The FAAR informed Petitioner that he had been overpaid $39,055.34 for Medicaid claims that, in whole or in part, were not covered by Medicaid. The FAAR included a request for Petitioner to pay that amount for the overpayment. The FAAR concluded, as to some patients, that Petitioner's documentation did not support the CPT codes that Petitioner used to bill and that Respondent used to pay for services. Thus, Respondent "down graded" the billing code to a lesser amount. As a result, the difference between the amount paid and the amount that should have been paid was an overpayment. The FAAR also stated that Petitioner billed and received payment for some undocumented services. In each such instance, Respondent considered the entire amount paid as an overpayment. The FAAR indicated that Petitioner billed Medicaid for some services at acute care hospital psychiatric units without documenting the medical records as to the appropriate CPT codes and medical illness diagnosis codes. Respondent adjusted the payments for these services to the appropriate psychiatric CPT codes. According to the FAAR, Petitioner billed and received payment for services which only allowed one unit of service per claim line. For this audit, Respondent allowed charges for the additional units of service where Petitioner's documentation for the additional dates of service supported the services allowed by the peer reviewer. The FAAR stated that Petitioner billed for psychiatric services at an ACLF or an assisted living facility. Medicaid normally does not pay for such services. However, in this case, Respondent adjusted the claims to a domiciliary or custodial care visit. Sometime after Petitioner received the FAAR, Petitioner sent Respondent some additional patients' medical records. Some of the records were duplicates of documents that Petitioner previously had furnished to Respondent. Other records were for services that may have been provided during the audit period but which were not a part of the random sample because Medicaid did not pay for them during relevant time frame. Respondent requested Dr. James R. Edgar to conduct a second peer review of Petitioner's correspondence and patient records to determine the appropriate level of service. Respondent provided Dr. Edgar with a copy of the patients' medical records, a copy of Respondent's worksheets, including Dr. Agbunag's notes, and the appropriate policy handbooks. Respondent requested Dr. Edgar to make changes in the level of service as he deemed appropriate. Dr. Edgar performed his review between July 25, 2004, and July 29, 2004, making an independent determination regarding issues of medical necessity and level of care. Initially, as to every disputed paid claim, Dr. Edgar agreed with Dr. Agbunag that Petitioner's patient records were insufficient to justify the procedure code and higher level of service claimed by Petitioner. Specifically, Dr. Edgar presented persuasive evidence that a number of paid claims, which Petitioner billed under CPT codes 99215, 99223, 99232, 99233, and 99238, were properly adjusted to CPT code 90862. Petitioner was not entitled to bill at a higher level of reimbursement because he failed to adequately document as to history, examination, medical decision-making, and time. Dr. Edgar agreed that, upon reconsideration, Petitioner's claim for Recipient 14, date of service September 7, 1998, billed under CPT code 99238, was appropriate. As to Recipient 1, date of service March 9, 1999, Petitioner was not entitled to bill for services using CPT code 99255, initial inpatient consultation for a new or established patient. CPT code 99222, initial hospital care, per day, for the E/M of a new or established patient, was more appropriate because Petitioner provided the consultation for one of his established patients. His services included a comprehensive history, a comprehensive examination, and medical decision making of moderate complexity. An independent analysis of the selection of the random sample, the statistical formula used by Respondent, and the statistical calculation used to determine the overpayment, confirms the conclusions in the FAAR. The greater weight of the evidence indicates that Respondent properly extrapolated the results from the sample to the total population. Out of a population of 222 recipients and a population of 2,123 claims, 30 recipients selected at random with 282 paid claims capture most of the characteristics of the total population. In this case, the statistical evidence indicates that 29 of the 30 recipients had overpayments. The odds that 29 out of 30 randomly selected recipients would have overpayments, if no overpayments existed, are greater than the odds of winning the Florida Lotto Quick Pick three weeks in a row. In fact, within a statistical certainly, the amount claimed in this cause based on the records of 30 recipients is lower than the reimbursement amount that Petitioner would owe if all records were reviewed. Respondent incurred costs during the investigation of this matter. The amount of those costs was not known at the time of the formal hearing.
Recommendation Based on the forgoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Respondent enter a final order finding that Petitioner owes Respondent for an overpayment in the amount of $39,055.34, less an adjustment for the September 7, 1998 claim for Recipient 14, plus interest. DONE AND ENTERED this 25th day of March, 2005, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD 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 25th day of March, 2005. COPIES FURNISHED: Alan Levine, Secretary Agency for Health Care Administration Fort Knox Building III 2727 Mahan Drive, Suite 3116 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration Fort Know Building III 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308 Debora E. Fridie, Esquire Agency for Health Care Administration Fort Knox Building III, Mail Station 3 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308 John D. Buchanan, Jr., Esquire Henry, Buchanan, Hudson, Suber & Carter, P.A. 117 South Gadsden Street Post Office Box 1049 Tallahassee, Florida 32302
The Issue The amount to be paid by Petitioners, Pedro Garcia, a minor by and through his parents and natural guardians, Jesus Garcia and Norma Cisneros ("Petitioners") to Respondent, Agency for Health Care Administration ("AHCA"), out of the settlement proceeds, as reimbursement for past Medicaid expenditures pursuant to section 409.910, Florida Statutes.
Findings Of Fact Pedro Garcia ("Pedro") was born on October 30, 2014. When he was two months old, he presented to the emergency room ("ER") with vomiting and excessive crying. The doctors failed to diagnose an intestinal blockage and discharged Pedro home. Pedro was taken again to the ER in dire distress. He was airlifted to a pediatric hospital where emergency surgery was performed to remove 90 percent of his intestine. Pedro now suffers from the effects of having 90 percent of his intestine removed, including: nutritional deficiencies, diarrhea, dehydration, and abdominal distress. He cannot play with exertion and his activities are limited. Pedro will suffer the effects of his injury for the remainder of his life. A portion of Pedro's medical care related to the injury was paid by AHCA through the Medicaid program and Medicaid, through AHCA, provided $71,230.43 in benefits. Pedro's parents and natural guardians, Jesus Garcia and Norma Cisneros, brought a medical malpractice action against the medical providers and staff responsible for Pedro's care ("Defendants") to recover all of Pedro's damages, as well as their individual damages associated with their son's injury. Because of uncertainty on issues of liability and only a $250,000 insurance policy on the most culpable defendant, Pedro's medical malpractice action against the Defendants was settled for a confidential unallocated lump sum of $2,000,000. During the pendency of Pedro's medical malpractice action, AHCA was notified of the action and AHCA asserted a $71,230.43 Medicaid lien against Pedro's cause of action and settlement of that action. The Medicaid program through AHCA, spent $71,230.43 on behalf of Pedro, all of which represents expenditures paid for Pedro's past medical expenses. Another non-AHCA Medicaid provider, Integral Quality Care, provided $223,089.26 in past medical expenses on behalf of Pedro. Another non-AHCA Medicaid provider, Department of Health, Child's Medical Services, provided $168,161.12 in past medical expenses on behalf of Pedro. Accordingly, a total of $462,480.81 was paid for Pedro's past medical expenses. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Pedro's action against the Defendants. By letter, AHCA was notified of Pedro's settlement. AHCA has not filed a motion to set-aside, void, or otherwise dispute Pedro's settlement. Application of the formula in section 409.910(11)(f) to Pedro's $2,000,000 settlement requires payment to AHCA of the full $71,230.43 Medicaid lien. At the hearing, Petitioners presented the expert testimony of attorney Edward H. Zebersky, who represented Pedro throughout the underlying medical malpractice action against the Defendants. Without objection, Mr. Zebersky was accepted as an expert in the valuation of damages suffered by injured parties. Mr. Zebersky has been an attorney since 1991. Since 1992, Mr. Zebersky has been a plaintiff's trial lawyer, with a substantial portion of his practice devoted to personal injury cases, including medical malpractice matters. He is a partner with the law firm of Zebersky Payne Shaw Lewenz, LLP and AV rated by Martindale-Hubbell. Mr. Zebersky is a member of numerous trial attorney associations and has held leadership positions in several associations, including president of the Florida Justice Association in 2006 and serving on the Board of Governors of the American Association for Justice for the past ten years. Mr. Zebersky handles jury trials. He has secured multiple eight-figure verdicts and several seven-figure verdicts, and he stays abreast of jury verdicts on other cases in his area. As a routine part of his practice, Mr. Zebersky makes assessments concerning the value of damages suffered by his clients. Mr. Zebersky was accepted as an expert in a Medicaid lien dispute at DOAH in the case of Herrera v. Agency for Health Care Administration, Case No. 16-1270MTR, 2016 Fla. Div. Admin. Hear. LEXIS 493 (Fla. DOAH Oct. 11, 2016). Mr. Zebersky was familiar with the circumstances surrounding Pedro's injury and medical malpractice claims and gave a detailed explanation of them. Mr. Zebersky reviewed Pedro's life care plan, which details Pedro's future medical needs, and an economist report, which calculated the present value of Pedro's future medical care and present value of Pedro's lost future earnings. The economist placed the present value of Pedro's future medical expenses and lost future earnings at approximately $9,500,000. According to Mr. Zebersky, past medical expenses would also be added to arrive at the full value of Pedro's economic damages. Mr. Zebersky testified that in addition to economic damages, a jury would also be asked to assign a value to past and future noneconomic damages (i.e., pain and suffering and loss of enjoyment of life). Mr. Zebersky testified that Pedro's claim for noneconomic damages would have an exceedingly high number, which as a "rule of thumb" is three times the value of his economic damages. Mr. Zebersky persuasively and credibly testified that the total value of all of Pedro's damages would be in excess of $20,000,000, and that valuing Pedro's damages at $15,000,000 is a very conservative and low valuation of his damages. Mr. Zebersky persuasively and credibly testified that the $2,000,000 settlement did not fully compensate Pedro for the full value of his damages. Mr. Zebersky testified that based on a conservative value of all of Pedro's damages of $15,000,000, the $2,000,000 settlement represents a recovery of 13.33 percent of the full value of his damages. AHCA did not call any witnesses, present any evidence as to the value of damages, or propose a different valuation of damages. Mr. Zebersky's testimony regarding the total value of Pedro's damages was credible, unimpeached, and unrebutted. Petitioner proved that the settlement of $2,000,000 does not fully compensate Pedro for the full value of his damages. Mr. Zebersky further testified that because Pedro only recovered in the settlement 13.33 percent of the full value of his damages, he only recovered 13.33 percent of AHCA's $71,230.43 Medicaid lien, or $9,495.01. Mr. Zebersky testified that it would be reasonable to allocate $9,495.01 of the settlement to past medical expenses paid by AHCA through the Medicaid program. Following the settlement, Mr. Zebersky negotiated the non-AHCA Integral Quality Care Medicaid lien from $233,089.26 to $18,737.00, and the non-AHCA Department of Health, Child's Medical Services lien from $168,161.12 to $22,415. On cross-examination, Mr. Zebersky acknowledged that the $233,089.26 and $168,161.12 from Integral Quality Care and Department of Health, Child's Medical Services are part of Pedro's claim for past medical expenses. However, Mr. Zebersky failed to include these past medical expenses in applying the ratio to reduce the Medicaid lien amount owed to AHCA. AHCA successfully contested the methodology used to calculate the allocation to past medical expenses based on Mr. Zebersky's failure to include these past medical expenses in applying the ratio. Accordingly, Petitioners proved by a preponderance of the evidence that 13.33 percent is the appropriate pro rata share of Pedro's past medical expenses to be applied to determine the amount recoverable by AHCA in satisfaction of its Medicaid lien. Total past medical expenses is the sum of AHCA's lien in the amount of $71,230.43, and the past medical expenses in the amounts of $233,089.26 and $168,161.12, which equals $462,480.81. Accordingly, following Mr. Zebersky's methodology and applying the $15,000,000 valuation to the proper amount of total past medical expenses of $462,480.81, the settlement portion properly allocable to Pedro's past medical expenses to satisfy AHCA's lien is $61,648.69 ($462,480.81 x 13.33 percent = $61,648.69).
The Issue The issue for determination in this case is whether the agency's interpretation of its Title XIX, ICF/MR Reimbursement Plan is a rule, and if so, whether it is an invalid rule.
Findings Of Fact Friendly Village of Brevard, Inc. d/b/a Washington Square (herein, Washington Square) is an intermediate care facility for the mentally retarded (ICF/MR), located at 2055 North U.S. 1, in Titusville, Florida. Friendly Village of Orange, Inc., d/b/a Lake View Court (herein, Lake View Court), is also an ICF/MR located at 920 W. Kennedy Boulevard, in Eatonville, Florida. Both facilities are operated by Developmental Services, Inc. Both are certified ICF/MR's participating in the Florida Medicaid Program. The Department of Health and Rehabilitative Services (HRS) is the state agency responsible for overseeing the ICF/MR Medicaid Program. Representatives of HRS and Florida's ICF/MR industry began negotiations on a new state Medicaid reimbursement plan in 1982 and 1983. The participants in the negotiations sought to remove certain cost limitations and to insure that individual facilities would receive fair reimbursement of their allowable costs. The negotiations resulted in the Title XIX ICF/MR Reimbursement Plan dated July 1, 1984 (the 1984 Plan). The 1984 Plan provides, in part, for the establishment of reimbursement rates for new ICF/MR's entering the Florida Medicaid program after January 1, 1983. Under the plan, a provider is required, prior to beginning operations, to prepare a budgeted costs report projecting what it expects to spend in allowable costs during the next year for care to its residents. HRS reviews these budgets and establishes a per diem rate, using the budgeted costs and the number of patients, arriving at a per patient, per day rate. Each month, as services are provided, the ICF/MR bills the state Medicaid program for the number of patient days times the per diem. During the period in question, cost settlement occurred at the conclusion of the budgeted period. The provider filed his cost report detailing what was actually spent in allowable costs, HRS compared that amount with the amount budgeted and settled with the provider. Washington Square entered the Florida Medicaid program on January 19, 1983; Lake View Court entered the program in February 1983. Both facilities filed cost reports for periods ending on February 29, 1984. Sometimes cost settlements occur quickly through a desk review. Other times, as here, audits are performed and settlement may occur much later. The audits of Washington Square and Lake View Court were conducted in 1985 for their initial cost reports ending February 1984. The audits were issued in April and May 1988. Those audits state that prior to July 1, 1984, the Florida Medicaid Program recognized only those interim rate settlements resulting in an overpayment. This is an interpretation of the 1984 Plan which Petitioners dispute and which, in this case, Petitioners contend is an invalid rule. ICF/MR Reimbursement plans prior to July 1, 1984, had one-way cost settlement, which meant that if the provider as overpaid, the funds had to be returned to HRS; if the facility as underpaid, it did not receive additional reimbursement. The 1984 ICF/MR Plan was changed to allow two-way cost settlement, thus allowing an underpaid provider to recover its approved costs. Petitioners claim that a proper interpretation of the 1984 Plan, especially when read with the 1985 Plan, is that two-way cost settlement is retroactive to January 1983, for new providers entering the program after January 1, 1983. HRS disagrees with that interpretation and this issue is the subject of the consolidated case, #88-2938. HRS' interpretation means that Petitioners will not be reimbursed for underpayments received during their first reporting period. The 1984 Plan was adopted as a rule by incorporation, in Rule 10C- 7.49(4)(a)2. Florida Administrative Code.
