The Issue The issue for determination is whether Petitioner was overpaid by the Medicaid program as set forth in Petitioner's Final Agency Audit Report dated June 12, 2006 for the period January 1, 2002 through December 31, 2004.
Findings Of Fact AHCA audited certain of Dr. Negrette's Medicaid claims pertaining to services rendered between January 1, 2002 and December 31, 2004, hereinafter the audit period. Dr. Negrette was an authorized Medicaid provider during the audit period. During the audit period, Dr. Negrette had been issued Medicaid provider number 061422000. No dispute exists that, during the audit period, Dr. Negrette had a valid Medicaid Provider Agreement with AHCA. For services provided during the audit period, Dr. Negrette received in excess $79,523.70 in payments for services to Medicaid recipients. By a preliminary audit report dated August 25, 2005, AHCA notified Dr. Negrette that a preliminary determination was made that he was overpaid by the Medicaid program in the amount of $137,051.25. Subsequently, by a FAR dated June 12, 2006, AHCA notified Dr. Negrette that, after a review of all documentation submitted, it determined that he had been overpaid by the Medicaid program in the amount of $79,523.70, thus, reducing the amount of the overpayment. The FAR further provided how the overpayment was calculated using a sample of the claims submitted during the audit period, including the statistical formula for cluster sampling; and indicated that the statistical formula was generally accepted and that the statistical formula showed an overpayment in the amount of $79,523.70, with a 95 percent probability of correctness. Dr. Negrette agrees that the mathematical computation of the audit is correct.
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 finding that Jesus Negrette, M.D., received overpayments from the Medicaid program in the amount of $79,523.70, during the audit period January 1, 2002 through December 31, 2004, and requiring Jesus Negrette, M.D., to repay the amount of overpayment. DONE AND ENTERED this 5th day of February, 2007, in Tallahassee, Leon County, Florida. S 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 5th day of February, 2007.
The Issue The issue is whether Petitioner overpaid Respondent Medicaid funds, for which Section 409.913(10), Florida Statutes (2002), authorizes Petitioner to seek repayment from Respondent.
Findings Of Fact During 1998, Respondent was an authorized Medicaid provider, pursuant to Medicaid provider number 105425200, and was a party to a valid Medicaid Provider Agreement with Petitioner. Respondent filed claims with Petitioner for payment, under the Medicaid program, for the goods and services that are the subject of the audit described below, and Petitioner paid Respondent for these claims. The audit period in this case is 1998. During 1998, Respondent submitted to Petitioner 36,257 claims for nearly 5.5 million units of over one thousand types of drugs. These claims totaled $3,075,449.88, which Petitioner paid Respondent. On June 2, 1999, Petitioner sent a letter to Respondent informing it of a review of its pharmacy claims for 1998. The letter requests documentation of all purchases of 12 named drugs for 1998 and documentation of all credits for these drugs during the same period. The letter states that acceptable documentation includes itemized wholesaler sales history reports, itemized manufacturer sales history reports, itemized invoices, and credit return receipts. By letter dated June 5, 1999, Respondent provided the requested information. By letter dated June 23, 2000, Petitioner advised Respondent that it had examined the paid Medicaid claims for 1998 and the acquisition documentation that Respondent had provided in June 1999. The letter states: "You have failed to provide adequate documentation to the effect that the available quantity of certain drugs of given strength was as great as the quantity of those drugs billed to and reimbursed by Medicaid.” Thus, Petitioner made a "provisional" determination that it had overpaid Respondent $1,092,205.32. The letter invites Respondent to provide additional information to reduce the overpayment determination. The June 23 letter contains an Overpayment Attachment that lists ten of the twelve drugs for which Petitioner had sought documentation in its earlier letter. For each of these ten drugs, the Overpayment Attachment lists the generic code, number of units for which Medicaid paid, the total amount of Medicaid payments, the total units documented by Respondent to have been available during the relevant period, and the number of units for which Respondent provided no availability documentation. The Overpayment Attachment also calculates the amount of Medicaid payments attributable to the unavailable units and the total overpayment, which is $1,092,205.32. The overpayment calculations described in the preceding paragraph assume that all available units of the audited drugs were sold to Medicaid patients. The effect of this improbable scenario reduces the amount of the overpayment. The overpayment calculations attempt no extrapolation of overpayments on the over 10,000 other drugs for which Respondent received Medicaid payments during 1998. The effect of limiting the overpayment calculation to the ten listed drugs reduces the amount of the overpayment. However, the ten listed drugs are the drugs that generated the most Medicaid payments to Respondent and account for over one-third of the total Medicaid payments during the relevant period. Respondent provided additional information to Petitioner on August 30 and November 3, 2000. However, after examining the information, Petitioner advised Respondent, by letter dated April 8, 2002, that its final determination was that Respondent owed $1,096,489.77 due to its receipt of Medicaid overpayments. The overpayment increased by over $4000 due to the determination that Respondent's records documented 1000 fewer available units of two dosages of Risperdone than Petitioner had previously determined.
Recommendation It is RECOMMENDED that the Agency for Health Care Administration enter a final order directing Respondent to pay Petitioner $1,096,489.77, plus interest, to repay overpayments that it received from the Medicaid program for the sale of drugs in 1998. DONE AND ENTERED this 3rd day of November, 2003, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of November, 2003. COPIES FURNISHED: Rhonda M. Medows, M.D., Secretary Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3116 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308 Grant P. Dearborn Assistant General Counsel Building 3, Mail Stop 3 2727 Mahan Drive Tallahassee, Florida 32308-5407 Jose M. Herrera Jose M. Herrera, P.A. 1401 Ponce de Leon Boulevard Suite 200 Coral Gables, Florida 33134
Conclusions THE PARTIES resolved all disputed issues and executed a Settlement Agreement. The parties are directed to comply with the terms of the attached settlement agreement, attached hereto and incorporated herein as Exhibit “1.” Based on the foregoing, this file is CLOSED. DONE and ORDERED on this the Wray of SJ tembos 2014, in Tallahassee, Florida. LI [for ELIZABETH{BUDEK, SECRETARY Agency for Health Care Administration Final Order Invoice No. NH16766 Page 1 of 3 Filed October 3, 2014 11:45 AM Division of Administrative Hearings A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED. ‘ " Peter A. Lewis, Esquire Peter A Lewis, P.L. 3023 North Shannon Lakes Drive Suite 101 Tallahassee, Florida 32309 palewis@petelewislaw.com (Via Electronic Mail) _ Bureau of Health Quality Assurance Agency for Health Care Administration (Interoffice Mail) Stuart Williams, General Counsel Agency for Health Care Administration (Interoffice Mail) Shena Grantham, Chief Medicaid FFS Counsel (Interoffice Mail} Agency for Health Care Administration Bureau of Finance and Accounting (Interoffice Mail) Jeffries Duvall, Esquire Assistant General Counsel Agency for Health Care Administration (Interoffice Mail) Zainab Day, Medicaid Audit Services Agency for Health Care Administration (Interoffice Mail) State of Florida, Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (Via U.S. Mail) Final Order Invoice No, NH16766 Page 2 of 3 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished to the above named addressees by the designated method of delivery on this the / day of ( Niles , 2014. Richard J. Shoop, Esquire Agency Clerk State of Florida Agency for Health Care Administration 2727 Mahan Drive, Building #3 Tallahassee, Florida 32308-5403 (850) 412-3671 Final Order Invoice No. NH16766 Page 3 of 3 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION SUNBELT HEALTH AND REHAB CENTER, INC, Petitioner, PROVIDER NO.: 032041200 vs. INVOICE NO.: NH16766 STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Respondent. / ETTLE: ENT The Respondent, Agency for Health Care Administration (“AHCA” or “Agency"}, and the Petitioner, Sunbelt Health and Rehab Center, Inc., (“PROVIDER”), stipulate and agree as follows: 1. This Agreement is entered into between the parties to resolve disputed issues arising from a collection matter assigned case number NH16766. 2. The PROVIDER is a Medicaid provider, Provider Number 032041200, in the State of Florida operating a nursing home facility. 3. On July 15, 2013, the Agency notified the PROVIDER of its determination that PROVIDER was responsible to the Agency for an overpayment in the amount of $95,610.99. 4. The PROVIDER timely filed an appeal regarding this determination challenging the Agency’s application of the interest rate in the FRVS property component that had been used to set the Medicaid per diem rate generating the overpayment. 5. Subsequent to the filing of the petition for administrative hearing, AHCA and the PROVIDER exchanged documents and discussed the adjustment to the interest rate used to determine the FRVS component of the Medicaid per diem. As a result of the aforementioned exchanges, the parties agree that AHCA will revise the PROVIDER’s January 1, 2014 per diem rates to reflect a fixed FRVS interest rate of 5.65%. The 5.65% fixed interest rate shall be used to establish the FRVS component of PROVIDER’s Medicaid per diem rate for all subsequent rate semesters unless the interest rate is required to be Sunbelt Health & Rehab Center, Inc. Settlement Agreement Page 1of5 Exhibst | revised in accordance with the provisions of the Florida, Title XIX, Long-Term Care Reimbursement Plan. 6. In order to resolve this matter without further administrative proceedings, the PROVIDER and AHCA expressly agree to the adjustment resolutions, as set forth in paragraph 5 above, completely resolve and settle this case and this agreement constitutes the PROVIDER'S withdrawal of its petition for administrative hearing, with prejudice. 7. The PROVIDER and AHCA further agree that the Agency shall recalculate the per diem rates for the above-stated period and issue a notice of the recalculation. Where the PROVIDER was overpaid, the PROVIDER will reimburse the Agency the full amount of the overpayment within thirty (30) days of such notice. Where the PROVIDER was underpaid, AHCA will pay the PROVIDER the full amount of the underpayment within forty- five (45) days of such notice. Payment shall be made to: AGENCY FOR HEALTH CARE ADMINISTRATION Medicaid Accounts Receivable—Mail Stop 14 2727 Mahan Drive, Building 2, Suite 200 Tallahassee, Florida 32308 Notices to the PROVIDER shall be made to: Peter A. Lewis, Esquire Peter A. Lewis, P.L. 3023 North Shannon Lakes Drive, Suite 101 Tallahassee, Florida 32309 Payment shall clearly indicate it is pursuant to a settlement agreement and shall reference the case number and the Medicaid provider number. 8. PROVIDER agrees that failure to pay any monies due and owing under the terms of this Agreement shall constitute the PROVIDER'S authorization for the Agency, without further notice, to withhold the total remaining amount due under the terms of this agreement from any monies due and owing to the PROVIDER for any Medicaid claims. 9. Either party is entitled to enforce this Agreement under the laws of the State of Florida; the Rules of the Medicaid Program; and all other applicable federal and state Sunbelt Health & Rehab Center, Inc. Settlement Agreement Page 2 of 5 laws, rules, and regulations, 10. This settlement does not constitute an admission of wrongdoing or error by the parties with respect to this case or any other matter. 11. Each party shall bear their respective attorney's fees and costs, if any. 12. The signatories to this Agreement, acting in their respective representative capacities, are duly authorized to enter into this Agreement on behalf of the party represented, 13. The parties further agree that a facsimile or photocopy reproduction of this Agreement shail be sufficient for the parties to enforce the Agreement. The PROVIDER agrees, however, to forward a copy of this Agreement to AHCA with original signatures, and understands that a Final Order may not be issued until said original Agreement is received by AHCA. 14. This Agreement shall be construed in accordance with the provisions of the laws of Florida. Venue for any action arising from this Agreement shall be in Leon County, Florida. 15. This Agreement constitutes the entire agreement between the PROVIDER and AHCA, including anyone acting for, associated with, or employed by them, respectively, concerning all matters and supersedes any prior discussions, agreements, or understandings: There are no promises, representations, or agreements between the PROVIDER and AHCA other than as set forth herein. No modifications or waiver of any provision shall be valid unless a written amendment to the Agreement is completed and properly executed by the parties. 16. This is an Agreement of settlement and compromise, recognizing the parties may have different or incorrect understandings, information and contentions, as to facts and law, and with each party compromising and settling any potential correctness or incorrectness of its understandings, information, and contentions as to facts and law, so that no misunderstanding or misinformation shall be a ground for rescission hereof. 17. The PROVIDER expressly waives in this matter their right to any hearing pursuant to §§120.569 or 120.57, Florida Statutes, the making of findings of fact and conclusions of law by the Agency, and all further and other proceedings to which it may be Sunbelt Health & Rehab Center, Inc. Settlement Agreement Page 3 of 5 entitled by law or rules of the Agency regarding these proceedings and any and all issues raised herein, other than enforcement of this Agreement. The PROVIDER further agrees the Agency shall issue a Final Order which adopts this Agreement. 18. This Agreement is and shall be deemed jointly drafted and written by all parties to it and shall not be construed or interpreted against the party originating or preparing it. 19. To the extent any provision of this Agreement is prohibited by law for any reason, such provision shall be effective to the extent not so prohibited, and such prohibition shall not affect any other provision of this Agreement. 20. This Agreement shall inure to the benefit of and be binding on each party’s successors, assigns, heirs, administrators, representatives, and trustees. SUNBELT HEALTH AND REHAB CENTER, INC. Dated: Spt 2014 Seen Dated: Printed Title of Providers’ OCF Dated: 4-9- Providers’ Representative ——_____, 2014 > 2014 Legal Counsel for Provider Sunbelt Health & Rehab Center, Inc. Settlement Agreement Page 40fS FLORIDA AGENCY FOR HEALTH CARE | ADMINISTRATION 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308-5403 | 4 Lh : Dated: G/26 2014 Justin Senio Deputy Secretary, Medicaid .S AGI pated: Z//F 2014 Stuart Williams General Counsel Dated: ) | 19 , 2014 Sh¢ya Gran Medicaid FFS Sunbelt Health & Rehab Center, Inc. Settlement Agreement Page 5 of 5 FLORIDA AGENCY FOR HEATH CARE ASMINISTRATION, pecan Better Heaith Care for aif Floridians cS ETARY EK CERTIFIED MAIL RECEIPT REQUESTED: Of 7108 2433 3937 6307 1806 July 15, 2013 Nursing Home Administrator Sunbelt Health & Rehab Center 305 East Oak Street Apopka, FL 327@2 Dear Administrator: You have been notified by the Office of Medicaid Cost Reimbursement Analysis of adjustments to your Medicaid reimbursement rates on the remittance voucher run dated: 7/13/13. The adjustments resulted from changes in your cost reports. This action has resulted in a balance due to the Agency in the amount of $95,610.99 for provider number 03204 1200/ invoice number NH 16766. If payment is not received, or arranged for, within 30 days of receipt of this letter, the Agency shall withhold Medicaid payments in accordance with the provisions of Chapter 409.913(27), F.S. Furthermore, pursuant to Sections 409.913(25) and 409.913(15), F.S., failure to pay in full, or enter into and abide by the terms of any repayment schedule set forth by the Agency may result in termination from the Medicaid Program. Likewise, failure to comply with all sanctions applied or due dates may result in additional sanctions being imposed. If the overpayment cannot be recouped by this office, Florida law authorizes referral of your account to the Department of Health and to a collection agency. All costs incurred by the Agency resulting from collection efforts will be added to your balance. Additionally, be advised that this referral does not relieve you of your obligation to make payment in full or contact this office to arrange mutually agreeable repayment terms. In addition, amounts due to the Agency shall bear interest at ten percent (10%) per annum from the date of this letter on the unpaid balance until the account is paid in full. The interest accrual will not be assessed if payment is received by the Agency within 30 days. You have the right to request a formal or informal hearing pursuant to Section 120.569, F.S. Ifa request for a formal hearing is made, the petition must be made in compliance with Section 28- 106.201, F.A.C. and mediation may be available. If a request for an informal hearing is made, the petition must be made in compliance with rule Section 28-106.301, F.A.C. Additionally, you are hereby informed that if a request for a hearing is made, the petition must be received by the Agency within twenty-one (21) days of receipt of this letter. For more information regarding your hearing and mediation rights, please see the attached Notice of Administrative Hearing and Mediation Rights. 2727 Mahan Drive, MS#14 Visit AHCA online at Tallahassee, Florida 32308 http://ahca.myflorida.com Please include a copy of the enclosed remittance advice to assure Proper posting of payments to your provider account. Should you have any questions regarding the Medicaid provider account balance information contained in this notice, please contact Julie Chasar (850) 412-4877. Questions regarding the reimbursement rate changes should be directed to Thomas Parker, Office of Medicaid Cost Reimbursement, at (850) 412-4110, Sincerely, Julie Chasar Medicaid Accounts Receivable JFC - July 15, 2013 PLEASE INCLUDE THIS REMITTANCE ADVICE WITH YOUR PAYMENT — eR EES REIS ANCE ADVICE WITH YOUR PAYMENT Remit Payment to: Agency for Health Care Administration Medicaid Accounts Receivable MS# 14 2727 Mahan Drive Bldg. 2 Ste. 200 Tallahassee, FL 32308 Attn: Sharon Dixon FROM: Sunbelt Health & Rehab Center 305 East Oak Street Apopka, FL 32703 Provider No. 032041200 Invoice No. NH16766 STATEMENT OF ACCOUNT CERTIFIED MAIL: 91 7108 2133 3937 6307 1800 VOUCHER RUN DATE: 7/13/13 BALANCE DUE: — $05.610.96 PAYMENT IS DUE WITHIN 30 DAYS FROM THE DATE OF THIS LETTER. Amount Enclosed: $ NOTICE OF ADMINISTRATIVE HEARING AND MEDIATION RIGHTS RE SE ARING AND MEDIATION RIGHTS The written request for an administrative hearing must conform to the requirements of either Rule 28-1 06.201(2) or Rule 28-} 06.301 (2), Florida Administrative Code, and must be received by the Agency for Health Care Administration, by 5:00 P.M. no later than 21 days after you received the SBR. The address for filing the written request for an administrative hearing is: Richard J. Shoop, Esquire Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308 Fax: (850) 921-0158 The request must be legible, on 8 % by 11-inch white paper, and contain: 1. Your name, address, telephone number, any Agency identifying number on the SBR, if known, and name, address, and telephone number of your representative, if any; 2. An explanation of how your substantial interests will be affected by the action described in the SBR; 3. A statement of when and how you received the SBR; 4. Fora request for formal hearing, a statement of al] disputed issues of material fact; 5. Fora request for formal hearing, a concise statement of the ultimate facts alleged, as well as the rules and statutes which entitle you to relief: 6. For a request for formal hearing, whether you request mediation, if it is available; 7. Fora request for informal hearing, what bases Support an adjustment to the amount owed to the Agency; and 8. A demand for relief. A formal mediation may be available in conjunction with a formal hearing. Mediation is a way to use a f you and the Agency agree to mediation, it does not mean that you give up the right to a hearing. Rather, you and the Agency will try to settle your case first with mediation, If a written request for an administrative hearing is not timely received you will have waived your right to have the intended action reviewed pursuant to Chapter 120, Florida Statutes, and the action set forth in the SBR shall be conclusive and final.
The Issue Whether Petitioner is liable for overpayment of Medicaid claims for the period of January 1, 1997, through December 31, 1998, as stated in Respondent's Final Agency Audit dated March 10, 2000.
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 (1997). At all times material hereto, C. Dwight Groves, M.D. (Petitioner) was a licensed medical doctor in the State of Florida and was providing medical services to Medicaid recipients. Petitioner provided the medical services pursuant to a contract with Respondent. When first accepted as a Medicaid provider in June of 1995, Petitioner was assigned provider number 3777278-00 and was approved for providing and billing for physician services. The letter notifying Respondent that he was accepted as a Medicaid provider referenced an enclosed handbook which explained how the Medicaid program operates and how to bill Medicaid. At that time Petitioner practiced in Key West, Florida. In October of 1997, Petitioner notified Respondent of a change of address to Southern Group for Women in Lake City, Florida. According to the answers provided to a Medicaid Provider Questionnaire, Petitioner became affiliated with Southern Group for Women on October 16, 1997. Petitioner's medical practice was and is in the area of obstetrics and gynecology. Respondent's witness, Toni Steele, is employed by Respondent in its Medicaid program integrity division. During the audit period in question, she was a senior human services program specialist. Her job responsibility was to ensure that Medicaid providers in Florida adhered to Medicaid policy and rules. Medicaid program integrity uses several detection devices to audit Medicaid provider billing. One such device is what is referred to as a "one and a half report." This type of report will indicate when a provider "spikes" one and a half times his or her normal billings. During December of 1998, Ms. Steele noticed a "spike" in Petitioner's billings. Because of this spike, Medicaid program integrity, ordered an ad hoc sampling of his billings within a two-year billing period, January 1, 1997, through December 31, 1998. She reviewed the sample and, using the Medicaid Management Information System, was able to look at the actual dates of service and view the procedure code that was billed and paid by Medicaid. Ms. Steele then conducted an on-site visit to Petitioner's office. As is her usual practice, she took a tour of Petitioner's office looking at what types of lab equipment were there, the State of Florida license, and the number of medical personnel employed. During the on-site visit, Ms. Steele presented the office manager with a computer-generated list of patients and requested that the office manager provide the medical records of those patients on the list. The requested 31 files were provided to her within the requested time frame. Ms. Steele reviewed the patients' files received from Petitioner's office for the purpose of determining policy violations according to the Medicaid Physician Coverage and Limitations Handbook (Nov. 1997), the Advanced Registered Nurse Practitioner Coverage and Limitations Handbook (Nov. 1997), and the Medicaid Provider Reimbursement Handbook (Nov. 1996). The Medicaid Provider Reimbursement Handbook (Nov. 1996) provides in pertinent part: Introduction: Every facility, individual and group practice must submit an application and sign an agreement in order to provide Medicaid services. Note: See the Coverage and Limitations Handbook for specific enrollment requirements. Group Enrollment: When two or more Medicaid providers form a group practice, a group enrollment application must be filed with the Medicaid fiscal agent. * * * Renewal: A provider agreement is valid for the time period stated in the agreement and must be renewed by the provider by completing a new provider agreement and submitting it to the Medicaid fiscal agent 30 days prior to the expiration date of the existing agreement. The Physician Coverage and Limitations Handbook (Nov. 1997) provides in pertinent part: Other Licensed Health Care Practitioners: If a physician provider employs or contracts with a non-physician health care practitioner who can enroll as a Medicaid provider and that health care provider is treating Medicaid recipients, he or she must enroll as a Medicaid provider. Examples of non-physician health care practitioners who can enroll as Medicaid providers include but are not limited to: physician assistants, advanced registered nurse practitioners, registered nurse first assistants, physician therapists, etc. If the services rendered by a non-physician health care practitioner are billed with that practitioner as the treating provider, the services must be provided in accordance with the policies and limitations contained in that practitioner's program-specific Coverage and Limitations Handbook. * * * Physician Supervision: 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 . reviews, signs and dates the medical record within 24 hours of providing the service. The Advanced Registered Nurse Practitioner Coverage and Limitations Handbook (November 1997) provides in pertinent part: ARNP in a Physician Group: If an ARNP is employed by or contracts with a physician who can enroll as a Medicaid provider, the physician must enroll as a group provider and the ARNP must enroll as a treating provider within the group. If the services rendered by the ARNP are billed with the ARNP as the treating provider, the services must be provided in accordance with the policies and limitations contained in this handbook. According to answers provided on a Medicaid Provider Questionnaire completed in February of 1999, Anna Hall Kelley, ARNP, became affiliated with Southern Group for Women on October 16, 1997. The answers provided on the Questionnaire indicated that Petitioner and Nurse Kelley formed a partnership and practiced together at Southern Group for Women. Nurse Kelley did not testify at the hearing. In reviewing the requested medical records, Ms. Steele noted that some of the medical records were signed by Nurse Kelley, ARNP, indicating that Nurse Kelley, not Petitioner, performed the services. They were not countersigned by Petitioner. Nurse Kelly was not an enrolled Medicaid provider at the time the services were rendered as her provider number expired on May 31, 1997. Nurse Kelley signed a new enrollment application to be a Medicaid provider in October of 1999. Thus, she was not an enrolled provider from June 1, 1997, through the remainder of the audit period. Nurse Kelley saw patients and billed for those services under Petitioner's individual provider number. Neither Nurse Kelley nor Petitioner applied for a group Medicaid provider number during the audit period. Respondent sent a Preliminary Agency Audit Report to Petitioner on September 21, 1999, notifying him of a preliminary determination of a Medicaid overpayment in the amount of $71,261.92. Respondent sent a Final Agency Audit Report to Petitioner on March 10, 2000, notifying him that the Agency made a determination of a Medicaid overpayment in the amount of $55,829.04. Because of recalculations made by Respondent, the amount of reimbursement sought was reduced to $55,647.92. As a result of a stipulation of the parties prior to the hearing, the amount of reimbursement was further reduced to approximately $51,000. As to the statistical aspect of Respondent's audit, Respondent presented testimony of a statistical expert, Dr. Robert Peirce, who is employed by Respondent as an administrator in the Bureau of Program Integrity. Dr. Peirce's testimony is considered credible. Dr. Peirce developed the statistical methodology used in the statistical sampling of Dr. Groves' medical files. Dr. Peirce studied the methodology used by Respondent in this case, and concluded that the statistical procedures used in the audit of Petitioner were in accordance with customary statistical methodology. The statistical analysis of a Medicaid provider's billing begins with the selection of an audit period, which in Petitioner's case was calendar years 1997 and 1998. During that audit period, Petitioner submitted 3912 claims for Medicaid reimbursement. A random sample of recipients, 31 out of a possible 315, was selected by a computerized random sample generator from the claims submitted by Petitioner during the audit period. All of the claims in the sample were reviewed by an analyst, who determined whether any overpayment existed with respect to those claims. An overpayment totaling $5,130.99 was determined for the 302 claims of the 31 recipients in the sample. The amount of overpayment from the sample was extended to the population of the claims through a widely accepted statistical sampling formula. In extending the results of the 302 claims to the 3,912 claims, the total amount of overpayments was calculated as $55,647.92. The determination of that amount was made at the 95 percent confidence level, meaning that Respondent is confident that the overpayment is the amount that was calculated or more. There is a five percent probability that it might be less and a 95 percent chance that it would be more then the $55,647.92 that was calculated. The process used by Respondent is in accordance with customary statistical methodology. However, the result does not take into account the fact that the audit period began January 1, 1997, whereas Nurse Kelley did not begin to practice at Southern Women's Group until October 16, 1997, and, therefore, worked there only 14 and one-half months (or approximately 60%) of the audit period. Despite the stipulation of the parties that all issues other than the ARNP services had been resolved and that the amount in dispute was now approximately $51,000, no evidence was presented to indicate the exact amount remaining in dispute.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Agency for Health Care Administration enter a final order sustaining the Final Agency Audit Report in part, recalculating the amount of overpayment as indicated and consistent with this Recommended Order, and requiring Petitioner to repay overpayments in the amount determined by the recalculation. DONE AND ENTERED this 21st day of December, 2000, in Tallahassee, Leon County, Florida. BARBARA J. STAROS 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 21st day of December, 2000.
Findings Of Fact Petitioner, Westchester General Hospital (WGH), is an osteopathic hospital located at 2500 S.W. 75th Avenue, Miami, Florida. It holds a license from respondent, Department of Health and Rehabilitative Services (HRS), and serves in an area of Dade County settled mostly by Cuban Refugees. On March 5, 1973, a participation agreement was executed by WGH and HRS wherein WGH agreed to provide certain hospital services to Medicaid patients in return for payment of reasonable costs incurred by such patients. Under that agreement, reimbursement was made on the basis of an interim payment plan in the form of a per diem cost rate. These rates were established by HRS based upon cost reports submitted by WGH. For the years 1979 and 1980, which are the pertinent years in this controversy, the Medicaid per diem reimbursement rates for WGH were as follows: 1-1-79 through 5-20-79 $175.71 per day 5-21-79 through 5-15-80 $166.55 per day 5-16-80 through 12-31-80 $203.52 per day In 1979 and 1980, a large number of Cuban refugees settled in the Dade County area and WGH provided Medicaid services to these refugees under its participation agreement. By virtue of a special ace of Congress, the refugees were also eligible for Medicare Part B coverage which paid various hospital charges, including radiology, laboratory, EKG, EEG and nuclear medicine. Consequently, the patients were eligible for both Medicaid and Medicare, and WGH received reimbursement under both programs for the same patients. The hospital's problems began when it first received preliminary or interim payments from the Federal government based upon charges for providing Medicare services to these indigents. Because charges are generally higher than costs in a hospital setting, the payments were later adjusted downward by the government at year-end when WGH's Medicare cost report was prepared. Nonetheless, under the then effective Rule 10C-7.36, Florida Administrative Code, WGH was required to submit its Medicaid claims for payment within forty- five days after services were rendered or the patient discharged. Therefore, WGH submitted its requests for payment to HRS before the true-up at year-end was performed by the Federal government. These claims reflected that WGH had been reimbursed by Medicare at the interim payment level rather than the year-end adjusted amount since the latter amounts were not yet known. As discussed in greater detail hereinafter, the interim payments were used as an offset to the Medicaid payments due from the state. In 1979, after being gently nudged by the Federal government, HRS discovered that a number of patients on the State Medicaid eligibility file also were eligible for Medicare coverage and that Medicare, rather than Medicaid, was responsible for at least a part of their bills. This was determined by comparing the State's Medicaid file with Medicare computer tapes obtained from the Federal government. As a result of this discovery, HRS advised WGH on November 16, 1979, by letter that WGH must bill Medicare for hospital charges incurred by Medicaid patients with Medicare Part B coverage. The letter pointed out that Medicaid is the payer of last resort, and pays only after other third parties, including Medicare, pay their applicable portion of the medical bills. This was consistent with federal regulations which obligated HRS to identify third-party resources of Medicaid recipients, and to seek reimbursement from such third-party resources within 30 days after the end of the month in which it first determined a third party was responsible for the claim. Had it not pursued these third party resources, HRS risked the loss of federal funds. However, the same regulations also required HRS to "take reasonable measures to determine the legal liability of third parties to pay for services under the plan." Other than relying upon the interim payment amounts reflected on WGH's Medicaid claims, HRS made no effort to determine the actual legal liability of Medicare. Indeed, it was not until after May, 1980 that HRS had the capability to take reasonable measures to determine a third party's liability. On that date, it formed, at the insistence of the Federal government, a special "unit" for that specific purpose. Prior to that time, it was unable to comply with Federal regulations. In compliance with the letter, WGH reflected the interim Medicare payments on its Medicaid payment claims filed with HRS. However, to its consternation, it later learned that HRS did not take into account the interim nature of the payments, and used those amounts vis a vis adjusted amounts to calculate the amount of WGH's Medicaid reimbursement. The net result was the filing of Medicaid payment claims by WGH in 1979 and 1980 which reflected Medicare reimbursement at a much higher level than it actually received after year-end adjustments were made, and a concomitant reduction in Medicaid receipts from the State. WGH recognized its dilemma in early 1981. Accordingly, on March 10, 1981, its treasurer wrote HRS's Medicaid Third Party Reimbursement Manager complaining that it had been under-reimbursed for Medicaid patients with Medicare Part B Coverage for periods beginning in 1978. He stated that the ancillary services covered by Medicare Part B were reimbursable only at 80 percent cost, and resulted in a substantial amount of the reimbursement being refunded back to the Federal program. This in turn had caused a shortfall on the hospital's part, and payment less than its Medicaid per diem rate. It accordingly requested that Medicaid return the funds necessary to bring its "reimbursement back to the level not less than the established Medicaid per diem rate of the given period." The request was authorized by Rule 10C-7.36(3), Florida Administrative Code, which allowed providers such as WGH to demonstrate "undue hardships" on the part of the provider if it submitted its Medicaid claim for payment in accordance with the forty-five day time schedule prescribed by rule, and by Florida law which authorized HRS to "make appropriate settlements" in determining third party liability in the Medicaid program. HRS did not respond to this letter. Although it did not respond to WGH's request, HRS was nevertheless fully aware of the problem by that time for it already had rule amendments in the mill which would cure the problem. Effective March 18, 1981, HRS amended its Rule 10C-7.36 to provide that providers who had claims that were crossed over to Medicaid from Medicare due to recipient eligibility in both programs were relieved from the time constraints for filing claims imposed by the rule. But because the rule operated on a prospective basis only, it did not apply to the 1979 and 1980 fiscal years. The parties have stipulated that if WGH owes HRS for excess Medicaid funds paid to WGH during January 1, 1978 through June 30, 1981, the proper amount is $4,779.90. In support of its claim against HRS, WGH produced worksheets reflecting under-reimbursement from HRS in the amounts of $41,905 and $100,542 for fiscal years 1979 and 1980, respectively, under the Medicaid program. They are derived from a log prepared by Blue Cross, the fiscal intermediary retained by HRS to conduct audits on Medicaid providers in the state. The deficiencies were caused by HRS applying full credit to the interim payments that WGH received from Medicare even though a portion of the same were subsequently returned to Medicare by WGH after the year-end audit was completed. In preparing the revenue deficiencies, WGH applied a cost-to-charge ratio which was based on the average of the five ancillary services included under Medicare Part B rather than reviewing each patient's actual billing records to determine the percentage of patients receiving a particular ancillary service. However, it was impossible to perform the latter analysis in 1979 since a "combination method" was used for the various cost centers, and the principle of consistency required that the 1980 log be prepared in the same manner as 1979.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Health and Rehabilitative Services repay Westchester General Hospital $142,447 less $4,779.90 by virtue of it having been under-reimbursed under the Medicaid program for fiscal years 1979 and 1980. DONE and ORDERED this 28th day of September, 1984, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of September, 1984.
The Issue Whether Petitioner received Medicaid overpayments and, if so, the total amount of the overpayments.
Findings Of Fact AHCA is charged with administration of the Medicaid program in Florida pursuant to Section 409.907, Florida Statutes. Petitioner is a durable medical equipment provider that provided Medicaid services to Medicaid beneficiaries pursuant to a valid Medicaid Provider Agreement with AHCA under provider number 9512721 00. Petitioner was an authorized Medicaid provider during the period of October 1, 1999, through September 30, 2001, which is the audit period at issue here. AHCA conducted an audit of paid Medicaid claims for services claimed to have been performed by Petitioner from October 1, 1000, through September 30, 2001. On October 16, 2002, AHCA issued a Final Agency Audit Report ("FAAR") requesting Petitioner to reimburse AHCA in the amount of $28,407.90, for Medicaid claims submitted by and paid to Petitioner, for services allegedly rendered during the audit period. When the FAAR was issued, AHCA's claims for overpayment were based upon audit findings that paid Medicaid claims for certain services performed by Petitioner did not meet Medicaid requirements. The deficiencies in the subject Medicaid claims included a lack of documentation of required medication for nebulizer equipment, payments in excess of allowable total amounts for rent-to-purchase equipment, and payments for portable oxygen with a lack of documentation that the attending practitioner has ordered a program of exercise or an activity program for therapeutic purposes, that the recommended activities cannot be accomplished by the use of stationary oxygen service, and that the use of a portable oxygen system during exercise or activity results in improvement in the individual's ability to perform the exercises or activities. During the subject audit period, the applicable statutes, rules, and Medicaid handbooks required Petitioner to retain all medical, fiscal, professional, and business records on all services provided to a Medicaid recipient. Petitioner had to retain these records for at least five years from the dates of service. Petitioner had a duty to make sure that each claim was true and accurate and was for goods and services that were provided in accordance with the requirements of Medicaid rules, handbooks, and policies, and in accordance with federal and state law. Medicaid providers who do not comply with the Medicaid documentation and record retention policies may be subject to administrative sanctions and/or recoupment of Medicaid payments. Medicaid payments for services that lack required documentation and/or appropriate signatures will be recouped. Claire Cohen, AHCA's analyst, generated a random list of 30 Medicaid recipients (cluster sample) who had received services by Petitioner during the audit period. In addition, AHCA generated work papers revealing the following: the total number of Medicaid recipients during the audit period; the total claims of Petitioner, with dates of services; the total amount of money paid to the Petitioner during the audit period; and worksheets representing the analyst's review of each recipient's claims for the audit period. After Ms. Cohen reviewed the medical records and documentation provided by Petitioner, she reviewed the Medicaid handbook requirements, and arrived at a figure of $7,572.13 as the total overpayment for all cluster sample claims. Using the Agency's formula for calculating the extrapolated overpayment, Ms. Cohen determined that the overpayment in this case amounted to $29,703.63. Ms. Cohen then prepared the June 20, 2002, Preliminary Agency Audit Report (PAAR) and mailed it to Petitioner. At that point, the case was reassigned to Ellen Williams, a program analyst/investigator. Ms. Williams reviewed additional documentation submitted by Petitioner, and on October 16, 2002, issued on behalf of AHCA, the FAAR, which reduced the alleged overpayment to $28,407.90. Part of this reduction resulted from Petitioner's paying $369.97 to satisfy the issue concerning payments in excess of allowable totals for rent-to-purchase equipment. At the hearing, Ms. Williams testified that the adjusted overpayment amount was $27,473.27. The formula used by AHCA is a valid statistical formula, the random sample used by the Agency was statistically significant, the cluster sample was random, and the algebraic formula and the statistical formula used by AHCA are valid formulas. The DME/Medical Supply Services Coverage and Limitations Handbook provides, in part: Medicaid reimburses for portable oxygen when a practitioner prescribes activities requiring portable oxygen. The oxygen provider must document the following information in the recipient's record: the recipient qualifies for oxygen service; the attending practitioner has ordered a program of exercise or an activity program for therapeutic purposes; the recommended exercises or activities cannot be accomplished by the use of stationary oxygen services; and the use of a portable oxygen system during the activity or exercise results in an improvement in the individual's ability to perform the activities and exercises. The DME/Medical Supply Services Coverage and Limitations Handbook also provides, in part: Medicaid may reimburse for a nebulizer if the recipient's ability to breathe is severely impaired. The documentation of medial necessity must include required medications. The following payments are claimed by AHCA to be overpayments for failure to provide documentation of medical necessity and required medications: Recipient Date of Service Procedure Overpayment 4 7/19/00 E0570 $106.70 9 6/30/00 E0570 $106.70 10 10/24/00 E0570 $106.70 14 02/15/00 E0570 $106.70 16 05/08/00 E0570 $106.70 23 06/09/00 E0570 $106.70 26 06/14/00 E0570 $106.70 The remaining overpayments claimed by AHCA concern the failure to document that the attending practitioner had ordered a program of exercise or an activity program for therapeutic purposes that required the use of a portable oxygen system. The Medicaid Provider Reimbursement Handbook provides, in part, that "Records must be retained for a period of at least five years from the date of service." The types of records that must be retained include "patient treatment plans" and "prescription records." The handbook goes on to provide in pertinent part: Medical records must state the necessity for and the extent of services provided. The following minimum requirements may vary according to the services rendered: * * * Treatment plan, including prescriptions; Medications, supplies, scheduling frequency for follow-up or other services; Progress reports, treatment rendered; * * * Note: See the service-specific Coverage and Limitations Handbook for record keeping requirements that are specific to a particular service. 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. Petitioner, through its owners and operators, is of the view that it does not need to have the documentation on file, and it does not ask physicians for details about their prescriptions, "because that's something private from doctors and patient." Petitioner, by signing a Medicaid Provider agreement, agreed that all submissions for payment of claims for services will constitute a certification that the services were provided in accordance with local, state, and federal laws, as well as rules and regulations applicable to the Medicaid program, including the Medical Provider Handbooks issued by AHCA. Petitioner routinely obtained from Medicaid beneficiaries to whom it provides goods or services a written statement authorizing other healthcare provides to furnish any information needed to determine benefits.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency issue a final order requiring Petitioner to reimburse the Agency for Medicaid overpayments in the total amount of $27,473.27, plus such interest as may statutorily accrue. DONE AND ENTERED this 22nd day of September, 2003, in Tallahassee, Leon County, Florida. S MICHAEL M. 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 22nd day of September, 2003. COPIES FURNISHED: Tom Barnhart, Esquire Agency for Health Care Administration 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308 Lawrence R. Metsch, Esquire Metsch & Metsch, P.A. 1455 Northwest 14th Street Miami, Florida 33125 Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration Fort Knox Building, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308 Rhonda M. Medows, M.D., Secretary Agency for Health Care Administration Fort Knox Building, Suite 3116 2727 Mahan Drive Tallahassee, Florida 32308
The Issue The issues in this case are whether Respondent applied the proper reimbursement principles to Petitioners' initial Medicaid rate setting, and whether elements of detrimental reliance exist so as to require Respondent to establish a particular initial rate for Petitioners' facilities.
Findings Of Fact There are nine Petitioners in this case. Each of them is a long-term health care facility (nursing home) operated under independent and separate legal entities, but, generally, under the umbrella of a single owner, Tzvi "Steve" Bogomilsky. The issues in this case are essentially the same for all nine Petitioners, but the specific monetary impact on each Petitioner may differ. For purposes of addressing the issues at final hearing, only one of the Petitioners, Madison Pointe Rehabilitation and Health Center (Madison Pointe), was discussed, but the pertinent facts are relevant to each of the other Petitioners as well. Each of the Petitioners has standing in this case. The Amended Petition for Formal Administrative Hearing filed by each Petitioner was timely and satisfied minimum requirements. In September 2008, Bogomilsky caused to be filed with AHCA a Change of Licensed Operator ("CHOP") application for Madison Pointe.1 The purpose of that application was to allow a new entity owned by Bogomilsky to become the authorized licensee of that facility. Part and parcel of the CHOP application was a Form 1332, PFA. The PFA sets forth projected revenues, expenses, costs and charges anticipated for the facility in its first year of operation by the new operator. The PFA also contained projected (or budgeted) balance sheets and a projected Medicaid cost report for the facility. AHCA is the state agency responsible for licensing nursing homes in this state. AHCA also is responsible for managing the federal Medicaid program within this state. Further, AHCA monitors nursing homes within the state for compliance with state and federal regulations, both operating and financial in nature. The AHCA Division of Health Quality Assurance, Bureau of Long-Term Care Services, Long-Term Care Unit ("Long-Term Care Unit") is responsible for reviewing and approving CHOP applications and issuance of an operating license to the new licensee. The AHCA Division of Health Quality Assurance, Bureau of Health Facility Regulation, Financial Analysis Unit ("Financial Analysis Unit") is responsible for reviewing the PFA contained in the CHOP application and determining an applicant's financial ability to operate a facility in accordance with the applicable statutes and rules. Neither the Long-Term Care Unit nor the Financial Analysis Unit is a part of the Florida Medicaid Program. Madison Pointe also chose to submit a Medicaid provider application to the Medicaid program fiscal agent to enroll as a Medicaid provider and to be eligible for Medicaid reimbursement. (Participation by nursing homes in the Medicaid program is voluntary.) The Medicaid provider application was reviewed by the Medicaid Program Analysis Office (MPA) which, pursuant to its normal practices, reviewed the application and set an interim per diem rate for reimbursement. Interim rate-setting is dependent upon legislative direction provided in the General Appropriations Act and also in the Title XIX Long-Term Care Reimbursement Plan (the Plan). The Plan is created by the federal Centers for Medicare and Medicaid Services (CMS). CMS (formerly known as the Health Care Financing Administration) is a federal agency within the Department of Health and Human Services. CMS is responsible for administering the Medicare and Medicaid programs, utilizing state agencies for assistance when appropriate. In its PFA filed with the Financial Analysis Unit, Madison Pointe proposed an interim Medicaid rate of $203.50 per patient day (ppd) as part of its budgeted revenues. The projected interim rate was based on Madison Pointe's expected occupancy rate, projected expenses, and allowable costs. The projected rate was higher than the previous owner's actual rate in large part based on Madison Pointe's anticipation of pending legislative action concerning Medicaid reimbursement issues. That is, Madison Pointe projected higher spending and allowable costs based on expected increases proposed in the upcoming legislative session. Legislative Changes to the Medicaid Reimbursement System During the 2007 Florida Legislative Session, the Legislature addressed the status of Medicaid reimbursement for long-term care facilities. During that session, the Legislature enacted the 2007 Appropriations Act, Chapter 2007-72, Laws of Florida. The industry proposed, and the Legislature seemed to accept, that it was necessary to rebase nursing homes in the Medicaid program. Rebasing is a method employed by the Agency periodically to calibrate the target rate system and adjust Medicaid rates (pursuant to the amount of funds allowed by the Legislature) to reflect more realistic allowable expenditures by providers. Rebasing had previously occurred in 1992 and 2002. The rebasing would result in a "step-up" in the Medicaid rate for providers. In response to a stated need for rebasing, the 2007 Legislature earmarked funds to address Medicaid reimbursement. The Legislature passed Senate Bill 2800, which included provisions for modifying the Plan as follows: To establish a target rate class ceiling floor equal to 90 percent of the cost- based class ceiling. To establish an individual provider- specific target floor equal to 75 percent of the cost-based class ceiling. To modify the inflation multiplier to equal 2.0 times inflation for the individual provider-specific target. (The inflation multiplier for the target rate class ceiling shall remain at 1.4 times inflation.) To modify the calculation of the change of ownership target to equal the previous provider's operating and indirect patient care cost per diem (excluding incentives), plus 50 percent of the difference between the previous providers' per diem (excluding incentives) and the effect class ceiling and use an inflation multiplier of 2.0 times inflation. The Plan was modified in accordance with this legislation with an effective date of July 1, 2007. Four relevant sentences from the modified Plan are relevant to this proceeding, to wit: For a new provider with no cost history resulting from a change of ownership or operator, where the previous provider participated in the Medicaid program, the interim operating and patient care per diems shall be the lesser of: the class reimbursement ceiling based on Section V of this Plan, the budgeted per diems approved by AHCA based on Section III of this Plan, or the previous providers' operating and patient care cost per diem (excluding incentives), plus 50% of the difference between the previous providers' per diem (excluding incentives) and the class ceiling. The above new provider ceilings, based on the district average per diem or the previous providers' per diem, shall apply to all new providers with a Medicaid certification effective on or after July 1, 1991. The new provider reimbursement limitation above, based on the district average per diem or the previous providers' per diem, which affects providers already in the Medicaid program, shall not apply to these same providers beginning with the rate semester in which the target reimbursement provision in Section V.B.16. of this plan does not apply. This new provider reimbursement limitation shall apply to new providers entering the Medicaid program, even if the new provider enters the program during a rate semester in which Section V.B.16 of this plan does not apply. [The above cited sentences will be referred to herein as Plan Sentence 1, Plan Sentence 2, etc.] Madison Pointe's Projected Medicaid Rate Relying on the proposed legislation, including the proposed rebasing and step-up in rate, Madison Pointe projected an interim Medicaid rate of $203.50 ppd for its initial year of operation. Madison Pointe's new projected rate assumed a rebasing by the Legislature to eliminate existing targets, thereby, allowing more reimbursable costs. Although no legislation had been passed at that time, Madison Pointe's consultants made calculations and projections as to how the rebasing would likely affect Petitioners. Those projections were the basis for the $203.50 ppd interim rate. The projected rate with limitations applied (i.e., if Madison Pointe did not anticipate rebasing or believe the Plan revisions applied) would have been $194.26. The PFA portion of Madison Pointe's CHOP application was submitted to AHCA containing the $203.50 ppd interim rate. The Financial Analysis Unit, as stated, is responsible for, inter alia, reviewing PFAs submitted as part of a CHOP application. In the present case, Ryan Fitch was the person within the Financial Analysis Unit assigned responsibility for reviewing Madison Pointe's PFA. Fitch testified that the purpose of his review was to determine whether the applicant had projected sufficient monetary resources to successfully operate the facility. This would include a contingency fund (equal to one month's anticipated expenses) available to the applicant and reasonable projections of cost and expenses versus anticipated revenues.2 Upon his initial review of the Madison Pointe PFA, Fitch determined that the projected Medicaid interim rate was considerably higher than the previous operator's actual rate. This raised a red flag and prompted Fitch to question the propriety of the proposed rate. In his omissions letter to the applicant, Fitch wrote (as the fourth bullet point of the letter), "The projected Medicaid rate appears to be high relative to the current per diem rate and the rate realized in 2006 cost reports (which includes ancillaries and is net of contractual adjustments). Please explain or revise the projections." In response to the omissions letter, Laura Wilson, a health care accountant working for Madison Pointe, sent Fitch an email on June 27, 2008. The subject line of the email says, "FW: Omissions Letter for 11 CHOW applications."3 Then the email addressed several items from the omissions letter, including a response to the fourth bullet point which says: Item #4 - Effective July 1, 2007, it is anticipated that AHCA will be rebasing Medicaid rates (the money made available through elimination of some of Medicaid's participation in covering Medicare Part A bad debts). Based on discussions with AHCA and the two Associations (FHCA & FAHSA), there is absolute confidence that this rebasing will occur. The rebasing is expected to increase the Medicaid rates at all of the facilities based on the current operator's spending levels. As there is no definitive methodology yet developed, the rebased rates in the projections have been calculated based on the historical methodologies that were used in the 2 most recent rebasings (1992 and 2002). The rates also include the reestablishment of the 50% step-up that is also anticipated to begin again. The rebasing will serve to increase reimbursement and cover costs which were previously limited by ceilings. As noted in Note 6 of the financials, if something occurs which prevents the rebasing, Management will be reducing expenditures to align them with the available reimbursement. It is clear Madison Pointe's projected Medicaid rate was based upon proposed legislative actions which would result in changes to the Plan. It is also clear that should those changes not occur, Madison Pointe was going to be able to address the shortfall by way of reduced expenditures. Each of those facts was relevant to the financial viability of Madison Pointe's proposed operations. Madison Pointe's financial condition was approved by Fitch based upon his review of the PFA and the responses to his questions. Madison Pointe became the new licensed operator of the facility. That is, the Long-Term Care Unit deemed the application to have met all requirements, including financial ability to operate, and issued a license to the applicant. Subsequently, MPA provided to Madison Pointe its interim Medicaid rate. MPA advised Madison Pointe that its rate would be $194.55 ppd, some $8.95 ppd less than Madison Pointe had projected in its PFA (but slightly more than Madison Pointe would have projected with the 50 percent limitation from Plan Sentence 1 in effect, i.e., $194.26). The PFA projected 25,135 annual Medicaid patient days, which multiplied by $8.95, would equate to a reduction in revenues of approximately $225,000 for the first year of operation.4 MPA assigned Madison Pointe's interim Medicaid rate by applying the provisions of the Plan as it existed as of the date Madison Pointe's new operating license was issued, i.e., September 1, 2007. Specifically, MPA limited Madison Pointe's per diem to 50 percent of the difference between the previous provider's per diem and the applicable ceilings, as dictated by the changes to the Plan. (See Plan Sentence 1 set forth above.) Madison Pointe's projected Medicaid rate in the PFA had not taken any such limitations into account because of Madison Pointe's interpretation of the Plan provisions. Specifically, that Plan Sentence 3 applies to Madison Pointe and, therefore, exempts Madison Pointe from the new provider limitation set forth in Plan Sentences 1 and 2. However, Madison Pointe was not "already in the Medicaid program" as of July 1, 2007, as called for in Plan Sentence 3. Rather, Madison Pointe's commencement date in the Medicaid program was September 1, 2007. Plan Sentence 1 is applicable to a "new provider with no cost history resulting from a change of ownership or operator, where the previous operator participated in the Medicaid program." Madison Pointe falls within that definition. Thus, Madison Pointe's interim operating and patient care per diems would be the lesser of: (1) The class reimbursement ceiling based on Section V of the Plan; (2) The budgeted per diems approved by AHCA based on Section III of the Plan; or (3) The previous provider's operating and patient care cost per diem (excluding incentives), plus 50 percent of the difference between the previous provider's per diem and the class ceiling. Based upon the language of Plan Sentence 1, MPA approved an interim operating and patient care per diem of $194.55 for Madison Pointe. Plan Sentence 2 is applicable to Madison Pointe, because it applies to all new providers with a Medicaid certification effective after July 1, 1991. Madison Pointe's certification was effective September 1, 2007. Plan Sentence 3 is the primary point of contention between the parties. AHCA correctly contends that Plan Sentence 3 is not applicable to Petitioner, because it addresses rebasing that occurred on July 1, 2007, i.e., prior to Madison Pointe coming into the Medicaid system. The language of Plan Sentence 3 is clear and unambiguous that it applies to "providers already in the Medicaid program." Plan Sentence 4 is applicable to Madison Pointe, which entered the system during a rate semester, in which no other provider had a new provider limitation because of the rebasing. Again, the language is unambiguous that "[t]his new provider reimbursement limitation shall apply to new providers entering the Medicaid program. . . ." Madison Pointe is a new provider entering the program. Detrimental Reliance and Estoppel Madison Pointe submitted its CHOP application to the Long-Term Care Unit of AHCA for approval. That office has the clear responsibility for reviewing and approving (or denying) CHOP applications for nursing homes. The Long-Term Care Unit requires, as part of the CHOP application, submission of the PFA which sets forth certain financial information used to determine whether the applicant has the financial resources to operate the nursing home for which it is applying. The Long-Term Care Unit has another office within AHCA, the Financial Analysis Unit, to review the PFA. The Financial Analysis Unit is found within the Bureau of Health Facility Regulation. That Bureau is responsible for certificates of need and other issues, but has no authority concerning the issuance, or not, of a nursing home license. Nor does the Financial Analysis Unit have any authority to set an interim Medicaid rate. Rather, the Financial Analysis Unit employs certain individuals who have the skills and training necessary to review financial documents and determine an applicant's financial ability to operate. A nursing home licensee must obtain Medicaid certification if it wishes to participate in the program. Madison Pointe applied for Medicaid certification, filing its application with a Medicaid intermediary which works for CMS. The issuance of a Medicaid certification is separate and distinct from the issuance of a license to operate. When Madison Pointe submitted its PFA for review, it was aware that an office other than the Long-Term Care Unit would be reviewing the PFA. Madison Pointe believed the two offices within AHCA would communicate with one another, however. But even if the offices communicated with one another, there is no evidence that the Financial Analysis Unit has authority to approve or disapprove a CHOP application. That unit's sole purpose is to review the PFA and make a finding regarding financial ability to operate. Likewise, MPA--which determines the interim Medicaid rate for a newly licensed operator--operates independently of the Long-Term Care Unit or the Financial Analysis Unit. While contained within the umbrella of AHCA, each office has separate and distinct duties and responsibilities. There is no competent evidence that an applicant for a nursing home license can rely upon its budgeted interim rate--as proposed by the applicant and approved as reasonable by MPA--as the ultimate interim rate set by the Medicaid Program Analysis Office. At no point in time did Fitch tell Madison Pointe that a rate of $203.50 ppd would be assigned. Rather, he said that the rate seemed high; Madison Pointe responded that it could "eliminate expenditures to align them with the available reimbursement." The interim rate proposed by the applicant is an estimate made upon its own determination of possible facts and anticipated operating experience. The interim rate assigned by MPA is calculated based on the applicant's projections as affected by provisions in the Plan. Furthermore, it is clear that Madison Pointe was on notice that its proposed interim rate seemed excessive. In response to that notice, Madison Pointe did not reduce the projected rate, but agreed that spending would be curtailed if a lower interim rate was assigned. There was, in short, no reliance by Madison Pointe on Fitch's approval of the PFA as a de facto approval of the proposed interim rate. MPA never made a representation to Madison Pointe as to the interim rate it would receive until after the license was approved. There was, therefore, no subsequent representation made to Madison Pointe that was contrary to a previous statement. The Financial Analysis Unit's approval of the PFA was done with a clear and unequivocal concern about the propriety of the rate as stated. The approval was finalized only after a representation by Madison Pointe that it would reduce expenditures if a lower rate was imposed. Thus, Madison Pointe did not change its position based on any representation made by AHCA.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Respondent, Agency for Health Care Administration, approving the Medicaid interim per diem rates established by AHCA and dismissing each of the Amended Petitions for Formal Administrative Hearing. DONE AND ENTERED this 23rd day of February, 2009, in Tallahassee, Leon County, Florida. R. BRUCE MCKIBBEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of February, 2009.
Findings Of Fact Petitioner GLADES HEALTH PLAN, INC., (GLADES) is a for-profit corporation with offices in Belle Glade, Florida. GLADES was formed for the purpose of applying for and obtaining a contract with the State of Florida for a Medicaid Prepaid Health Plan. Respondent, AGENCY FOR HEALTH CARE ADMINISTRATION, (AHCA), is the agency of the State of Florida statutorily responsible for the administration of the Florida Medicaid prepaid health plan program. On October 5, 1994, GLADES filed a Medicaid prepaid health plan contract application with AHCA. In December of 1994, a series of newspaper articles were published which raised concerns regarding the quality of health care and service provided by Medicaid prepaid health plans in Florida. In response to these concerns, AHCA, beginning in the latter part of December of 1994, implemented a number of administrative changes, and also undertook a comprehensive review to assess the quality of health care and service provided by existing Medicaid prepaid health plans. In order to accomplish this comprehensive review, AHCA redirected all of the agency's managed care staff to conduct a survey of the assessment of the quality of health care and services provided by the existing Medicaid prepaid health plans. Because AHCA's managed care staff was redirected to conduct this comprehensive review of the existing Medicaid prepaid health plans, there were insufficient staff available to review Medicaid prepaid health plan contract applications. AHCA was also concerned with contracting with additional health plans until the assessment of the existing plans was completed. AHCA accordingly placed a temporary moratorium on the consideration of applications for Medicaid prepaid health plan contracts until the completion of the comprehensive review. The purpose of the agency's comprehensive review of existing health plans and imposition of a temporary moratorium on pending contract applications for new health plans was to assess the quality of care and service of the existing Florida Medicaid prepaid health plan program, and to develop in-house agency policies to address problems identified by agency staff conducting the comprehensive review. On December 30, 1994, James M. Barclay, vice-president of GLADES, received a letter from AHCA relating to another organization with which he is affiliated, Heartland Healthcare, Inc., which like GLADES, had filed a Medicaid prepaid health plan contract application that was pending with AHCA. The December 30, 1994 letter from AHCA to Barclay recited AHCA's concern with the quality of health care and service provided by existing Medicaid prepaid health plans. The letter further stated that due to the implementation of administrative changes, and the need for agency staff to be committed to the comprehensive review of existing Medicaid prepaid health plans, AHCA had imposed a moratorium on the consideration of Medicaid Prepaid Health Plan contract applications to last approximately sixty to ninety days. GLADES did not receive a letter, or other communication from AHCA notifying GLADES of AHCA's imposition of a temporary moratorium on the consideration of its Medicaid prepaid health plan contract application, and no action was taken by AHCA with regard to the GLADES' contract application during this period. Upon completion of the agency's comprehensive review of existing Medicaid prepaid health plans, AHCA, in the spring of 1995, discontinued the moratorium on consideration of Medicaid prepaid health plan contract applications. In processing Medicaid prepaid health plan contract applications subsequent to the discontinuation of the moratorium, AHCA determined not to contract with any prepaid health plan unless the plan was a public entity, or commercially #licensed under the provisions of Chapter 641, Florida Statutes. The basis for AHCA's decision in this regard was that the agency's comprehensive review of Medicaid prepaid health plans indicated that the existing commercially licensed Medicaid prepaid health plans provided a better quality of care to Medicaid recipients than the health plans that were not commerically licensed. On September 13, 1995, AHCA filed with the Department of State, Bureau of Administrative Code, proposed rules amending Rule 59G-8.100, Florida Administrative Code. The proposed rule amendments set out criteria for AHCA's consideration of Medicaid prepaid health plan contract applications. The criteria include commercial licensure under Chapter 641, Florida Statutes, managed care accreditation, prior health care experience, and need for managed care services. Under the proposed rule amendments, failure to meet such criteria, including commercial licensure, is grounds for denial of a Medicaid prepaid health plan contract application. AHCA has not promulgated or instituted proceedings to promulgate rules regarding the temporary moratorum imposed in this case. GLADES is not commercially licensed under the provisions of Chapter 641, Florida Statutes. Subsequent to the discontinuation of the moratorium, AHCA has taken no action with regard to GLADES' Medicaid prepaid health plan contract application. Because GLADES is not commercially licensed, AHCA presently considers the GLADES' Medicaid prepaid health plan contract application inactive. AHCA has not written, published or otherwise made a formal statement of agency policy to the effect that Medicaid prepaid health plan contracts are not licenses as that term is defined in Section 120.52(9), Florida Statutes. AHCA has not promulgated or instituted proceedings to promulgate rules to the effect that Medicaid prepaid health plan contracts are not licenses.
