The Issue The issues in this bid protest are whether, in making the decision to award Intervenor Prestige Health Choice, LLC ("Prestige"), a contract to provide Medicaid managed medical assistance services as a provider service network in Region 11 (covering Miami-Dade and Monroe Counties), Respondent Agency for Health Care Administration ("AHCA") acted contrary to a governing statute, rule, or solicitation specification; and, if so, whether such action was clearly erroneous, contrary to competition, arbitrary, or capricious. (In this protest, Petitioner Care Access PSN, LLC ("Care Access"), challenges AHCA's intended award to Prestige in Region 11, and only that award. Care Access does not seek to upset any other intended awards in Region 11 or in any other Region.)
Findings Of Fact On December 28, 2012, AHCA issued 11 separate invitations to negotiate, one for each region of Florida as established by the legislature in section 409.966, Florida Statutes. These invitations to negotiate solicited proposals from vendors seeking contracts to provide managed medical assistance services to Medicaid enrollees. The goal of these interrelated procurements was (and remains) to enable AHCA, as the agency responsible for administering the Medicaid program, to purchase medical goods and services for all Medicaid recipients throughout the entire state of Florida on a managed care basis instead of under a fee-for-service payment model. At issue in this case is Invitation to Negotiate No. 027-12/13 (the "ITN"), which sought proposals from eligible plans4/ to provide services to Medicaid enrollees in Region 11, which consists of Miami-Dade and Monroe Counties. In compliance with section 409.974(1)(k), Florida Statutes, the ITN stated that AHCA intended to enter into at least five contracts and up to ten contracts in Region 11, with at least one of those contracts being awarded to a provider service network ("PSN"), if a responsive bid from a responsible PSN were received. Fourteen plans responded to the ITN. Four of the bidders identified themselves as PSNs: Care Access; Prestige; Salubris PSN; and South Florida Community Care Network PSN. The other ten bidders were health maintenance organizations ("HMOs"). As described in the ITN, the evaluation phase of the selection process consisted of the following components: evaluation of mandatory criteria; (2) evaluation of financial stability; (3) review and scoring of comments from enrolled Medicaid providers regarding the vendor; (4) review and scoring of the vendor's past performance; and (5) evaluation and scoring of the technical responses. AHCA appointed 28 evaluators to evaluate and score the bids. At the completion of the evaluation phase, AHCA tabulated the evaluators' scores and ranked the 14 Region 11 bids from first to last. The HMOs occupied the first 10 places, followed by Prestige (No. 11), Care Access (No. 12), and the other two PSNs. Thereafter, in July 2013, AHCA invited the eight highest-ranked HMOs and the two highest-ranked PSNs (Prestige and Care Access) to participate in negotiations. AHCA held three negotiation sessions apiece with the ten vendors who advanced to this phase of the competition. Following these negotiations, AHCA presented the vendors with an offer of the contractual terms AHCA sought, including a composite capitation rate and a list of expanded benefits to be covered by the plans. Vendors were instructed to accept AHCA's proposed terms or make a counteroffer. On September 23, 2013, AHCA gave notice of its intent to award contracts in Region 11 to six plans, including Prestige, which was the only PSN to receive an intended award. AHCA later notified the public that four additional contracts would be awarded in Region 11, each to an HMO. With these announcements, which brought to ten the total number of intended awards, AHCA reached the maximum number of contracts it can offer in Region 11. Care Access was not selected for an intended award in Region 11. Care Access timely initiated the instant protest, seeking to have Prestige disqualified from the competition or, failing that, the proposed award to Prestige set aside for reasons independent of Prestige's alleged ineligibility. While Care Access protests the intended award on numerous grounds, the principal objective of this challenge is to establish that Prestige is not really a PSN, which if true would mean that AHCA's intended award is contrary to the mandate of section 409.974(1)(k) that at least one contract in Region 11 be let to a PSN. In this regard, Care Access contends that Prestige fails to meet the PSN provider control and financial interest requirements (about which more will be said) for two separate but related reasons, namely: (a) an HMO named Florida True Health ("FTH"), rather than a group of affiliated health care providers, effectively owns and controls Prestige; and (b) Prestige is not majority-owned (over 50%) by a group of affiliated health care providers. Care Access's position relating to FTH's alleged control of Prestige is based on the undisputed facts that FTH not only owns 40% of Prestige's shares, but also holds an option, which it can exercise at any time until December 31, 2020, to purchase the remaining 60%. Relying on the contractual instruments behind the complex transaction by which FTH purchased both its 40% stake in Prestige and the option to acquire the entire company, Care Access argues that FTH has already taken over Prestige through a "virtual merger," even though the option it holds has not yet been formally exercised. If this were the case, Prestige clearly would not be a provider- operated PSN, because FTH is not a health care provider. Concerning the requirement that a PSN be majority- owned by providers, Care Access asserts that affiliated health care providers, as a group, own less than 50% of Prestige because, even if FTH is merely a minority shareholder, one of the putative "provider owners"——Health Choice Network of Florida, Inc. ("HCNF")——is actually not a provider. There is no dispute that HCNF owns 13.333% of Prestige. There can be no dispute that if, in determining whether Prestige meets the PSN ownership requirement, HCNF's 13.333% interest were subtracted from the sum of Prestige's "provider ownership," Prestige would not be majority-owned by a group of health care providers (because, as everyone agrees, at least 40% of Prestige is owned by non-provider FTH)——and thus it would fail one of the tests for determining PSN status. Care Access's remaining protest grounds can be boiled down to three salient objections: (1) Prestige's bid deviated materially from the ITN specifications because the electronic version of the document Prestige submitted which identified its network providers had been saved in a file format not supported in Microsoft Excel, a popular spreadsheet application; Prestige improperly colluded with FTH, the HMO with which it has a business relationship; and (3) AHCA's decision to set a base price neutralized any competitive advantage for having the lowest bid, in violation of the statutory directive to achieve the "best value" for the state. As mentioned above, the ITN provides that "[a]t least one (1) award in this Region will be to a PSN provided a PSN submits a responsive reply and negotiates a rate acceptable to the Agency." The principal statutory definition of a PSN is set forth in section 409.912, Florida Statutes, which states as follows: (4) [For the purpose of purchasing goods and services for Medicaid recipients in the most cost-effective manner consistent with the delivery of quality medical care, the] agency may contract with: * * * (d)1. A provider service network, which may be reimbursed on a fee-for-service or prepaid basis. Prepaid provider service networks shall receive per-member, per-month payments. A provider service network that does not choose to be a prepaid plan shall receive fee-for-service rates with a shared savings settlement. The fee-for-service option shall be available to a provider service network only for the first 2 years of the plan's operation or until the contract year beginning September 1, 2014, whichever is later. * * * 4. A provider service network is a network established or organized and operated by a health care provider, or group of affiliated health care providers, including minority physician networks and emergency room diversion programs that meet the requirements of s. 409.91211, which provides a substantial proportion of the health care items and services under a contract directly through the provider or affiliated group of providers and may make arrangements with physicians or other health care professionals, health care institutions, or any combination of such individuals or institutions to assume all or part of the financial risk on a prospective basis for the provision of basic health services by the physicians, by other health professionals, or through the institutions. The health care providers must have a controlling interest in the governing body of the provider service network organization. (Emphasis added.)5/ Section 409.962(13) supplies another, slightly different definition of the term: "Provider service network" means an entity qualified pursuant to s. 409.912(4)(d) of which a controlling interest is owned by a health care provider, or group of affiliated providers, or a public agency or entity that delivers health services. Health care providers include Florida-licensed health care professionals or licensed health care facilities, federally qualified health care centers, and home health care agencies. The ITN required each bidder to include, with its submission, a signed Exhibit C-3 titled "Required Certifications and Statements." Item No. 8 of Exhibit C-3 required the bidder to certify that it was a type of plan eligible to respond to the ITN. Prestige certified its eligibility as a PSN by marking the following box: I hereby certify that my company currently operates as one (1) of the following: * * * ? Provider Service Network (PSN) qualified by Section 409.912(4)(d), Florida Statutes, which is majority owned (over 50%) by a health care provider, group of affiliated providers, public agency, or entity that delivers health services (Section 409.962(13), Florida Statutes), and possess a Florida Third Party Administrative License or a subcontract/letter of agreement with a Florida-licensed Third Party Administrator. In addition, the respondent shall complete Exhibit C-4, Disclosure of Ownership and Control Interest Statement (CMS 1513). (Emphasis added.) Prestige's certification was at least partially true. Prestige is a Florida limited liability company that was established in 2007 by a group of Florida-based, federally qualified health centers ("FQHC"s) and community mental health centers. First accepted by AHCA as a PSN in 2008, Prestige has provided services under continuous contract with AHCA ever since, with the most recent contract renewal effective October 1, 2013. The ITN, however, added a requirement that the statutes do not impose, i.e., that a network, to be a PSN, must be majority-owned (over 50%) by a provider or group of affiliated providers. Recall that the statutes, in contrast, mandate that a provider or group of affiliated providers have "a controlling interest" in both the entity and its governing body, which is not the same as owning a majority of its shares.6/ While owning more than 50% of a corporation is likely to ensure a controlling interest in the entity, having a controlling interest is not dependent upon or tantamount to majority ownership. As both AHCA and Prestige acknowledge in their respective proposed recommended orders, it is possible for a minority shareholder or group of affiliated shareholders whose combined ownership is less than 50% to have a controlling interest in a corporation.7/ It is possible, therefore, for an entity to satisfy the definitions of a PSN under sections 409.912(4) and 409.962(13) because a group of affiliated providers have a controlling interest in the network, and yet not be eligible for an award as a PSN pursuant to the ITN because the group of affiliated providers' combined ownership interests total less than 50%. As required by Item No. 8 of Exhibit C-3, Prestige submitted a fully executed Exhibit C-4, the form titled "Disclosure of Ownership and Control Interest Statement." This instrument——a form whose provenance is the Centers for Medicare and Medicaid Services——is commonly known as a "CMS 1513." In its CMS 1513, Prestige divided its shareholders into two categories: "Provider Owners" and "Other Owners." Within the category of Provider Owners, Prestige identified three subcategories: "Health Choice Network of Florida, Inc.-FQHC Controlled Network"; "FQHC Owners"; and "Other Provider Owners." The category of Other Owners, comprising non-providers, was not subdivided.8/ Under the respective subcategories of Provider Owners, Prestige named the shareholder or shareholders belonging to each subset; disclosed each shareholder's percentage of ownership; and provided a subtotal of the aggregate ownership interests within each subcategory. So, under the subcategory of Health Choice Network of Florida, Inc.-FQHC Controlled Network, one entity was identified, i.e., HCNF, whose 13.333% stake represented the subtotal of ownership for that subcategory. Under the subcategory of FQHC Owners, 17 separate entities were listed, whose respective interests added up to a subtotal of 21.139%. Under the subcategory of Other Provider Owners, Prestige enumerated 12 shareholders, some of whom are individuals, and others of which appear to be facilities or organizations. The subtotal of the Other Provider Owners' interests was shown to be 23.364%. For the whole category of Provider Owners, Prestige represented that the combined ownership interests——the sum of the several subtotals——amounted to 57.836%. In addition to the CMS 1513, PSN applicants needed to complete and submit a form titled "Managed Medical Assistance (MMA) Provider Service Network (PSN) Provider Ownership Interest and Disclosure Report," also known as Exhibit C-5. This exhibit contained the following directions: Directions: List each PSN respondent owner included on the completed CMS-1513, Disclosure of Ownership and Control Interest Statement in Column (1). Include direct and indirect owners. In Column 2, specify the percent of indirect and direct ownership of each owner in the PSN respondent (see Item III on the CMS-1513 Detailed Instructions for information on direct and indirect ownership interest). In Column (3), indicate if the owner is currently a Medicaid provider (Yes or No). Only MMA providers included in the legend below are considered providers for the purpose of meeting the MMA PSN ownership requirement pursuant to Section 409.962(13), Florida Statutes. If the answer to Column (3) is yes, complete Columns (4), (5) and (6); otherwise, leave these columns blank. If completing Column (5), preface the number with either "L" for License Number or "M" for Medicaid identification number. In Exhibit C-5's ownership disclosure table, a portion of which is reproduced below,9/ Prestige reported HCNF's ownership interest as follows: In answering "Yes" to the question of whether HCNF is a Medicaid provider, Prestige did not tell the truth. In reality, as the evidence persuasively demonstrates, at no time relevant to this case was HCNF a health care provider, much less an enrolled Medicaid provider. HCNF is a nonprofit corporation organized under chapter 617, Florida Statutes. As described in its bylaws, HCNF's purposes are as follows: [T]he Network's specific purposes shall be to operate and/or support clinical programs, to carry out certain community initiatives, and to perform certain management functions, including but not limited to, information systems and financial services, for the benefit of health centers as defined in Section 330 of the Public Health Service Act and similar community-based primary or behavioral health care organizations that serve medically underserved and uninsured populations . . . . Formed and governed by community medical and behavioral health centers, HCNF qualifies, under federal law, as a tax-exempt "501(c)(3) organization." Under its Articles of Incorporation, moreover, HCNF has chosen to be operated, at all times, "exclusively as a supporting organization within the meaning of Section 509(a)(3) of the [Internal Revenue] Code." As a section 509(a)(3) organization, HCNF is required to provide support services for the benefit of public agencies or private 501(c)(3) organizations. This it generally does for community mental health centers and FQHCs, which——unlike HCNF——directly provide health-care services. According to HCNF's CEO Kevin Kearns, whose testimony on this point is credited as truthful, HCNF is a "fiscal intermediary services organization" ("FISO"). As defined in section 641.316(2)(b), Florida Statutes, a FISO is: a person or entity that performs fiduciary or fiscal intermediary services to health care professionals who contract with health maintenance organizations other than a hospital licensed under chapter 395, an insurer licensed under chapter 624, a third- party administrator licensed under chapter 626, a prepaid limited health service organization licensed under chapter 636, a health maintenance organization licensed under this chapter, or a physician group practice as defined in s. 456.053(3)(h) which provides services under the scope of licenses of the members of the group practice. "Fiduciary or fiscal intermediary services" include: [receiving and collecting reimbursements] on behalf of health care professionals for services rendered, patient and provider accounting, financial reporting and auditing, receipts and collections management, compensation and reimbursement disbursement services, or other related fiduciary services pursuant to health care professional contracts with health maintenance organizations. § 641.316(2)(a), Fla. Stat. FISOs must register with the Florida Office of Insurance Regulation. § 641.316(6), Fla. Stat. HCNF is also a health center controlled network ("HCCN"). This term, as used by the Health Resources and Services Administration ("HRSA") of the U.S. Department of Health and Human Service, means:10/ group of safety net providers (a minimum of three collaborators/members) collaborating horizontally or vertically to improve access to care, enhance quality of care, and achieve cost efficiencies through the redesign of practices to integrate services, optimize patient outcomes, or negotiate managed care contracts on behalf of the participating members. As a FISO and an HCCN, HCNF does not provide health- care services. Rather, HCNF provides back-office services to its members, each of whom is either a behavioral health care center or FQHC and, thus, a health care provider.11/ The back- office services available to HCNF's members include financial services, information technology services, billing services, and centralized referral services. HCNF members pay annual dues for access to these services, and each of them pays additional fees to the corporation based upon the scope and volume of the services that HCNF renders to the individual member. In the abstract, HCNF's membership can reasonably be considered a "group of affiliated providers," for HCNF's members enjoy a mutually beneficial association under, and share a common interest in the continued operation of, the nonprofit corporation which is their jointly controlled service provider, i.e., HCNF. Prestige, however, identified HCNF as a "GP," thereby signifying that HCNF (as opposed to its collective membership) is a "group of affiliated providers," that is, one of the health care "provider types" listed in Exhibit C-5's ownership disclosure table. Given that HCNF is not any type of provider, the designation of HCNF as a GP was of debatable accuracy,12/ but Prestige had claimed HCNF as a GP owner in previous filings with AHCA (unrelated to this procurement), and AHCA had not objected, so there was at least some historical precedent for such a characterization of HCNF. In contrast, Prestige's statement in Exhibit C-5 that HCNF is a Medicaid provider was a material misrepresentation for which no persuasive justification has been made. While the evidence fails to establish that Prestige intended to deceive AHCA, it does show that AHCA relied on Prestige's representations, including this one, which it accepted at face value. As AHCA explains in its Proposed Recommended Order, "Nothing in the ITN required AHCA to look beyond Prestige's certifications and disclosures in Exhibits C-3, C-4 and C-5 in determining Prestige's status as PSN."13/ Thus, in making its decision to award Prestige the contract reserved for a PSN, AHCA did so in the mistaken belief that HCNF was a Medicaid provider, which in fact it is not. This is significant because if HCNF were a Medicaid provider, as AHCA thought, there would be no dispute over the treatment of HCNF's 13.333% interest in Prestige as "provider ownership" for the purpose of determining whether Prestige is majority-owned (over 50%) by a group of affiliated providers. As it is, there is no reason to consider non-provider HCNF's 13.333% interest for the purpose of meeting the PSN ownership requirement. For reasons that will be more fully explained below in the Conclusions of Law, the undersigned determines as a matter of ultimate fact that Prestige is not a PSN for the purposes of the ITN because: (a) HCNF is not a health care provider; (b) HCNF is not a "group of affiliated providers" as that term is used in sections 409.912(4) and 409.962(13) and in Item No. 8 of ITN Exhibit C-3, nor, as a non-provider, can it be a member of such a group; and (c) when HCNF's 13.333% ownership interest is excluded from consideration, as it must be, Prestige is not majority-owned (over 50%) by a group of affiliated providers, as required by Item No. 8 of ITN Exhibit C-3. Because Prestige is not a PSN for the purposes of the ITN, it is ineligible for the PSN award pursuant to the set- aside provided for in section 409.974(1)(k), Florida Statutes, which is what Prestige has tentatively won under AHCA's intended decision. AHCA's proposed action is, therefore, contrary to the plain and unambiguous language of the governing statutes and applicable ITN specifications. To the extent AHCA's proposed action is based upon interpretations of these statutes and specifications, such action is clearly erroneous. The determination, as a matter of ultimate fact, that Prestige fails to meet the ITN's majority-ownership test and, hence, is not a PSN for purposes of this procurement provides a sufficient basis, without more, for concluding that AHCA should not proceed with the intended award. This makes it unnecessary to decide whether FTH is either in exclusive control of Prestige or, alternatively, the sole legal and beneficial owner of Prestige's shares, as Care Access contends; accordingly——and because a thorough discussion of the dispute over the nature and extent of FTH's respective ownership and controlling interests might entail the disclosure of facts that Prestige considers confidential trade secrets——no further findings or conclusions on this issue will be made.14/ Although the merits of Care Access's remaining protest grounds need not be decided either, the undersigned will address them in abbreviated fashion. The Provider Network File. Each bidder was required to submit, as Exhibit E-3, a "Provider Network File" that contained a comprehensive listing of its proposed provider network. The ITN provided the following instructions for completing and submitting the Provider Network File: Respondents shall submit both a printed hard copy and electronic version of the Provider Network File saved to CD. The electronic version of the Provider Network File shall be an Excel spreadsheet, and should adhere to the data specifications outlined below. The Agency will evaluate the Provider Network File using a Provider Network Assessment Tool . . . . (Emphasis added.) Addendum 2 to the ITN warned bidders as follows: Respondents to the ITN shall utilize the Attachment E, Exhibits E-1 through E-5, as applicable. All respondents bidding on a Standard MMA Plan shall complete the following Exhibits to Attachment E: Exhibit E-1, Standard Submission Requirements and Evaluation Criteria; Exhibit E-2, Standard Quality Measurement Tool; and Exhibit E-3, Provider Network File. Failure to use the formats provided by the Agency or failure to properly complete any Exhibit may result in a reduction of the score (to include an award of zero (0) points for the submission.) (Emphasis added.) Neither Care Access nor any other vendor challenged this amendment to the ITN. Prestige submitted its digital Provider Network File in the Portable Document Format ("PDF"), which is not supported in Microsoft Excel. Therefore, the AHCA evaluators were unable to extract data from the electronic version of Prestige's Provider Network File and needed to review the printed hard copy instead——a less efficient method of performing the task of evaluating Prestige's network. Prestige's failure to submit the Provider Network File in the proper digital format did not give Prestige a competitive advantage over other bidders who strictly complied with the electronic filing requirements. A list of Prestige's providers was, after all, submitted (as required) in a printed hard copy and thus available for review. In addition, AHCA's evaluators deducted points from Prestige's score for the mistake of submitting an incompatible electronic file, a penalty which placed Prestige at a competitive disadvantage relative to compliant bidders. In giving Prestige zero points for evaluation criteria related to the Provider Network File, the evaluators took action consistent with the ITN's instructions. AHCA determined, as a matter of ultimate fact, that Prestige's submission of an electronic PDF document containing its provider list, rather than an Excel-compatible file, was a minor irregularity, not a material deviation. This determination, the undersigned finds, was not clearly erroneous. AHCA's decision to waive the minor irregularity is entitled to great deference and should be upheld unless it was arbitrary or capricious. The undersigned cannot say that waiving the technical deficiency was illogical, despotic, thoughtless, or otherwise an abuse of discretion. Therefore, the intended award should not be rescinded based upon Prestige's noncompliance with the electronic filing requirements. Collusion. The ITN contained three separate provisions prohibiting collusion and requiring the bidders to independently prepare their responses. In Attachment A, the ITN provided as follows: 9. Respondent's Representation and Authorization. In submitting a response, each respondent understands, represents, and acknowledges the following (if the respondent cannot so certify to any of following, the respondent shall submit with its response a written explanation of why it cannot do so). * * * The submission is made in good faith and not pursuant to any agreement or discussion with, or inducement from, any firm or person to submit a complementary or other noncompetitive response. * * * The respondent has made a diligent inquiry of its employees and agents responsible for preparing, approving, or submitting the response, and has been advised by each of them that he or she has not participated in any communication, consultation, discussion, agreement, collusion, act or other conduct inconsistent with any of the statements and representations made in the response. In Attachment C, the ITN provided these instructions for preparing a response: Independent Preparation of Response: A respondent shall not, directly or indirectly, collude, consult, communicate or agree with any other respondent as to any matter related to the response each is submitting. Additionally, a respondent shall not induce any other respondent to submit or not to submit a response. Finally, the ITN required bidders to sign a "Non- Collusion Certification," which provided as follows: I hereby certify that all persons, companies, or parties interested in the response as principals are named therein, that the response is made without collusion with any other person, persons, company, or parties submitting a response. In applying the foregoing anti-collusion provisions, consideration must be given to section 409.966(3)(b), Florida Statutes, which governs the instant procurement and provides as follows: An eligible plan must disclose any business relationship it has with any other eligible plan that responds to the invitation to negotiate. The agency may not select plans in the same region for the same managed care program that have a business relationship with each other. Failure to disclose any business relationship shall result in disqualification from participation in any region for the first full contract period after the discovery of the business relationship by the agency. For the purpose of this section, "business relationship" means an ownership or controlling interest, an affiliate or subsidiary relationship, a common parent, or any mutual interest in any limited partnership, limited liability partnership, limited liability company, or other entity or business association, including all wholly or partially owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates of such entities, business associations, or other enterprises, that exists for the purpose of making a profit. (Emphasis added.) It is not surprising that, in view of section 409.966(3)(b)——which practically requires potential bidders having a business relationship with each other to coordinate in some fashion so as to avoid an intra-regional competition that would be at best a zero-sum game between them——several vendors sought clarification of the anti-collusion provisions during the pre-bid question-and-answer process. Of interest are the following questions: 6. Can entities which have some common ownership, share common management or have Board of Directors that overlap, strategize and determine [through] communications and discussion which region under the SMMC ITN is appropriate for each such entity to respond to as a bidder without violating the prohibition against "inducement" set forth in the SMMC ITN? * * * 13. Does this section apply to respondents who are affiliates and who are preparing responses in different regions? * * * 23. How can entities which share some common ownership or are otherwise related in some manner AND who are responding to the SMMC ITN in separate and distinct regions collaborate, communicate, consult and strategize on each's respective response to the SMMC ITN for the applicable region without violating the requirement of "independent preparation of response" as set forth in the SMMC ITN? AHCA answered each of these questions with the same response: "Each Regional ITN is a separate procurement, the specifications of which apply to that region." This answer was made part of the ITN through Addendum 2. What AHCA meant by this, the evidence shows, is that the anti-collusion provisions were intended to apply only to bidders competing against each other within a particular region. While there might be other reasonable interpretations of the ITN's anti-collusion specifications, AHCA's is within the range of permissible interpretations and, thus, not clearly erroneous. Indeed, a stricter interpretation might have discouraged affiliated companies from competing.15/ FTH did not submit a bid in response to the ITN. Pursuant to AHCA's interpretation of the ITN's anti-collusion specifications——an interpretation which no one protested upon its publication in Addendum 2 to the ITN——Prestige and FTH were free to communicate with each other about one's bid in any region, such as Region 11, where the two would not be competing head-to-head. AHCA's proposed action should not be set aside based upon the objection that Prestige violated the ITN's anti- collusion provisions by communicating with FTH. Cost Proposals. Care Access objects to AHCA's refusal to allow a bidder to achieve an advantage over competitors by offering a lower price. The evidence shows that, after comparing and evaluating the price proposals submitted by each vendor for the region, AHCA developed a common base rate, which was presented to the bidders invited to participate in negotiations. This rate ($366.66) was higher than Care Access's initial offer ($317.46). During negotiations, Care Access acceded to AHCA's proposed rate, apparently because there was nothing to be gained by offering a lower price, as it had been willing to do. AHCA's establishment of a common base rate which a bidder willing to accept less was not allowed to beat for competitive advantage conformed to the answer AHCA had given in response to a pre-bid question, which had been published in Addendum 2 to the ITN. The question was: "Will the state consider plan specific reimbursement rates or will there be a common rate negotiated among the awarded plans within a region?" AHCA answered as follows: "The Agency intends to negotiate common base rates for each region." No potential bidder protested this response, which became part of the ITN. It is determined as a matter of ultimate fact that the procedure used by AHCA with respect to the common rate was not contrary to the terms of the ITN, but rather was consistent therewith. Consequently, AHCA's intended action should not be disturbed based upon Care Access's objection to use of a common base rate.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that AHCA enter a Final Order (a) rescinding the proposed award to Prestige on the ground that Prestige, being minority owned (under 50%) by a group of affiliated health care providers, is not a PSN for the purpose of this procurement; and (b) taking such further remedial action(s)——besides upsetting any other intended awards in any Region——as AHCA, in its discretion as the letting authority, deems necessary or appropriate in light of Prestige's ineligibility to receive the PSN contract in Region 11. DONE AND ENTERED this 2nd day of January, 2014, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings 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 2nd day of January, 2014.
The Issue Whether Medicaid overpayments were made to Petitioner and, if so, what is the total amount of those overpayments.
Findings Of Fact Petitioner Petitioner is a Florida-licensed osteopathic physician specializing in internal medicine. He has board certifications in internal medicine and nuclear medicine. In addition, he is certified in the sub-specialty of cardiology. Petitioner graduated from the Kirksville College of Osteopathic Medicine in Kirksville, Missouri in 1962. He has been practicing as an osteopathic internist in Florida since 1966, the year he came to the state after completing his residency at Brentwood Hospital in Cleveland, Ohio. Petitioner's Practice Petitioner's practice is now, and has been at all times material to instant case, located in Miami-Dade County, Florida. Petitioner currently practices at 9765 Southwest 184th Street in Miami Florida. Among Petitioner's current patients are Ira Hershman, D.O., a retired osteopathic physician who, as noted above, testified as a medical expert on Petitioner's behalf in this case, and Dr. Hershman's wife. Dr. Hershman's "career as an active doctor ended in 1997." Dr. Hershman was, and still is, board-certified in family practice medicine. Unlike Petitioner, at no time has he been board-certified in internal medicine. When he was in active practice and needed to consult with an internist, he "utilized [Petitioner's] services."12 From the "mid '60s through the '90s," Dr. Hershman and Petitioner were "on the staff of hospitals" together. They are, and have been over the years, "friends." Furthermore, their "families know each other" and socialize. During the period from March 1, 1996, through March 17, 1998 (Audit Period), Petitioner rendered "primary care" services at 17615 Southwest 97th Avenue, Miami, Florida, in a 30,000 square foot facility known as the Suburban Medical Center (Facility), which he owned and operated. A significant number of Medicaid patients were served at the Facility. Other physicians, hired by Petitioner, saw and otherwise provided services to Petitioner's patients at the Facility. Petitioner considered these physicians, who included Drs. Katzeff and Lubin, to be "independent contractors." On the premises of the Facility, Petitioner had "sophisticated equipment," not typically found in a "primary care" setting, available to perform various diagnostic tests,13 as well as a room equipped with items for urgent care that "very few" primary care physicians have. Petitioner used Dr. Key as a "consultant in radiology" to provide him with the "official reading" of x-rays, CAT scans, mammographies, and other imaging tests done at the Facility. The Provider Agreements During the Audit Period, Petitioner was authorized to provide physician services to eligible Medicaid patients. Petitioner provided such services pursuant to two provider agreements. The first agreement was a Non-Institutional Professional and Technical Medicaid Provider Agreement (First Provider Agreement) that Petitioner had entered into with the Department of Health and Rehabilitative Services, AHCA's predecessor, in 1983.14 The First Provider Agreement contained the following provisions, among others: * * * The provider agrees to keep such records as are necessary to fully disclose the extent of services provided to individuals receiving assistance under the State Plan and agrees to furnish the State Agency upon request such information regarding any payments claimed for providing these services. Access to these pertinent records and facilities by authorized Medicaid Program representatives will be permitted upon a reasonable request. The provider agrees that claims submitted must be for services rendered to eligible recipients of the Florida Medicaid Program and that payment by the program for services rendered will be based on the payment methodology in the applicable Administrative Rule. The Provider also agrees to submit requests for payment in accordance with program policies. * * * Payment by the State agency shall constitute full payment for services rendered to recipients under the Medicaid program except in specific programs when co- insurance is required from the recipient. The provider and the Department agree to abide by the provisions of the Florida Administrative Rules, Florida Statutes, policies, procedures, manuals of the Florida Medicaid Program and Federal laws and regulations. * * * The second agreement was a Medicaid Provider Agreement (Second Provider Agreement) that Petitioner had entered into with AHCA in October of 1996. The Second Provider Agreement contained the following provisions, among others: The Provider agrees to participate in the Florida Medicaid program under the following terms and conditions: * * * Quality of Services. The provider agrees to provide medically necessary services or goods of not less than the scope and quality it provides to the general public. The provider agrees that services or goods billed to the Medicaid program must be medically necessary, of a quality comparable to those furnished by the provider's peers, and within the parameters permitted by the provider's license or certification. The provider further agrees to bill only for the services performed within the specialty or specialties designated in the provider application on file with the Agency. The services or goods must have been actually provided to eligible Medicaid recipients by the provider prior to submitting the claim. Compliance. The provider agrees to comply with all local, state and federal laws, rules, regulations, licensure laws, Medicaid bulletins, manuals, handbooks and Statements of Policy as they my be amended from time to time. Term and signatures. The parties agree that this is a voluntary agreement between the Agency and the provider, in which the provider agrees to furnish services or goods to Medicaid recipients. This provider agreement shall become effective the date the provider's Florida Medicaid Enrollment Application is received by the state or its fiscal agent. It shall remain in effect until July 1, 1999, unless otherwise terminated. This agreement shall be renewable only by mutual consent. The provider understands and agrees that no Agency signature is required to make this Agreement valid and enforceable. Provider Responsibilities. The Medicaid provider shall: * * * (b) Keep and maintain in a systematic and orderly manner all medical and Medicaid related records as the Agency may require and as it determines necessary; make available for state and federal audits for five years, complete and accurate medical, business, and fiscal records that fully justify and disclose the extent of the goods and services rendered and billings made under the Medicaid. The provider agrees that only records made at the time the goods and services were provided will be admissible in evidence in any proceeding relating to the Medicaid program. * * * (d) Except as otherwise provided by law, the provider agrees to provide immediate access to authorized persons (including but not limited to state and federal employees, auditors and investigators) to all Medicaid- related information, which may be in the form of records, logs, documents, or computer files, and all other information pertaining to services or goods billed to the Medicaid program. This shall include access to all patient records and other provider information if the provider cannot easily separate records for Medicaid patients from other records. * * * (f) Within 90 days of receipt, refund any moneys received in error or in excess of the amount to which the provider is entitled from the Medicaid program. * * * Accept Medicaid payment as payment in full . . . . . . . . The provider shall be liable for all overpayments for any reason and pay to the Agency any fine or overpayment imposed by the Agency or a court of competent jurisdiction. Provider agrees to pay interest at 12% per annum on any fine or repayment amount that remains unpaid 30 days from the date of any final order requiring payment to the Agency. * * * Agency Responsibilities. The Agency: (a) Unless claims have been pended for medical review or investigation of suspected fraud or abuse, will make payment within 60 days at the established rate for medically necessary services or goods furnished to an eligible recipient by the provider upon receipt of a properly completed claim. . . . Termination and Equitable Relief. This agreement may be terminated, with or without cause, upon thirty (30) days written notice by either party. . . . * * * (19) Assignability. The provider number is the property of the Agency and the provider may not assign its rights or obligation under this number or this Agreement without the express written consent of the Agency. * * * THE PROVIDER AGREES THAT THIS AGREEMENT SHALL MERGE AND BECOME A PART OF THE PROVIDER APPLICATION . . . . The Provider Reenrollment Request form that Petitioner submitted (with which the Second Provider Agreement "merge[d]") reflected that the "provider['s] name" was "Minkes, Jules G." At no time did Petitioner enroll in the Medicaid program as part of a group practice (consisting of two or more physicians).15 He was enrolled only as an individual provider, and he used his individual provider number (0466301-00) to bill the Medicaid program. All of the Medicaid claims that are the subject of the instant controversy were billed by Petitioner under his individual provider number. Manual and Handbook Provisions Among the "manuals" and "handbooks" Petitioner was required to "abide by" and "comply with" during the Audit Period pursuant to the First and Second Provider Agreements were the Medicaid Provider Reimbursement Handbook, HCFA-1500 (MPR Handbook) and the Physician Coverage and Limitations Handbook (PCL Handbook). Medical Necessity The PCL Handbook provided that the Medicaid program would reimburse for services "determined [to be] medically necessary" and not duplicative of another provider's service, and it went on to state as follows: In addition, the services must meet the following criteria: the services must be individualized, specific, consistent with symptoms or confirmed diagnosis of the illness or injury under treatment, and not in excess of the recipient's needs; the services cannot be experimental or investigational; the services must reflect 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; and the service must be 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 services medically necessary or a covered services. Note See Appendix D, Glossary, in the Medicaid Provider Reimbursement Handbook, HCFA-1500 and EPSDT 224, for the definition of medically necessary The term "medically necessary" was defined in Appendix D of the MPR Handbook as follows: Medically Necessary or Medical Necessity Means that the medical or allied care, goods, or services furnished or ordered must: Meet the following conditions: Be necessary to protect life, to prevent significant illness or significant disability, or to alleviate severe pain; Be individualized specific, and consistent with symptoms or confirmed diagnosis of the illness or injury under treatment, and not in excess of the patient's needs; Be consistent with generally accepted professional medical standards as determined by the Medicaid program, and not experimental or investigational; Be reflective of the level of service that can be safely furnished, and for which no equally effective and more conservative or less costly treatment is available statewide; and Be furnished in a manner not primarily intended for the convenience of the recipient, the recipient's caretaker, or the provider. "Medically necessary" or "medical necessity" for inpatient hospital services requires that those services furnished in a hospital on an inpatient basis could not, consistent with the provisions of appropriate medical care, be effectively furnished more economically on an outpatient basis or in an inpatient facility of a different type. The fact that a provider has prescribed, recommended, or approved medical or allied care, goods, or services does not, in itself, make such care, goods or services medically necessary or a medical necessity or a covered service. Documentation Requirements The MPR Handbook required that: "medical records . . . state the necessity for and the extent of services provided"16; and the provider "retain all medical, fiscal, professional, and business records on all services provided to a Medicaid recipient" for "at least five years from the date of service." The handbook further provided that "payments for services that lack[ed] required documentation" would be recouped. Physician Supervision The PCL Handbook provided: Delivery of all services must be done by or under the personal supervision of the physician. Personal supervision means the physician: is in the building when the services are rendered, and signs and dates the medical record within 24 hours of providing the service. Enrollment Requirements The PCL Handbook and the MPR Handbook both mandated that two or more physicians practicing together as a group enroll in the Medicaid program as a "provider group" and that each member of the group enroll in the program as an individual provider. Under the provisions of the MPR Handbook, an "individual provider" was required to "report when the provider bec[ame] a member of a provider group or [was] no longer a member of a provider group." Coding Chapter 3 of the PCL Handbook "describe[d] the procedure codes for the services reimbursable by Medicaid that [had to be] used by physicians providing services to eligible recipients." As explained on the first page of this chapter of the handbook: The procedure codes listed in this chapter [were] Health Care Financing Administration Common Procedure Coding System (HCPCS) Levels 1, 2 and 3. These [were] based on the Physician[]s['] Current Procedural Terminology (CPT) book. The CPT include[d] HCPCS descriptive terms and numeric identifying codes and modifiers for reporting services and procedures. . . . The Physicians' Current Procedural Terminology At all times material to the instant case, the American Medical Association's Physicians' Current Procedural Terminology (or the "CPT") referred to in Chapter 3 of the PCL Handbook contained an "[i]ntroduction," which read, in pertinent part, as follows: Physicians' Current Procedural Terminology (CPT) is a systematic listing and coding of procedures and services performed by physicians. Each procedure is identified by a five digit code. . . . Inclusion of a descriptor and its associated specific five-digit identifying code number in CPT is generally based upon the procedure being consistent with contemporary medical practice and being performed by many physicians in clinical practice in multiple locations. . . . * * * Section Numbers and Their Sequences Evaluation and Management 99201 to 99499 * * * Surgery 10040 to 69979 Radiology (Including Nuclear Medicine and Diagnostic Ultrasound) 70010 to 79999 * * * At all times material to the instant case, the CPT referred to in Chapter 3 of the PCL Handbook had "[e]valuation and [m]anagement (E/M) [s]ervice [g]uidelines" (E/M Guidelines). It was noted on the first page of the E/M Guidelines that: The E/M section is divided into broad categories such as office visits, hospital visits, and consultations. Most of the categories are further divided into two or more subcategories of E/M services. For example, there are two subcategories of office visits (new patient and established patient) and there are two subcategories of hospital visits (initial and subsequent). The subcategories of the E/M services are further classified into levels of E/M services that are identified by specific codes. . . . "New and [e]stablished patient[s]" were described in the E/M Guidelines as follows: A new patient is one who has not received any professional services from the physician or another physician of the same specialty who belongs to the same group practice, within the past three years. An established patient is one who has received professional services from the physician or another physician of the same specialty who belongs to the same group practice, within the past three years. The concept of "[l]evels of E/M [s]ervices" was described, in pertinent part, as follows in the E/M Guidelines: Within each category or subcategory of E/M service, there are three to five levels of E/M services available for reporting purposes. . . . The levels of E/M services include examinations, evaluations, treatments, conferences with or concerning patients, preventative pediatric and adult health supervision, and similar medical services, such as the determination of the need and/or location for appropriate care. Medical screening includes the history, examination, and medical decision-making required to determine the need and/or location for appropriate care and treatment of the patient . . . . The levels of E/M services encompass the wide variations in skill, effort, time, responsibility and medical knowledge required for the prevention or diagnosis and treatment of illness or injury and the promotion of optimal health. Each level of E/M services may be used by all physicians. 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. These components are: history; examination; medical decision making; counseling; coordination of care; nature of presenting problem; and time. The first three or these components (history, examination and medical decision making) are considered the key components in selecting a level of E/M services. . . . The next three components (counseling, coordination of care, and the nature of the presenting problem) are considered contributory factors in the majority of encounters. . . . * * * Time . . . . The inclusion of time as an explicit factor beginning in CPT 1992 is done to assist physicians in selecting the most appropriate level of E/M services. It should be recognized that the specific times expressed in the visit code descriptors are averages, and therefore represent a range of times which may be higher or lower depending on actual clinical circumstances. * * * According to the E/M Guidelines, "[l]isted services [could] be modified under certain circumstances," with the "modifying circumstances" being "identified by the addition of [an] appropriate modifier code . . . ." Among the available "modifier codes" was one for "[p]rolonged [e]valuation and [m]anagement [s]ervices," which was explained in the E/M Guidelines as follows: When the face-to-face or floor/unit service(s) provided is prolonged or otherwise greater than that usually required for the highest level of E/M service within a given category, it may be identified by adding the modifier "-21" to the E/M code number or by use of the separate five digit modifier code 09921. A report may also be appropriate. The E/M Guidelines contained "[i]nstructions for [s]electing a [l]evel of E/M [s]ervice," which read, in pertinent part, as follows: * * * Review of Level of E/M Service Descriptors and Examples in the Selected Category or Subcategory 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. These components are: history; examination; medical decision making; counseling; coordination of care; nature of presenting problem; and time. The first three or these components (i.e., history, examination and medical decision making) are considered the key components in selecting a level of E/M services. An exception to this rule is in the case of visits which consist predominantly of counseling or coordination of care. . . . The nature of the presenting problem and time are provided in some levels to assist the physician in determining the appropriate level of E/M service. Determine the Extent of History Obtained The extent of history is dependent upon critical judgment and on the nature of the presenting problem(s). The levels of E/M services recognize four types of history that are defined as followed: Problem Focused: chief complaint; brief history of present illness or problem. Expanded Problem Focused: chief complaint; brief history of present illness; problem pertinent system review. Detailed: chief complaint; extended history of present illness; problem pertinent system review extended to include a review of a limited number of additional systems; pertinent past, family and/or social history directly related to the patient's problems. Comprehensive: chief complaint; extended history of present illness; review of systems which is directly related to the problem(s) identified in the history of the present illness plus a review of all additional body systems; complete past, family and social history. * * * Determine the Extent of Examination Performed The extent of the examination performed is dependent on clinical judgment and on the nature of the presenting problem(s). The levels of E/M services recognize four types of examinations that are defined as follows: Problem Focused: a limited examination of the affected body area or organ system. Expanded Problem Focused: a limited examination of the affected body area or organ system and other symptomatic or related organ system(s). Detailed: an extended examination of the affected body area(s) and other symptomatic or related organ system(s). Comprehensive: a general multi-system examination or a complete examination of a single organ system. . . . For the purposes of these CPT definitions, the following body areas are recognized Head, including the face Neck Chest, including breasts and axilla Abdomen Genitalia, groin, buttocks Back Each extremity For the purposes of these CPT definitions, the following organ systems are recognized Eyes Ears, Nose, Mouth and Throat Cardiovascular Respiratory Gastrointestinal Genitourinary Musculoskeletal Skin Neurologic Psychiatric Hematologic/Lymphatic/Immunologic Determine the Complexity of Medical Decision Making Medical decision making refers to the complexity of establishing a diagnosis and/or selecting a management option as measured by: the number of possible diagnoses and/or the number of management options that must be considered; the amount and/or complexity of medical records, diagnostic tests, and/or other information that must be obtained, reviewed and analyzed; and -The risk of significant complications, morbidity and/or mortality, as well as comorbidities, associated with the patient's presenting problem(s), the diagnostic procedure(s) and/or the possible management options. Four types of medical decision making are recognized: straightforward; low complexity; moderate complexity; and high complexity. To qualify for a given type of decision making, two of the three elements [shown] below must be met or exceeded. Type of Decision Making: straightforward; Number of Diagnoses or Management Options: minimal; Amount and/or Complexity of Data to be Reviewed: minimal or none; Risk of Complications and/or Morbidity or Mortality: minimal Type of Decision Making: low complexity; Number of Diagnoses or Management Options: limited; Amount and/or Complexity of Data to be Reviewed: limited; Risk of Complications and/or Morbidity or Mortality: low Type of Decision making: moderate complexity; Number of Diagnoses or Management Options: multiple; Amount and/or Complexity of Data to be Reviewed: moderate; Risk of Complications and/or Morbidity or Mortality: moderate Type of Decision Making: High complexity; Number of Diagnoses or Management Options: extensive; Amount and/or Complexity of Data to be Reviewed: extensive; Risk of Complications and/or Morbidity or Mortality: high Select the Appropriate Level of E/M Services Based on the Following For the following categories/ subcategories, all of the key components, i.e., history, examination, and medical decision making, must meet or exceed the stated requirements to qualify for a particular level of E/M service: office, new patient; . . . For the following categories/ subcategories, two of the three key components, (i.e., history, examination, and medical decision making) must meet or exceed the stated requirements to qualify for a particular level of E/M service: office, established patient; . . . In the case where counseling and/or coordination of care dominates (more than 50%) of the physician/patient and/or family encounter (face-to-face time in the office . . . ), then time is considered the key or controlling factor to qualify for a particular level of E/M services. The extent of counseling and/or coordination of care must be documented in the medical record. At all times material to the instant case, the CPT referred to in Chapter 3 of the PCL Handbook contained the following codes and code descriptions for "E/M" office and other outpatient services: New Patient 99201 Office or other outpatient visit for the evaluation and management of a new patient, which requires these three 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 are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are self- limited or minor. Physicians typically spend 10 minutes face-to-face with the patient and/or family. * * * 99202 Office or other outpatient visit for the evaluation and management of a new patient which requires these three key components: an expanded problem focused history; an expanded problem focused examination; and straightforward medical decision making. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of low to moderate severity. Physicians typically spend 20 minutes face-to-face with the patient and/or family. * * * 99203 Office or other outpatient visit for the evaluation and management of a new patient which requires these three key components: a detailed history; a detailed examination; and medical decision making of low complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of moderate severity. Physicians typically spend 30 minutes face-to-face with the patient and/or family. * * * 99204 Office or other outpatient visit for the evaluation and management of a new patient which requires these three key components: a comprehensive history; a comprehensive examination; and medical decision making of moderate complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of moderate to high severity. Physicians typically spend 45 minutes face-to-face with the patient and/or family. * * * 99205 Office or other outpatient visit for the evaluation and management of a new patient which requires these three 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 are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are of moderate to high severity. Physicians typically spend 60 minutes face-to-face with the patient and/or family. * * * Established Patient 99211 Office or other outpatient visit for the evaluation and management of an established patient that may or may not require the presence of a physician. Usually, the presenting problem(s) are minimal. Typically, 5 minutes are spent performing or supervising these services. * * * 99212 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: a problem focused history; a problem focused examination; straightforward medical decision making. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are self- limited or minor. Physicians typically spend 10 minutes face-to-face with the patient and/or family. * * * 99213 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: an expanded problem focused history; an expanded problem focused examination; medical decision making of low complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of low to moderate severity. Physicians typically spend 15 minutes face-to-face with the patient and/or family. * * * 99214 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: a detailed history; a detailed examination; medical decision making of moderate complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of moderate to high severity. Physicians typically spend 25 minutes face-to-face with the patient and/or family. * * * 99215 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: a comprehensive history; a comprehensive examination; medical decision making of high complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of moderate to high severity. Physicians typically spend 40 minutes face-to-face with the patient and/or family. It is a rarity for an osteopathic internist to provide office services at the 99205 or 99215 "E/M" code level. Generally speaking, office services at the 99203 and 99213 "E/M" code levels are the most common types of office services that osteopathic internists provide. Typically, osteopathic internists provide a "higher percentage" of office services at the 99204 and 99214 "E/M" code levels than at the 99202 and 99212 "E/M" code levels.17 The experience or expertise of the provider is not a factor to be taken into consideration in determining the appropriate "E/M" code level. The Audit and Aftermath Commencing in 1998, AHCA conducted an audit of paid Medicaid claims submitted by Petitioner for services assertedly rendered from March 1, 1996, through March 17, 1998. The audit was undertaken because it had been determined, from a review of the Medicaid provider database maintained by AHCA, that Petitioner had billed for more "chest x-rays and various radiology [tests]" than the "average provider."18 Petitioner had submitted 2,571 Medicaid claims for services assertedly rendered during the Audit Period to 314 patients, for which he had received payments totaling $134,597.58. From the 314 Medicaid patients to whom Petitioner had assertedly provided services during the Audit Period, AHCA randomly selected, by computer, a "cluster sample" of 42, and asked Petitioner to produce the medical records he had on file for these 42 patients. Petitioner had submitted a total of 386 claims for services assertedly rendered to the 42 patients in the "cluster sample" during the Audit Period and had received a total of $20,823.33 in Medicaid payments for these services. Each of these claims was reviewed by AHCA to determine whether it was supported by information contained in the medical records produced by Petitioner in response to AHCA's medical records request. Based on a preliminary review conducted by AHCA staff and a physician consultant (John Sullenberger, M.D.), AHCA determined that Petitioner had been overpaid a total $98,545.98 for the Medicaid claims he had submitted for services assertedly rendered during the Audit Period. After having been advised of this preliminary determination, Petitioner sent additional documentation to AHCA. The additional documentation was reviewed by AHCA staff and Dr. Sullenberger. Following this review, the overpayment was recalculated by AHCA and determined to be $94,208.27. As noted above, by letter dated June 29, 1999, Petitioner was notified of this recalculation and advised of his right to request an administrative hearing on the matter. After Petitioner requested such a hearing, in or around March of 2000, as a result of the Legislature's enactment of the "peer review" provisions of Section 409.9131, Florida Statutes, which became effective July 1, 1999, AHCA retained the services of Richard Thacker, D.O., an osteopathic physician, like Petitioner, Board-certified in internal medicine. Dr. Thacker received his medical education at Nova Southeastern University, College of Osteopathic Medicine, from which he graduated in 1992. After graduation, he obtained "internal medicine training" for three years in the internship and residency program at Delaware Valley Medical Center in Langhorne, Pennsylvania. In 1995, he returned to Florida, and has been in "active practice" as an osteopathic physician in the state since his return. His experience includes "working in Medicaid clinics." He currently practices with the Medical Group of North Florida, a Tallahassee "multi-specialty group with primary emphasis on general internal medicine." Aside from his practice, among other things, he serves as: the chairman of the Tallahassee Community Hospital's Department of Medicine; the Medical Director of Outpatient Services at Health South Rehabilitation Hospital of Tallahassee; the Medical Director of Long Term Care at Capital Health Care Center; the Medical Director of American Home Patient Home Health; and an Associate Professor for Clinical Instruction at Florida State University College of Medicine. At AHCA's request, Dr. Thacker reviewed all of the records that Petitioner had provided regarding the 42 patients in the "cluster sample" (including those records that had been furnished after June 29, 1999)19 to determine whether there was documentation to support the Medicaid claims relating to these patients that Petitioner had submitted for services assertedly rendered during the Audit Period.20 On or about May 15, 2000, after Dr. Thacker completed his review, the overpayment was again recalculated by AHCA and determined to be $84,486.25. On or about June 12, 2003, following a meeting between Dr. Thacker and Petitioner held the afternoon of the first day of hearing in this case, AHCA made another downward revision in its overpayment calculation, this time to $70,629.68.21 AHCA has made no additional revisions to its overpayment calculation in the instant case. It maintains that Petitioner received $70,629.68 in Medicaid overpayments for services claimed to have been provided during the Audit Period. Respondent's Exhibit 25 contains spreadsheets prepared by AHCA which identify all of the alleged overpaid claims (of the 386 reviewed) and, for each such claim, specify the amount of the alleged overpayment and AHCA's reason(s) for determining that an overpayment was made. Where AHCA alleges "upcoding" (that is, billing for a higher (and more costly) "level of E/M service" than Petitioner's documentation reveals was actually provided) or "inappropriate cod[ing]" of a surgical or radiological procedure, and no other billing deficiency is asserted, the procedure code deemed appropriate by AHCA, based on the documentation furnished by Petitioner, is also specified. The spreadsheets that comprise Respondent's Exhibit 25 accurately identify (as "not documented") those claims (of the 386 reviewed) that were for services not shown, by the documentation Petitioner has furnished AHCA, to have been actually provided (by anyone). The monies Petitioner received for these claimed, but undocumented, services constitute overpayments. The spreadsheets that comprise Respondent's Exhibit 25 accurately identify (through entries made in the "not group member" columns thereof) those claims (of the 386 reviewed) that were for services not shown, by the documentation Petitioner has furnished AHCA, to have been provided by Petitioner or under his "personal supervision," as that term was described in the materials Petitioner was required to "abide by" and "comply with" during the Audit Period pursuant to the First and Second Provider Agreements. The monies Petitioner received for these claimed services not documented as having been provided by him or under his "personal supervision" as required by the First and Second Provider Agreements constitute overpayments. The spreadsheets that comprise Respondent's Exhibit 25 accurately identify those claims (of the 386 reviewed) that were for services not shown, by the documentation Petitioner has furnished AHCA, to have been "medically necessary," as that term was used in the materials Petitioner was required to "abide by" and "comply with" during the Audit Period pursuant to the First and Second Provider Agreements. The monies Petitioner received for these claimed services not documented as having been "medically necessary" as required by the First and Second Provider Agreements constitute overpayments. The spreadsheets that comprise Respondent's Exhibit 25 accurately identify (through entries made in the "levels of care" columns thereof) those claims (of the 386 reviewed) that were "upcoded."22 The documentation Petitioner has furnished AHCA supports "adjust[ed]" "levels of E/M service" no higher than those indicated in the "adjust" columns of the spreadsheets. For each "upcoded" claim, Petitioner was overpaid in an amount equal to what he received minus what he would have received had he billed at the "adjust[ed]" level specified on Respondent's Exhibit 25. The spreadsheets that comprise Respondent's Exhibit 25 accurately identify those claims for radiological services that, following the meeting between Dr. Thacker and Petitioner, it was agreed were "inappropriate[ly] cod[ed]," and they further reflect the correct codes and reimbursement amounts for these "inappropriate[ly] cod[ed]" services. The difference between the amount Petitioner was reimbursed for each such "inappropriate[ly] cod[ed]" service and the correct reimbursement amount set forth on Respondent's Exhibit 25 represents an overpayment. As Respondent's Exhibit 25 indicates, the office services Petitioner claimed he provided Patient #79 on October 20, 1997, for which he billed Medicaid at the 99214 "E/M" code level, as well as the office services he claimed he provided Patient #203 on February 16, 1998, for which he billed Medicaid at the 99215 "E/M" code level, were wholly non- reimbursable inasmuch as the documentation concerning these office visits does not reveal that, in either case, the patient received services justifying reimbursement at even the lowest "E/M" code level (99211) for an established patient. As Respondent's Exhibit 25 also indicates, Petitioner's claim for the January 7, 1998, excision of a benign lesion from Patient #264's left ankle was "inappropriate[ly] coded." Given what the documentation Petitioner has furnished AHCA reveals about the size of the lesion and what needed to be done to remove it and close the resulting wound, in billing Medicaid for this service, Petitioner should have used the 11401 procedure code, instead of the 11404 procedure code, which has a higher reimbursement rate. In making its final overpayment calculation, AHCA determined, correctly, that Petitioner was overpaid a total of $11,913.23, or $30.86329051 per claim, for the 386 claims he had submitted seeking reimbursement from Medicaid for services assertedly rendered during the Audit Period to the 42 patients in the "cluster sample." Using a statistical formula that Petitioner has admitted is valid, AHCA extended these results to the total "population" of 2,571 Medicaid claims that Petitioner had submitted for services assertedly rendered during the Audit Period, and it correctly calculated that Petitioner had been overpaid a total of $70,629.68. Simple Mistake or Fraud? There has been no allegation made, nor proof submitted, that any of the overbillings referenced above were the product of anything other than simple mistake or inadvertence on Petitioner's part.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that AHCA enter a final order finding that Petitioner received $70,629.68 in Medicaid overpayments for paid claims covering the period from March 1, 1996, through March 17, 1998, and requiring Petitioner to repay this amount to AHCA. DONE AND ENTERED this 28th day of January, 2004, in Tallahassee, Leon County, Florida. S STUART M. LERNER 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 28th day of January, 2004.
The Issue Whether Respondent engaged in sanctionable conduct in violation of Medicaid laws, as alleged in the April 9, 2012, sanction letters the Agency for Health Care Administration (ACHA) sent to Respondent in the above-styled cases, and, if so, what sanction(s) should be imposed.
Findings Of Fact AHCA is the state agency charged with administering and overseeing the Medicaid program in Florida. Housed within AHCA is the Bureau of Medicaid Program Integrity (MPI). Among MPI's responsibilities is to conduct audits and investigations to ensure that the state's Medicaid providers are in compliance with programmatic requirements. At all times material to the instant cases, Respondent was enrolled in the Florida Medicaid program under two separate provider numbers (Provider No. 679849796, as a provider of Developmental Disabilities Home and Community-Based Medicaid Waiver services, and Provider No. 142150600, as a provider of assistive care services) and subject to the terms of Medicaid Provider Agreements,3/ which contained the following provisions, among others: (5) Provider Responsibilities: The Medicaid provider shall: * * * (b) Keep, maintain, and make available in a systematic and orderly manner all medical and Medicaid-related records as AHCA requires for a period of at least five (5) years. * * * (d) Send, at the provider's expense, legible copies of all Medicaid-related information to authorized state and federal employees, including their agents. The provider shall give state and federal employees access to all Medicaid patient records and to other information that cannot be separated from Medicaid-related records; and, in connection with Provider No. 679849796, it was also subject to the terms of a Medicaid Waiver Services Agreement with the Florida Agency for Persons with Disabilities (APD),4/ in which it had agreed, among other things, to do the following: To permit persons duly authorized by APD, the Agency for Health Care Administration (AHCA), or representatives of either, to monitor, audit, inspect, and investigate any recipient records, payroll and expenditure records, (including electronic storage media), papers, documents, facilities, goods and services of the Provider, which are relevant to this Agreement . . . . * * * Upon demand, and at no additional cost to the APD, AHCA, or their authorized representatives, the Provider will facilitate the duplication and transfer of any records or documents (including electronic storage media), during the required retention period . . . . At all times material to DOAH Case No. 12-1664MPI Respondent, as an enrolled Medicaid provider of Developmental Disabilities Home and Community-Based Medicaid Waiver services, was bound by the following provisions of the Developmental Disabilities Waiver Services Coverage and Limitations Handbook dealing with employee training and recordkeeping requirements, which handbook provisions were incorporated by reference (along with the other provisions of the handbook) in Florida Administrative Code 59G-13.083: Companion Provider Requirements * * * Training Requirements Proof of training in the areas of Cardiopulmonary Resuscitation (CPR), HIV/AIDS and infection control is required within 30 days of initially providing companion services. Proof of annual or required updated training shall be maintained on file for review. The provider is responsible for all training requirements outlined in the Core Assurances. Note: Refer to the Core Assurances in Appendix A for the provider training requirements. . . . * * * Appendix A: Core Assurances for Providers of Developmental Disabilities Home and Community-Based Waiver Services Program * * * 2.1 Required Training The provider and its employees will ensure they receive the specific training required to successfully serve each recipient including the following topics: * * * H. All direct service providers hired after 90 days from the effective date of this rule are required to complete the Agency for Persons with Disabilities developed Zero Tolerance Training course prior to rendering direct care services (as a pre-service training activity). Said training may only be completed via APD's web-based instruction or classroom-led instruction (using APD's approved classroom curriculum presented either by APD staff or an individual who has been trained and approved by APD to conduct such classroom trainings). In addition, all direct service providers shall be required to complete the APD developed Zero Tolerance training course at least once every three years. The provider shall maintain on file for review, adequate and complete documentation to verify its participation, and the participation of its employees, in the required training sessions. The documentation for the above listed training shall, at a minimum, include the training topic(s), length of training session, date and location of training, name and signature of trainer, name and signature of person(s) in attendance. Proof of training shall be on file and available for monitoring and review. At all times material to DOAH Case No. 12-1841MPI, Respondent, as an enrolled Medicaid provider of assistive care services, was bound by the following provisions of the Assistive Care Services Coverage and Limitations Handbook dealing with health assessments, which handbook provisions were incorporated by reference (along with the other provisions of the handbook) in Florida Administrative Code Rule 59G-4.025: Recipients receiving Assistive Care Services must have a complete assessment at least annually by a physician or other licensed practitioner of the healing arts (Physician Assistant, Advanced Registered Nurse Practitioner, Registered Nurse) or sooner if a significant change in the recipient's condition occurs (see below for a definition of a significant change). An annual assessment must be completed no more than one year plus fifteen days after the last assessment. An assessment triggered by a significant change must be completed no more than fifteen days after the significant change. -The assessment for a resident of a ALF or AFCH must be completed by a physician or other licensed practitioner of the healing arts (Physician Assistant, Advanced Registered Nurse Practitioner, Registered Nurse) acting within the scope of practice under state law, physician assistant or advanced registered practitioner. -The assessment for a resident of a RTF must be completed by a physician or licensed mental health professional. The assessment must document the need for at least two of the four ACS components. The assessment for ALF residents must be recorded on the Resident Health Assessment for Assisted Living Facilities, AHCA Form 1823. At all times material to both DOAH Case No. 12-1664MPI and DOAH Case No. 12-1841MPI, Respondent was also bound by the following provisions of the Florida Medicaid Provider General Handbook, which were incorporated by reference in Florida Administrative Code Rule 59G-5.020 and applied to all enrolled Medicaid providers, including providers of Developmental Disabilities Home and Community-Based Medicaid Waiver services and providers of assistive care services: Record Keeping Requirement Medicaid requires that the provider retain all business records as defined in 59G- 1.010(30) F.A.C., medical-related records as defined in 59G-1.010(154) F.A.C., and medical records as defined in 59G-1.010(160) F.A.C. on all services provided to a Medicaid recipient.[5/] Records can be kept on paper, magnetic material, film, or other media including electronic storage, except as otherwise required by law or Medicaid requirements. In order to qualify as a basis for reimbursement, the records must be signed and dated at the time of service, or otherwise attested to as appropriate to the media. Rubber stamped signatures must be initialed. The records must be accessible, legible and comprehensible. * * * Record Retention Records must be retained for a period of at least five years from the date of service. * * * Right to Review Records Authorized state and federal agencies and their authorized representatives may audit or examine a provider's or facility's records. This examination includes all records that the agency finds necessary to determine whether Medicaid payment amounts were or are due. This requirement applies to the provider's records and records for which the provider is the custodian. The provider must give authorized state and federal agencies and their authorized representatives access to all Medicaid patient records and to other information that cannot be separated from Medicaid- related records. The provider must send, at his expense, legible copies of all Medicaid-related information to the authorized state and federal agencies and their authorized representatives upon request of AHCA. At the time of the request, all records must be provided regardless of the media format on which the original records are retained by the provider. All medical records must be reproduced onto paper copies. * * * Incomplete Records Providers who are not in compliance with the Medicaid documentation and record retention policies described in this chapter may be subject to administrative sanctions and recoupment of Medicaid payments. Medicaid payments for services that lack required documentation or appropriate signatures will be recouped. Note: See Chapter 5 in this handbook for information on administrative sanctions and Medicaid payment recoupment The foregoing contractual and handbook provisions supplemented section 409.913(9), Florida Statutes, which then provided (as it still does) as follows: A Medicaid provider shall retain medical, professional, financial, and business records pertaining to services and goods furnished to a Medicaid recipient and billed to Medicaid for a period of 5 years after the date of furnishing such services or goods. The agency may investigate, review, or analyze such records, which must be made available during normal business hours. However, 24-hour notice must be provided if patient treatment would be disrupted. The provider is responsible for furnishing to the agency, and keeping the agency informed of the location of, the provider's Medicaid- related records. The authority of the agency to obtain Medicaid-related records from a provider is neither curtailed nor limited during a period of litigation between the agency and the provider. On or about December 6, 2011, MPI investigators visited Respondent's facility to review Respondent's Medicaid-related records, but left before completing their review. Approximately a month later, MPI sent Respondent a letter, dated January 5, 2012, concerning claims that Respondent had filed under its Provider No. 679849796 as a provider of Developmental Disabilities Home and Community-Based Medicaid Waiver services (January 5 Letter). The letter read as follows: The Agency for Health Care Administration (Agency), Office of Inspector General, Bureau of Medicaid Program Integrity is in the process of completing a review of claims billed to Medicaid during the period June 01, 2011, through December 01, 2011, to determine whether the claims were billed and paid in accordance with Medicaid policy. Pursuant to Section 409.913, Florida Statutes (F.S.), this is official notice that the Agency requests the documentation for services paid by the Florida Medicaid provider to the above provider number [679849796]. The Medicaid-related records to substantiate billing for the [four] recipients identified on the enclosed printout are due within fifteen (15) calendar days of your receipt of this notification. Please submit the documentation and the attached Certification of Completeness of Records to the Agency within this timeframe, or other mutually agreed upon timeframe. Correspondence and requested records should be sent to the following address: Victor Rivera, Investigator Agency for Health Care Administration Medicaid Program Integrity 400 West Robinson Street, Suite S309 South Tower, Hurston Building Orlando, Florida 32801 In accordance with Section 409.913, F.S., and Rule 59G-9.070, Florida Administrative Code (F.A.C.), the Agency shall apply sanctions for violations of federal and state laws, including Medicaid policy. Pursuant to the aforementioned provisions, failure to provide all Medicaid-related records in compliance with this request will result in the application of sanctions, which include, but are not limited to, fines, suspension and termination. The Medicaid-related records associated with this review should be retained until [the review is] completed. If you have any questions, please contact Victor Rivera, Investigator, at (407)420- 2524. The Certification of Completeness of Records form enclosed with the letter was to be completed by the provider's "official custodian of records," and it contained the following verification and certification: I hereby verify that I have searched the Medicaid-related records maintained by the Provider and have determined that the attached records consisting of (# of pages) are true and correct copies of the Medicaid- related records requested by the Agency for Health Care Administration, Office of the Inspector General, Bureau of Medicaid Program Integrity. I further certify that these are all of the Medicaid-related records that were made at or near the time that the services were rendered by, or from information transmitted by, the Provider; are kept in the course of the regularly conducted business of the Provider; and that it is the regular practice of the Provider to keep such records. Also accompanying the letter was a printout providing information concerning "documentation organization." Among other things, it advised that the "employee documentation" that needed to be submitted included "[c]opies of all required AHCA training certificates," and it contained the further advisement that "[f]ailure to follow the aforementioned guidelines and/or failure to provide the [sic] ALL of the requested documentation for ALL staff members who provided services to Medicaid Recipients during the predetermined audit period w[ould] result in the [a]application of sanctions," including "fines." The January 5 Letter and accompanying documents were received by Respondent on January 9, 2012. Ten days later, MPI sent Respondent a second letter, dated January 19, 2012 (January 19 Letter). This letter concerned claims that Respondent had filed under its Provider No. 142150600 as a provider of assistive care services, and it provided as follows: The Agency for Health Care Administration (Agency), Office of Inspector General, Bureau of Medicaid Program Integrity is in the process of completing a review of claims billed to Medicaid during the period January 1, 2011, through November 30, 2011, to determine whether the claims were billed and paid in accordance with Medicaid policy. Pursuant to Section 409.913, Florida Statutes (F.S.), this is official notice that the Agency requests the documentation for services paid by the Florida Medicaid provider to the above provider number [143150600]. The Medicaid-related records to substantiate billing for the [four] recipients identified on the enclosed printout are due within fifteen (15) calendar days of your receipt of this notification. Please submit copies of the Medicaid-related records and the attached Certification of Completeness of Records to the Agency within this timeframe, or other mutually agreed upon timeframe. Correspondence and requested records should be sent to the following address: Victor Rivera, Investigator Agency for Health Care Administration Medicaid Program Integrity 400 West Robinson Street, Suite 309 South Tower, Hurston Building Orlando, Florida 32801 In accordance with Section 409.913, F.S., and Rule 59G-9.070, Florida Administrative Code (F.A.C.), the Agency shall apply sanctions for violations of federal and state laws, including Medicaid policy. Pursuant to the aforementioned provisions, failure to provide all Medicaid-related records in compliance with this request will result in the application of sanctions, which include, but are not limited to, fines, suspension and termination. The Medicaid-related records associated with this review should be retained until [the review is] completed. If you have any questions, please contact Victor Rivera, Investigator, at (407)420- 2524. At the bottom of the "enclosed printout" referenced in the letter was the following cautionary advisement: Please refer to your Assistive Care Services handbook, July 2009, for information on the required documentation for recipient files. The Certification of Completeness of Records form enclosed with the letter was identical to the Certification of Completeness of Records form that had accompanied the January 5 Letter. The January 19 Letter and accompanying documents were received by Respondent on January 21, 2012. Respondent, through its owner/administrator Angel Cox, responded to the records requests made in the January 5 and January 19 Letters by providing MPI with copies of numerous documents, along with two completed, signed, and dated Certifications of Completeness of Records (one for each records request), on January 24, 2012.6/ Ms. Cox supplemented this response by faxing additional copies to MPI on February 7, 2012. Victor Rivera, the MPI investigator to whom Respondent had been directed to send its responses to MPI's January 5, 2012, and January 19, 2012, records requests, reviewed the documentation that Ms. Cox had submitted and determined that the following Medicaid-related records that Respondent had been requested to produce in the January 5 and January 19 Letters were missing (hereinafter referred to collectively as the "Further Required Documentation"): written proof that D. S., an employee of Respondent's who had helped deliver services for which Respondent had billed the Florida Medicaid program from June 1, 2011, through December 1, 2011, under its Developmental Disabilities Home and Community-Based Medicaid Waiver services provider number, had completed the infection control and zero tolerance training required by the Developmental Disabilities Waiver Services Coverage and Limitations Handbook; and the annual health assessments required by the Assistive Care Services Coverage and Limitations Handbook for the four recipients of the services for which Respondent had billed the Florida Medicaid program from January 1, 2011, through November 30, 2011, under its assistive care services provider number. At all times material to the instant cases, Respondent had the Further Required Documentation in its possession,7/ however, Ms. Cox had inadvertently failed to include these documents in the submissions she made (on behalf of Respondent) in response to MPI's January 5 and January 19 Letters. Ms. Cox first learned that the Further Required Documentation was missing during a telephone conversation she had with Mr. Rivera at the end of March 2012, when he advised her of the omission and told her that she needed to get these documents to him "as soon as possible."8/ On April 1 or 2, 2012, no more than three or four days after this telephone conversation, Ms. Cox provided Mr. Rivera, by fax, with copies of the following: a certificate of completion issued by APD to employee D. S. on April 28, 2010, for "Zero Tolerance Training"; a certificate of completion issued by All Metro Health Care to employee D. S. for "Infection Control Guidelines" training completed on February 12, 2011; and a completed March 2011 annual health assessment recorded on AHCA Form 1823 (2011 Health Assessment Form) for each of the four recipients identified in the printout accompanying the January 19 Letter. Respondent also had in its possession the previous year's completed AHCA Form 1823 (2010 Health Assessment Form) for each of these recipients, but Ms. Cox did not fax copies of these forms9/ to Mr. Rivera because she reasonably believed that Mr. Rivera had asked only for the 2011 Health Assessment Forms.10/ MPI tries to "work with the [Medicaid] providers." If a provider is asked by MPI to provide, "as soon as possible," a specified document or documents previously requested but not produced and the provider, in response to such a follow-up request, produces the document(s) in question within a matter of days, it is MPI's practice to not impose any sanctions on the provider and, instead, to "move on to the next case."11/ In the instant cases, however, in an unexplained departure from that practice, MPI chose to issue the April 9, 2012, sanction letters set out above. It is these sanction letters that frame the issues to be resolved in these cases.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Agency for Health Care Administration dismiss the allegations made against Respondent in the April 9, 2012, sanction letters issued in these cases and it not impose any sanctions against Respondent for the conduct alleged in these letters. DONE AND ENTERED this 21st day of February, 2013, in Tallahassee, Leon County, Florida. S STUART M. LERNER 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 21st day of February, 2013.
The Issue Whether the Respondents were overpaid by Medicaid for radiology and nuclear medicine services provided to Florida Medicaid patients. The Agency for Health Care Administration (AHCA, Agency or Petitioner) asserts that the Respondents, Lazaro Plasencia, M.D., and Ana M. Elosegui, M.D., billed Medicaid for procedures they did not perform in violation of Medicaid policy, the Florida Administrative Code, and Florida Statutes. The Respondents maintain that because of ambiguities in Medicaid policy regarding reimbursement protocols for the radiology services at issue, the Respondents mistakenly believed in good faith that under the applicable Medicaid regulations and guidelines, Medicaid would reimburse the "maximum" fee allowable under the relevant fee schedule. The Respondents acknowledge that the "professional component" of the radiology services at issue was provided by a third-party physician specialist. The Respondents further assert that they are entitled to, at the minimum, payment of the "technical component" of the medically necessary radiological services that they provided to Medicaid recipients. The Petitioner seeks reimbursement from Dr. Plasencia in the amount of $196,129.52 and $122,065.08 from Dr. Elosegui.
Findings Of Fact The Petitioner is the state agency charged with the responsibility of monitoring the Medicaid Program in Florida. At all times material to the allegations of DOAH Case No. 07-2195MPI, the Respondent, Dr. Plasencia, was a licensed medical doctor in good standing with the State of Florida, license #ME49315, and was also a Medicaid provider, #0448125-00. Similarly, at all times material to the allegations of DOAH Case No. 07-2462MPI, the Respondent, Dr. Elosegui, was a licensed medical doctor in good standing with the State of Florida, license #ME85963, and was also a Medicaid provider, #2654636-00. Drs. Elosegui and Plasencia practiced medicine together in a shared office space in Miami, Florida. The Respondents were not members of a "group practice." The Respondents were individual providers who billed Medicaid separately, using their individual Medicaid provider numbers. The doctors performed services for Medicaid recipients and submitted the charges for those services to Medicaid. Medicaid has a "pay and chase" policy of paying Medicaid claims as submitted by providers. Audits performed by the Agency then, after-the-fact, reconcile the amounts paid to providers with the amounts that were payable under the Medicaid guidelines and pertinent rules. If more is paid to the provider than allowable, a recoupment against the provider is sought. In these cases, the Respondents conducted (or supervised) various tests including "Radiological and Nuclear Medicine" services for Florida Medicaid patients in a shared office setting. The services at issue in these cases were billed under the CPT procedure codes of series 70000 and 90000. The Petitioner has not challenged any procedure at issue as not "medically necessary." Moreover, the Petitioner does not dispute that the Respondents performed or supervised the "technical component" of the universe of the radiological services at issue. The "professional component" for the universe of the radiological services at issue in this proceeding was outsourced to third-party physicians. The Respondents contracted with the outside third-party physicians for the "professional component" services to read and interprete the radiological product. These third party physicians were not Medicaid providers, nor were they part of a Medicaid group provider that included the Respondents. When billing for the radiological services, the Respondents billed Medicaid for both the "technical" and "professional" components using the "maximum" fee set forth in the Fee Schedule. The Respondents knew or should have known that they had not performed a global service as they never performed or supervised the "professional" component of the services billed. The Petitioner performed an audit of the radiological claims for Dr. Plasencia for the dates of service July 1, 2001 through December 31, 2005. On December 1, 2006, the Petitioner issued a Final Audit Report that concluded Dr. Plasencia had been overpaid $196,129.52. Additionally, the Petitioner sought an administrative fine against Dr. Plasencia in the amount of $1,000.00. Similarly, the Petitioner performed an audit of the radiological claims submitted by Dr. Elosegui for the dates of service October 11, 2002 through December 31, 2005. On December 1, 2006, the Petitioner issued a Final Audit Report that concluded Dr. Elosegui had been overpaid $122,065.08. The Petitioner also sought an administrative fine against Dr. Elosegui in the amount of $1,000.00. In January 2005, the Fee Schedule applicable to CPT 90000 procedure code services was revised. The Fee Schedule specified a reimbursement amount for the "technical" component of the radiological services in the CPT 90000 code set. Prior to that time, there had been no reimbursable amount for the "technical component" performed separately from the "professional component." The Medicaid provider agreements executed between the parties govern the contractual relationships between these providers and the Agency. The parties do not dispute that those provider agreements, together with the pertinent laws or regulations, control the billing and reimbursement claims that remain at issue. The amounts, if any, that were overpaid were related solely to the radiological services billed under a global or inclusive manner that included the "professional" component within the amount claimed to be owed by Medicaid. The provider agreements pertinent to these cases are voluntary agreements between AHCA and the Respondents. The Fee Schedule adopted by the Petitioner dictates the code and reimbursement amounts authorized to be billed pursuant to the provider agreement. The Respondents performed or supervised the "technical components" for the radiological services billed to Medicaid. The Respondents did not perform the "professional component." For all of the 70000 series billing codes the components can be split and the "technical component" can be identified and paid separately. For these billing codes, the Respondents were given (or paid for) the "technical component" of the 70000 codes. Similarly, for the 90000 billing codes, for the "technical component" portion where it was identifiable and allowable, the Petitioner gave the Respondents credit for that amount. The "technical component" for the 90000 billing codes was not identifiable or allowable prior to 2005. Prior to the amendment to the Fee Schedule the 90000 billing codes were presumed to be performed in a global manner; i.e. the "professional component" and the "technical component" were done together by the Medicaid provider submitting the claim. That was not the factual case in these audits. Respondents were not authorized to bill the 90000 codes in the global manner as they did not perform the "professional component" of the services rendered. Any Medicaid provider whose billing is not in compliance with the Medicaid billing policies may be subject to the recoupment of Medicaid payments. The Petitioner administers the Medicaid program in Florida. Pursuant to its authority AHCA conducts audits to assure compliance with the Medicaid provisions and provider agreements. These “integrity” audits are routinely performed and Medicaid providers are aware that they may be audited. These “integrity” audits are to assure that the provider bill and receive payment in accordance with applicable rules and regulations. The Respondents do not dispute the Agency’s authority to perform audits such as the ones at issue.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order of recoupment as set forth in the reports at issue. The final order should also impose an administrative fine against each Respondent in the amount of $1,000.00. DONE AND ENTERED this 1st day of April, 2008, in Tallahassee, Leon County, Florida. J. D. PARRISH 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 1st day of April, 2008. COPIES FURNISHED: Richard Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Station 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 Holly Benson, Secretary Agency for Health Care Administration Fort Knox Building, Suite 3116 2727 Mahan Drive Tallahassee, Florida 32308 Robert M. Penezic, Esquire Broad and Cassel Post Office Box 14010 Fort Lauderdale, Florida 33302-4010 L. William Porter, II, Esquire Agency for Health Care Administration Fort Knox Executive Center III 2727 Mahan Drive, Building 3, Mail Stop 3 Tallahassee, Florida 32308-5403 Robert N. Nicholson, Esquire Broad and Cassel Post Office Box 14010 Fort Lauderdale, Florida 33302-4010
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, including the parties' Joint Prehearing Stipulation, the following findings s of fact are made: Petitioner and his Practice Petitioner is a general practice physician. He has been licensed to practice medicine in Florida for the past ten years. He is now, and has been at all times material to the instant case, in private practice in Miami-Dade County, Florida Petitioner's Participation in the Medicaid Program During the Audit Period, Petitioner was authorized to provide physician services to eligible Medicaid patients. Petitioner provided such services pursuant to a valid provider agreement with AHCA.4 Petitioner's Medicaid provider number was, and remains, 3759873 00 Petitioner billed all of the Medicaid claims that are the subject of the instant controversy under this (individual) provider number. Handbook Provisions As a prerequisite to his entitlement to Medicaid payment for services rendered during the Audit Period, Petitioner was required to comply with, among other things, the provisions of the Physician Coverage and Limitations Handbook (PCL Handbook) then in effect. Medical Necessity Chapter 2 of the PCL Handbook provided that the Medicaid program would reimburse physician providers for services "determined [to be] medically necessary" and not duplicative of another provider's service, and it went on to state as follows: In addition, the services must meet the following criteria: the services must be individualized, specific, consistent with symptoms or confirmed diagnosis of the illness or injury under treatment, and not in excess of the recipient's needs; the services cannot be experimental or investigational; the services must reflect 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; and the service must be 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 services medically necessary or a covered services. Radiology Services Chapter 2 of the PCL Handbook further provided that, "[t]o be reimbursed the maximum fee [or 'global fee'] for a radiology service, the physician must provide both the technical and professional components." A physician provider billing the "global fee" was not authorized, pursuant Chapter 2 of the PCL Handbook, to also seek additional payment for the "professional component" of that fee. Doing so amounted to impermissible "double-billing." Coding Chapter 3 of the PCL Handbook "describe[d] the procedure codes for the services reimbursable by Medicaid that [had to be] used by physicians providing services to eligible recipients." As explained on the first page of this chapter of the handbook: The procedure codes listed in this chapter [were] Health Care Financing Administration Common Procedure Coding System (HCPCS) Levels 1, 2 and 3. These [were] based on the Physician[]s['] Current Procedural Terminology (CPT) book. The CPT include[d] HCPCS descriptive terms and numeric identifying codes and modifiers for reporting services and procedures. . . . The Physicians' Current Procedural Terminology At all times material to the instant case, the American Medical Association's Physicians' Current Procedural Terminology (or the "CPT") referred to in Chapter 3 of the PCL Handbook contained an "[i]ntroduction," which read, in pertinent part, as follows: Current Procedural Terminology, Fourth Edition (CPT) is a systematic listing and coding of procedures and services performed by physicians. Each procedure or service is identified by a five digit code. . . . Inclusion of a descriptor and its associated specific five-digit identifying code number in CPT is generally based upon the procedure being consistent with contemporary medical practice and being performed by many physicians in clinical practice in multiple locations. . . . * * * Section Numbers and Their Sequences Evaluation and Management 99201 to 99499 * * * Surgery 10040 to 69979 Radiology (Including Nuclear Medicine and Diagnostic Ultrasound) 70010 to 79999 Pathology and Laboratory 80002 to 89399 Medicine (except Anesthesiology) 90701 to 99199 * * * The CPT had "[e]valuation and [m]anagement (E/M) [s]ervice [g]uidelines" (E/M Guidelines). It was noted on the first page of the E/M Guidelines that: The E/M section is divided into broad categories such as office visits, hospital visits, and consultations. Most of the categories are further divided into two or more subcategories of E/M services. For example, there are two subcategories of office visits (new patient and established patient) and there are two subcategories of hospital visits (initial and subsequent). The subcategories of the E/M services are further classified into levels of E/M services that are identified by specific codes. . . . "New and [e]stablished patient[s]" were described in the E/M Guidelines as follows: A new patient is one who has not received any professional services from the physician or another physician of the same specialty who belongs to the same group practice, within the past three years. An established patient is one who has received professional services from the physician or another physician of the same specialty who belongs to the same group practice, within the past three years. The concept of "[l]evels of E/M [s]ervices" was described, in pertinent part, as follows in the E/M Guidelines: Within each category or subcategory of E/M service, there are three to five levels of E/M services available for reporting purposes. Levels of E/M services are not interchangeable among the different categories of service. For example, the first level of E/M services in the subcategory of office visit, new patient, does not have the same definition as the first level of E/M services in the subcategory of office visit, established patient. The levels of E/M services include examinations, evaluations, treatments, conferences with or concerning patients, preventative pediatric and adult health supervision, and similar medical services, such as the determination of the need and/or location for appropriate care. Medical screening includes the history, examination, and medical decision-making required to determine the need and/or location for appropriate care and treatment of the patient (e.g., office and other outpatient setting, emergency department, nursing facility, etc.). The levels of E/M services encompass the wide variations in skill, effort, time, responsibility and medical knowledge required for the prevention or diagnosis and treatment of illness or injury and the promotion of optimal health. Each level of E/M services may be used by all physicians. 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. These components are: history; examination; medical decision making; counseling; coordination of care; nature of presenting problem; and time. The first three of these components (history, examination and medical decision making) are considered the key components in selecting a level of E/M services. . . . The next three components (counseling, coordination of care, and the nature of the presenting problem) are considered contributory factors in the majority of encounters. . . . * * * The actual performance and/or interpretation of diagnostic tests/studies ordered during a patient encounter are not included in the levels of E/M services. Physician performance of diagnostic tests for which specific CPT codes are available may be reported separately, in addition to the appropriate E/M code. The physician's interpretation of the results or diagnostic tests/studies (i.e., professional component) with preparation of a separate distinctly identifiable signed written report may also be reported separately, using the appropriate CPT code with the modifier -26 appended. * * * Time . . . . The inclusion of time as an explicit factor beginning in CPT 1992 is done to assist physicians in selecting the most appropriate level of E/M services. It should be recognized that the specific times expressed in the visit code descriptors are averages, and therefore represent a range of times which may be higher or lower depending on actual clinical circumstances. * * * The E/M Guidelines contained "[i]nstructions for [s]electing a [l]evel of E/M [s]ervice," which read, in pertinent part, as follows: * * * Review of Level of E/M Service Descriptors and Examples in the Selected Category or Subcategory 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. These components are: history; examination; medical decision making; counseling; coordination of care; nature of presenting problem; and time. The first three or these components (i.e., history, examination and medical decision making) are considered the key components in selecting a level of E/M services. An exception to this rule is in the case of visits which consist predominantly of counseling or coordination of care. . . . The nature of the presenting problem and time are provided in some levels to assist the physician in determining the appropriate level of E/M service. Determine the Extent of History Obtained The extent of history is dependent upon clinical judgment and on the nature of the presenting problem(s). The levels of E/M services recognize four types of history that are defined as followed: Problem Focused: chief complaint; brief history of present illness or problem. Expanded Problem Focused: chief complaint; brief history of present illness; problem pertinent system review. Detailed: chief complaint; extended history of present illness; problem pertinent system review extended to include a review of a limited number of additional systems; pertinent past, family and/or social history directly related to the patient's problems. Comprehensive: chief complaint; extended history of present illness; review of systems which is directly related to the problem(s) identified in the history of the present illness plus a review of all additional body systems; complete past, family and social history. * * * Determine the Extent of Examination Performed The extent of the examination performed is dependent on clinical judgment and on the nature of the presenting problem(s). The levels of E/M services recognize four types of examinations that are defined as follows: Problem Focused: a limited examination of the affected body area or organ system. Expanded Problem Focused: a limited examination of the affected body area or organ system and other symptomatic or related organ system(s). Detailed: an extended examination of the affected body area(s) and other symptomatic or related organ system(s). Comprehensive: a general multi-system examination or a complete examination of a single organ system. . . . For the purposes of these CPT definitions, the following body areas are recognized Head, including the face Neck Chest, including breasts and axilla Abdomen Genitalia, groin, buttocks Back Each extremity For the purposes of these CPT definitions, the following organ systems are recognized Eyes Ears, Nose, Mouth and Throat Cardiovascular Respiratory Gastrointestinal Genitourinary Musculoskeletal Skin Neurologic Psychiatric Hematologic/Lymphatic/Immunologic Determine the Complexity of Medical Decision Making Medical decision making refers to the complexity of establishing a diagnosis and/or selecting a management option as measured by: the number of possible diagnoses and/or the number of management options that must be considered; the amount and/or complexity of medical records, diagnostic tests, and/or other information that must be obtained, reviewed and analyzed; and -The risk of significant complications, morbidity and/or mortality, as well as comorbidities, associated with the patient's presenting problem(s), the diagnostic procedure(s) and/or the possible management options. Four types of medical decision making are recognized: straightforward; low complexity; moderate complexity; and high complexity. To qualify for a given type of decision making, two of the three elements [shown below] must be met or exceeded. Type of Decision Making: straightforward; Number of Diagnoses or Management Options: minimal; Amount and/or Complexity of Data to be Reviewed: minimal or none; Risk of Complications and/or Morbidity or Mortality: minimal Type of Decision Making: low complexity; Number of Diagnoses or Management Options: limited; Amount and/or Complexity of Data to be Reviewed: limited; Risk of Complications and/or Morbidity or Mortality: low Type of Decision making: moderate complexity; Number of Diagnoses or Management Options: multiple; Amount and/or Complexity of Data to be Reviewed: moderate; Risk of Complications and/or Morbidity or Mortality: moderate Type of Decision Making: High complexity; Number of Diagnoses or Management Options: extensive; Amount and/or Complexity of Data to be Reviewed: extensive; Risk of Complications and/or Morbidity or Mortality: high Comorbidities/underlying diseases, in and of themselves, are not considered in selecting a level of E/M services unless their presence significantly increases the complexity of the medical decision making. Select the Appropriate Level of E/M Services Based on the Following For the following categories/ subcategories, all of the key components, i.e., history, examination, and medical decision making, must meet or exceed the stated requirements to qualify for a particular level of E/M service: office, new patient; hospital observation services; initial hospital care; office consultations; initial inpatient consultations; confirmatory consultations; emergency department services; comprehensive nursing facility assessments; domiciliary care, new patient; and home, new patient. . . For the following categories/ subcategories, two of the three key components, (i.e., history, examination, and medical decision making) must meet or exceed the stated requirements to qualify for a particular level of E/M service: office, established patient; subsequent hospital care; follow-up inpatient consultations; subsequent nursing facility care; domiciliary care, established patient; and home, established patient. In the case where counseling and/or coordination of care dominates (more than 50%) of the physician/patient and/or family encounter (face-to-face time in the office or other outpatient setting or floor/unit time in the hospital or nursing facility) then time is considered the key or controlling factor to qualify for a particular level of E/M services. The extent of counseling and/or coordination of care must be documented in the medical record.[5] The CPT contained the following codes and code descriptions for "E/M" office and other outpatient services: New Patient 99201 Office or other outpatient visit for the evaluation and management of a new patient, which requires these three 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 are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are self- limited or minor. Physicians typically spend 10 minutes face-to-face with the patient and/or family. * * * 99202 Office or other outpatient visit for the evaluation and management of a new patient which requires these three key components: an expanded problem focused history; an expanded problem focused examination; and straightforward medical decision making. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of low to moderate severity. Physicians typically spend 20 minutes face-to-face with the patient and/or family. * * * 99203 Office or other outpatient visit for the evaluation and management of a new patient which requires these three key components: a detailed history; a detailed examination; and medical decision making of low complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of moderate severity. Physicians typically spend 30 minutes face-to-face with the patient and/or family. * * * 99204 Office or other outpatient visit for the evaluation and management of a new patient which requires these three key components: a comprehensive history; a comprehensive examination; and medical decision making of moderate complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of moderate to high severity. Physicians typically spend 45 minutes face-to-face with the patient and/or family. * * * 99205 Office or other outpatient visit for the evaluation and management of a new patient which requires these three 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 are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are of moderate to high severity. Physicians typically spend 60 minutes face-to-face with the patient and/or family. * * * Established Patient 99211 Office or other outpatient visit for the evaluation and management of an established patient that may not require the presence of a physician. Usually, the presenting problem(s) are minimal. Typically, 5 minutes are spent performing or supervising these services. * * * 99212 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: a problem focused history; a problem focused examination; straightforward medical decision making. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are self- limited or minor. Physicians typically spend 10 minutes face-to-face with the patient and/or family. * * * 99213 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: an expanded problem focused history; an expanded problem focused examination; medical decision making of low complexity. Counseling and coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of low to moderate severity. Physicians typically spend 15 minutes face-to-face with the patient and/or family. * * * 99214 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: a detailed history; a detailed examination; medical decision making of moderate complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of moderate to high severity. Physicians typically spend 25 minutes face-to-face with the patient and/or family. * * * 99215 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: a comprehensive history; a comprehensive examination; medical decision making of high complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of moderate to high severity. Physicians typically spend 40 minutes face-to-face with the patient and/or family. The CPT provided separate codes for "prolonged physician service with direct (face-to-face) patient contact" and contained the following explanation as to when these codes were to be used: Codes 99354-99357 are used when a physician provides prolonged service involving direct (face-to-face) patient contact that is beyond the usual service in either the inpatient or outpatient setting. This service is reported in addition to other physician service, including evaluation and management service at any level. Appropriate codes should be selected for supplies or procedures performed in the care of the patient during this period. Codes 99354-99357 are used to report the total duration of face-to-face time spent by a physician on a given date providing prolonged service, even if the time spent by the physician on that date is not continuous. Code 99354 or 99356 is used to report the first hour of prolonged service on a given date, depending on the place of service. Either code also may be used to report a total duration of prolonged service of 30-60 minutes on a given date. Either code should be used only once per date, even if the time spent by the physician is not continuous on that date. Prolonged service of less than 30 minutes total duration on a given date is not separately reported because the work involved is included in the total work of the evaluation and management codes. Code 99355 or 99357 is used to report each additional 30 minutes beyond the first hour, depending on the place of service. Either code may also be used to report the final 15-30 minutes of prolonged service on a given date. Prolonged service of less than 15 minutes beyond the first hour or less than 15 minutes beyond the final 30 minutes is not reported separately. * * * The Audit and Aftermath Commencing in or around August 2000, AHCA conducted an audit of paid Medicaid claims submitted by Petitioner for services assertedly rendered from May 22, 1998, through May 22, 2000.6 Petitioner had submitted 4,574 Medicaid claims for services assertedly rendered during the Audit Period to 492 patients, for which he had received payments totaling $156,903.14. From the 492 Medicaid patients to whom Petitioner had assertedly provided services during the Audit Period, AHCA randomly selected a "cluster sample" of 41, and obtained from Petitioner medical records he had on file for these 41 patients. Petitioner had submitted a total of 325 claims for services assertedly rendered to the 41 patients in the "cluster sample" during the Audit Period and had received a total of $11,562.14 in Medicaid payments for these services.7 Each of these claims was reviewed to determine whether it was supported by information contained in the medical records obtained from Petitioner. Based on a preliminary review, AHCA determined that Petitioner had been overpaid a total $58,157.96 for the Medicaid claims he had submitted for services assertedly rendered during the Audit Period. By letter dated September 10, 2002, AHCA advised Petitioner of this preliminary determination and "encourage[d] [him] to submit any additional information or documentation" in his possession that he believed would "serve to reduce the overpayment." The antepenultimate and penultimate paragraphs of the letter read as follows: Since you have a choice of accepting the above overpayment or submitting additional information, this is not a final action by the Agency for Health Care Administration. If you have not made payment within thirty (30) days, we will prepare and send to you the final agency determination, taking into consideration any information or documentation that you submit within that time period. Petitioner did not "ma[k]e payment within thirty (30) days" of AHCA's September 10, 2002, letter. As promised, following another review conducted after the expiration of this 30-day period, AHCA "prepare[d] and sen[t] to [Petitioner]" its Final Agency Audit Report showing the calculation of overpayments made to Petitioner during the Audit Period.8 AHCA's Final Agency Audit Report was dated January 28, 2003, and in the form of a letter to Petitioner, which read, in pertinent part, as follows: Medicaid Integrity has completed the review of your Medicaid claims for the procedures specified below for dates of service during the period May 22, 1998 through May 22, 2000. A Provisional Agency Audit Report, dated September 10, 2002, was sent to you indicating that we had determined you were overpaid $58,157.96. Based upon a review of all documentation submitted, we have determined that you were overpaid $58,157.96 for services that in whole or in part are not covered by Medicaid. Pursuant to Section 409.913, Florida Statutes (F.S.), this letter shall serve as notice of the following sanction(s): The provider is subject to comprehensive follow-up review in six months. In determining the appropriateness of Medicaid payment pursuant to Medicaid policy, the Medicaid program utilizes procedure codes, descriptions, policies, limitations and requirements found in the Medicaid provider handbooks and Section 409.913, F.S. In applying for Medicaid reimbursement providers are required to follow the guidelines set forth in the applicable rules[9] and Medicaid fee schedules, as promulgated in the Medicaid policy handbooks, billing bulletins, and the Medicaid provider agreement. Medicaid cannot pay for services that do not meet these guidelines. The following is our assessment of why certain claims paid to your provider number do not meet Medicaid requirements. The audit work papers detailing the claims affected by this assessment are attached. REVIEW DETERMINATION(S) Medicaid policy specifies how medical records must be maintained. A review of your medical records revealed that some services for which you billed and received payment were not documented. Medicaid requires documentation of the services and considers payments made for services not appropriately documented an overpayment. Medicaid policy defines the varying levels of care and expertise required for the evaluation and management procedure codes for office visits. The documentation you provided supports a lower level of office visit than the one for which you billed and received payment. The difference between the amounts you were paid and the correct payment for the appropriate level of service is considered an overpayment. Medicaid policy requires services performed be medically necessary for the diagnosis and treatment of an illness. You billed and received payments for services for which the medical records, when reviewed by a Medicaid physician consultant, indicated that the services provided did not meet the Medicaid criteria for medical necessity. The claims, which were considered medically unnecessary, were disallowed and the money you were paid for these procedures is considered an overpayment. Medicaid policy addresses specific billing requirements and procedures. In some instances, you billed a procedure code as global and also billed the professional when the professional component was incorporated in the global fee. The difference between the amounts you were paid and the appropriate fee is considered an overpayment. The overpayment was calculated as follows: A random sample of 41 recipients respecting whom you submitted 325 claims was reviewed. For those claims in the sample which have dates of service from May 22, 1998, through May 22, 2000, an overpayment of $5,004.04 or $15.39704606 per claim was found, as indicated on the accompanying schedule. Since you were paid for a total (population) of 4,574 claims for that period, the point estimate of the total overpayment is $15.39704606 x 4,574=$70,426.09. There is a 50 percent probability that the overpayment to you is that amount or more. There was then an explanation of the "statistical formula for cluster sampling" that AHCA used and how it "calculated that the overpayment to [Petitioner was] $58,157.96 with a ninety-five percent (95%) probability that it is that amount or more." The concluding portions of the letter advised Petitioner of his right to "request an administrative hearing [on this overpayment determination] pursuant to Sections 120.569 and 120.57, Florida Statutes." The "Medicaid physician consultant" referred to in AHCA's January 28, 2003, letter was Lisa Kohler, M.D., a Florida-licensed "family physician," who is certified by the American Board of Family Practice and is a fellow of the American Academy of Family Physicians. Dr. Kohler received her medical education at the University of South Florida College of Medicine, from which she graduated in 1985. After graduation, she did her internship and residency at Tallahassee Memorial Regional Medical Center's Family Practice Residency program. In 1988, following the completion of her residency, she entered private practice. She currently serves as the Associate Director of the Tallahassee Memorial Regional Medical Center's Family Practice Residency program. In addition, she is a Clinical Assistant Professor in the Department of Family Medicine at the University of South Florida College of Medicine and the Volunteer Medical Director of the Neighborhood Health Services in Tallahassee, Florida, a health clinic that provides free medical care to indigent patients. In accordance with the "peer review" provisions of Section 409.9131, Florida Statutes, which became effective July 1, 1999, AHCA had Dr. Kohler review all of the records that Petitioner had provided regarding the 41 patients in the "cluster sample"10 to determine whether there was documentation to support the Medicaid claims relating to these patients that Petitioner had submitted for services assertedly rendered during the Audit Period. In conducting her "peer review," Dr. Kohler did not interview any of the 41 patients in the "cluster sample," nor did she take any other steps to supplement the information contained in the records she examined. Her assessment of the propriety of Petitioner's billing was based exclusively on what was in those records and no other information. On February 19, 2003, Petitioner requested an administrative hearing on the overpayment determination (announced in AHCA's January 28, 2003, letter to Petitioner). On or about August 20, 2003, following a meeting between the parties, AHCA made a downward revision in its overpayment calculation, to $47,931.79. AHCA has made no additional revisions to its overpayment calculation in the instant case. It maintains that Petitioner received $47,931.79 in Medicaid overpayments for services claimed to have been provided during the Audit Period. In making this final overpayment calculation, AHCA determined, correctly, that Petitioner was overpaid a total of $3,867.62, or $11.90036931 per claim, for the 325 claims he had submitted seeking reimbursement from Medicaid for services assertedly rendered during the Audit Period to the 41 patients in the "cluster sample." Using a statistical formula the validity of which Petitioner has not disputed, AHCA extended these results to the total "population" of 4,574 Medicaid claims that Petitioner had submitted for services assertedly rendered during the Audit Period, and it correctly calculated that Petitioner had been overpaid a total of $47,931.79. Simple Mistake or Fraud? There has been no allegation made, nor proof submitted, that any of Petitioner's overbillings was the product of anything other than simple mistake or inadvertence on Petitioner's part.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that AHCA enter a final order finding that Petitioner received $47,931.79 in Medicaid overpayments for paid claims covering the period from May 22, 1998, through May 22, 2000, and requiring Petitioner to repay this amount to AHCA. DONE AND ENTERED this 15th day of June, 2004, in Tallahassee, Leon County, Florida. S STUART M. LERNER 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 15th day of June, 2004.
The Issue Whether the Petitioner is required to repay $2,269.00 to the Respondent?
Findings Of Fact The Petitioner entered into a "Noninstitutional Professional and Technical Medicaid Provider Agreement" (hereinafter referred to as the "Medicaid Provider Agreement") with the Respondent. Pursuant to the Medicaid Provider Agreement, the Petitioner agreed to participate in the Florida Medicaid Program. Pursuant to paragraph 2 of the Medicaid Provider Agreement, the Petitioner agreed to the following: The provider agrees to keep such records as are necessary to fully disclose the extent of services provided to individuals receiving assistance under the State Plan and agrees to furnish the State agency upon request such information regarding any payments claimed for providing these services. Access to these pertinent records and facilities by authorized Medicaid Program representatives will be permitted upon a reasonable request. The Petitioner also agreed in the Medicaid Provider Agreement to submit claims under the Medicaid Provider Agreement in accordance with the Florida Medicaid Program and applicable "Florida Administrative Rules, Florida Statutes, policies, procedures, manuals of the Florida Medicaid Program and Federal laws and regulations." Paragraphs 3 and 7 of the Medicaid Provider Agreement. Medicaid is essentially a mechanism by which the federal government provides funds for the payment of a part of certain medical service costs to the State of Florida. It is a federal grant under Title XIX of the Social Security Act. In Florida, community mental health services provided to persons eligible for Medicaid coverage can be paid for under the Medicaid program. Generally, the federal government provides 56 percent of the costs of Medicaid services and the State is responsible for 44 percent. As eligible services are rendered federal Medicaid funds are received and deposited in the Medical Care Trust Fund. In order for services to constitute "eligible services" they must have been rendered in compliance with Chapter 10C-7, Florida Administrative Code. If services are not "eligible services" (they do not comply with Chapter 10C-7), the State is not entitled to receive federal Medicaid funds. In order to insure that providers of Medicaid services are providing "eligible services" the Respondent conducts compliance audits. The purpose of compliance audits is to determine if federal Medicaid funds have been properly received. On June 27, 1985, the Respondent's Medicaid Program auditors conducted a compliance audit of the records of the Petitioner pertaining to Medicaid clients of the Petitioner's Bristol office. As a result of the June 27, 1985 audit, the Respondent determined that the Petitioner had improperly submitted claims for Medicaid care and that such claims had been improperly paid by the Respondent. The parties stipulated that the Petitioner was paid $2,269.00 for claims for which there was insufficient documentation to warrant payment under Chapter 10C-7, Florida Administrative Code. Petitioner claimed $2,269.00 as an amount due for Medicaid "eligible services" and was so paid by the Respondent. In fact, however, the services were not Medicaid "eligible services." The State was not entitled to federal Medicaid funds for these services. The Petitioner improperly received the amount in controversy because the Petitioner did not comply with Chapter 10C-7, Florida Administrative Code, as it was required to do pursuant to the Medicaid Provider Agreement. On May 21, 1985, the Petitioner executed an "Alcohol, Drug Abuse and Mental Health Services Contract Between State of Florida Department of Health and Rehabilitative Services and Apalachee Community Mental Health Services, Inc." (hereinafter referred to as the "Provider Contract"). The Provider Contract was executed by the Respondent on June 11, 1985. Pursuant to the Provider Contract, the Petitioner agreed to provide alcohol, drug abuse and mental health services in eight designated counties. In paragraph IC4 of the Provider Contract, the Petitioner was required to comply with Chapters 394, 396 and 397, Florida Statutes, and Chapters 10E-13 and 10E-14, Florida Administrative Code, "as appropriate." 15. Paragraph IC5 of the Provider Contract also required the Petitioner to "comply with all other applicable state standards, provided they are specified in Florida Statutes or Administrative Rules established by the department or made known in writing to the contractor." Paragraph IE1 and 2 of the Provider Contract required that the Petitioner "participate in the Community Mental Health/Alcohol Services Program as defined in Section 10C-7.525, F.A.C." and that the Petitioner "pursue and submit vouchers on all Medicaid eligible clients for Medicaid eligible services." [Emphasis added]. Paragraph IG1 of the Provider Contract required the Petitioner to provide an annual audit report by an independent certified public accountant to the Respondent. Paragraph IH of the Provider Contract required the Petitioner to permit monitoring for compliance with state and federal rules and regulations. Paragraph IIA1 of the Provider Contract provided that the Respondent will pay up to 75 percent of approved costs as determined under Chapters 394 and 397, Florida Statutes, and Chapter 10E-14, Florida Administrative Code, in an amount not to exceed $4,096,175.00. Paragraph IO of the Provider Contract required that the Petitioner secure "local match." Pursuant to the Provider Contract the Petitioner is entitled to receive payment for eligible expenditures" up to the amount of the Provider Contract and subject to the availability of funds. Services to be paid for pursuant to the Provider Contract include Medicaid eligible services and non-Medicaid services. Even though the Petitioner did not provide "eligible services" the amount in controversy may have been an "eligible expenditure" for which it may receive payment at a later date. Whether the Petitioner is entitled to payment of the amount in controversy will be determined at a later date as a result of the financial audit required by paragraph IGI of the Provider Agreement and will depend on the availability of funds and whether the Petitioner has already received the maximum amount specified in the Provider Contract. Whether the Petitioner is entitled to ultimate payment of the amount in controversy at a later date is governed by Chapters 394 and 397, Florida Statutes, and Chapters 10E-13 and 10E-14, Florida Administrative Code. A dispute arose between certain medical health providers and the Respondent over whether Medicaid funds are considered "state funds" for which local match is required pursuant to Chapter 394, Florida Statutes. The Department took the position that Medicaid funds are considered state funds and thus require local match and are subject to audit pursuant to Chapter 10E-13, Florida Administrative Code. When the dispute arose, the Respondent developed an "Issue Paper" (Petitioner's exhibit 2). The Respondent adopted one of the alternatives recommended in the Issue Paper to treat Medicaid funds as state funds for which local match is required. The Respondent also took the position that Medicaid eligible services were subject to the provisions of Chapter 394, Florida Statutes, and Chapter 10E, Florida Administrative Code. The Respondent's decision to treat Medicaid funds as state funds subject to local match was challenged by the Florida Council for Community Mental Health, Inc. Florida Council for Community Mental Health, Inc. v. Department of Health and Rehabilitative Services, 8 FALR 756 (Feb. 6, 1986). The issue in that case was whether the position of the Respondent taken in the Issue Paper was a rule.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner repay the Respondent $2,269.00 for services improperly billed. DONE and ENTERED this 17th day of March, 1987, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1500 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of March, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-1381 The parties have submitted proposed findings of fact. It has been generally noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. Paragraph numbers in the Recommended Order are referred to as "RO ." Petitioner's Proposed Findings of Fact: Proposed Finding RO Number of Acceptance of Fact Number or Reason for Rejection 1 RO 15-16. RO 17-19. The first and second sentences incorrectly refer to Paragraph I(C)(6) of the Medicaid Provider Agreement. The correct paragraphs are 1(0)4 (first sentence) and 1(0)5 (second sentence). The following portion of the second sentence is not supported by the weight of the evidence: "or incorporated as part of the contract. The following portion of the third sentence is not supported by the weight of the evidence: "and HRS Manual 230-31. The first sentence is accepted in RO 28. The rest of this proposed finding of fact is generally accepted in RO 28. 4-5 These proposed findings of fact are too broad and are not supported by the weight of the evidence. Irrelevant and not supported by the weight of the evidence. Too broad and not supported by the weight of the evidence. See RO 28. Too broad and not supported by the weight of the evidence. See RO 30. 9-17 These proposed findings of fact are irrelevant. Additionally, the third and fourth sentences of paragraph 16 are not supported by the weight of the evidence. RO 6. RO 9. The last sentence is irrelevant. Not supported by the weight of the evidence. Irrelevant. Respondent's Proposed Findings of Fact: 1 RO 1-3. 2 RO 10. 3 RO 11. 4 RO 12-13 5 Hereby accepted. COPIES FURNISHED: Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Theodore E. Mack, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building 1, Room 407 Tallahassee, Florida 32399-0700 Ronald W. Brooks, Esquire Brooks, LeBoeuf & LeBoeuf 863 East Park Avenue Tallahassee, Florida 32301
