The Issue The issue for determination is whether Petitioner is liable for overpayment of Medicaid claims for the period from 9/1/94 through 9/30/96, as stated in Respondent's Final Agency Audit Report dated May 5, 1998.
Findings Of Fact At all times material hereto, the Agency for Health Care Administration (Respondent) was the state agency charged with administration of the Medicaid program in the State of Florida pursuant to Section 409.907, Florida Statutes. At all times material hereto, Henry M. Rubinstein, D.C., (Petitioner) was a licensed chiropractor in the State of Florida and was providing chiropractic services to Medicaid recipients. Petitioner provided the services pursuant to a contract with Respondent under the Medicaid provider number 0503517-00. His Medicaid patients for years have included children and multi-handicapped children. Petitioner has published in peer review journals and is a board certified chiropractor. Dennis L. Jones, D.C., is a licensed chiropractor in the State of Florida. 1/ He was involved in the creation of Florida's Medicaid program and monitors the Florida Chiropractic Medicaid Program. Dr. Jones also serves as a Medicaid chiropractic consultant, including the issuance of prior authorizations for treatment. Prior authorizations are required for a chiropractor to provide and bill for visits by Medicaid recipients in excess of the set limited number. The maximum number of visits allowed per year prior to July 1, 1994, was 12, and after July 1, 1994, was 24. After July 1, 1994, prior authorization was required for visits beyond 24 for Medicaid recipients under the age of Prior authorization was granted for requests that demonstrated medical necessity. Dr. Jones denied many of Petitioner's requests for prior authorization. He denied the requests on the basis that the treatments were extending for periods of up to two years without detailed explanation of medical necessity to substantiate such extended periods of care. Dr. Jones observed that Petitioner's requests for such extended care routinely lacked substantiation and documentation for such extended care, such as x-rays, orthopedic and neurological findings, and subjective/objective descriptions. However, Dr. Jones granted some of Petitioner's requests for prior authorization to exceed the maximum number of visits. Dr. Jones had concerns as to the sufficiency of the documentation of Petitioner's requests for prior authorizations. As a result, when such requests were granted, Dr. Jones noted on the request forms that supplemental medical necessity needed to be documented more completely in the future. In 1996, Dr. Jones related his concerns about Petitioner in a letter to Respondent and included with the letter prior authorizations for primarily special needs children covering the years 1994 through 1996. Twenty-nine prior authorizations were included, with 25 of them for special needs children. His concerns related primarily to Petitioner's Medicaid patients who were special needs children and for whom Dr. Jones had reviewed only prior authorizations submitted by Petitioner. Further, in his letter, Dr. Jones requested an investigation into possible patient brokering, a criminal act. However, a request from a complainant for an investigation into a particular area of alleged violation does not prevent Respondent from identifying and investigating other areas of possible violation revealed by the documents provided. Dr. Jones' letter was referred to one of Respondent's employees, Judith M. Jensen. At that time, Ms. Jensen was also in the process of reviewing another complaint lodged against Petitioner by Dr. Jones, regarding prior authorizations for children, but covering a different time period--from 1993 through 1995. Ms. Jensen was, and is, employed by Respondent as a Human Services Program Specialist. Her duties include monitoring Medicaid claims and investigating Medicaid complaints and aberrant billings for Respondent's Medicaid Program Integrity Office. In investigating all billing irregularities or specific complaints, a review is typically made of the Medicaid provider's medical records. Substantiation of Medicaid claims that are submitted and paid is by adequate and proper medical record documentation. An audit, based upon a billing irregularity or complaint, is usually begun with the selection of a provider or a group of providers. Next, a sample of the chosen provider's Medicaid claims is chosen for a particular time period, which is the audit period. An analyst for Respondent then requests from the provider the medical records for the Medicaid recipients sampled for the audit period. The medical records are provided to and analyzed by a medical peer reviewer. If the medical peer reviewer recommends denial of payment for any of the claims, resulting in overpayment, Respondent forwards a preliminary audit letter to the Medicaid provider, describing the audit findings and requesting any supplemental medical records. A review of any submitted supplemental medical records is conducted, and the audit findings are adjusted in accordance with the results of the review. If an overpayment continues to be indicated after the review, Respondent forwards a final audit letter to the Medicaid provider. Respondent has a limited number of analysts and medical peer reviewers. Due to such constraints on Respondent, sampling is utilized due to its reliability, cost-effectiveness, and commonly accepted method for review of high volumes of Medicaid claims. Ms. Jensen initiated Respondent's review of Petitioner's Medicaid claims. She began the audit by requesting an ad hoc computer report on Petitioner's billing history for all Medicaid recipients under the age of 21 for the time period from 9/1/94 through 9/30/96. Ms. Jensen's request concentrated only on Medicaid recipients under the age of 21 because Dr. Jones alerted Respondent primarily to prior authorizations for children. Ms. Jensen received the ad hoc computer report, which was a detail of all of Petitioner's Medicaid billings for Medicaid recipients under the age of 21 for the period from 9/1/94 through 9/30/96. The report provided that for the time period indicated, Petitioner billed and was paid for 4,499 claims for 85 recipients, for a total amount of $71,731.30. Having received this information, Ms. Jensen requested a computer-generated selection of a random sample of 20 recipients from the total population of the 85 recipients. Twenty recipients were randomly selected from the total population of the 85 recipients, which showed, among other things, claims totaling 1,307 and payment for the claims totaling $20,710.69. Afterwards, Ms. Jensen requested Petitioner to provide all the medical records for the 20 sampled recipients for the time period from 9/1/94 through 9/30/96. Petitioner complied with Ms. Jensen's request. Having received the medical records, Ms. Jensen engaged a peer review consultant, Dr. Ronald J. Hoffman, D.C., to evaluate the records submitted by Petitioner. She provided the medical records to Dr. Hoffman.. 2/ He was provided with the medical records of only 10 Medicaid recipients on two separate occasions, instead of all 20 at the same time. The Medicaid recipients' medical records were not "sanitized" when they were submitted to Dr. Hoffman, meaning that the names of the Medicaid recipients and provider, Petitioner, were not redacted. Dr. Hoffman, as a peer reviewer, rarely reviews files which have been sanitized. The failure to sanitize the medical records found to be of no consequence to Dr. Hoffman's determinations. Dr. Hoffman is a licensed chiropractor in the State of Florida and has been practicing for over 30 years. His practice includes patients who are pediatric and multi-handicapped, but these patients comprise a very small number of his patients. He performs chiropractic Medicaid utilization review for Respondent and is a Medicaid provider. He has performed chiropractic utilization review for more than 15 years. For the Medicaid program, Dr. Hoffman has been a consultant since 1997, but Petitioner's review was the first peer review performed by Dr. Hoffman for the Medicaid program. When Dr. Hoffman performs peer reviews for Respondent, he relies upon State statutes and Respondent's guidelines, specifically, The Chiropractic Coverage and Limitation Handbook, and his years of experience Dr. Hoffman is knowledgeable about what a medical record should contain in order for the medical record to demonstrate medical necessity for Medicaid reimbursement purposes. The medical record should contain the complete medical history; an examination showing the condition of the patient and why the patient is being treated; symptoms; standardized testing, including orthopedic and neurological tests; treatment notes; a treatment program; objective findings; special procedures; and an evaluation of the patient's progress. 3/ Petitioner agrees that, according to the Medicaid provider reimbursement handbook, the following are requirements for medical records: patient history; chief complaint for each visit; diagnostic tests and results; diagnosis; treatment plan, including prescriptions; medications, supplies, scheduling frequency for follow-up or other services; progress reports, treatment rendered; original signatures and dates; dates of service; and referrals to others. Dr. Hoffman was aware from review of the medical records provided by Petitioner that the Medicaid recipients were special needs children. However, he was unaware of Florida's special needs statutes (Subsections 409.803(1)(c) and 409.9126(1)(b), and Section 409.9121, Florida Statutes), which address, among other things, health care needs for special needs children, and he did not use the statutes in his determination. The failure to use the special needs statutes had little or no effect on Dr. Hoffman's review. The undersigned is persuaded and a finding of fact is made that Dr. Hoffman's failure to use the special needs statutes in his review did not invalidate his determinations. Dr. Hoffman was tendered and is accepted as an expert in chiropractic medicine. He is also found to be an appropriate peer reviewer for Petitioner's situation. Dr. Hoffman's testimony is found to be credible. After having reviewed the medical records, regarding the 20 randomly sampled Medicaid recipients, pursuant to Respondent's Medicaid peer review, Dr. Hoffman produced two reports of his findings. 4/ During his review, Dr. Hoffman considered all of the Medicaid recipients' visits, including those that had been granted prior authorization. Patient 1 was recipient K.K., with a date of birth of 5/18/86. 5/ Dr. Hoffman's opinion was that Patient 1's medical records did not support a finding of medical necessity. The medical records failed to support justification for Patient 1's 198 visits from 11/10/94 through 9/10/96. X-rays contained in the medical records were of such poor quality that they were of no diagnostic value; however, the x-rays were not a factor in the determination of medical necessity. Petitioner's medical notes were practically the same for each visit, with Petitioner noting practically the same comment(s); and there was no recorded orthopedic or neurological testing and no standard chiropractic evaluation forms justifying the number of treatments billed. Patient 1's medical records failed to demonstrate medical necessity for the visits. For Patient 1, 198 claims were paid in the amount of $3,081.30. Prior authorizations granted totaled $2,964. 6/ Patient 2 was recipient N.M., with a date of birth of 8/11/83. Dr. Hoffman's opinion was that Patient 2's medical records lacked documentation demonstrating that the treatments were a medical necessity for Medicaid reimbursement purposes for the 175 visits from 7/12/94 through 6/27/96. The medical records contained no standard medical notes or examination forms and no orthopedic, neurological or chiropractic examination forms to justify treatments; and were redundant and repetitive. X-rays contained in the medical records were of such poor quality that they were of no diagnostic value; but, the x-rays have no impact on the determination of medical necessity. Patient 2's medical records failed to demonstrate medical necessity for the visits. For Patient 2, 175 claims were paid in the amount of $2,726.50. Prior authorizations granted totaled $2,964. Patient 3 was recipient D.A., with a date of birth of 4/6/89. Dr. Hoffman's opinion was that Patient 3's medical records lacked justification for the 173 visits from 8/23/94 through 7/30/96. The medical records contained no standard procedures performed by an acceptable chiropractic physician licensed in the State of Florida. The medical records also indicated that a medical radiologist, Dr. Robert S. Elias, M.D., read the recipient's x-rays for the purpose of a medical diagnosis of treatment and that Dr. Elias' diagnosis directly conflicted with Petitioner's diagnosis; however, the x-rays were not a factor in the determination of medical necessity. Patient 3's medical records failed to demonstrate medical necessity for the visits. For Patient 3, 173 claims were paid in the amount of $2,693.70. Prior authorizations granted totaled $2,604. Patient 6 was recipient T.W., with a date of birth of 2/5/90. Dr. Hoffman's opinion was that Patient 6's medical records lacked justification for the 160 visits from 1/3/95 through 9/3/96. The medical records contained no standardized chiropractic notes, no specified diagnosis, and no routine re- examinations. Furthermore, the medical records failed to show why Petitioner was treating Patient 6. X-rays contained in the medical records were not of diagnostic quality and were, therefore, of no diagnostic value; however, the x-rays had no impact on the determination of medical necessity. Patient 6's medical records failed to demonstrate medical necessity for the visits. For Patient 6, 160 claims were paid in the amount of $2,502.20. Prior authorizations granted totaled $1,882.90. Patient 24 was recipient G.H., with a date of birth of 7/20/95. Dr. Hoffman's opinion was that Patient 24's medical records failed to justify the approximately 73 visits. The medical records contained no standardized chiropractic notes, no objective findings, and no standardized testing, including range of motion, muscle spasms, and orthopedic or neurological tests. For many of the visits, the only documentation contained in the medical records consisted of the same notation or statement: "Patient doing well." Patient 24's medical records failed to demonstrate medical necessity for the visits. For Patient 24, 72 claims were paid in the amount of $1,158.09. The medical records do reflect that any prior authorizations were granted. Patient 25 was recipient O.M., with a date of birth of 4/25/83. Dr. Hoffman's opinion was that Patient 25's medical records failed to justify the 87 visits. The medical records contained no standardized chiropractic notes, no justification of diagnosis, and no standard medical tests. The notes that were recorded were quite sparse and repetitive and typically recorded as "Doing well." Patient 25's medical records failed to demonstrate medical necessity for the visits. For Patient 25, 71 claims were paid in the amount of $1,131.69. Prior authorizations granted totaled $753.60. Patient 27 was recipient C.F., with a date of birth of 2/12/84. Dr. Hoffman's opinion was that Patient 27's medical records failed to justify the 67 visits from 10/11/95 through 3/25/96. The medical records contained no standardized chiropractic notes, no standardized examination forms, and no documentation of Patient 27's progress. Patient 27's medical records failed to demonstrate medical necessity for the visits. For Patient 27, 67 claims were paid in the amount of $1,079.59. The medical records do reflect that any prior authorizations were granted. Patient 28 was recipient K.H., with a date of birth of 8/22/94. Dr. Hoffman's opinion was that Patient 28's medical records failed to justify the 69 visits. The medical records contained no standardized chiropractic notes and no standardized testing, and showed no specific treatment provided based upon the requirements of the Medicaid laws. Patient 28's medical records failed to demonstrate medical necessity for the visits. For Patient 28, 66 claims were paid in the amount of $1,031.79. The medical records do reflect that any prior authorizations were granted. Patient 33 was recipient K.D., with a date of birth of 2/15/84. Dr. Hoffman's opinion was that Patient 33's medical records failed to justify the 73 visits. The medical records contained no standardized chiropractic notes and no standardized testing. Patient 33's medical records failed to demonstrate medical necessity for the visits. For Patient 33, 51 claims were paid in the amount of $800.70. Prior authorizations granted totaled $376.80. Patient 35 was recipient T.M., with a date of birth of 10/15/91. Dr. Hoffman's opinion was that Patient 35's medical records failed to justify the 51 visits from 2/15/95 through 6/10/96. The medical records contained no standardized chiropractic notes justifying the treatment provided. The medical records also stated that Dr. Elias read Patient 35's x- rays for the purposes of medical diagnosis of treatment and that Dr. Elias' diagnosis directly conflicted with Petitioner's diagnosis; however, the x-rays were not a factor in determining medical necessity. Patient 35's medical records failed to demonstrate medical necessity for the visits. For Patient 35, 51 claims were paid in the amount of $828.39. Prior authorizations granted totaled $753.60. Patient 39 was recipient B.T., with a date of birth of 8/8/95. Dr. Hoffman's opinion was that Patient 39's medical records failed to justify the 47 visits from 2/9/95 through 10/19/95. The medical records contained no standardized chiropractic notes justifying the treatment provided. Patient 39's medical records failed to demonstrate medical necessity for the visits. For Patient 39, 47 claims were paid in the amount of $765.59. Prior authorizations granted totaled $753.60. Patient 40 was recipient T.H., with a date of birth of 7/11/84. Dr. Hoffman's opinion was that Patient 40's medical records failed to justify the 46 visits from 11/15/94 through 2/28/95. The medical records contained no standardized chiropractic notes justifying the treatment provided. The medical records also indicated that Dr. Elias read the recipient's x-rays for the purposes of medical diagnosis of treatment and that Dr. Elias' diagnosis directly conflicted with Petitioner's diagnosis; however, the x-rays were not a factor in determining medical necessity. Patient 40's medical records failed to demonstrate medical necessity for the visits. For Patient 40, 46 claims were paid in the amount of $731.70. Prior authorizations granted totaled $753.60. Patient 45 was recipient T.W., with a date of birth of 9/26/90. Dr. Hoffman's opinion was that Patient 45's medical records failed to justify the 22 visits from 4/24/95 through 11/15/95. The medical records contained no standardized chiropractic notes justifying the treatment provided. Patient 45's medical records failed to demonstrate medical necessity for the visits. For Patient 45, 26 claims were paid in the amount of $408.20. Prior authorizations granted totaled $376.80. Patient 48 was recipient S.L., with a date of birth of 1/31/91. Dr. Hoffman's opinion was that Patient 48's medical records failed to justify the 23 visits from 3/25/96 through 9/11/96. The medical records contained no standardized chiropractic notes justifying the treatment provided. Patient 48's medical records failed to demonstrate medical necessity for the visits. For Patient 48, 23 claims were paid in the amount of $388.79. The medical records do reflect that any prior authorizations were granted. Patient 54 was recipient H.A., with a date of birth of 1/31/88. Dr. Hoffman's opinion was that Patient 54's medical records failed to justify the 7 visits from 9/6/95 through 10/2/95. The medical records contained no standardized chiropractic notes justifying the treatment provided. Patient 54's medical records failed to demonstrate medical necessity for the visits. For Patient 54, 19 claims were paid in the amount of $298.30. The medical records do reflect that any prior authorizations were granted. Patient 58 was recipient T.W., with a date of birth of 11/19/81. Dr. Hoffman's opinion was that Patient 58's medical records failed to justify the 23 visits from 3/25/96 through 9/30/96. The medical records contained no standardized chiropractic notes justifying the treatment provided. Patient 58's medical records failed to demonstrate medical necessity for the visits. For Patient 58, 17 claims were paid in the amount of $294.59. The medical records do reflect that any prior authorizations were granted. Patient 59 was recipient C.P., with a date of birth of 4/11/93. Dr. Hoffman's opinion was that Patient 59's medical records failed to justify the 22 visits from 4/10/96 through 10/9/96. The medical records contained no standardized chiropractic notes, no documentation of standardized testing of the spine, no documentation of standard tests, including orthopedic and neurological tests, and no medical justification for ongoing care and treatment. Patient 59's medical records failed to demonstrate medical necessity for the visits. For Patient 59, 16 claims were paid in the amount of $278.89. Prior authorizations granted totaled $376.80. Patient 64 was recipient M.L., with a date of birth of 8/20/89. Dr. Hoffman's opinion was that Patient 64's medical records failed to justify the 8 visits from 8/30/95 through 10/2/95. The medical records contained no standardized chiropractic notes, no documentation of standardized testing, and no description of Patient 64's pain or physical condition. Patient 64's medical records failed to demonstrate medical necessity for the visits. For Patient 64, 13 claims were paid in the amount of $204.10. The medical records do reflect that any prior authorizations were granted. Patient 69 was recipient A.L., with a date of birth of 1/14/92. Dr. Hoffman's opinion was that Patient 69's medical records failed to justify the 9 visits from 2/27/95 through 3/20/95. The medical records contained no standardized chiropractic notes, and the documentation contained in the records was minimal and repetitious. Patient 69's medical records failed to demonstrate medical necessity for the visits. For Patient 64, 13 claims were paid in the amount of $204.10. The medical records do reflect that any prior authorizations were granted. Patient 77 was recipient N.J., with a date of birth of 4/16/80. Dr. Hoffman's opinion was that Patient 77's medical records failed to justify the 7 visits from 3/6/95 through 3/29/95. The medical records contained no standardized chiropractic notes justifying the treatment provided. Patient 77's medical records failed to demonstrate medical necessity for the visits. For Patient 77, 7 claims were paid in the amount of $137.59. The medical records do reflect that any prior authorizations were granted. Dr. Hoffman recommended denial of all claims for the 20 sampled Medicaid recipients for the period from 9/1/94 through 9/30/96 due to Petitioner's failure to adequately document medical necessity in the recipients' medical records. For the 20 sampled Medicaid recipients for the period from 9/1/94 through 9/30/96, the total of the Medicaid payments was $20,710.69. As a result, the denial amount, the overpayment, for the 20 sampled recipients was the same, $20,710.69. The overpayment for the 20 sampled Medicaid recipients was extrapolated to the entire universe or total population of the 85 Medicaid recipients under the age of 21 for the period from 9/1/94 through 9/30/96, which resulted in a total projected overpayment of $70,518.26. The actual total amount of Medicaid payments for the 85 Medicaid recipients for the covered time period was $71,731.30. Considering the actual total payment of $71,731.30, the projected overpayment of $70,518.26 is very close to the actual total payment and is inherently reasonable. There is an expectation that, because all the claims of the 20 sampled Medicaid recipients were denied, the projected denial for all the claims in the universe of 85 recipients would be very close to the actual total payment. The difference between the projected overpayment of $70,518.26 and the actual amount paid of $71,731.30 is $1,213.04. This difference is negligible and such negligible difference reflects the inherent accuracy and reliability of the statistical methodology utilized. The maximum error range is 5 percent. The difference between the projected overpayment total and the actual payment total is also well within the maximum error range of 5 percent, or $3,587, for a 95 percent statistical confidence interval. To illustrate Respondent's statistical methodology, first, begin with sampled Medicaid recipient Patient 1. As indicated previously, the total number of actual claims for the total population of 85 Medicaid recipients, who were under the age of 21, was 4,499, and the total amount paid for the claims was $71,731.30; the data being taken from Respondent's Medicaid claims database. For Patient 1, 198 claims were audited and $3,081.30 was the total amount paid for the claims. All of the $3,081.30 was denied and determined to be an overpayment. Second, the same process was used with all 20 Medicaid recipients sampled, which produced a total of 1,307 claims, which were all denied, and produced a total of $20,710.69 in overpayment. The total sampled overpayment of $20,710.69 was divided by the total number of sampled claims (1,307) to obtain a mean overpayment per sampled claim of $15.85. The overpayment per sampled claim of $15.85 was multiplied by the number of claims in the total population (4,499) to obtain a point estimate of the total population overpayment, which was $71,291.04. Third, adjusting the point estimate of $71,291.04 for any potential statistical error, Respondent's model reduces the point estimate by 1.73 standard deviations, yielding an error- adjusted total overpayment of $70,518.26. Respondent has a level of confidence that there is 95 percent chance that actual overpayment is a minimum of $70,518.26. The point estimate of $71,291.04 is very close to the actual payment of $70,731.30 for the claims of the total population of the 85 Medicaid recipients; therefore, the overpayment of $70,518.26 is relatively conservative. Respondent's audit was conducted in conformity with Respondent's standards and conformed to Respondent's manner in conducting audits. The audit also had no known deviations or irregularities or deficiencies in the technical processes utilized, except the failure to take into account the prior authorizations granted. As to the statistical aspect of Respondent's audit, Respondent presented the testimony of a statistical expert, Dr. James T. McClave, Ph.D. 7/ Dr. McClave's testimony is considered credible. Using statistical methods in Medicaid overpayment determinations is a common and well-accepted standard of practice. Statistical modeling in Medicaid auditing scientifically and accurately determines the extent of overpayments in a population of payments from a small sample of overpayments drawn from the population of payments. Statistical modeling is capable of providing reliable estimates of the integrity, or lack thereof, of a Medicaid provider's billings, within reasonable time and resource constraints. In the statistical formula, a sample of claims is used to obtain a valid statistical estimate of the overpayment, if any, associated with the entire population of claims from which the sample of claims was drawn. A point estimate, being the best estimate the sample has to offer of the overpayment, is taken; and then a factor, allowing for the uncertainty associated with the sample, is subtracted such that there is a specified level of confidence that what is obtained is the conservative estimate of what the total population overpayment would be. The point estimate is referred to as "the lower 95 percent confidence bound," 8/ and the number obtained is a number which one "can be 95 percent confident that it is an underestimate of what the total overpayment would be" 9/ if the entire population was sampled. Respondent complied with the statistical methodology. The random selection process and the ad hoc computer report were valid and reliable. The results of the sampling and extrapolation were valid and reliable on the basis of the total population of Petitioner's Medicaid patients was pediatric patients and the results were limited to Petitioner's Medicaid patients under the age of 21. Further, the sample size of 20 Medicaid recipients from the total population of 85 was adequate. However, the results of the sampling and extrapolation are not reliable as they pertain to the failure of Respondent to take into consideration the granted prior authorizations. Respondent is compelled and should be provided an opportunity to re-apply its statistical methodology in light of granted prior authorizations not being considered. Uncertainty now exists as to what effect the granted prior authorizations would have on the outcome of the total overpayments. The denial of all of Petitioner's claims was a situation of first impression for Respondent. Prior to the instant case, Respondent had had no chiropractor's Medicaid claims go through peer review and denial recommended. By letter dated February 4, 1998, Respondent forwarded to Petitioner a Preliminary Agency Audit Report (Preliminary Audit Report). The Preliminary Audit Report informed Petitioner, among other things, that Respondent's preliminary determination was that Petitioner had received an overpayment of $70,518.26 due to the claims being determined not medically necessary, and requested, among other things, that Petitioner submit any additional information or documentation which may reduce the overpayment. The Preliminary Audit Report also informed Petitioner of the overpayment calculation and statistical formula used by Respondent. In response to the request for additional information or documentation, Petitioner forwarded to Ms. Jensen a videotape and testimonials. Ms. Jensen did not send the testimonials and videotape to Dr. Hoffman, the peer reviewer, for his review because these items (1) were determined by her to have been created prior to recording of the medical records at issue, and, therefore, did not constitute a medical record for review; and (2) were, consequently, not relevant. The undersigned is persuaded and a finding of fact is made that the testimonials and videotape were not relevant and need not have been submitted to Dr. Hoffman for his review. By letter dated May 5, 1998, Respondent forwarded to Petitioner its Final Agency Audit Report (Final Audit Report). The Final Audit Report, based upon the recommendations of Dr. Hoffman, notified Petitioner, among other things, that the final determination was that he had received an overpayment of $70,518.26, due to the Medicaid claims not being medically necessary. The Final Audit Report also notified Petitioner, among other things, of the overpayment calculation and statistical formula used by Respondent. Moreover, Petitioner was notified that his type of violation warranted termination from the Medicaid program and a $2,000 fine, but that, in lieu of termination from the Medicaid program, he could continue as a provider by paying a $5,000 fine. In a subsequent letter to Petitioner, regarding clarification of continued participation in the Medicaid program, Ms. Jensen explained that, as a requirement for continued participation in the Medicaid program, in addition to the $5,000 fine, Petitioner must comply with Medicaid policy and Florida Statutes and rules. Petitioner was placed on notice that to continue as a Medicaid provider he must abide by Medicaid billing requirements. Respondent's Final Audit Report did not contain any notice of mediation being available. Section 120.573, Florida Statutes, requires notice of whether mediation (settlement) is available in agency action that affects substantial interests. There is no dispute that Respondent's Final Audit Report affects Petitioner's substantial interests. No evidence was presented that either Petitioner inquired about mediation or that Petitioner or Respondent sought or desired mediation. Moreover, no evidence was presented that Petitioner was harmed or suffered as a result of not receiving the notice. No evidence was presented to support a finding that the basis of the audit findings involved a conspiracy. A finding of fact is made that the basis of the audit findings does not involve a conspiracy between Respondent and its employees and Dr. Jones and Dr. Hoffman and Dr. McClave or anyone else. Respondent did not initiate any disciplinary action against Petitioner's license as a chiropractor and, therefore, Subsections 455.225(1) and 455.621(1), Florida Statutes, are not applicable. No evidence was presented that any criminal action was referred or taken against Petitioner as a result of Respondent's audit. No evidence was presented that Respondent suspected Petitioner of having committed a criminal violation, that a criminal act had been committed by Petitioner, or that Respondent had determined that Petitioner had committed a criminal act.
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 against Henry M. Rubinstein, D.C. and therein: Sustaining the failure of Dr. Rubinstein's medical records, except as to granted prior authorizations, for Medicaid recipients under the age of 21 for the period from 9/1/94 through 9/30/96, to demonstrate medical necessity. Sustaining the Final Agency Audit Report, except as indicated and consistent with this Recommended Order. Requiring Dr. Rubinstein to repay overpayments, without interest, in an amount subsequently determined in a proceeding by the Agency for Health Care Administration and within a time period under terms and conditions deemed appropriate. Imposing a fine of $5,000. DONE AND ENTERED this 11th day of April, 2000, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 11th day of April, 2000.
Findings Of Fact The Petitioner, Department of Professional Regulation, Board of Nursing, is an agency of the State of Florida having jurisdiction over the licensing, regulation of licensure status, and regulation of practice of professional nurses in the State of Florida. The Respondent, Patricia J. Canfield, is a licensed practical nurse, holding license No. 27935-1 authorizing the practice of practical nursing in the State of Florida. The Respondent has been so licensed at all times material to this proceeding. At all times material to this proceeding the Respondent has been employed as a licensed practical nurse in the infirmary at the Florida School for the Deaf and Blind located in St. Augustine, Florida. The Respondent was employed on November 29 and November 30, 1981, in the infirmary at the School for the Deaf and Blind when student Aaron Henderson was checked into the infirmary. Petitioner's Composite Exhibit 1 consists of the medication records by which nurse-employees obtained medication, as pertinent hereto Darvon, from the school infirmary dispensary. The Respondent, when she obtained Darvon from the dispensary, initialed this record with the initials "PC." On the dates in question the medication administration records in evidence established that the Respondent signed as having received into her possession one Darvon tablet, reputedly to be administered to patient Aaron Henderson on each of the days, November 29 and November 30. Aaron Henderson, testifying for the Petitioner, was shown a unit of Darvon established to be identical to that dispensed at the infirmary during the material time period in November, 1981. Witness Henderson stated he had never received such a pill from the Respondent, whom he identified as the nurse on duty in the infirmary when he was there on the two days in question. Witness Patty Grant was a patient in the infirmary on November 16, 1981. It was established that the Respondent signed the medication administration record as having received from the dispensary a Darvon tablet, reputedly to be administered to patient Grant on that date. Patient Grant received asthma medication from the Respondent on that date, but maintained that she had never received a Darvon tablet from the Respondent on that date after being shown a sample Darvon tablet established to be identical to that dispensed by the infirmary during November, 1981. Student-patient Stratton was a patient in the infirmary on October 22, 1981. On that date the Respondent signed the subject record indicating that she checked out a unit of Darvon from the dispensary on behalf of patient Stratton. Patient Stratton recalled receiving some medication from the Respondent on that date, but did not recall her administering to him a pill of the appearance of the Darvon tablet in use by the dispensary during the time in question. The Respondent initialed the Darvon medication chart for November 13, 1981, indicating that she had received from the dispensary a Darvon tablet to be administered to patient Diane Matthews. Patient Matthews testified that the Respondent had never given her a Darvon tablet on the date in question. Included as a part of Petitioner's Composite Exhibit 1 are the Nurses' Notes for the various patients named in the Administrative Complaint. With regard to patient Aaron Henderson, the medication administration records revealed that the Respondent signed for and obtained a unit of Phenaphen on December 8, 1981, for that patient, but the administration of the drug is not recorded in the nursing notes pertaining to patient Henderson. With regard to patient John Wise, the medication administration records revealed that on November 13, and November 16, 1981, the Respondent signed out Darvon tablets on behalf of that patient, but the Nurses' Notes pertaining to patient Wise made no reference whatever to the ultimate disposition of the Darvon. The medication administration records pertaining to patient Ray Jackson for November 4, 1981, established that the Respondent signed for a unit of Darvon for that patient, but the Nurses' Notes for that patient on that date do not reflect any notation regarding the administration or disposition of that unit of Darvon. The medication administration records for patient Duffy for the date of October 16, 1981, establish that Respondent obtained from the dispensary one unit of Darvon on behalf of that patient; however, her Nurses' Notes contain no indication of the ultimate disposition of that unit of Darvon. Expert testimony presented by the Petitioner establishes that the failure to document the administration of a drug on a patient's chart does not meet the minimum acceptable and prevailing standards of nursing practice, and that any licensed nurse knows or should know that documenting the administration of medication is a proper and required procedure. The Respondent testified on her own behalf and established that she has been licensed since 1969 in Michigan and Florida and has worked in St. Augustine at the subject school since 1975. Her duties involve general nursing duties and she customarily sees 50 to 100 student-patients per day on her shift. Frequently, she signs for medication which is obtained from the dispensary or secure area and another person on duty actually administers it, which would explain in part the students not remembering that she administered any Darvon. Often this procedure involves the Respondent working in the back room of the infirmary, obtaining the medication or signing for the medication, and the nurse on duty at the front desk actually giving it to the patient, with that nurse generally keeping the record slip made of the administering of the Darvon. The Respondent acknowledged, however, that Mrs. Harvey, the Head Nurse, had talked to her on one occasion about her neglecting to "chart medication." The Respondent also established that she was under Dr. Gurling's care in November and December of 1981 for a physical condition involving severe vascular headaches, for which she took Darvoset. She took Darvoset, containing Darvon and Tylenol (different from the Darvon tablets involved in this proceeding), because she has an allergy to aspirin and codeine. She filled her prescription for Darvoset in November, 1981, as Dr. Gurling directed and also filled a prescription for December, 1981, at the direction of her doctor. She maintains she never signed out for a drug and converted that drug to her own use and has never improperly taken drugs from the infirmary. She established that although she signed out for some Darvon orders, that they were requested by other nurses who would have been responsible for administering it to the particular students involved. She admits, however, that at times she either forgot to chart medication administered by her or lost the record slip which she normally uses for charting. In corroboration of her testimony regarding her own medical condition and the use of her own prescriptions for Darvon or Darvoset, Harold E. Waldron, a licensed pharmacist (testifying for the Petitioner), established that a large amount of Darvon had been obtained from his pharmacy by the Respondent in November of 1981 through prescriptions from her doctor. Mr. Waldron's recollection was that she received approximately 180 units of Darvon from his pharmacy in November of 1981. Although Mr. Waldron feels this may indicate some dependency on the drug, his testimony was not allowed on that theme because it was too speculative and non-expert in nature. Indeed, the fact that she received a large amount of Darvoset pursuant to legitimate prescriptions during November and December of 1981, militates in part against a finding that she converted drugs from the dispensary to her own use.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence in the record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore RECOMMENDED: That a Final Order be entered by the Petitioner imposing a one-year probationary term on the licensure status of the Respondent, Patricia J. Canfield, L.P.N., and that she be required to take a continuing education course designed to enhance her competency in the area of properly accounting for, recording and conducting transactions with medications, especially controlled substances. DONE and ENTERED this 2nd day of December, 1982, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 2nd day of December, 1982. COPIES FURNISHED: W. Douglas Moody, Esquire 119 North Monroe Street Tallahassee, Florida 32301 Charles Pellicer, Esquire 28 Cordova Street St. Augustine, Florida 32084 Helen P. Keefe, Executive Director Board of Nursing Room 504 111 East Coastline Drive Jacksonville, Florida 32202 Samuel R. Shorstein, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact Because the Respondent Marjorie Sue Fancher, L.P.N., was not present at the Hearing, although commencement of the Hearing was delayed for thirty minutes, careful inquiry into the correct address of Marjorie Sue Fancher was made. From the personnel records of Community General Hospital, it was determined that Marjorie Sue Fancher had resided at 551 Emerald Avenue, Lake Wales, Florida, 33856, with her mother. Notice in this cause was sent to Marjorie Sue Fancher at 551 Emerald Avenue, Lake Wales, Florida, 33856, by first-class mail. Notice of the Hearing sent Marjorie Sue Fancher was not returned to the Division of Administrative Hearings by the United States Postal Service. Marjorie Sue Fancher is a licensed practical nurse holding license number, LPN 37287-1. Marjorie Sue Fancher was employed by Community General Hospital in Dade City, Florida on approximately February 9, 1976. After undergoing an orientation at the hospital, she was moved from the day shift to the night shift. On February 22, 1976 Marjorie Sue Fancher was medication nurse on the eleven to seven shift at Community General Hospital. As medication nurse, Marjorie Sue Fancher was responsible for the administration and charting of the administration of medications to patients in Rooms 101 through 114 in the East Wing of Community General Hospital. As medication nurse, Marjorie Sue Fancher was responsible for the medication cart which contained the narcotics safe which had only one key. The procedure of the hospital called for the oncoming medication nurse to inventory the narcotics with the medication nurse being relieved. When the oncoming medication nurse was satisfied with the inventory, the oncoming nurse would relieve the nurse going off duty and the key would be turned over to the nurse coming on duty. This key was on a long ribbon and worn around the neck of the medication nurse. The hospital medical records for patients of the hospital in Rooms 101 to 114 on the East Wing were identified by Marian Newell, a registered records administrator and Records Administrator for Community General Hospital. The narcotic control records were identified by William Connors, Registered Pharmacist and Pharmacist for Community General Hospital. Elizabeth Kutsch, L.P.N., was the medication nurse who relieved Marjorie Sue Fancher on the morning of February 23, 1976. Kutsch found that the narcotic control sheets had not been filled out, chartings for the patients not been done, and nurse's notes on the patients had not been made by Fancher when Kutsch relieved her on the morning of February 23, 1976. Because the narcotics on hand did not agree with the narcotics control records, Kutsch refused to relieve Fancher and assume responsibility for the narcotics safe and its contents. Kutsch called Dawn Bell, Registered Nurse, Acting Director of Nurses at Community General Hospital, who initiated an investigation. Bell immediately interviewed Marjorie Sue Fancher. Fancher at that time appeared to Bell, a nurse with twenty-one (21) years of experience, to be under the influence of drugs. Fancher was unable to respond coherently to questions, could not remember what she had done during her shift, was somnolent and staggered when she walked. Bell's review of the patient records, their narcotics control records, and nurse's notes revealed many discrepancies. These records conflicted on whether Fancher had administered preop medications to a patient, Elmer Wile. Although the narcotics control sheet indicated that Fancher had withdrawn 10 mgs of morphine sulphate at 7:30 a.m., the drug administration records and nurse's notes had not been filled out indicating administration of the drug to the patient. Fancher had failed to administer insulin and pronestyl, a heart medication, as directed in the medication administration records for Hush Walker, a patient. Fancher had failed to administer inderal to Rena Bell at 6:00 a.m. as prescribed and had indicated this by circling the time on the medication administration record but no explanation of why the drug was not administered was entered in the nurse's notes by Fancher. Fancher had failed to administer kafsol to Florence Profe, as prescribed at 6:00 a.m. No entry was made on the medication administration records and no explanation was made in the nurse's notes by Fancher. Fancher failed to administer ampicillin and phenobarbital to Tonya Harnage at 6:00 a.m. as prescribed. The medication administration record shows no entry and no explanation was made in nurse's notes. Fancher administered talwin intramuscularily to Martha Jackson, a patient, instead of talwin compound prescribed to be administered per oz. Fancher signed out for 15 mgs of morphine sulphate on the narcotics control record for administration to the patient, Catherine Dolan, but no indication of administration of the drug was made in the medication administration record or in the nurse's notes for the patient Dolan. Fancher withdrew 10 mgs of morphine sulphate for administration to patient, Bessie Wolf, who had a preoperative order for the administration of 5 mgs of morphine sulphate and .2 mg of atrophine. The narcotics control record did not indicate the wastage of 5 mgs of morphine sulphate. The medication administration record indicated the administration of .2 mg of atrophine while the Nurse's notes indicated that .6 mgs of atrophine had been administered. The patient Wolf had been prescribed demerol PRN. The narcotics control record for demerol indicated that an entry showing 25 mgs had been withdrawn by Fancher for administration to the patient, Bessie Wolf, had been lined out. Inventory of demerol on hand in the narcotics safe for which Fancher was responsible, indicated an overage of one ampule of demerol. Fancher had failed to have the narcotics control record corrected by the pharmacist as required in accordance with hospital operating procedure when an erroneous entry was made. Patients who were scheduled for laboratory workups on the morning of the twenty-third and who were to receive no medications after twelve, midnight, had had medications administered to them by Fancher contrary to direction. Patients who were to receive preoperation medication did not have these medications administered. The records of the shift which Marjorie Sue Fancher had worked were so confused and incomplete that it was impossible to determine what medications had been administered to what patients. Marjorie Sue Fancher's physical condition was such that she could not remember what she had done during the shift to include what medications she had administered to what patients.
Recommendation The Hearing Officer having considered the Findings of Fact and Conclusions of Law recommends that the Florida State Board of Nursing revoke the license to practice nursing of Marjorie Sue Fancher. DONE and ORDERED this 11th day of October, 1976 in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Julius Finegold, Esquire 1130 American Heritage Building Jacksonville, Florida 32202 Marjorie Sue Fancher 551 Emerald Avenue Lake Wales, Florida 33856 Mrs. Geraldine Johnson State Board of Nursing Suite 201 6501 Arlington Expressway Jacksonville, Florida 32211
The Issue Whether an administrative fine should be imposed on the respondent for the violations alleged in Final Agency Audit Report number 94-0367-000-G, and, if so, the appropriate amount of the fine.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Agency for Health Care Administration is the state agency responsible for administering the Medicaid program in Florida. Ch. 93-129, 58, Laws of Fla. (1993). The Agency oversees the activities of Medicaid providers and is authorized in section 409.913(9), Florida Statutes, to impose sanctions for violations of the Medicaid rules and regulations. The division of the Agency responsible for monitoring payments to Medicaid providers is referred to as Medicaid Program Integrity, which is part of the Agency's Office of the Inspector General. Medicaid payments are monitored to ensure that such payments are made in accordance with federal and state rules and regulations. At all times relevant to this proceeding, the respondent was licensed to practice medicine in Florida and was an approved Medicaid treating provider assigned Treating Provider number 065767102. The respondent entered into a Noninstitutional Professional and Technical Medicaid Provider Agreement on October 14, 1981, in which he agreed 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," as provided in paragraph 7 of the agreement. The Medicaid Physician Provider Handbook provides in the introduction to section 11.1 that "[t]he services in this program must be performed for medical necessity for diagnosis and treatment of an illness for an eligible Medicaid recipient." The provider agreement also requires in paragraph 2 that the provider "keep such records as are necessary to fully disclose the extent of services provided to individuals receiving assistance under the State Plan." The Agency audited a random sample of medical records of Medicaid recipients for whom payments were made to Dade Health Services for medical services provided from August 3, 1992 through October 31, 1993. The respondent's name appeared frequently in these records as a treating provider. As a result, the Agency extended its investigation to the respondent. The respondent provided medical services at Dade Health Services from the beginning of the audit period until February 9, 1993, when he terminated his association with the clinic. The medical records of seven Medicaid recipients treated by the respondent were among the Dade Health Services's medical records audited by the Agency. In order to ensure that the Agency had all the medical records relevant to these patients, a letter was sent to the respondent requesting any additional medical records he might have in his possession. The respondent notified the Agency through his attorney that he did not have any medical records relating to the seven patients. The medical records of the seven Medicaid recipients treated by the respondent were reviewed by Dr. John Sullenberger, Chief Medical Consultant for the State of Florida Medicaid Group, to determine if the services provided and billed to Medicaid were medically necessary. Dr. Sullenberger evaluated the medical records in accordance with generally-accepted practices and using generally-accepted tools such as the Current Physician Terminology Handbook. He concluded that certain of the tests and treatments ordered by the respondent were not medically necessary Patient Q.M. was seen by the respondent in an office visit on September 16, 1992. The patient's main complaint was shortness of breath. The respondent ordered spirometry, a test which measures lung function. Shortness of breath can have many causes, among them heart problems. There is no indication in the medical records that a chest x-ray was taken, and nothing in the records supports the medical necessity for a test measuring lung function for shortness of breath alone. Patient J.U. was seen by the respondent in an office visit on January 30, 1993. The patient complained of a dry cough and shortness of breath. The respondent noted that the patient wheezed when he blew air out of his lungs, and he ordered spirometry. Spirometry is contraindicated for wheezing, and there is nothing in the records to support the medical necessity for the test for shortness of breath alone. Patient M.V. was treated on November 11, 13, 16, 18, 20, 23, 25, 27, and 29, 1992, and on December 2 and 7, 1992, with aerosol treatments ordered by the respondent. An aerosol treatment consists of the patient's breathing in a vaporized mist to moisten the nose and the bronchial tubes, and it provides relief for approximately three hours. Aerosol treatments are properly administered every four to six hours, usually to patients who are hospitalized. There is nothing in M.V.'s medical records to support the medical necessity for aerosol treatments, and there is no medical justification for administering these tests every two to three days. Patient D.S. was seen by the respondent in an office visit on January 23, 1993. The medical record of this visit is largely illegible, but it appears that the patient's main complaint was a cough. The respondent ordered spirometry, an electrocardiogram, and radiologic testing. There is nothing in the medical records to support the medical necessity for spirometry, especially since the respondent noted in the records that an examination of the lungs showed that they were within normal limits. There was no legible entry in the medical records to support the medical necessity for an electrocardiogram, which measures, among other things, the rhythm of the heart beat, the rate of the beat, and any blockage of blood passing through the heart. The radiologic testing consisted of a chest x-ray, but there is nothing in the medical records to support the medical necessity for this test. Patient E.R. was seen by the respondent in an office visit on November 2, 1992. The entry in the medical records of this visit for the patient's chief complaint is illegible. The respondent ordered two non-invasive tests, one to measure the blood flow through the arteries of the patient's legs and one to measure the blood flow through the veins of the legs. The respondent also ordered echography to test the patient's peripheral vascular system. Echography uses sound waves to construct a picture or photographic plate of the area being tested. There is no indication in the medical records that the respondent observed any abnormality of the patient's legs or feet or that he took the pulse in the feet to determine if the tests were necessary. The two non- invasive tests and the echography were not justified as medically necessary by the information contained in the medical record of E.R.'s November 2 office visit. Patient E.R. was also seen by the respondent in an office visit on December 19, 1992. The respondent ordered a duplex scan, which is a sonogram of the arteries in the neck that go to the brain. It is unusual to perform such a test on a 45-year-old woman, and there is nothing in the medical records to support the medical necessity for this test. Based on his examination of patient E.R. on December 19, the respondent also ordered aerosol treatments, which were administered on December 21, 23, 26, 28, and 30, 1992, and on January 4, 1993. There is nothing in the medical records to support the medical necessity for aerosol treatments, and there is no medical justification for administering the treatments every two to five days. Patient W.L. was seen by the respondent in an office visit on November 23, 1992. The patient's chief complaint was pain in the legs. There is nothing in the medical records indicating that the respondent examined the patient's legs or took the pulses in the feet, behind the knees, or in the groin. Nevertheless, the respondent diagnosed the patient as having peripheral vascular disease and ordered two non-invasive tests and echography of the peripheral vascular system. There is nothing in the medical record to support a diagnosis of peripheral vascular disease or the medical necessity for the three tests. Patient A.A. was seen by the respondent in an office visit on October 19, 1992. The patient's chief complaint was hemorrhoids, and the respondent noted in the medical records that the patient's lungs were clear. Nevertheless, he ordered aerosol treatments, which were administered October 19, 21, 22, 23, 26, 28, and 30, 1992, and November 2, 4, 6, and 9, 1992. There is nothing in the medical records to support the medical necessity for these treatments, and there is no medical justification for administering the treatments on the prescribed schedule. The evidence is clear and convincing that the respondent administered or ordered administered forty-seven tests and treatments for these seven Medicaid recipients, that Medicaid claims were submitted for these tests and treatments, and that no medical necessity was shown in their respective medical records for these tests and treatments.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a Final Order finding that, from August 3, 1992, until February 9, 1993, Jaime Vergel, M.D., committed forty-seven violations of Medicaid rules and regulations and imposing an administrative fine in the amount of $25,000. DONE AND ENTERED at Tallahassee, Leon County, Florida, this 14th day of November 1995. PATRICIA HART MALONO, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of November 1995.
The Issue The issues are whether Petitioner is liable to Respondent for Medicaid reimbursement overpayments, and if so, in what amount.
Findings Of Fact Respondent is the agency charged with administration of the Medicaid program in Florida pursuant to Section 409.907, Florida Statutes. Petitioner provides services to Medicaid beneficiaries under provider No. 1000098-00 pursuant to a contract with Respondent. Under the provider agreement dated March 31, 1997, Petitioner agreed to comply with all local, state and federal laws, rules, regulations, licensure laws, Medicaid bulletins, manuals, handbooks, and statements of policy. The contract also sets forth Petitioner's responsibilities to keep and maintain in a systematic and orderly manner all medical and Medicaid-related records, and to make them available for state and federal audits for five years. Heritage Information Systems, Inc. (Heritage) is and has been a pharmacy audit company since 1980. In 1999, Respondent contracted with Heritage to perform audits of pharmacies enrolled in the Florida Medicaid program. Respondent and Heritage subsequently created a list of violations to be investigated during an audit. The list is based upon provisions in the Florida Statutes and federal Medicaid policies and regulations. The purpose of the list is to guide Heritage in performing its duty during an audit. Heritage conducts its audits based on a standard methodology and protocol. During the course of an audit, Heritage examines a provider's records to determine whether a pharmacy is compliant with all rules and regulations that apply to the pharmacy. Heritage uses an established set of neutral criteria to select pharmacies for participation in an audit. Using these criteria, Heritage selected Petitioner as a candidate for audit. By letter dated January 17, 2000, Heritage advised Petitioner that it would be audited on January 26, 2000. The letter stated as follows in relevant part: The auditor(s) will require access to original hard-copy prescription records, third party signature logs, and, in some cases, pharmacy computer screens relating to a sample of prescription claims billed by your pharmacy between 12/25/1998 and 12/24/1999. Please note that the sample claim may actually be a refill of a prescription originally dispensed prior to the audit period. Because of this, we recommend that you also have the prior twelve months of prescription records available the day of the audit. For your reference, the audit terms are defined in your participating provider agreement and the prescribed drug services handbook. If you have any additional questions prior to the audit, please call Heritage Information Systems, Inc. . . . Between December 25, 1998, and December 24, 1999, Petitioner submitted claims and received payments from the Medicaid program for 7,065 claims. Using an industry standard software application, Heritage selected a random sample of 101 of Petitioner's claims to be analyzed during the audit. In performing the audit, Heritage utilized a methodology similar to that used by auditing agencies who examined Medicaid providers in previous years. During the audit, Heritage identified four areas of noncompliance for Petitioner. First, Heritage requested Petitioner's staff to produce hard-copy prescription records for the 101 sampled claims. Hard-copy prescriptions include those ordered and signed by a physician on a handwritten form and the records created by the pharmacists immediately after receiving verbal authorization from a physician by telephone. In this case, Petitioner could not produce hard-copy prescriptions for five claims. The second area of noncompliance involved unauthorized refills. In seven instances, Petitioner refilled prescriptions more times than the number authorized on the documented prescription. There were no notations on the hard-copy prescriptions or in the pharmacy computer to indicate that the doctors or someone from their office called to increase the number of authorized refills. The third area of noncompliance involved one instance in which Petitioner claimed payment for a "days supply value" that was inconsistent with the quantity and directions on the prescription. The prescription at issue was for sixty tablets with directions for the patient to take the drug once a day, constituting a sixty-day supply of medicine. Petitioner filled this prescription as a thirty-day supply and claimed Medicaid payment accordingly. Respondent did not include this violation in the calculation of overpayment. The fourth area of noncompliance involved a prescription that was refilled 30 days earlier than appropriate with respect to the quantity and directions for use that appeared on the prescription. This was the same prescription referenced above in paragraph twelve. After completing the audit, Heritage completed a final audit report. Said report documents the following: (a) 7,310 claims submitted by Petitioner; (b) $350,639.95 paid by Respondent for all claims; (c) 101 claims in total random sample; (d) $3,839.33 paid by Respondent for claims in total random sample; (e) 13 discrepant claims in random sample; $778.09 paid by Respondent for discrepant claims; 13 documented sanctions in random sample; (h) $724.91 paid by Respondent for documented sanctions in random sample; (i) $52,466.25 as the total calculated overpayment; and (j) $13,798.70 as the amount of the overpayment based on a 95 percent one-sided lower confidence limit. The final audit report also contained a listing of the violations discovered during the audit. The final audit report contained the following comments/notes in relevant part: Five prescriptions could not be found by auditors and could not be found by pharmacist Geiger and technician Daniels either. Many unauthorized refills were noticed. Pharmacy staff stated some information may be on the old computer system that was not functioning because of Y2K problems. Any authorization or documentation that was found on the computer system was accepted. Under cover of a letter dated March 2, 2000, Petitioner furnished Respondent with statements relative to the discrepant claims/documented sanctions signed by several physicians. All of the statements included the following: (a) statements that the doctors had prescribed the medication(s) for their patients; (b) the patient name; (c) the prescription number; (d) a print-out of a computer screen; and (e) opinions that Petitioner would not fill or refill prescriptions without authority and approval. None of these physicians testified at the hearing. By letter dated August 16, 2000, Respondent notified Petitioner of the determination of a Medicaid overpayment in the amount of $13,798.70. The greater weight of the evidence indicates that Petitioner received an overpayment in that amount or more.
Recommendation Based upon the findings of fact and conclusions of law, it is RECOMMENDED: That Respondent enter a final order finding that Petitioner must timely pay Respondent $13,798.70 for Medicaid reimbursement overpayments from December 25, 1998, through December 24, 1999. DONE AND ENTERED this 30th day of January, 2001, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of January, 2001. COPIES FURNISHED: Melvin H. Fletcher, R.Ph. Corporate Representative Mayhugh Drugs, Inc. 200 South Orange Avenue Green Cove Springs, Florida 32043 L. William Porter, II, Esquire Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308 Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308 Julie Gallagher, General Counsel Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308 Ruben J. King-Shaw, Jr., Director Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3116 Tallahassee, Florida 32308
