The Issue The issue for determination is whether Respondent must repay Petitioner an amount of up to $144,471.25 in alleged Medicaid overpayments, for paid claims covering the period from January 1, 2010, to December 31, 2012.
Findings Of Fact AHCA is the agency responsible for administering Medicaid in the state of Florida. VMC was, at all relevant times, an enrolled Medicaid provider authorized to receive reimbursement for covered goods and services rendered to Medicaid beneficiaries. Exercising its statutory authority to oversee the integrity of Medicaid, the Agency conducted a review of VMC's medical records to verify that claims paid by Medicaid during the period from January 1, 2010, to December 31, 2012 (the "Audit Period"), had not exceeded authorized amounts. During the Audit Period, VMC had submitted claims for 9,783 discrete billable goods or services ("BGOSs") rendered to 1,313 patients (or recipients), on which Medicaid had paid a total of $459,572.82. Rather than examine the records of all 1,313 recipients served, the Agency selected a sample of 35 patients, whose records were reviewed first by a nurse consultant, and then by a physician "peer reviewer." VMC had submitted claims for 302 BGOSs during the Audit Period in connection with the 35 patients in the sample population. Medicaid had paid a total of $13,909.94 on these claims. The Agency's reviewers determined that, for various reasons, VMC had received a total of $6,901.64 in reimbursement of claims in the sample for services not covered by Medicaid, in whole or in part. Having discovered this alleged "empirical overpayment" of $6,901.64, the Agency employed a statistical formula for cluster sampling——for purposes of which a "cluster" comprises all claims relating to an individual patient in the sample population——to ascertain the alleged "probable total overpayment" that VMC had received from Medicaid for the 9,783 BGOSs presented in the totality of claims submitted during the Audit Period.1/ The statistical analysis revealed a probable total overpayment of $179,660.46, with a 95 percent probability that the actual overpayment is equal to or greater than such amount. (As discussed below, VMC disputes the cluster sampling methodology that AHCA used in determining the probable total overpayment based on the empirical overpayment associated with the sample population.) Shortly before the final hearing, based on documents which VMC belatedly produced, the Agency revised its preliminary adjudication of certain claims associated with four of the patients in the sample population, resulting in a reduction of the alleged empirical overpayment to $5,976.00. AHCA's statistical formula extended this figure to VMC's entire patient population for the Audit Period, calculating a total probable overpayment of $144,471.25. VMC does not dispute every one of AHCA's preliminary adjudications. To begin, for five recipients (Patient Nos. 15, 17, 19, 21, and 28) AHCA found no overpayments. Thus, none of the claims presented for BGOSs furnished to these patients is in dispute. In many additional instances, VMC agrees not only with the Agency's determination that Medicaid paid too much for a particular BGOS (or "encounter" as VMC refers to an individual good or service for which a claim was submitted), but also with the amount of the alleged overpayment. As a result of these admissions, none of the claims presented for BGOSs furnished to Patient Nos. 2, 9, 11, 13, 16, 25, and 34 is in dispute. In some instances, VMC suggests that the empirical overpayment for a particular BGOS should be more than the amount that AHCA has alleged. The sum of these suggested additional overpayments ("SAOs") is $303.19. Owing to VMC's inculpatory suggestions of insufficiently aggressive recoupment, it is undisputed that all of the overpayments AHCA has alleged in connection with the claims submitted for the treatment of Patient Nos. 3, 10, 23, 24, 26, and 32 are, in fact, overpayments. In sum, out of 35 patients in the sample population, only 17 involve one or more disputed encounters, where the existence of an overpayment must be decided. As for the 18 patients listed in the two preceding paragraphs, all of the overpayments alleged in those clusters are accepted as such based on the evidence presented, including the Agency's work papers and VMC's admissions, leaving only the question of what to do about the SAOs. All told, VMC admits having received an empirical overpayment of at least $2,488.50. VMC contends, however, that it was underpaid a total of $27.76 in connection with two BGOSs provided to Patient No. 18. VMC asserts that this alleged underpayment offsets the admitted overpayment by an equal amount, so that, in VMC's eyes, the net admitted empirical overpayment (taking into account the SAOs totaling $303.19) is $2,763.93.2/ VMC disputes the Agency's determinations regarding 55 specific BGOSs. Of these, AHCA found in 48 instances that the particular service which VMC had provided was not medically necessary. These 48 determinations relate to ten separate diagnostic procedures. AHCA further found a single instance of incomplete documentation in connection with one of those same ten procedures, bringing to 49 the total number of disputed adjudications pertaining to ten different procedures. Four disputed Agency determinations relate to what are known as "evaluation and management services" ("E/M services") provided (a) in the doctor's office or other outpatient setting to new or established patients or (b) to patients in hospitals. E/M services are billed to Medicaid using codes that reflect the intensity level of service provided. The codes are called "CPT codes"——"CPT" being short for Current Procedural Terminology®, a registered trademark of the American Medical Association, which developed and keeps up-to-date this widely used system for reporting medical procedures and services. Medicaid reimburses providers for E/M services pursuant to fee schedules that specify the amount payable for each level of service according to the CPT codes. It is the provider's responsibility, in presenting a claim to Medicaid for payment, to determine the appropriate CPT code for the service provided. Medicaid generally pays claims upon receipt, without second-guessing the provider's judgment regarding the level of care. When the Agency conducts an investigation to determine possible overpayment to a provider, however, one thing it might review is whether the provider's claims were properly "coded"—— that is, whether the CPT codes on the bills accurately reflected the level of service provided to the patients, as documented in the medical records. If the Agency determines that the level of service provided was lower than that claimed, then it will "downcode" the claim to the proper level and seek to recoup from the provider, as an overpayment, the difference between what Medicaid paid on the claim as originally coded and what it would have paid on the claim as downcoded. In this case, four of the 55 disputed claim determinations involve a downcode. Collectively, these four disputed items total $13.55. In two instances involving Patient No. 18, VMC agrees with AHCA's determination that there was no overpayment for the BGOS in question, but it asserts that Medicaid paid too little on the claims, which could have been billed under higher paying codes. As mentioned above, these alleged underpayments ("UPs") total $27.76. The table below summarizes the disputed overpayments, sorted by disputed overpayment ("OP") amount per patient (largest to smallest): Pt. # Disputed OP (w/SAOs) Admitted OP (w/SAOs) Alleged OP Number of Disputed BGOSs Number of SAOs Amount of SAOs Number of alleged UPs Amount of Claimed UP 22 545.00 401.83 946.83 8 7 523.79 57.75 581.54 5 35 466.10 112.83 578.93 7 6 376.65 91.89 468.54 5 1 15.98 31 194.88 73.21 268.09 3 1 14.85 27 157.73 479.12 636.85 2 8 157.73 12.85 170.58 2 5 153.54 16.61 170.15 4 18 150.97 280.56 431.53 5 2 -27.76 4 106.29 38.85 145.14 1 33 105.44 182.80 288.24 2 14 89.94 120.37 210.31 1 1 20.60 20 84.39 264.56 348.95 6 11 168.79 12 51.09 0 51.09 1 30 47.53 0 47.53 1 29 35.46 50.99 86.45 1 1 15.98 1 4.77 0 4.77 1 Subtotal 3,251.30 2,184.22 5,435.52 55 15 236.20 2 -27.76 Pt. # Disputed OP (w/SAOs) Admitted OP (w/SAOs) Alleged OP Number of Disputed BGOSs Number of SAOs Amount of SAOs Number of alleged UPs Amount of Claimed UP 2 0 23.32 23.32 9 0 23.32 23.32 11 0 37.58 37.58 13 0 32.57 32.57 16 0 33.10 33.10 25 0 46.85 46.85 34 0 36.14 36.14 Subtotal 0 232.88 232.88 32 (1.50) 37.64 36.14 1 1.50 26 (2.00) 203.04 201.04 1 2.00 3 (15.56) 37.64 22.08 1 15.56 24 (15.97) 34.13 18.16 1 15.97 10 (15.98) 31.07 15.09 1 15.98 23 (15.98) 31.07 15.09 1 15.98 Subtotal (66.99) 374.59 307.60 6 66.99 15 n/a 0 17 n/a 0 19 n/a 0 21 n/a 0 28 n/a 0 TOTAL 3,184.31 2,791.69 5,976.00 55 21 303.19 2 -27.76 Before addressing the disputed BGOSs, two subjects will be resolved, to further refine the issues. First, the undersigned has decided that each of the 21 separate SAOs should be treated as no more or less than corroboration that the alleged overpayment is correct——not used as a basis for increasing the amount AHCA alleges is due. Thus, for example, if AHCA alleged that the overpayment for a particular encounter was $36.14 and VMC offered evidence that the overpayment for that encounter was actually $37.64, the undersigned will find that the undisputed overpayment is $36.14. As a result, nothing else needs to be decided in regard to any of the claims presented for BGOSs furnished to Patient Nos. 3, 10, 23, 24, 26, and 32. Second, the undersigned rejects VMC's assertion that the empirical overpayment should be reduced by a total of $27.76 because it provided BGOSs to Patient No. 18 for which it did not bill Medicaid enough.3/ This reduces the number of disputed encounters from 55 to 53. The table below summarizes the disputed overpayments after taking account of the foregoing determinations, sorted by disputed overpayment amount per patient (largest to smallest): Pt. # Disputed OP Admitted OP Alleged OP Number of Disputed BGOSs 22 545.00 401.83 946.83 8 7 523.79 57.75 581.54 5 35 466.10 112.83 578.93 7 6 392.63 75.91 468.54 5 20 253.18 95.77 348.95 6 31 209.73 58.36 268.09 3 27 157.73 479.12 636.85 2 8 157.73 12.85 170.58 2 5 153.54 16.61 170.15 4 18 150.97 280.56 431.53 3 14 110.54 99.77 210.31 1 4 106.29 38.85 145.14 1 33 105.44 182.80 288.24 2 29 51.44 35.01 86.45 1 12 51.09 0 51.09 1 30 47.53 0 47.53 1 1 4.77 0 4.77 1 Subtotal 3,487.50 1,948.02 5,435.52 53 2 0 23.32 23.32 0 3 0 22.08 22.08 0 9 0 23.32 23.32 0 10 0 15.09 15.09 0 11 0 37.58 37.58 0 13 0 32.57 32.57 0 16 0 33.10 33.10 0 23 0 15.09 15.09 0 24 0 18.16 18.16 0 25 0 46.85 46.85 0 Pt. # Disputed OP Admitted OP Alleged OP Number of Disputed BGOSs 26 0 201.04 201.04 0 32 0 36.14 36.14 0 34 0 36.14 36.14 0 Subtotal 0 540.48 540.48 0 15 n/a 0 n/a 17 n/a 0 n/a 19 n/a 0 n/a 21 n/a 0 n/a 28 n/a 0 n/a TOTAL 3,487.50 2,488.50 5,976.00 53 Each side presented opinion testimony regarding the compensability of the disputed BGOSs under Medicaid. On the question of medical necessity, AHCA's medical expert was Ronald Machado, M.D., upon whose testimony, together with the notations of the Agency's nurse reviewer appearing in the audit worksheets, AHCA relies in support of its overpayment allegations. VMC's medical expert was Dr. Michael Sterns, whose written opinions were presented through the report of L. Lamar Blount, a health-care consultant who, at VMC's request, conducted a shadow audit of the claims AHCA had examined. To assist in his review, Mr. Blount engaged the services of a coding specialist (Rae Freeman) and a statistician (Frank Collins) in addition to Dr. Sterns. The undersigned has considered all of the opinion testimony presented, together with the medical records and other evidence received. Each of the findings that follow is based upon a preponderance of the evidence which the undersigned deemed credible and persuasive, and each constitutes a rejection of other evidence to the extent of any conflict between the finding and such evidence. In determining whether a particular claim should be allowed or disallowed, the undersigned considered, as necessary, the relevant provisions of the pertinent statutes, rules, and Medicaid handbooks, the operative terms of which are identified in the Conclusions of Law following these Findings of Fact. The undersigned's determinations as to each of the disputed BGOSs are set forth below in summary fashion, using abbreviations where possible. This is consistent with the manner in which the parties' respective experts addressed the individual claims. The brevity of the discrete rulings is not a reflection of the attention that has been given each item, all of which were carefully and thoroughly examined. For analytical efficiency, the undersigned sorted the disputed claims by procedure, from highest to lowest overpayment subtotal. The claim-specific findings are presented below in that fashion. The descriptions of the procedures are adapted from the American Medical Association's Physician's Current Procedural Terminology® Handbook. Each disputed claim is identified by Patient Number – Encounter Number ("Pt. # - Enc. #"), using the recipient numbers assigned by AHCA. The Encounter Numbers correspond to the identically designated numbers in column C of Appendix D to Respondent's Exhibit JJ, which in turn match the claim numbers appearing in AHCA's "Listing of All Claims in Sample by recip name" worksheet, a 73- page document attached to the FAR, Petitioner's Exhibit 4. Ultrasound, retroperitoneal (e.g., renal, aorta, nodes), real time with image documentation, complete – CPT 76770. A complete ultrasound examination of the retroperitoneum consists of real time scans of the kidneys, abdominal aorta, common iliac artery origins, and inferior vena cava, including any demonstrated retroperitoneal abnormality. If the clinical history suggests urinary tract pathology, a complete evaluation of the kidneys and urinary bladder also comprises a complete retroperitoneal ultrasound. The undersigned makes the following findings of fact regarding VMC's claims for this BGOS: Pt.# - Enc.# AHCA Determination Disputed Overpayment ALJ Determination of Overpayment – CPT 76770 5-15 NMN 52.00 MN established by diagnosis of microscopic hematuria. 0.00 6-2 NMN 53.44 78-year-old man presents with hematuria and nocturia plus a renal cyst. MN established to rule out BPH (enlarged prostate). 0.00 8-1 NMN 51.44 Patient reports pain and history of kidney stones during review of genitourinary ("GU") system plus low back pain. MN established to rule out recurrence of renal calculi. 0.00 18-12 NMN 51.44 Patient complains of flank pain, giving reason to rule out renal calculi. No evidence that a kidney, ureter, and bladder ("KUB") X-ray would have been cheaper, nor proof that renal US was outside generally accepted standards of medical practice. MN shown. 0.00 18-27 NMN 52.00 Patient continues to complain of unexplained right flank/abdominal pain. Diagnoses of hydronephrosis and renal colic. MN established. 0.00 Pt.# - Enc.# AHCA Determination Disputed Overpayment ALJ Determination of Overpayment – CPT 76770 20-8 NMN 51.44 Patient presents with complaint of dark- colored urine. Dysuria and hematuria noted. MN shown. 0.00 22-2 NMN 53.44 1/11/10 Patient experiencing unexplained hematuria. US revealed two kidney cysts. MN shown. 0.00 22-11 NMN 53.44 7/12/10 US to follow up on kidneys cysts. No documentation of symptoms or need for such close monitoring. NMN 53.44 22-16 NMN 53.44 11/10/10 Repeat US of kidney to monitor cysts. Excess of need for a benign condition. NMN 53.44 22-21 NMN 51.44 11/29/11 Patient presents with hematuria and history of kidney cysts. MN established in light of symptom and need to reexamine the cysts for possible enlargement. 0.00 27-17 NMN 53.44 No reason given for repeat study of kidney after apparently asymptomatic cyst found via renal US on 6/30/10. NMN 53.44 29-4 NMN 51.44 Contemporaneous urinalysis ("UA") found occult blood and renal epithelial cells, warranting study to rule out kidney disease. MN shown. 0.00 31-12 NMN 51.44 Patient in his early 70s complains of dysuria and abdominal pain. US not preceded by review of UA results and prostate exam. NMN 51.44 31-20 NMN 52.00 Progress notes do not provide grounds for this study. NMN 52.00 33-6 NMN 53.44 Patient presents with persistent hematuria notwithstanding treatment of UTI. MN shown. 0.00 33-11 NMN 52.00 Patient reports dysuria and renal colic. MN for US established by new symptoms. 0.00 35-2 NMN 51.44 Progress note reports patient complaint of nephrolithiasis plus hematuria per UA results. MN established. 0.00 35-26 NMN 50.00 Patient presents with undiagnosed hematuria plus absence of menstruation. MN shown. 0.00 Subtotal 938.72 263.76 Echocardiography, transthoracic, real-time with image documentation, complete, with spectral Doppler echocardiography, and with color flow Doppler echocardiography – CPT 93306. A standard echocardiogram is also known as a transthoracic echocardiogram ("TTE"). The echocardiography transducer (or probe) is placed on the chest wall of the patient, and images are taken through the chest wall. This noninvasive procedure allows for the assessment of the overall health of the patient's heart valves and degree of heart muscle contraction, which is an indicator of the ejection fraction. The undersigned makes the following findings of fact regarding VMC's claims for this BGOS: Pt.# - Enc.# AHCA Determination Disputed Overpayment ALJ Determination of Overpayment – CPT 93306 4-3 NMN 106.29 Patient presents with heart murmur and/or rub. TTE ordered to assess left ventricular ejection fraction ("LVEF") and rule out valvular disease of heart, which was confirmed by finding of mitral valve disease. MN shown. 0.00 7-4 NMN 104.29 Patient presents with history of palpitations and chest pain and has a heart murmur on examination. MN for TTE shown. 0.00 8-2 NO DOC 106.29 Patient presents with murmur, palpitation, and chest pain, as documented in progress note. TTE ordered to rule out valvular disease. Echocardiogram Report is in the file. Documentation shown. 0.00 14-4 NMN 110.54 Teenage patient presents with recent history of seizure and loss of consciousness. TTE ordered to rule out mitral valve prolapse. MN shown. 0.00 27-14 NMN 104.29 85-year-old man reports dizziness and has murmur on examination. TTE ordered to rule out worsening of valvular disease and assess LVEF. MN shown. 0.00 31-10 NMN 106.29 Patient presents with heart murmur. TTE one year earlier found numerous abnormalities. TTE ordered to assess function and rule out worsening of condition. MN shown. 0.00 35-23 NMN 104.29 Patient presents with complaint of migraine. No cardiac symptoms. History of mitral valve prolapse indicated. NMN 104.29 Subtotal 742.28 104.29 Duplex scan of lower extremity arteries or arterial bypass grafts, complete bilateral study – CPT 93925. Duplex Doppler ultrasound uses standard ultrasound methods to produce an image of a blood vessel and the surrounding organs. A computer converts the Doppler sounds into a graph that provides information about the speed and direction of blood flow through the blood vessel being evaluated. The undersigned makes the following findings of fact regarding VMC's claims for this BGOS: Pt.# - Enc.# AHCA Determination Disputed Overpayment ALJ Determination of Overpayment – CPT 93925 6-9 NMN 156.21 Patient presents with limb swelling, symptomatic varicose veins, chronic venous insufficiency, and peripheral edema. MN shown. 0.00 7-7 NMN 156.21 Patient presents with limb pain or swelling and symptomatic varicose veins. Diagnoses of peripheral artery disease and venous insufficiency. MN shown. 0.00 35-9 NMN 156.21 Patient presents with lower extremity swelling, chronic venous insufficiency, and peripheral edema; heart murmur noted on exam. MN shown. 0.00 Subtotal 468.63 0.00 Noninvasive physiologic studies of upper or lower extremity arteries, multiple levels or with provocative functional maneuvers, complete bilateral study (e.g., segmental blood pressure measurements, segmental Doppler waveform analysis, segmental volume plethysmography, segmental transcutaneous oxygen tension measurements, measurements with postural provocative tests, measurements with reactive hyperemia) – CPT 93923. The undersigned makes the following findings of fact regarding VMC's claims for this BGOS: Pt.# - Enc.# AHCA Determination Disputed Overpayment ALJ Determination of Overpayment – CPT 93923 6-10 NMN 91.02 Patient presents with limb swelling, symptomatic varicose veins, chronic venous insufficiency, and peripheral edema. This study excessive in combination with lower extremity study of same date. NMN 91.02 7-8 NMN 91.02 Patient presents with limb pain or swelling and symptomatic varicose veins. Diagnoses of peripheral artery disease and venous insufficiency. This study excessive in combination with lower extremity study of same date. NMN 91.02 22-6 NMN 91.02 Patient presents with muscle pain in the left leg but progress note lacks support for this study to check blood flow. NMN 91.02 35-10 NMN 91.02 Patient presents with lower extremity swelling, chronic venous insufficiency, and peripheral edema; heart murmur noted on exam. This study excessive in combination with lower extremity study of same date. NMN 91.02 Subtotal 364.08 364.08 Duplex scan of extremity veins including responses to compression and other maneuvers, complete bilateral study – CPT 93970/93971. The CPT code 93970 is described as a "complete bilateral study." The CPT code 93971 states: "unilateral or limited study." The undersigned makes the following findings of fact regarding VMC's claims for this BGOS: Pt.# - Enc.# AHCA Determination Disputed Overpayment ALJ Determination of Overpayment – CPT 93970/93971 7-5 NMN 122.74 Patient presents with limb pain or swelling and symptomatic varicose veins. Diagnoses of peripheral artery disease and venous insufficiency. This study excessive in combination with lower extremity study of same date. NMN 122.74 22-7 NMN 122.74 Patient presents with muscle pain in the left leg but progress note lacks support for this study. NMN 122.74 22-27 (93971) NMN 70.20 Insufficient support in the progress notes for this study. NMN 70.20 Subtotal 315.68 315.68 Ultrasound, pelvic (nonobstetric), real time with image documentation; complete – CPT 76856. Pelvic ultrasound codes are used for both female and male anatomy. Elements of a complete female pelvic examination include a description and measurement of the uterus and adnexal structures, endometrium, bladder, and of any pelvic pathology (e.g., ovarian cysts, uterine leiomyomata, free pelvic fluid). Elements of a complete male pelvic examination include the evaluation and measurement (when applicable) of the urinary bladder, prostate and seminal vesicles to the extent they are visualized transabdominally, and any pelvic pathology (e.g., bladder tumor, enlarged prostate, free pelvic fluid, pelvic abscess). The undersigned makes the following findings of fact regarding VMC's claims for this BGOS: Pt.# - Enc.# AHCA Determination Disputed Overpayment ALJ Determination of Overpayment – CPT 76856 5-5 NMN 51.09 Patient is reported to have pelvic pain on 5/3/11 and referral to GYN is made. Pelvic pain again noted on 8/24/11. Study performed on 9/13/11 found uterine fibroid. MN established. 0.00 5-16 NMN 47.68 Excessive in light of retroperitoneal US of same date. NMN 47.68 6-4 NMN 51.09 78-year-old man presents with hematuria and nocturia plus a renal cyst. Excessive in light of retroperitoneal US of same date. NMN 51.09 12-2 NMN 51.09 Patient presents complaining of irregular periods, pelvic pain (non- radiating, pressure-like), nausea, and urinary changes for several weeks. MN for study shown. 0.00 20-9 NMN 51.09 Patient presents with complaint of dark-colored urine. Dysuria and hematuria noted. Excessive in light of retroperitoneal US of same date. NMN 51.09 Subtotal 252.04 149.86 Ultrasound, soft tissues of the head and neck (e.g., thyroid, parathyroid, parotid), real time with image documentation – CPT 76536. The undersigned makes the following findings of fact regarding VMC's claims for this BGOS: Pt.# - Enc.# AHCA Determination Disputed Overpayment ALJ Determination of Overpayment – CPT 76536 7-3 NMN 49.53 Patient presents complaining of neck mass and swollen glands. MN shown. 0.00 18-10 NMN 47.53 Patient presents with complaints of memory loss and dizziness. Progress notes reflect presence of carotid bruits and possible neck swelling. Insufficient documentation of grounds for this study. NMN 47.53 20-4 NMN 49.53 Patient presents with swollen glands and physical exam reveals thyroid abnormality. MN established. 0.00 22-30 NMN 49.28 Insufficient documentation of grounds for the study; no mention of history or findings relating to thyroid issue. NMN 49.28 30-1 NMN 47.53 Patient presents with swollen glands and neck lumps, complaining of dizziness, and physical exam reveals thyroid abnormality. MN established. 0.00 Subtotal 243.40 96.81 Ultrasound, abdominal, real time with image documentation, limited (e.g., single organ, quadrant, follow-up) – CPT 76705. The undersigned makes the following findings of fact regarding VMC's claims for this BGOS: Pt.# - Enc.# AHCA Determination Disputed Overpayment ALJ Determination of Overpayment – CPT 76705 6-3 NMN 40.87 78-year-old man presents with hematuria and nocturia plus a renal cyst. Excessive in light of retroperitoneal US of same date. NMN 40.87 20-7 NMN 42.87 Patient presents with complaint of dark-colored urine. Dysuria and hematuria noted. Excessive in light of retroperitoneal US of same date. NMN 42.87 Subtotal 83.74 83.74 Ultrasound, abdominal, real time with image documentation; complete – CPT 76700. A complete ultrasound examination of the abdomen consists of scans of the liver, gallbladder, common bile duct, pancreas, spleen, kidneys and the upper abdominal aorta and inferior vena cava including any demonstrated abdominal abnormality. The undersigned makes the following findings of fact regarding VMC's claims for this BGOS: Pt.# - Enc.# AHCA Determination Disputed Overpayment ALJ Determination of Overpayment – CPT 76700 20-17 NMN 55.01 Patient presents with abdominal pain and abdominal mass related to an incisional hernia. This study was in excess of need in light of CT scan ordered same date. NMN 55.01 Subtotal 55.01 55.01 Electrocardiogram, routine EKG with at least 12 leads; with interpretation and report – CPT 93000. The undersigned makes the following findings of fact regarding VMC's claims for this BGOS: Pt.# - Enc.# AHCA Determination Disputed Overpayment ALJ Determination of Overpayment – CPT 93000 35-25 NMN 10.37 Patient presents with heart murmur. TTE one year earlier found numerous abnormalities. This EKG excessive in combination with TTE ordered on same date to assess function and rule out worsening of condition. NMN 10.37 Subtotal 10.37 10.37 Office or other outpatient visit (established patient) – CPT 99213. This level of care is located in the middle of the coding spectrum for office visits with established patients. Usually the presenting problems are of low to moderate severity. The documentation for this encounter requires two out of three of the following: (1) expanded problem focused history; (2) expanded problem focused examination; and (3) low complexity medical decision making. Physicians typically spend 15 minutes face-to-face with the patient in connection with a 99213-level appointment. In contrast, 99212 is a CPT code for office or other outpatient visit for the evaluation and management of an established patient with a problem focused history and examination, and straightforward medical decision making. The documentation for this encounter requires two out of three of the following: problem focused history; (2) problem focused examination; and (3) straightforward medical decision making. Physicians typically spend ten minutes face-to-face with the patient in connection with a 99212-level appointment. The undersigned makes the following findings of fact regarding VMC's claims for office or other outpatient visits: Pt.# - Enc.# AHCA Determination Disputed Overpayment ALJ Determination of Overpayment – CPT 99213 1-1 LL - 99212 4.77 Problem focused history and exam plus straightforward medical decision making. 99212 4.77 5-6 LL - 99212 2.77 Problem focused history and exam plus straightforward medical decision making. 99212 2.77 35-19 LL - 99212 2.77 Problem focused history and exam plus straightforward medical decision making. 99212 2.77 Subtotal 10.31 10.31 Initial Hospital Care – CPT 99223. The undersigned makes the following findings of fact regarding VMC's claim for a patient being admitted to the hospital: Pt.# - Enc.# AHCA Determination Disputed Overpayment ALJ Determination of Overpayment – CPT 99223 20-20 LL - 99221 3.24 Evidence supports 99221, not 99223 as billed. Applicable Fee Schedule (eff. Jan. 1, 2011) provides for payment of 49.12, not 52.36 as VMC urges. 3.24 Subtotal 3.24 3.24 The table below summarizes the foregoing findings, showing the per-patient overpayments (including both the adjudicated and admitted subtotals per patient, listed in separate columns), sorted from lowest to highest numbered patient: Pt. # ALJ Disallow Admitted OP Finding of OP 1 4.77 0 4.77 2 Undisputed 23.32 23.32 3 Undisputed 22.08 22.08 4 0 38.85 38.85 5 50.45 16.61 67.06 6 182.98 75.91 258.89 7 213.76 57.75 271.51 8 0 12.85 12.85 9 Undisputed 23.32 23.32 10 Undisputed 15.09 15.09 11 Undisputed 37.58 37.58 12 0 0 0 13 Undisputed 32.57 32.57 14 0 99.77 99.77 15 n/a n/a n/a 16 Undisputed 33.10 33.10 17 n/a n/a n/a 18 47.53 280.56 328.09 19 n/a n/a n/a 20 152.21 95.77 247.98 21 n/a n/a n/a 22 440.12 401.83 841.95 23 Undisputed 15.09 15.09 24 Undisputed 18.16 18.16 25 Undisputed 46.85 46.85 26 Undisputed 201.04 201.04 27 53.44 479.12 532.56 Pt. # ALJ Disallow Admitted OP Finding of OP 28 n/a n/a n/a 29 0 35.01 35.01 30 0 0 0 31 103.44 58.36 161.80 32 Undisputed 36.14 36.14 33 0 182.80 182.80 34 Undisputed 36.14 36.14 35 208.45 112.83 321.28 TOTAL 1,457.15 2,488.50 3,945.65 Thus, the undersigned finds that the entire empirical overpayment for the Audit Period is $3,945.65, an amount that comprises $1,457.15 as the sum of all adjudicated overpayments and $2,488.50 as the sum of all admitted overpayments. To be clear, each of the numbers in the "ALJ Disallow" column above is based on findings supported by a preponderance of the evidence. The figure of $1,457.15 is not supported, however, by clear and convincing evidence. The grand total of $3,945.65 is, more likely than not, the correct empirical overpayment for the claims in the sample population. The figure of $3,945.65 is not supported, however, by clear and convincing evidence. As mentioned above, AHCA determines the probable total overpayment based upon the empirical overpayment observed in the sample population, using a statistical formula for cluster sampling to extend the empirical data to the provider's entire patient population. AHCA is statutorily authorized to use generally accepted statistical methods in making a determination of overpayment to a provider, and to offer the results of such statistical methods as proof of overpayment.4/ The formula that AHCA uses is reproduced below: VMC contends that the statistical formula upon which AHCA has relied produces less accurate results than other methods that could have been used, and that AHCA made mistakes when it employed the formula in this case. The latter argument is rejected as contrary to the persuasive evidence, which shows that AHCA correctly performed the calculations required to implement the statistical formula for cluster sampling. As for the efficacy of the Agency's formula, the undersigned accepts that there are other statistical methodologies that AHCA could use, and that it would be possible to obtain a more accurate result using other methods. The Agency does not dispute this. But, according to AHCA's expert witness, Dr. Fred Huffer, a statistician whose testimony the undersigned credits with qualifications as explained below, increasing the accuracy of the statistical methodology most likely would result in a higher probable total overpayment because there is supposed to be only a five percent chance that the figure AHCA's formula produces is too high. The undersigned determines that the statistical formula for cluster sampling that AHCA uses is a generally accepted, valid, and reliable method of extending the overpayment observed in a sample population to the entire relevant population. That said, there is less to the relative persuasiveness of the number produced by the Agency's formula than meets the eye. The confidence level of 95 percent assumes that every numerical value going in to the formula is absolutely (not just probably) true. For some of the values, i.e., F, Bi, U, and N, this degree of confidence (namely, 100 percent) is justified. For others, i.e., Ai, it clearly is not. The total overpayment in the sample cluster is not an objective truth, such as the number of clusters in the random sample, or a mathematical constant such as pi. Rather, each alleged overpaid claim in the sample reflects a judgment by AHCA (or more precisely its medical reviewers) founded on findings of historical fact, legal conclusions, and determinations of ultimate fact. Indeed, each figure contributing to the total empirical overpayment numerically represents an ultimate factual determination based upon the application (and interpretation when necessary) of Medicaid rules to a limited body of evidence——mostly medical records——of past events. Of none (or very few) of those figures can it be said with 100 percent certainty that the number is absolutely (not just probably) true. No one involved in the decision making process is omniscient or infallible. As here, the provider may dispute some or all of AHCA's preliminary adjudications of the claims behind the total alleged overpayment in the sample cluster and demand a hearing, at which each (disputed) individual overpayment in the sample cluster must be proved by a preponderance of the evidence. The standard of proof being what it is, the Agency does not need to prove each of the disputed overpayments to an absolute certainty. To recoup an overpayment, it is sufficient for AHCA to show with a 51 percent probability that the amount alleged to have been overpaid for a given claim is, in fact, the amount overpaid. In the paragraphs above, the undersigned has set forth his findings regarding the disputed claims. Each individual finding of an overpayment reflects the undersigned's determination that the disallowed amount is, more likely than not, the correct adjudication of the disputed claim. There is, in the undersigned's estimation, approximately a 60 percent probability that the sum of all adjudicated overpayments ($1,457.15) is the correct figure, which satisfies the preponderance of evidence standard. In contrast, the undersigned estimates that there is approximately an 80 percent probability that the sum of all admitted overpayments ($2,488.50) is the correct figure, meaning that this portion of the empirical overpayment was established by clear and convincing evidence. This discussion of the undersigned's relative confidence in the overpayment findings made in this Recommended Order is meant to demonstrate that using the figure $3,945.65 as the value Ai in the Agency's formula for cluster sampling, while consistent with the standard of proof for an action to recoup an overpayment, nevertheless injects uncertainty into the equation, which logically must reduce the confidence level in the formula's outcome from 95 percent to something less than that.5/ Based on the instant record, the undersigned cannot quantify the probable accuracy of the formula's output, as applied to the facts found here. The bottom line is that although the undersigned finds AHCA's statistical formula to be a sufficiently reliable method of calculating, to the degree of certainty required under the preponderance of evidence standard of proof, the total probable overpayment to VMC, the formula's output (in this instance) does not satisfy the stricter clear and convincing standard.6/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that AHCA: Recalculate the probable total overpayment using the statistical formula for cluster sampling to extend the empirical overpayment of $3,945.65 in the sample population to the entire population during the Audit Period. Make a preliminary determination of the amount of costs that may be recovered from VMC, taking into consideration the financial resources, earning ability, and needs of VMC to the extent VMC demonstrates such factors. Remand the matter to DOAH for an evidentiary hearing on recovery of costs if necessary. Enter a final order directing VMC to repay the Agency the total probable overpayment as recalculated using the findings herein, plus statutory interest, for paid claims covering the period from January 1, 2010, to December 31, 2012; imposing an administrative fine against VMC in the amount of $5,000; and taxing recoverable costs, full payment of these monies to be due within 30 days after the rendition of the final order and payable on the Agency's instructions. DONE AND ENTERED this 10th day of April, 2015, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM 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 10th day of April, 2015
The Issue Whether the Petitioner should reimburse the Respondent for alleged Medicaid overpayments in the amount of $44,581.50.
Findings Of Fact At all times material to the allegations of this case, the Petitioner, Roosevelt T. Jackson, Jr., M.D., has been a Medicaid provider authorized to receive reimbursement for Medicaid services provided to Medicaid recipients. Dr. Jackson is an ophthalmologist. All services in this cause related to Medicaid claims for procedures performed between January 1, 1998, and December 31, 1999. The Respondent is the state agency responsible for the administration of the Medicaid program within the State of Florida. Medicaid Program Integrity is the arm of the Agency that oversees the activity of the Florida Medicaid providers and recipients to ensure that they are in compliance with the Medicaid program. As part of its duties, the Agency audits the records of providers to verify compliance with all Medicaid rules. In this case the audit of Petitioner's records was triggered by a computer program that reviews data from similar Medicaid providers. The Surveillance Utilization Review Section (SURS) of the Medicaid Program Integrity office found that the Petitioner had exceeded the norm in Medicaid billings when compared to his peers. When the SURS kicked back the Petitioner's name, it represented that the Petitioner had exceeded his peers in the total number of Medicaid recipients serviced, total number of evaluation and management procedures, average number of evaluation and management procedures per recipient, number of office visits, average number of office visits per recipient, and average number of services per recipient. Based upon the SURS responses, the Agency elected to conduct a sample audit of the Petitioner's records. Records for 30 Medicaid recipients were requested and obtained from the Petitioner. The results of that sample audit were then extended to calculate the overpayment for which the Respondent currently seeks reimbursement. The Respondent's audit established that the Petitioner had failed to comply with Medicaid provisions in three specific areas. First, based upon the records submitted to the Agency, the Petitioner billed for services at a higher level than actually performed. Second, the audit established that the Petitioner billed for services that were "medically unnecessary" as that term is utilized by Medicaid. And third, the audit found that the Petitioner billed for services that were not properly documented by the records maintained. Such records were created, maintained and produced to the Agency by the Petitioner. The results of the audit were set forth in the Final Agency Audit Report and were provided to the Petitioner. The report requested reimbursement from the Petitioner in the amount of $44,581.50. The report was completed on or about June 27, 2001. Thereafter, the Petitioner timely challenged the results of the audit, and requested a formal administrative hearing to dispute the amounts set forth in the report. As to all amounts claimed in the report, the evidence presented in this cause supports the Agency's conclusions as to the overpayment. Prior to January of 1999, the Petitioner was not authorized to bill for a level 4 visit. Thus all services billed at that rate prior to January 1999 should be reduced. Secondly, none of the records supplied by the Petitioner supported the complexity required for a level 4 billing. Therefore, services billed at the level 4 rate should be reduced to the appropriate level. The Petitioner also billed for services that were not medically necessary. A normal examination (with no retinal problem identified in the record) would not warrant additional retinal examinations. Therefore, billings for additional procedures would not be warranted in such cases. Finally, Medicaid rules require that a physician maintain records in compliance with documentation guidelines. The Petitioner's records did not comply with such guidelines. Accordingly, Medicaid payments for services that lack the required documentation may be recouped. After a full review of the records submitted, the Agency used a standard formula to extend the sample data throughout the population from which the sample was taken. That is, from the 30 patient records reviewed, the results were applied by statistical formula to the entire Medicaid patient population served by the Petitioner. This computation resulted in the amount of the overpayment currently sought. The statistical formula used by the Agency to compute the overpayment was reasonable and within the guidelines of the law.
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 confirming the Medicaid overpayment in the amount of $44,581.50. DONE AND ENTERED this 21st day of May, 2002, in Tallahassee, Leon County, Florida. J. D. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of May, 2002. COPIES FURNISHED: Virginia A. Daire, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308 William Roberts, Acting General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308 Roosevelt T. Jackson, Jr., M.D. 3740 West Broward Boulevard Plantation, Florida 33312 Kim A. Kellum, Esquire Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403
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 in this case is whether the provider, Orietta Medical Equipment, Inc., d/b/a Pharmco Pharmacy (Respondent or Provider) should repay an alleged Medicaid overpayment and, if so, in what amount. The Petitioner’s Final Agency Audit Report (FAAR) claims the Provider must repay $486,879.06.
Findings Of Fact The Petitioner is the state agency charged with the responsibility of administering the Medicaid Program in Florida. As such, the Petitioner monitors payments to Medicaid providers and seeks to recover reimbursements when an overpayment is claimed. At all times material to the allegations of this case, the Respondent was a licensed pharmacy and was designated a “provider” of Medicaid pharmacy services pursuant to its provider agreement with the Petitioner. As a provider of Medicaid pharmacy services, the Respondent was authorized to dispense drugs to Medicaid recipients and to bill the Medicaid Program for the expenses associated with such pharmacy services. The Petitioner may, after-the-fact, seek to verify the claims paid for Medicaid recipients. This “pay and chase” methodology presumes that the Provider will maintain appropriate documentation to support the paid claims. When the Agency audits a provider, records supporting the claims paid must be produced. In this case, the Petitioner elected to perform an “invoice audit” for the audit period June 2, 2003 through May 28, 2004. The Agency sought to review the Provider’s drug acquisition records for the same drugs that were dispensed to Medicaid recipients. The paid claims should compare to the drugs acquired and held in inventory for the subject period of time. After performing a Provisional Agency Audit Report (PAAR) detailing an alleged overpayment, the Provider was notified of the audit results and was provided a spreadsheet of the work papers that detailed the overpayment claim. The Provider was given an opportunity to provide additional documentation to support the Medicaid claims and to establish the inventory to support its claims. After an additional review of the Provider's information, the Agency issued its FAAR dated February 2, 2005, which claimed a Medicaid overpayment in the amount of $486,879.06. This amount has not been repaid to the Petitioner. Instead, the Provider disputed the amount of the overpayment and requested an administrative proceeding. That request was timely submitted. All of the audit results were provided to the Provider at the time of the issuance of the FAAR and were, in fact, attached to the request for hearing submitted by the Provider on or about February 7, 2005. Florida Medicaid providers are required by their agreements with the state to comply with the Florida Medicaid Prescribed Drug Services Coverage, Limitations, and Reimbursement Handbook (the handbook). The handbook is furnished to providers and is also available on-line. The handbook outlines requirements for record keeping, as well as other pertinent information to assist providers. In this case, the Provider was obligated to maintain records to support the Medicaid claims paid by the State. The Agency contracted with Heritage Information Systems, Inc., to conduct the audit in this case. Auditors went to the Provider’s business location in Hialeah, Florida, to analyze the Respondent’s business records. More specifically, the auditors sought the records from the Provider to show that it had acquired sufficient inventory of the specific drugs for which claims had been paid during the audit period. It stands to reason that the drug inventory on hand for the Provider had to exceed the drugs dispensed during the audit period (presumably some of the Provider’s patients were not Medicaid recipients). In fact, in this case, the Provider could not produce inventory records to support the claims paid for the audit period. As the records did not support the claims, the Agency deemed the claims to be overpayments. As such, the Agency maintains the Provider was, under the terms of the guidelines set forth in the handbook, required to reimburse the Petitioner for the overpayment. To compute the overpayment the Agency used a methodology that established the use rate of the product for the audit period. For example, for the drug Acetylcysteine the Medicaid recipient use rate for the audit period was 97.27 percent. Applying this percentage to the units purchased for the audit period would establish the expected claims. Therefore, since the Respondent purchased 16,890 units of this drug, the number of units billed would be expected to be 97.27 percent (the Medicaid use rate) of that amount. Instead, the claims for this drug for the audit period totaled 96,120-- a difference of 79,691 units. The difference (79,691) must then be multiplied by the drug's $.56 cost to show an apparent overcharge in the amount of $44,626.96 for this drug. The Agency applied the same methodology described above for 20 different drugs that were billed during the audit period. The total overcharge for these drugs was $486,879.06. The Respondent presented no evidence to refute the audit findings. No acquisition records were produced to reduce the calculated overpayment. That is to say, no purchase records could demonstrate that the Provider had on hand the number of units of the drugs billed to Medicaid. The Respondent has not disputed that the pharmacy was a provider, was subject to the handbook and pertinent guidelines, was required to maintain records to support the claims, and was paid for claims submitted to the Agency. Moreover, the Respondent does not dispute that the audit, the audit work papers, and the spreadsheets describing the methodology used to compute the overpayment were provided to the Provider more than 14 days prior to the hearing. It claims the trial book of exhibits was not provided 14 days prior to the hearing date. The hearing in this cause was originally scheduled for two days, to commence on August 15, 2006. The Agency provided a trial book of its exhibits to the Respondent on or about 4:00 p.m., August 1, 2006. The Respondent maintains that all evidence presented by the Agency in this cause must be excluded pursuant to Section 409.913(22), Florida Statutes (2005).
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 sustaining the Medicaid overpayment in the amount of $486,879.06. DONE AND ENTERED this 1st day of December, 2006, in Tallahassee, Leon County, Florida. S J. D. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of December, 2006. COPIES FURNISHED: Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 William Roberts, Acting General Counsel Agency for Health Care Administration Fort Knox Building, Suite 3431 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Christa Calamas, Secretary Agency for Health Care Administration Fort Knox Building, Suite 3116 2727 Mahan Drive Tallahassee, Florida 32308 David W. Nam, Esquire Agency for Health Care Administration Fort Knox Building, Mail Station 3 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308 William M. Furlow, III, Esquire Akerman Senterfitt Highpoint Center, Suite 1200 106 East College Avenue Tallahassee, Florida 32301
The Issue The issues in this case are whether Petitioner received Medicaid overpayments, and, if so, what is the aggregate amount of the overpayments.
Findings Of Fact The Parties Respondent, the Agency for Health Care Administration, is the single state agency charged with administration of the Medicaid program in Florida under Section 409.907, Florida Statutes. Petitioner, The Doctor's Office, was a Florida corporation approved by the Agency to provide group Medicaid services. At all times relevant to this matter, Petitioner was owned entirely by non-physicians who employed salaried physicians to provide Medicaid services. Petitioner, at all times relevant to this matter, offered physician services to Medicaid beneficiaries pursuant to a contract with the Agency under provider number 371236P-00. Petitioner, pursuant to the specific terms in the contract with the Agency, agreed to abide by the Florida Administrative Code, Florida Statutes, policies, procedures, manuals of the Florida Medicaid Program, and Federal laws and regulations. Petitioner, pursuant to its contract with the Agency, agreed to only seek reimbursement from the Medicaid program for services that were "medically necessary" and "Medicaid compensable." The Audit In mid-1996, the Agency, pursuant to its statutory responsibility, advised Petitioner that it intended to audit Petitioner's paid Medicaid claims for the alleged medical services it provided between July 1, 1994 and June 30, 1996. In September 1996, the Agency conducted an initial audit site visit, and randomly selected 61 patient files for review. The complete patient files, provided by Petitioner, were reviewed by Sharon Dewey, a registered nurse consultant and Agency employee, as well as Dr. Solenberger, a physician consultant and Agency employee. In accordance with its procedure, the Agency determined that Petitioner had submitted a total of 580 claims for reimbursement relating to the 61 patient files and had received full payment from the Medicaid program for each claim. On March 3, 1997, the Agency issued a Preliminary Agency Audit Report (PAAR), and advised Petitioner that it had over-billed Medicaid and received an overpayment from the program. Shortly thereafter, the Agency auditors, Dr. Solenberger and Ms. Dewey, met with Frank Colavecchio, Petitioner's Corporate Representative, and discussed the Medicaid violations alleged in the review. During the meeting, the Agency requested Mr. Colavecchio to instruct Petitioner's staff physicians to review their records and provide a written rebuttal to the Agency's initial determinations. Within days, and prior to any further action, the Agency placed the audit on indefinite hold. The Agency decided to delay the audit until certain proposed legislation relating to peer review and the integrity of the Medicaid reimbursement program was enacted. Two years later, Section 409.9131, Florida Statutes, was enacted during the 1999 legislative session and became law. Shortly thereafter, in 1999, the Agency hired Dr. Larry Deeb, a board-certified, practicing pediatrician, to perform a peer review of Petitioner's practices and procedures. Dr. Deeb has performed similar medical records reviews for the Medicaid program since 1981 and possesses a thorough understanding of CPT coding and the EPSDT requirements. Dr. Deeb received the medical files provided by Petitioner, and reviewed each patient file in the random sample, including the medical services and Medicaid-related claim records. On November 11, 1999, Dr. Deeb completed his peer review of 564 of the 580 claims provided in the random sample and forwarded his findings to the Agency. Dr. Deeb advised the Agency that 16 reimbursement claims involved adult patients and he therefore did not review them. Utilizing Dr. Deebs findings, the Agency employed appropriate and valid auditing and statistical methods, and calculated the total Medicaid overpayment that Petitioner received during the two year audit period. On July 17, 2000, approximately four years after the original audit notification, the Agency issued its Final Agency Audit Report (FAAR). The Agency advised Petitioner that, based upon its review of the random sample of 61 patients for whom Petitioner submitted 580 claims for payment between 1994 and 1996, Petitioner received $875,261.03 in total overpayment from the Medicaid program during the audit period. Petitioner denied the overpayment and requested a formal administrative hearing. Following the initial commencement of the final hearing in this matter in December 2001, Dr. Deeb, again, reviewed the disputed claims and modified his opinion relating to 6 claims. Thereafter, the Agency recalculated the alleged overpayment and demanded Petitioner to pay $870,748.31. The Allegations The Agency alleges that specific claims submitted by Petitioner, which were paid by the Medicaid program, fail to comply with specific Medicaid requirements and therefore must be reimbursed. Since its inception, the Medicaid program has required providers to meet the Medicaid program's policies and procedures as set forth in federal, state, and local law. To qualify for payment, it is the provider's duty to ensure that all claims "[a]re provided in accord with applicable provisions of all Medicaid rules, regulations, handbooks, and policies and in accordance with . . . state . . . law." Section 409.913(5)(e), Florida Statutes (1993). Medicaid manuals are available to all Providers. Petitioner, as a condition of providing Medicaid services pursuant to the Medicaid program, is bound by the requirements and restrictions specified in the manuals, and under the contract, is required to reimburse the Medicaid program for any paid claims found to be in violation of Medicaid policies and procedures. The evidence presented at hearing established that Petitioner frequently violated various Medicaid policies and procedures. First, Petitioner repeatedly failed to comply with Section 10.9 of the Medicaid Physician's Provider Handbook, (MPPH), and Sections 409.905(9), 409.913(5)(e), 409.913(7)(e), and 409.913(7)(f), (1993, 1994 Supp. 1995, and 1996), Florida Statutes, which require all medical services to be rendered by, or supervised by a physician, and attested to by the physician's signature. Medical records reflecting services for paid claims must be physician signature certified and dated, or the services are not defined as physician's services. In addition, Petitioner routinely failed to correctly document the provision of certain physician's assistant (P.A.) Medicaid services that require the personal supervision of a physician or osteopath. See Chapter 1 of the Physician Assistant Coverage and Limitations Handbook, March 1995, and Appendix D (Glossary) in the Medicaid Provider Reimbursement Handbook, HCFA-1500 (HCFA-1500). In addition, Petitioner failed to comply with Medicaid regulations that require an approved physician to be present in the facility when certain P.A. services are delivered and to attest to it by signature within twenty-four hours of service. See Section 11.1 of the MPPH, effective July 1994, and Sections 409.905, and 409.913 (1993, 1994 Supp., 1995, and 1996 Supp.), Florida Statutes. The evidence presented at hearing also demonstrates that Petitioner repeatedly violated specific record keeping requirements located in Section 10.9 of the MPPH, Sections 10.6 and 11.5 of the Medicaid EPSDT Provider Handbook (EPSDT), and Sections 409.913(5)(e), 409.913(7)(e), and 409.913(7)(f), (1993, 1994 Supp., 1995, and 1996), Florida Statutes. In addition, the Agency demonstrated that Petitioner occasionally failed to document support for the necessity of certain services or simply billed for services that were not medically necessary. As indicated, Medicaid policy limits a physician to bill only for services that are medically necessary and defines the circumstances and varying levels of care authorized. In fact, Section 11.1 of the MPPH, effective July 1994, provides in part: The physician services program pays for services performed by a licensed physician or osteopath within the scope of the practice of medicine or osteopathy as defined by state law . . . . The services in this program must be performed for medical necessity for diagnosis and treatment of an illness on an eligible Medicaid recipient. Delivery of all services in this handbook must be done by or under the personal supervision of a physician or osteopath . . . at any place of service . . . . Each service type listed has special policy requirements that apply specifically to it. These must be adhered to for payment. The manual further provides clear guidelines defining authorized services for reimbursement which Petitioner apparently overlooked. For example, the manual defines the four types of medical history exams that Medicaid providers may conduct, the nature of the problems presented, and the appropriate and authorized tests. The manual also identifies the varying degrees of medical decision-making complexity related to Medicaid services and provides instructions relating to the method of selecting the correct evaluation and management code for billing. Petitioner consistently violated coding restrictions. Moreover, the Medicaid policy manual also outlines the specific procedures and billing requirements necessary for seeking payment for medical services including the early periodic screening for diagnosis and treatment (EPSDT) services. Chapter 10 and 11 of the MPPH specifically state that services that do not include all listed components of the EPSDT are not defined as an EPSDT, and upon audit, the Agency re-calculated Petitioner's medical services at the appropriate procedure code. Stipulation Prior to the commencement of the hearing, the parties stipulated that certain paid claims were correctly determined by the Agency to be overpayments. Specifically, the parties agreed that portions of samples 1, 3, 14, 21, 28, 41, 46, 47, 51, 53, and 56 could not be claimed for reimbursement since lab services which are part of an office visit reimbursement and/or lab service fees performed by an independent outside lab are not permitted. In addition, the parties agreed that specific portions of samples 1, 13, 14, 27, 28, 33, 35, 43, 46, 47, 52, 53, and 55 could not be claimed since Modifier 26 billing, the professional component, is only appropriate when the service is rendered in a hospital and Petitioner's services were rendered in an office. Pediatric Sample With regard to the random sample of pediatric files, upon careful review, the evidence presented at hearing sufficiently demonstrates that Petitioner was overpaid the following amounts on the following paid claims for the following reasons: The prolonged physician's services billed to Medicaid were not documented as having been provided or medically necessary. Cluster Number Date of Service Procedure Code Billed and Paid Overpayment 1 1/18/1996 99354 $ 36.64 1 5/14/1996 99354 $ 36.64 13 9/25/1995 99354 $ 36.64 19 9/28/1994 99354 $ 39.50 21 12/18/1995 99354 $ 36.64 28 3/06/1995 99354 $ 36.64 42 6/04/1996 99354 $ 36.64 43 12/19/1994 99354 $ 36.64 47 9/28/1994 99354 $ 39.50 47 10/17/1995 99354 $ 36.64 51 4/05/1995 99354 $ 36.64 53 11/02/1995 99354 $ 36.64 56 5/01/1996 99354 $ 36.64 The level of care billed to and reimbursed by Medicaid at the 99215 office visit procedure code level was improper since the level of care provided was at the 99213 office visit procedure code level. Cluster Number Date of Service Overpayment 1 9/14/1995 $ 34.14 1 1/18/1996 $ 34.14 1 5/14/1996 $ 34.14 33 9/28/1994 $ 20.00 47 10/17/1995 $ 34.14 The level of care billed and paid at the 99215 office visit procedure code level was improper since the level of care that was provided was at the 99214 office visit procedure code level. Cluster Number Date of Service Overpayment 53 5/31/1995 $ 21.69 The level of care billed and paid at the 99205 office visit procedure code level was improper since the level of care that was provided was at the 99204 office visit procedure code level. Cluster Number Date of Service Overpayment 25 7/27/1994 $ 2.00 The level of care that was billed and paid at the 99205 office visit procedure code level was improper since the level of care that was provided was at the 99203 office visit procedure code level. Cluster Number Date of Service Overpayment 35 5/11/1995 $ 37.96 51 12/08/1994 $ 15.00 55 11/21/1995 $ 37.96 58 9/22/1995 $ 37.96 The level of care that was billed and paid at the 99215 office visit procedure code level was improper since the level of care that was provided was at the 99204 office visit procedure code level. Cluster Number Date of Service Overpayment 43 12/11/1994 ($ 3.00) credit The level of care that was billed and paid at the 99205 office visit procedure code level was improper since the medical services provided and documentation supported an EPSDT visit. Cluster Number Date of Service Overpayment 53 2/06/1995 $ 16.53 The required components of the EPSDT were not documented as being performed at the office visit that had been claimed and paid as an EPSDT and therefore, the difference between the EPSDT payment received and the value of the procedure code for the documented level of office visit that occurred (i.e., 99214, 99213, 99212, 99211, or 99203), is deemed an overpayment. Cluster Number Date of Service Level of Visit Overpayment 1 7/28/1995 99213 $ 39.82 3 6/28/1995 99213 $ 39.82 5 3/03/1995 99203 $ 21.43 6 7/07/1994 99213 $ 5.00 10 8/17/1995 99212 $ 43.82 12 1/31/1996 99204 $ 0.00 14 5/31/1995 99213 $ 39.82 18 10/04/1994 99213 $ 5.00 18 1/29/1996 99214 $ 27.37 20 8/25/1994 99213 $ 5.00 21 12/11/1995 99214 $ 27.37 29 8/17/1994 99212 $ 9.00 Cluster Number Date of Service Level of Visit Overpayment 29 9/06/1995 99213 $ 39.82 40 7/25/1994 99203 $ 0.00 41 5/06/1996 99214 $ 27.37 46 9/19/1994 99213 $ 5.00 46 10/19/1995 99213 $ 39.82 47 11/02/1994 99213 $ 5.00 51 9/07/1995 99213 $ 39.82 53 7/10/1995 99213 $ 39.82 53 1/19/1995 99213 $ 39.82 59 5/02/1996 99203 $ 43.39 Adult Samples At hearing, Petitioner disputed all of the Agency's findings relating to patients over the age of 21 and objected to Dr. Deeb, a pediatrician, performing any review of their files. While Dr. Deeb is not the appropriate peer to review adult patient files, the following adult claims did not require substantive peer review and resulted in overpayment due to the stated reason: There were not any medical records in existence to indicate that any medical services were performed. Cluster Number Date of Service Procedure Code Billed and Paid Overpayment 2 2/20/1995 99215 $ 53.00 2 7/11/1995 99215 $ 59.14 2 8/09/1995 99215 $ 57.14 2 9/07/1995 99213 $ 23.00 2 10/11/1995 99213 $ 23.00 2 1/02/1996 99213 $ 23.00 2 3/22/1996 73560/Rad.Ex. $ 16.36 2 4/01/1996 99215 $ 57.14 2 4/05/1996 99213 $ 23.00 2 4/23/1996 99213 $ 23.00 15 2/16/1996 99213 $ 23.00 15 2/19/1996 99215 $ 57.14 16 5/14/1996 Blood Count $ 8.00 Cluster Number Date of Service Procedure Code Billed and Paid Overpayment 16 5/14/1996 UA $ 3.00 16 5/14/1996 99215 $ 57.14 23 7/28/1994 99213 $ 23.00 23 5/09/1995 72069/26 Rad.Ex. $ 6.98 23 5/09/1995 72069/Rad.Ex. $ 17.45 23 10/20/1995 99213 $ 23.00 34 4/24/1996 99214 $ 35.45 57 11/17/1995 99215 $ 59.14 60 4/10/1996 99215 $ 57.14 61 5/22/1995 99213 $ 23.00 The medical records failed to contain the required physician's signature and date authenticating the fact that the services billed were performed by either P.A. Olsen or P.A. Avidon under physician supervision. The services provided by the non-physician employee were reviewed and down-coded by the Agency to the appropriate level physician's office visit code. Cluster Number Date of Service Proc. Code Pd./ P. Code Allowed Overpayment 2 6/30/1995 99215/99212 $ 36.14 2 7/20/1995 99215/99213 $ 34.14 2 7/28/1995 99215/99213 $ 34.14 2 9/05/1995 99215/99212 $ 36.14 8 4/17/1995 99205/99203 $ 35.96 17 3/27/1995 99205/99203 $ 35.96 23 5/09/1995 99215/99213 $ 32.14 23 6/09/1995 99215/99213 $ 32.14 34 4/23/1996 99205/99203 $ 35.96 The medical records failed to contain the required physician signature authenticating the fact that the services were provided by a physician. The services provided were reviewed and down-coded by the Agency to the appropriate level physician's office visit code. Procedure Code Cluster Number Date of Service Billed and Paid Overpayment 2 6/14/1995 99215/99211 $ 45.14 16 5/15/1996 99215/99211 $ 45.14 61 5/05/1995 99205/99204 $ 14.53 The provider improperly sought payment for lab services that were part of the office visit reimbursement and/or lab services performed by an independent outside lab. Cluster Number Date of Service Procedure Billed and Paid Overpayment 2 3/08/1996 UA $ 3.00 2 4/03/1996 UA $ 3.00 15 2/08/1996 UA $ 3.00 16 5/15/1996 Blood Count $ 8.50 16 5/15/1996 Blood Count $ 8.00 The provider improperly sought payment for Modifier 26 billings (professional component) which are only appropriate when the service is rendered in a hospital. Cluster Number Date of Service Procedure Billed and Paid Overpayment 2 2/17/1995 Radiologic exam $ 6.98 2 6/14/1995 Radiologic exam $ 7.20 8 4/17/1995 Tympanometry $ 9.00 16 5/13/1996 Radiologic exam $ 5.45 16 5/15/1996 Radiologic exam $ 6.98 In addition to the policy and procedural violations, Petitioner, in egregious violation of the Medicaid program, admittedly submitted Medicaid claims for the services of specialist physicians (such as an allergist, OB/GYN, podiatrist, psychologists, and ophthalmologists) not within its Provider group, collected Medicaid funds based on those claims, and reimbursed the respective specialist. While Petitioner's corporate representative, Mr. Colavecchio, was admittedly responsible for the coding and billing of the Medicaid services submitted for reimbursement, he was minimally aware of the Medicaid policy requirements and possessed limited working knowledge of CPT coding and EPSDT billing. In addition, Petitioner's employees, Dr. Keith Wintermeyer and Dr. Marcia Malcolm, were only moderately familiar with the CPT coding and EPSDT component requirements. They provided little input to Petitioner regarding CPT coding and the sufficiency of certain physician's services relating to EPSDT billing.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency re-calculate the overpayment consistent with the Findings of Fact, and include only those identified violations in the cluster samples of the adult patient files, and issue a Final Order requiring Petitioner to reimburse, within 60 days, the Agency for the Medicaid overpayments plus any interest that may accrue after entry of the Final Order. DONE AND ENTERED this 14th day of February, 2003, in Tallahassee, Leon County, Florida. WILLIAM R. PFEIFFER 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 14th day of February, 2003. COPIES FURNISHED: Susan Felker-Little, Esquire Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox Building III Tallahassee, Florida 32308 Charles D. Jamieson, Esquire Ward, Damon & Posner, P.A. 4420 Beacon Circle West Palm Beach, Florida 33407 Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308 Rhonda M. Medows, M.D., Secretary Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3116 Tallahassee, Florida 32308
The Issue Whether Medicaid overpayments were made to Petitioner by the Agency for Health Care Administration ("AHCA") for services performed during the audit period of December 4, 1996 to December 4, 1998, and, if so, what is the total amount of these overpayments.
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: Parties Petitioner is a licensed physician in the State of Florida, having been issued license number 29615. His specialty area of practice is general or family practice. His office is located in Brandon, Florida. AHCA is the agency responsible for administering the Florida Medicaid Program. One of AHCA's duties is to recover Medicaid overpayments from physicians providing care to Medicaid recipients. Section 409.9131, Florida Statutes. The Provider Agreement During the audit period, Petitioner was authorized to provide physician services to eligible Medicaid patients. Petitioner provided such services pursuant to Medicaid Provider Agreements he entered into with AHCA and its predecessor, the Department of Health and Rehabilitative Services, on November 27, 1992, and December 3, 1996. The 1996 Provider Agreement, in effect at the time of the audit, contained the following provisions, among others: Quality of Service. The provider agrees to provide medically necessary services or goods of not less than the scope and quality it provides to the general public. The provider agrees that services or goods billed to the Medicaid program must be medically necessary, of a quality comparable to those furnished by the provider's peers, and within the parameters permitted by the provider's license or certification. The provider further agrees to bill only for the services performed within the specialty or specialties designated in the provider application on file with the Agency. The services or goods must have been actually provided to eligible Medicaid recipients by the provider prior to submitting the claim. Compliance. The provider agrees to comply with all local, state and federal laws, rules, regulations, licensure laws, Medicaid bulletins, manuals, handbooks and Statements of Policy as they may be amended from time to time. * * * 5. Provider Responsibilities. The Medicaid provider shall: * * * (b) Keep and maintain in a systematic and orderly manner all medical and Medicaid related records as the Agency may require and as it determines necessary; make available for state and federal audits for five years, complete and accurate medical, business, and fiscal records that fully justify and disclose the extent of the goods and services rendered and billings made under the Medicaid [sic]. The provider agrees that only records made at the time the goods and services were provided will be admissible in evidence in any proceeding relating to the Medicaid program. * * * (d) Except as otherwise provided by law, the provider agrees to provide immediate access to authorized persons (including but not limited to state and federal employees, auditors and investigators) to all Medicaid- related information, which may be in the form of records, logs, documents, or computer files, and all other information pertaining to services or goods billed to the Medicaid program. This shall include access to all patient records and other provider information if the provider cannot easily separate records for Medicaid patients from other records. * * * (f) Within 90 days of receipt, refund any moneys received in error or in excess of the amount to which the provider is entitled from the Medicaid program. Handbook Provisions Among the "manuals and handbooks" referenced in paragraph 3 of the Provider Agreement in effect during the audit period were the Medicaid Provider Reimbursement Handbook, HFCA- 1500 ("Reimbursement Handbook") and the Physician Coverage and Limitations Handbook ("C&L Handbook"), with their periodic updates. The term "medically necessary" was defined in Appendix D of the Reimbursement Handbook as follows, in relevant part: Medically Necessary or Medical Necessity Means that the medical or allied care, goods, or services furnished or ordered must: (a) Meet the following conditions: Be necessary to protect life, to prevent significant illness or significant disability, or to alleviate severe pain; Be individualized specific, and consistent with symptoms or confirmed diagnosis of the illness or injury under treatment, and not in excess of the patient's needs; Be consistent with generally accepted professional medical standards as determined by the Medicaid program, and not experimental or investigational; Be reflective of the level of service that can be safely furnished, and for which no equally effective and more conservative or less costly treatment is available statewide; and Be furnished in a manner not primarily intended for the convenience of the recipient, the recipient's caretaker, or the provider. . . . Chapter 3 of the C&L Handbook sets forth procedure codes to be used by physicians in claiming reimbursement for services provided to Medicaid recipients. The origin of the procedural and diagnosis codes is as follows, in relevant part: The procedure codes listed in this chapter are Health Care Financing Administration Common Procedure Coding System (HCPCS) Levels 1, 2, and 3. These are based on the Physician's Current Procedural Terminology (CPT) book. The CPT includes HCPCS descriptive terms and numeric identifying codes and modifiers for reporting services and procedures. . . . The CPT book is a systematic listing and coding of procedures and services provided by physicians. Each procedure or service is identified with a five digit code. For purposes of this proceeding, the relevant section of the CPT book is "Evaluation and Management-- Office or Other Outpatient Services," which sets forth the codes used to report evaluation and management services provided in the physician's office or in an outpatient or other ambulatory facility. The CPT book sets forth instructions for selecting the proper level of Evaluation and Management ("E/M") service, as follows in relevant part: Review the Level of E/M Service Descriptors and Examples in the Selected Category or Subcategory The descriptors for the levels of E/M services recognize seven components, six of which are used in defining the levels of E/M services. These components are: history; examination; medical decision making; counseling; coordination of care; nature of presenting problem; and time. The first three of these components (i.e., history, examination, and medical decision making) should be considered the key components in selecting the level of E/M services. . . . Determine the Extent of History Obtained The extent of the history is dependent upon clinical judgment and on the nature of the presenting problem(s). The levels of E/M services recognize four types of history that are defined as follows: Problem focused: chief complaint; brief history of present illness or problem. Expanded problem focused: chief complaint; brief history of present illness; problem pertinent system review. Detailed: chief complaint; extended history of present illness; problem pertinent system review extended to include a review of a limited number of additional systems; pertinent past, family, and/or social history directly related to the patient's problems. Comprehensive: chief complaint; extended history of present illness; review of systems which is directly related to the problem(s) identified in the history of the present illness plus a review of all additional body systems; complete past, family and social history. The comprehensive history obtained as part of the preventive medicine evaluation and management service is not problem-oriented and does not involve a chief complaint or present illness. It does, however, include a comprehensive system review and comprehensive or interval past, family and social history as well as a comprehensive assessment/history of pertinent risk factors. Determine the Extent of Examination Performed The extent of the examination performed is dependent on clinical judgment and on the nature of the presenting problem(s). The levels of E/M services recognize four types of examination that are defined as follows: Problem focused: a limited examination of the affected body area or organ system. Expanded problem focused: a limited examination of the affected body area or organ system and other symptomatic or related organ system(s). Detailed: an extended examination of the affected body area(s) and other symptomatic or related organ system(s). Comprehensive: a general multi-system examination or a complete examination of a single organ system. Note: The comprehensive examination performed as part of the preventive medicine evaluation and management service is multi-system, but its extent is based on age and risk factors identified. For the purposes of these CPT definitions, the following body areas are recognized: Head, including the face Neck Chest, including breasts and axilla Abdomen Genitalia, groin, buttocks Back Each extremity For the purposes of these CPT definitions, the following organ systems are recognized: Eyes Ears, Nose, Mouth and Throat Cardiovascular Respiratory Gastrointestinal Genitourinary Musculoskeletal Skin Neurologic Psychiatric Hematologic/Lymphatic/Immunologic Determine the Complexity of Medical Decision Making Medical decision making refers to the complexity of establishing a diagnosis and/or selecting a management option as measured by: the number of possible diagnoses and/or the number of management options that must be considered; the amount and/or complexity of medical records, diagnostic tests, and/or other information that must be obtained, reviewed and analyzed; and the risk of significant complications, morbidity and/or mortality, as well as comorbidities, associated with the patient's presenting problem(s), the diagnostic procedure(s) and/or the possible management options. Four types of medical decision making are recognized: straightforward; low complexity; moderate complexity; and high complexity. To qualify for a given type of decision making, two of the three elements in Table 2 below must be met or exceeded. Comorbidities/underlying diseases, in and of themselves, are not considered in selecting a level of E/M services unless their presence significantly increases the complexity of the medical decision making. The referenced Table 2, titled "Complexity of Medical Decision Making," sets forth guidelines for the four types of decision-making (straightforward, low complexity, moderate complexity, and high complexity) in terms of the relative number and/or complexity of three elements: number of diagnoses or management options (minimal, limited, multiple, or extensive); amount and/or complexity of data to be reviewed (minimal or none, limited, moderate, or extensive); and risk of complications and/or morbidity or mortality (minimal, low, moderate, or high). The "Office or Other Outpatient Services" section of the CPT book provides the codes for those services in terms of the guidelines set forth above. Five codes of increasing complexity are provided for new patients, and five counterpart codes are provided for established patients: New Patient 99201 Office or other outpatient visit for the evaluation and management of a new patient, which requires these three key components: a problem focused history; a problem focused examination; and straightforward medical decision making. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are self- limited or minor. Physicians typically spend 10 minutes face-to-face with the patient and/or family. 99202 Office or other outpatient visit for the evaluation and management of a new patient which requires these three key components: an expanded problem focused history; an expanded problem focused examination; and straightforward medical decision making. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are of low to moderate severity. Physicians typically spend 20 minutes face-to-face with the patient and/or family. 99203 Office or other outpatient visit for the evaluation and management of a new patient which requires these three key components: a detailed history; a detailed examination; and medical decision making of low complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are of moderate severity. Physicians typically spend 30 minutes face-to-face with the patient and/or family. 99204 Office or other outpatient visit for the evaluation and management of a new patient which requires these three key components: a comprehensive history; a comprehensive examination; and medical decision making of moderate complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are of moderate to high severity. Physicians typically spend 45 minutes face-to-face with the patient and/or family. 99205 Office or other outpatient visit for the evaluation and management of a new patient which requires these three key components: a comprehensive history; a comprehensive examination; and medical decision making of high complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are of moderate to high severity. Physicians typically spend 60 minutes face-to-face with the patient and/or family. Established Patient 99211 Office or other outpatient visit for the evaluation and management of an established patient that may or may not require the presence of a physician. Usually, the presenting problem(s) are minimal. Typically, 5 minutes are spent performing or supervising these services. 99212 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: a problem focused history; a problem focused examination; straightforward medical decision making. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are self- limited or minor. Physicians typically spend 10 minutes face-to-face with the patient and/or family. 99213 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: an expanded problem focused history; an expanded problem focused examination; medical decision making of low complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of low to moderate severity. Physicians typically spend 15 minutes face-to-face with the patient and/or family. 99214 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: a detailed history; a detailed examination; medical decision making of moderate complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of moderate to high severity. Physicians typically spend 25 minutes face-to-face with the patient and/or family. 99215 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: a comprehensive history; a comprehensive examination; medical decision making of high complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of moderate to high severity. Physicians typically spend 40 minutes face-to-face with the patient and/or family. Medicaid reimburses physicians according to the level of complexity of the office visit. The more complex the visit (and hence the higher the CPT code number), the greater the level of reimbursement. The Audit During the audit period, Petitioner submitted 2,215 Medicaid claims for services rendered to 382 patients, for which he received Medicaid payments of $134,469.21. In making a determination of overpayment, AHCA is not required to review each and every Medicaid claim submitted by a provider. Section 409.913(19), Florida Statutes, permits the agency to employ "appropriate statistical methods," including "sampling and extension to the population," to make its determination. In this instance, AHCA randomly selected a "cluster sample" of 39 patients from the 382 Medicaid patients to whom Petitioner had provided services during the audit period, and asked Petitioner to produce the medical records he had on file for these 39 patients. AHCA chose the cluster sample of 39 patients according to a statistical formula indicating a 95 percent probability that any overpayment amount would be at least the amount identified. By selecting the 95 percent confidence factor, AHCA attempted to ensure that any potential error in the audit would be resolved in favor of the audited physician. AHCA's statistical expert, Dr. Mark Johnson, validated the methodology used by AHCA. Dr. Johnson not only reviewed AHCA's work, but conducted his own independent analysis that reproduced AHCA's results. Dr. Johnson's testimony as to the reliability of AHCA's methodology is credited. Copies of the medical records were provided to AHCA by Zheila Galvez, the office assistant in charge of Petitioner's billings, on or about March 1, 1999. Ms. Galvez certified that she provided AHCA the complete medical records for the 39 patients, and acknowledged that these records would provide the only information AHCA would use in its audit. Petitioner was later provided an opportunity to supplement the records, but provided nothing further to the agency. At the hearing, counsel for Petitioner objected that AHCA failed to prove that the records it produced in evidence were the complete records as provided to AHCA by Ms. Galvez. The objection was rejected. No evidence was presented to show that AHCA mishandled the documents. Petitioner made no claim that a specific record was missing, and Petitioner was in the best position to know whether the records were complete. Petitioner had submitted a total of 232 claims for services rendered to the 39 patients in the cluster sample during the audit period. Each of these claims was reviewed by AHCA to determine whether it was supported by information contained in the medical records produced by Petitioner in response to AHCA's request. AHCA employee Dr. John Sullenberger, a physician who was not in active practice, performed the initial audit, reviewing all the claims for the 39 patient cluster sample. Dr. Sullenberger's work resulted in the First Audit Report that concluded Petitioner had been overpaid $72,724.89. As noted in the Preliminary Statement above, AHCA withdrew Dr. Sullenberger's audit because newly enacted Section 409.9131, Florida Statutes, mandated "peer review" in agency determinations of overpayment. Dr. Sullenberger did not meet the statutory definition of "peer" because he was not in active practice. See Section 409.9131(2)(c), Florida Statutes. AHCA engaged Dr. Timothy Walker, an active, Board- certified family practice physician who is a faculty member of Tallahassee Memorial Hospital's Family Practice Residency Program, to perform a second audit. Through Dr. Walker's deposition testimony, AHCA established that Dr. Walker's background, work experience and education establish him as an expert in CPT coding, qualified to render an opinion on the propriety of Petitioner's coding and billing practices. Dr. Walker reviewed the records that Petitioner had provided regarding the 39 patients in the cluster sample to determine whether there was documentation to support the Medicaid claims relating to these patients. Dr. Walker's review found that Petitioner exclusively billed the highest levels of CPT coding for outpatient services, i.e., 99205 for new patients and 99215 for established patients. Dr. Walker found that Petitioner failed to document a level of service consistent with these codes. Dr. Walker performed his own review of Petitioner's medical records and noted his conclusions as to the level of CPT coding that could be supported by the record of each patient for each visit to Petitioner's office. Dr. Walker found that all of the visits should have been billed at lower levels, based on the documentation provided by Petitioner. Dr. Walker's testimony is credited as to his review of Petitioner's records. Margarete Johnson, AHCA's registered nursing consultant, performed the calculations by which Dr. Walker's conclusions as to the proper coding were translated into dollar figures. These calculations were a simple function of addition and subtraction, using the relevant Medicaid reimbursement amounts for the various codes. Petitioner had been reimbursed $14,101.44 for the claims related to the 39 patients. Following Dr. Walker's analysis, Ms. Johnson calculated that $8,520.59 of that amount constituted overpayments. Using the generally accepted, appropriate, and valid statistical formula described by Dr. Johnson, AHCA extended this result to the total population of 2,215 Medicaid claims that Petitioner had submitted for services rendered during the audit period, and correctly calculated that Petitioner had been overpaid a total of $77,848.16. Petitioner did not present a case-in-chief. Petitioner's only exhibits were three pages that duplicated documents presented by AHCA, except for the fact that they carried an additional, later agency date stamp not found on those presented by AHCA. Petitioner claimed that these documents proved that AHCA did not produce its entire file on Petitioner during discovery or at the hearing. AHCA's witness Jack Williams explained that the extra, later date stamp on these documents resulted from Petitioner's having re-submitted these pages to AHCA as exhibits to his petition for formal hearing. This explanation was sufficient to allay any suspicion that AHCA's production was less than complete. On the strength of the evidence and testimony presented by AHCA, and in the absence of any evidence or testimony to the contrary, it is found that Petitioner received Medicaid overpayments in the amount of $77,848.16.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that AHCA enter a final order finding that Petitioner received $77,848.16 in Medicaid overpayments for services rendered to his Medicaid patients from December 4, 1996 to December 4, 1998, and requiring him to repay this amount to the agency. DONE AND ENTERED this 24th day of October, 2001, in Tallahassee, Leon County, Florida. LAWRENCE P. STEVENSON 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 24th day of October, 2001. COPIES FURNISHED: Donald W. Weidner, Esquire Matthew D. Weidner, Esquire Weidner, Bowden & Weidner 11265 Alumni Way, Suite 201 Jacksonville, Florida 32246 Anthony L. Conticello, Esquire Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building Three Tallahassee, Florida 32308-5403 Diane Grubbs, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308 William Roberts, Acting General Counsel Agency For Health Care Administration Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308
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
Findings Of Fact On August 23, 1995, the undersigned entered a Recommended Order in DOAH Case 94-1365. The Petitioner in that proceeding was Billy Beeks, M.D., and the Respondent was the Agency for Health Care Administration (AHCA). At issue in that proceeding was whether Dr. Beeks had been overpaid by the Medicaid program. The Recommended Order contained extensive findings of fact, including findings as to the appropriate levels at which certain services should have been billed to the Medicaid program by Dr. Beeks. It was concluded that because certain of his services were billed at levels higher than justified by Medicaid protocol, Dr. Beeks had been overpaid by the Medicaid program. Because the calculation of such overpayments are done by computer, it was recommended that the overpayment be recalculated based on the findings of fact contained in the Recommended Order. On October 19, 1995, Douglas M. Cook, Director of AHCA, entered a Final Order in DOAH Case 94-1365. That Final Order adopted the findings of fact and conclusions of law contained in the Recommended Order and provided, in pertinent part, as follows: The dollar amount of the overpayment liability shall be calculated based on the findings and conclusions made by the hearing officer. The amount of the overpayment claimed by AHCA at the beginning of the hearing in DOAH Case 94-1365 was $50,852.56. An overpayment to Medicaid is calculated by computer using a statistical analysis of a sampling of the provider's billings to Medicaid. AHCA asserted that the level at which Dr. Beeks had billed Medicaid for certain of these services in the sample was excessive. It was found in that underlying proceeding that while Dr. Beeks had billed certain of his services at excessive levels as asserted by AHCA, some of the challenged billings were not excessive and others were not as excessive as asserted by AHCA. Logically, one would expect that the recalculation of overpayment would result in a smaller figure than that claimed prior to the hearing. Following the entry of the Final Order, Vickie Givens, an employee of AHCA, made a detailed analysis of the evidence presented at the formal hearing, including the deposition of Joni Leterman, M.D.. Ms. Givens compared her analysis with the findings of fact contained in the Recommended Order and discovered certain billings by Dr. Beeks that she believed should have been included in the Recommended Order as being excessive. 1/ These billings were not included in the Recommended Order and, consequently, were not incorporated by reference into the Final Order. Thereafter the overpayment was recalculated by an appropriately trained AHCA employee. As instructed, this employee included in the recalculation of the overpayment the additional billings for the services identified by Ms. Givens, but not included in the Recommended Order. AHCA staff recalculated the amount of the overpayment to Dr. Beeks to be $51,745.13, which is slightly higher than the amount claimed prior to the hearing in DOAH Case NO. 94-1365. The figure that resulted from this recalculation was higher than it would have been had these additional billings not been included.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency enter a final order that adopts the findings of fact and conclusions of law contained herein and that the Agency recalculate the total amount of the overpayment during the audit period based solely on the findings of fact contained in the Recommended Order in DOAH Case 94-1365. DONE AND ENTERED this 8th day of July, 1996, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON, 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 8th day of July, 1996.
Findings Of Fact The Parties The Petitioner is the state agency that administers the Florida Medicaid program, which includes pharmacies that participate in the program. The Petitioner's Office of Program Integrity is responsible for insuring that the goods and services billed to the Medicaid program are those that are actually provided to Medicaid recipients. Medicaid is a joint program, funded by the federal government and by the State of Florida, and is administered pursuant to both state and federal statutes and rules. All services or goods billed to the program must be necessary, Medicaid compensable, and must also have actually been provided to eligible recipients by providers prior to submitting claims. Any payment made by the Medicaid program for goods or services not actually provided to an eligible recipient is subject to recoupment by the Petitioner, and the provider is also subject to the imposition of administrative fines and exclusion from the program for a specified period of time. The Respondent is a community pharmacy located in a hispanic section of Miami, Florida, which has been owned and operated for the past six years by Frances Larin, a licensed pharmacist, who makes all drug purchases and does all Medicaid billings at the pharmacy herself. Most of Respondent's customers have limited financial resources and are Medicaid recipients. The Respondent has participated in the Medicaid program for approximately eight years, and has not previously been charged with overbilling the Medicaid program. The Respondent has cooperated fully with the Petitioner throughout these proceedings. Prior Review From February to April 1988, the Petitioner's Office of Program Integrity had a review performed of the Respondent's billings to Medicaid from March 1, 1987 to December 31, 1987. This review was conducted for the Petitioner by the Foundation for Health Care, Inc. (Foundation), contract auditors, and resulted in the determination that the Respondent had overbilled the Medicaid program for prescription drugs dispensed to program recipients during the review period. In performing this review, the Foundation used an across-the-board Medicaid percentage of 54% in determining the available units of the various drugs on hand for dispensing to Medicaid recipients. Based upon the Foundation's review, the Petitioner sought recoupment for overpayments in the amount of $28,649.99 by letter to the Respondent dated July 20, 1988, as well as an administrative fine of $7,162.49, and a three month suspension from the program. The Respondent timely sought a formal administrative hearing in which it disputed the results of the Foundation review. However, after the matter was referred to the Division of Administrative Hearings, the Petitioner withdrew its notice of overpayment and imposition of administrative sanctions, and thus, without a determination on the merits, the Division of Administrative Hearings file was closed and jurisdiction was relinquished to the Petitioner. Subsequently, the Petitioner entered a Final Order which provided that the Respondent would be re-audited. The Respondent timely sought judicial review of this Final Order in which it challenged that Petitioner's right to conduct a further review of the period March 1, 1987 to December 31, 1987. However, the District Court of Appeal of Florida, Third District, dismissed the Respondent's appeal, and the Petitioner proceeded with a further review. The KPMG Review (a) For purposes of its further review, the Petitioner employed the public accounting and management consulting firm of KPMG Peat Marwick which designed a statistically valid sampling methodology to determine the Respondent's Medicaid percentage for each drug, and also to perform a management review of the Respondent. It was established by competent substantial evidence in the record, and in particular by the expert testimony in statistics from Dr. Robert Ladner and Robert Peirce, that the KPMG methodology was statistically valid. The KPMG review was conducted during the latter half of 1989, and included developing a Medicaid percentage for individual drugs based upon an analysis of prescriptions for all drugs in question to determine the portion of each drug's total sales that went to Medicaid recipients, calculating the total units claimed for each drug for which the Respondent sought reimbursement during the audit period, and calculating the total units purchased by the Respondent for each drug claimed for reimbursement during the audit period. The Medicaid percentage of each drug was then applied to total purchases for each specific drug to determine the amount of each drug that was on hand at the Respondent's pharmacy for dispensing to Medicaid recipients. This number of available units was then compared with the total units claimed for reimbursement. Where the units claimed exceeded the units available for dispensing, a positive variance was noted, and this number of excess units claimed was then multiplied by the per unit reimbursement amount for that particular drug in order to obtain the amount of the apparent overbilling for that particular drug. Where the total units available for dispensing exceeded the total units claimed for a particular drug, a negative variance was noted. It was stipulated by the parties that negative variances did not indicate underpayments, and the evidence, including specifically the testimony and report of Dr. Victor Pestien, an expert in statistics, does not establish that such negative variances should be offset against the positive variances or that they in any way reduce the positive variances. This is the first instance in which this methodology has been utilized by the Petitioner in seeking a recoupment of an alleged Medicaid overpayment from a pharmacy, and this methodology was not set forth in any rule or regulation of the Petitioner that had been adopted at any time material hereto. Previous audits used an overall Medicaid percentage to calculate the portion of a pharmacy's business that was comprised of Medicaid recipients, and the quantity of drugs that were available to them. Using a drug specific Medicaid percentage, however, is a more accurate and conservative approach to determining overpayments than using a fixed percentage. Based upon the consideration of all evidence in the record, it is specifically found that the greater weight of evidence establishes that the methodology used by KPMG in this review for calculating Medicaid percentages was sound and reasonable, and in no way precluded the Respondent from presenting additional competent substantial evidence to the Petitioner, or at hearing, which would have established different Medicaid percentages for particular drugs. (a) The type of review conducted by KPMG is known as an aggregate analysis, a generally accepted type of statistical analysis, in which drugs that have been billed to and paid for by the Medicaid program are reviewed to determine whether the pharmacy under review purchased or otherwise acquired a sufficient quantity of drugs to justify its billings to Medicaid. Interchangeable brand-name drugs and generic equivalents were grouped together so that in conducting this review, whole equivalent groups of drugs were considered as one type of drug, regardless of differences in individual product names. To obtain a statistically random sample, prescriptions were put in numerical order and every fourth prescription for the review period was examined, and since prescriptions may be refilled for up to a year after they are originally filled, reviewers also examined every prescription for the year prior to the review period. Competent substantial evidence establishes that KPMG performed an appropriate and valid statistical analysis, and that they used an acceptable sampling methodology which produced a truly random result. The underlying assumption of this analysis is that before a drug can be claimed to have been dispensed and billed to Medicaid, the pharmacy under review must have that drug in its possession. (b) The approach taken by KPMG and the Petitioner was to be as conservative as possible in resolving all uncertainties and questions which arose during the course of this review in favor of the Respondent. KPMG did not conduct a financial audit of the Respondent, but did prepare a management report based upon its review of Respondent's operations during the audit period. Data used by KPMG in its methodology in calculating the amount paid by Medicaid to the Respondent, the unit price of drugs dispensed, and the quantity claimed by Respondent for payment by Medicaid, was derived from computer based information provided by the Petitioner's fiscal agent. During the period of time being reviewed in this case, Electronic Data Systems (EDS) was the Petitioner's fiscal agent, while Consultec was the Petitioner's fiscal agent during the period when the KPMG review was actually being performed. When Consultec was selected as the Petitioner's fiscal agent and replaced EDS on January 1, 1989, EDS turned over its computer records to the new agent by copying all of its magnetic, computer files, along with supporting microfiche documentation, which it then provided to Consultec under the supervision of the Petitioner. Upon receipt of these magnetic tapes, Consultec placed them in a controlled environment vault, and then later converted the information on these tapes to a new format used by Consultec. It was established by competent substantial evidence that in this process, no data was added, deleted or changed in any manner. The "units claimed" data was subsequently provided by computer download from the Consultec claims data base directly to the Petitioner's Office of Program Integrity. It was established by competent substantial evidence that data regarding claims which originated with EDS passed through Consultec to the Petitioner's Office of Program Integrity unchanged. Specific information regarding Respondent, including the claimed quantity of drugs dispensed and amounts paid, was accessed by staff in the Office of Program Integrity, randomly verified, and then made available to KPMG. Both Consultec and EDS are nationally recognized data processing and management companies. Competent substantial evidence established that the claims processing function utilized by the Petitioner in the Medicaid program during the period at issue was subject to several quality control checks to insure that claims were properly processed and appropriate payments were made. On occasion claim adjustments were made, but these were reasonable and for good cause, such as a substantiated underpayment. The computer hardware utilized in this process was reliable and properly maintained. In order to verify the data used by KPMG concerning the dollar amount of claims paid and the quantity of units of medication claimed, an "audit trail" was performed using 140 randomly selected sample claims by tracing each claim from its claim reference number to its associated remittance voucher and cancelled checks, where available. This audit trail verified that the data used as the basis for quantity claimed and total dollars paid was valid and reliable. The KPMG review was not limited to the top 100 drugs, by volume claimed, during the audit period, but included each drug dispensed by the Respondent to Medicaid recipients during the audit period. In its report dated November 20, 1989, KPMG calculated a total Medicaid overpayment to Respondent of $30,452.59, and based thereon, the Petitioner notified the Respondent that it was seeking recoupment of this amount, as well as an administrative fine of $2,000 and termination from the Medicaid program for at least two years. Subsequently, however, the Petitioner and KPMG reviewed and considered additional invoices documenting additional purchases of drugs in question by the Respondent during the audit period, and prepared a revised report dated August 30, 1990. Based upon this revised report, the Petitioner sought recoupment of a revised, reduced overpayment calculated to be $21,939.93, as well as a $2,000 administrative fine and a minimum two year termination from the program, and it was on this basis that this matter proceeded to final hearing. The Top 100 Drugs Subsequent to the final hearing, the Petitioner issued an amended recoupment letter dated October 17, 1990, which limited the recoupment it is seeking in this matter to the top 100 drugs, by dollar volume of claims, plus their generic equivalents. This resulted in the elimination of many individual drugs with relatively small overpayments from the list of overpayments, and left only five instances among these top 100 drugs where the difference between the quantity available, adjusted for standard error, and the quantity claimed is less than 100 units. In many instances the difference is well in excess of 1,000 units. The sanctions being sought in this amended recoupment letter further reduced the recoupment being sought to $12,643.11, reduced the administrative fine to $1,400, and reduced the period of exclusion from the program that is being sought to 16 months. However, due to an error in calculating the top 100 drugs and equivalents, the Petitioner issued a second amended recoupment letter dated October 26, 1990, further reducing the administrative fine sought to $1,200 and reducing the period of exclusion to 14 months. Inventory Analysis In performing its review, KPMG obtained information concerning the quantities of drugs purchased during the review period by the Respondent directly from the pharmacy's wholesalers and from a review of invoices retained by the Respondent for a period that included one month prior to the review period through one month after the review period (February 1, 1987, to January 31, 1988). The effect of seasonal variations in pharmacy sales and ordering patterns was also taken into account, and balanced, by extending this period to a full twelve months. All documentation concerning drug acquisitions was requested from Respondent, and the information received and considered by KPMG and the Petitioner was checked for reasonableness by a consultant pharmacist and cross validated by two reviewers. It was stipulated by the parties that the Respondent's main wholesaler, Gulf Distribution, Inc., had and maintained accurate information and records regarding its sales to the Respondent, and that it properly transferred that information to computer disks which were provided to KPMG. Subsequent thereto, additional invoices were discovered and were also made available to KPMG. The Petitioner stipulated that these additional invoices from Gulf did not reduce the number of drug units purchased by, and invoiced to, Respondent. Pharmacies in Florida which choose to participate in the Medicaid program are required to maintain complete and accurate patient and fiscal records which fully substantiate the extent of services rendered and billings made for a period of five years from the date of billing or service, and are also required to retain all invoices from wholesalers, or from the transfer or receipt of drugs through barter or exchange, for a period of five years. (a) Actual beginning and ending inventories of the top 100 drugs reviewed by KPMG for which the Petitioner now seeks recoupment in the amount of $12,643.11 were not determined. Rather, an estimate of inventory on hand was derived by counting invoices of all drug acquisitions through purchase, transfer or exchange made by the Respondent during the review period, as well as invoices of acquisitions made one month prior to and one month after the review period. Additionally, all documentation provided by the Respondent of bulk, or large, acquisitions made during or prior to the review period was also considered and included in the Petitioner's estimate of inventory. It was established by competent substantial evidence that pharmacies generally keep a drug inventory consisting of a two to two-and-a-half week supply on hand, and acquire drugs in anticipation of future sales rather than as a replacement of inventory depletion from past sales. Therefore, a basic assumption of the KPMG methodology, relied upon and accepted by the Petitioner, that Respondent had only those drugs available for dispensing which were obtained by invoiced purchase from wholesalers, or through transfer or exchange, between February 1, 1987 and January 31, 1988, as well as documented invoiced bulk purchases prior to this time period, is reasonable. At hearing, the Respondent established that a significant quantity of nine specific drugs were purchased during the review period from suppliers other than Gulf that were not considered by KPMG. These drugs include Xanax (.5 mg.), Inderal (10 mg.), Tagamet (300 mg.), Nitrostat (.4 mg.), Trental (400 mg.), Motrin (400 mg.), Motrin (600 mg.), Quinamm (260 mg.), and Quinidine Sulfate (200 mg.). It is, therefore, found that the overpayment of $2,902.19 calculated by KPMG and relied upon by the Petitioner for these particular drugs has not been supported by competent substantial evidence. Frances Larin, Respondent's owner and operator, testified that she did not follow the generally accepted practice of retaining only a two to two-and-a- half week supply of drugs on hand. Rather, she testified that for a significant number of the top 100 drugs at issue in this proceeding, she would purchase large quantites in bulk, and was thus able to draw down on these inventories without making additional purchases of particular drugs for over a year. The Respondent sought to establish that due to very large beginning inventories of particular drugs at issue, it was able to legitimately dispense more units during the review period than it purchased during the same time. However, the Respondent did not produce evidence in support of its position, such as invoices for bulk purchases which KPMG or the Petitioner did not consider, or complete records of bartering or transfers which had not been considered, and which would have supported its claim of a significantly larger beginning inventory for these particular drugs than would be the generally accepted practice. To the contrary, competent substantial evidence in the record, as well as the demeanor of Larin while testifying, establishes that Respondent's claim is unreasonable and lacks credibility. The deposition testimony of JoAnn Padell is outweighed by the testimony of Deborah Launer, Susan McCleod, and Robert Peirce. A review of the Respondent's purchasing patterns clearly shows that Respondent generally and routinely kept low inventories of drugs on hand, placing daily orders with Gulf to obtain drugs on an as-needed basis. Recoupment Based upon the foregoing, it is found that competent substantial evidence establishes that the Respondent overbilled the Medicaid program during the review period at issue in this case in the amount of $9,740.92 ($12,643.11 claimed in the second amended recoupment letter minus the $2,902.19 claim associated with the nine specific drugs for which significant purchases were omitted from the KPMG review, as found above at Finding 13). Petitioner is authorized to recoup the established overpayment of $9,740.92 from the Respondent. Sanctions (a) In determining the sanctions stated in the second amended recoupment letter which Petitioner seeks to impose upon the Respondent, the Petitioner considered the provisions of Section 409.266(13), Florida Statutes, as well as the impact which sanctioning this Medicaid provider would have upon Medicaid recipients. Competent substantial evidence establishes that there are eight pharmacies which accept Medicaid within a one mile radius from the Respondent's location, and twenty-six such pharmacies within a two mile radius. Medicaid recipients are issued new cards each month and may transfer pharmacies at the beginning of each month. Therefore, it is found that Medicaid recipients would not be substantially affected by the imposition of sanctions upon the Respondent. The parties stipulated that the sanction matrix set forth in Rule10C- 7.063, Florida Administrative Code, was not applied by the Petitioner against the Respondent in this case because it was not in effect at the time of this review. The sanctions which the Petitioner seeks to impose against the Respondent, therefore, are based upon non-rule policy which must be explicated in this proceeding. In seeking to explicate its non-rule policy upon which the sanctions set forth in the second amended recoupment letter are based, the Petitioner established that it was concerned that sanctions imposed in prior cases, as well as in the original recoupment letter which had been sent to the Respondent in this case, had been too lenient in view of the seriousness of Medicaid violations. The Petitioner developed its non-rule sanctions policy after the KPMG review had been completed, and based its proposal upon the maximum sanctions set forth in state and federal statutes and rules. Specifically, Section 409.266(12), Florida Statutes, provides for a maximum fine of $10,000; the maximum exclusion period applied in previous cases by the Office of Program Integrity is ten years, and the minimum exclusionary period imposed by the federal government has been five years for the failure to supply payment information. At hearing, the Petitioner explained that it first determined the percent of Respondent's total Medicaid payments that the overpayment represented, and then applied that percentage to these maximum sanctions allowed under law and existing policy. The overpayment of $12,643.11 claimed by the Petitioner in its second amended letter of recoupment is 12% of the total payment of $100,397.88 made by the Petitioner to Respondent for the review period, and 12% of the maximum fine and exclusion period is $1,200 and 14 months, respectively. While the Petitioner explained the manner by which this exclusionary period and fine were calculated, it did not explicate its non-rule policy by establishing a reasonable, rational basis for applying the percentage of Medicaid overbillings to the maximum fine and exclusionary period. Certainly, the arithmetic calculation used to arrive at these proposed sanctions is clear, but there was no explication through competent substantial evidence which would establish that there is a basis in fact or logic for this calculation. Therefore, it is found that the Petitioner's non-rule policy used to propose these sanctions is arbitrary and capricious. Due to the lack of any evidentiary basis in the record which would support the imposition of the sanctions of an administrative fine or a period of exclusion from the Medicaid program, the Petitioner is not authorized to impose sanctions on the Respondent.
Recommendation Based upon the foregoing, it is recommended that Petitioner enter a Final Order which requires that Respondent to repay the Petitioner for Medicaid overbillings in the amount of $9,704.92, but which does not impose sanctions consisting of either an administrative fine or period of exclusion. DONE AND ENTERED this 18th day of January, 1991 in Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 18th day of January, 1991. APPENDIX TO RECOMMENDED ORDER Rulings on the Petitioner's Proposed Findings of Fact: Adopted in Finding 1. Adopted in Finding 2. Adopted in Finding 3. Adopted in Finding 1. Adopted in Finding 4. Adopted in Findings 4 and 5. 7-10. Adopted in Findings 6 and 7, but otherwise Rejected as unnecessary. 11-17. Rejected as unnecessary. 18-20. Adopted in Findings 6 and 7. 21-24. Adopted in Finding 12. 25. Adopted in Finding 2. 26-28. This is a conclusion of law and not a proposed finding. 29-30. Adopted in Finding 8. 31-32. Adopted in Findings 7 and 10. Adopted in Finding 6. Rejected as unnecessary. 35-39. Adopted in Finding 7. 40-47. Adopted in Finding 7, but otherwise Rejected as unnecessary. 48. Rejected as unnecessary and immaterial 49-51. Adopted in Finding 7, but otherwise Rejected as unnecessary. 52-53. Rejected as unnecessary. 54-63. Adopted in Finding 12, but otherwise Rejected as unnecessary. Adopted in Finding 8. Adopted in Finding 9. 66-67. Adopted in Finding 8, but otherwise Rejected as unnecessary. 68-69. Adopted in Finding 9. 70-78. Adopted in Finding 8, but otherwise Rejected as unnecessary. 79-82. Adopted in Finding 8. 83-85. Rejected as unnecessary. 86-93. Adopted in Finding 13, but otherwise Rejected as unnecessary. 94-97. Adopted in Finding 14, but otherwise Rejected as unnecessary. 98-103. Adopted in Finding 14. 104-105 Rejected as unnecessary and immaterial. 106-107 Adopted in Finding 12. 108. Adopted in Findings 12 and 13. 109-112 Rejected as unnecessary and immaterial. 113-115 Adopted in Finding 13, but otherwise Rejected as immaterial. This is a conclusion of law and not a proposed finding. Adopted in Finding 11. 118-119 Rejected as unnecessary and immaterial 120-122 Adopted in Finding 11. Rejected as unnecessary. Adopted in Finding 6. 125-128 Rejected as unnecessary. 129. Adopted in Finding 6. 130-132 Adopted in Finding 9. Adopted in Finding 11. This is a conclusion of law and not a proposed finding. 135-147 Adopted in Finding 16, but otherwise Rejected as unnecessary and immaterial. 148. Adopted in Finding 11. 149-150 Adopted in Finding 16, but otherwise Rejected as unnecessary. 151-152 Rejected as unnecessary. 153. Rejected as unnecessary and cumulative. Rulings on the Respondent's Proposed Findings of Fact: 1. Adopted in Finding 4. 2-3. Adopted in Finding 5, but otherwise Rejected as unnecessary and not based on competent substantial evidence. 4-5. Adopted in Findings 3, 6 and 7. 6-7. Adopted in Finding 10, but otherwise Rejected as unnecessary. 8-9. Adopted in Finding 11. 10-11. Adopted in Finding 3, but otherwise Rejected as unnecessary. Adopted in Finding 6. Rejected as immaterial and unnecessary. 14-15. Rejected as argument on the evidence rather than a proposed finding, and otherwise as not based on competent substantial evidence. Adopted in Finding 7, but otherwise Rejected as argument on the evidence rather than a proposed finding. Rejected as repetitive and otherwise as immaterial. Adopted in Finding 13, but Rejected in Finding 14 and otherwise as argument on the evidence rather than a proposed finding and as not based on competent substantial evidence. Rejected in Finding 14, as immaterial, speculative, and as not based on competent substantial evidence. 20-21. Rejected in Finding 6, as immaterial, and as not based on competent substantial evidence. 22-23. Rejected in Findings 13 and 14, and otherwise as immaterial and not based on competent substantial evidence. Rejected as repetitive and otherwise as argument on the evidence rather than a proposed finding. Rejected in Findings 13 and 14. 26-30. Rejected as a statement of the Respondent's position and not a proposed finding, as speculative and contrary to competent substantial evidence, and as totally without citation to authority in the record as required by Rule 22I-6.031(3), Florida Administrative Code. 31-35. Rejected in Finding 6, and as not based on competent substantial evidence and as unnecessary. 36-38. Adopted in Findings 12 and 13. 39-41. Adopted in Finding 8. 42. Rejected as immaterial. 43-44. Rejected in Finding 9. 45. Rejected as simply a summation of testimony and not a proposed finding. 46-48. Rejected in Finding 9, and otherwise as immaterial and not based on competent substantial evidence. 49-50. Rejected as unnecessary and immaterial. 51. Adopted in Finding 16, but otherwise Rejected as immaterial. 52-53. Rejected as unnecessary and immaterial. Rejected as not based on competent substantial evidence. Adopted and Rejected in part in Finding 16. 56-57. Adopted in Finding 16. 58-61. Rejected as immaterial and irrelevant. 62. Adopted and Rejected in part in Finding 15. COPIES FURNISHED: David G. Pius, Esquire Building Six, Room 233 1317 Winewood Boulevard Tallahassee, FL 32399-0700 James J. Breen, Esquire Michael P. Scian, Esquire 900 Sun Bank Building 777 Brickell Avenue Miami, FL 33131 R. S. Power, Agency Clerk 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Linda Harris, Acting General Counsel 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Robert B. Williams, Acting Secretary 1323 Winewood Boulevard Tallahassee, FL 32399-0700
The Issue Whether Medicaid overpayments were made to Petitioners, Jeanette E. Norris, M.D., and Sandcastle Pediatrics, and, if so, what is the total amount of these overpayments.
Findings Of Fact The Agency is the state agency charged with administration of the Medicaid program in Florida under Section 409.907, Florida Statutes. Petitioner Norris is a physician who, during the period of January 1, 1997, through October 16, 1999, provided Medicaid services to Medicaid beneficiaries pursuant to a valid Medicaid provider agreement with the Agency under provider number 0543756-00. Petitioner Norris at all times relevant to this matter, provided Medicaid services in an office owned by Petitioner Norris, doing business as Sandcastle Pediatrics, but all Medicaid claims were claimed by and paid to Petitioner. The Agency performed an audit of paid Medicaid claims for services claimed to have been performed by Petitioner Norris during the period January 1, 1997, through October 16, 1999. On March 12, 2201, the Agency issued a Final Agency Audit Report ("Audit Report" or "FAAR"), requesting Petitioner Norris to reimburse the Agency $39,534.32, alleged for overpayments of Medicaid claims submitted by and paid to Petitioner Norris. The determination of overpayment was based upon audit findings that services provided by Petitioner Norris did not meet Medicaid criteria. These criteria included: lack of documentation of services rendered; lack of documentation to support the higher level of service billed; failure to document the required elements for early periodic screening for diagnosis; failure to document performance of treatment services; and billing for two codes when one code incorporated the elements of the other code. During the Audit period, the applicable statutes, laws, rules and policy guidelines (Medicaid rules) in effect required Petitioner Norris to maintain all Medicaid-related records and information that supported any and all Medicaid invoices or claims made by Petitioner Norris during the Audit period. During the Audit period, the Medicaid rules required Petitioner Norris to provide the Agency or the Agency's authorized representatives all the Medicaid-related records and other information that supported all the Medicaid-related invoices or claims for which Petitioner Norris billed Medicaid during the Audit period. Petitioner Norris was required to maintain all medical and Medicaid-related records for a period of five years to satisfy all necessary inquiries by the Agency. During all times relevant to this matter, Petitioner Norris had an affirmative duty to assure that each claim presented to the Agency was true and accurate, and that goods and services were provided in accord with applicable provisions of the Medicaid rules. Medicaid goods and services are deemed excessive or medically unnecessary unless both the medical basis and specific need for them are fully and properly documented in the recipient's medical record. At the request of Ms. Lynne Edwards, the Agency's auditor, the Agency generated a random list of 24 Medicaid recipients (cluster sample) rendered services by Petitioner Norris during the audit period. In addition, the Agency generated work papers of: the total number of recipients to whom Petitioner Norris rendered services during the audit period; the total number of claims by Petitioner Norris with dates of service during the audit period; the total amount paid to Petitioner Norris for all claims with dates of service during the audit period; and worksheets representing each recipient's claims for the audit period. Ms. Edwards obtained the work papers generated by the Agency concerning the random cluster sample, provided 24-hour advance notice to Petitioner Norris of an on-site visit, and performed an on-site visit at the office where Petitioner Norris provided medical services and maintained patient records. After the on-site visit, Ms. Edwards prepared an on-site investigative summary. When Ms. Edwards performed the on-site visit, she spoke with Petitioner Norris. Ms. Edwards presented Petitioner Norris with a questionnaire and printout of the names of the 24 patients in the cluster sample, and asked Petitioner Norris to fill out the questionnaire and mail back to Ms. Edwards the completed questionnaire along with copies of the medical records of the 24 patients in the cluster sample. Ms. Edwards also asked to see medical records of a few of the patients in the cluster sample while she was on-site. Petitioner Norris did not mail a completed questionnaire to Ms. Edwards. Subsequent to the on-site visit, Petitioner Norris provided the Agency with medical records for five of the 24 recipients in the sample. The records were given to Ms. Blanca Notman, the Agency's registered nurse consultant, for policy compliance review. Thereafter, Petitioner Norris submitted medical records for an additional five recipients in the sample. Ms. Edwards forwarded the additional medical records to Ms. Notman for review. After Ms. Notman reviewed the medical records and provided her comments on the claims worksheets, Ms. Notman forwarded the records and worksheets to Dr. Larry Deeb, a pediatrician physician consultant, for a review relating to medical necessity and level of care issues. After review and comments by Dr. Deeb, the records and worksheets were returned to Ms. Notman, who calculated adjustments on the claims worksheets based on the opinions of Dr. Deeb. Ms. Notman returned the medical records and worksheets to Ms. Edwards, along with a Professional Medical Review Report signed by Ms. Notman and Dr. Deeb. Ms. Edwards received the medical records, worksheets, and the Professional Medical Review Report, totaled the overpayments per patient/cluster in the sample, and arrived at a figure of $3,298.45 as the total overpayment for all cluster sample claims. Ms. Edwards submitted the cluster sampling information and the audit review results to another Agency employee for the generation of the extrapolated overpayment calculation, using the Agency's formula. The Agency employee generated and provided to Ms. Edwards the overpayment calculation that represented the findings of the audit of the cluster sampling extrapolated to the total paid claims in the audit period, which was $39,534.32. The Agency prepared its February 6, 2001, Preliminary Agency Audit Report (PAAR) based on the audit review of the medical records provided by Petitioner Norris for the paid claims in the cluster sample. Petitioner Norris provided no documentation for 14 of the 24 patients in the cluster sample, and the audit took this into account. The PAAR was mailed to Petitioner Norris. The PAAR identified all policy violations and determinations found in the audit review. Petitioner Norris closed her medical practice in March 2001. Petitioner Norris joined the employees of a group that provides physicians to hospitals on contract for limited periods of time. This required Petitioner Norris to be away from home and unavailable for large periods of time, which complicated all aspects of this case. The PAAR informed Petitioner Norris that the findings were preliminary and encouraged Petitioner Norris to submit any additional documentation she felt would serve to reduce the overpayment within 30 days. Petitioner Norris did not submit additional documentation to the Agency. Pursuant to Section 409.9131, Florida Statutes (2000 Supp.), the Agency prepared and mailed to Petitioner Norris its March 12, 2001, Final Agency Audit Report (FAAR), asserting a total overpayment determination of $39,534.32 and again identifying all policy violations and determinations found in the audit review. After receipt of the FAAR, Petitioner Norris requested an informal hearing, which the Agency received on April 13, 2001. In her hearing request Petitioner Norris said the 30 days given between the PAAR and FAAR for the submission of additional documentation was not sufficient because she was in the process of closing her medical office and relocating her files and medical records. Petitioner Norris requested an additional 60 days for the submission of additional information, and the letter inferred there were disputed issues of material fact. On April 26, 2001, the Agency's clerk submitted a request to Petitioner Norris that she clarify her hearing request, given what appeared to be disputed issues of material fact. On September 12, 2001, Petitioner Norris sent the Agency a letter that informed the Informal Hearing Officer of dates of availability and acknowledged there were disputed issues of material fact. The matter was subsequently referred to the Division of Administrative Hearings. On March 28, 2002, the Agency took the deposition of Dr. Deeb in lieu of live trial testimony. Prior to the commencement of the deposition, the determination of the Agency as to the paid claims in the cluster sample was reviewed by the parties and stipulations were entered into between the Agency and Petitioner Norris. The stipulations were restated during the deposition. Based on the stipulations prior to and during the deposition of Dr. Deeb, the Agency re-calculated the total overpayment for the paid claims in the cluster sample, extrapolated the sample findings to the population, and determined the adjusted total overpayment of paid Medicaid claims. Prior to the commencement of the final hearing on April 1, 2002, the parties agreed that the information set forth in AHCA Exhibit 10A represented the Agency's final determination as to the claims in the cluster sample determined to be overpayments by the Agency, with the exception of the "No Documentation" overpayment for the date of service of March 3, 1997, which the parties agreed should not be listed on the exhibit because the Agency represented that it would recalculate the extrapolated total overpayment, based upon the final determinations set forth in the Agency Exhibit 10A (subtracting out the "No Documentation" March 3, 1997 listing), and the parties were permitted to supplement AHCA Exhibit 30 with any updated total overpayment determination. The Agency recalculated the extrapolated total overpayment after April 1, 2002, which was determined to be $4,000.48, and supplemented AHCA Exhibit 30 by filing AHCA Exhibit 30A on June 7, 2002. On April 1, 2002, when the final hearing commenced, the parties agreed that the only Medicaid claims overpayment determinations made by the Agency concerning the audit of the claims in the cluster sample that were in dispute were the following: Blood count/fingerstick hemoglobin and hemocrit tests performed as a part of a physician office visits as follows: Recipient/ Patient Date of Service Procedure Billed Reason for Claim Denial Overpayment 13 3/25/97 Blood Count/HE Part of OV $ 2.00 14 2/24/97 Blood Count/HE Part of OV $ 2.00 14 3/10/97 Blood Count/HE Part of OV $ 2.00 16 4/4/98 Blood Count/HE Part of OV $ 2.00 16 5/12/98 Blood Count/HE Part of OV $ 2.00 16 6/18/98 Blood Count/HE Part of OV $ 2.00 Office visit (OV) cannot be billed the same day that an EPSDT is billed, when patient only seen once that day: Recipient/ Patient Date of Service Procedure Billed Reason for Claim Denial Overpayment 22 7/29/97 OV-99202 OV billed same $31.35 same day as EPSDT On April 1, 2002, when the final hearing commenced, the parties agreed that the following claims overpayment determinations made by the Agency concerning the audit of the claims in the cluster sample were not in dispute: Claims were no medical records existed to indicate services were performed: Recipient/ Patient Date of Service Procedure Billed Reason for Claim Denial Overpayment 3 5/12/97 EPSDT No Med. Rec. $64.98 3 5/12/97 blood count No Med. Rec. $ 2.00 3 5/12/97 immunization No Med. Rec. $10.00 3 5/12/97 immunization No Med. Rec. $10.00 3 5/12/97 immunization No Med. Rec. $10.00 3 8/27/97 immunization No Med. Rec. $10.00 3 8/27/97 immunization No Med. Rec. $10.00 3 8/27/97 immunization No Med. Rec. $10.00 3 8/27/97 immunization No Med. Rec. $10.00 7 7/30/97 OV-99213 No Med. Rec. $25.00 22 7/14/98 EPSDT No Med. Rec. $65.33 Office visit (OV) claims, to include Early and Periodic Screening, Diagnosis, and Treatment Services claims (EPSDTs), that lacked all EPSDT components, adjusted to appropriate level of care OV claims. Recipient/ Date of Adjustment Reason for Patient Service Made Adjustment Overpayment 3 8/27/97 EPSDT to 99214 OV Lacked components $27.72 3 8/27/98 99205 OV to 99204 OV Level of Service $38.18 9 10/17/97 99205 OV to 99204 OV Level of Service $17.04 10 4/3/97 99204 OV to 99203 OV Level of Service $21.36 14 3/24/97 99214 OV to 99213 OV Level of Service $12.26 14 4/28/97 99214 OV to 99213 OV Level of Service $12.26 16 1/20/97 99205 OV to 99204 OV Level of Service $17.04 16 3/5/97 99214 OV to 99213 OV Level of Service $12.26 19 3/11/97 99205 OV to 99204 OV Level of Service $17.04 20 4/2/97 99214 OV to 99213 OV Level of Service $12.26 21 2/13/98 99205 OV to 99204 OV Level of Service $16.77 23 8/4/97 99204 OV to 99203 OV Level of Service $21.36 As to the disputed claims concerning the blood count/fingerstick hemoglobin and hemocrit test performed as a part of a physician office visit, Petitioner Norris testified that she did not see the test as a routine part of an office visit, she disagreed with the policy that the test could not be billed separately, and she indicated that usually her nurse would perform the test, which she agreed involved a little prick of blood run through something and took about five minutes. The preponderance of the evidence established that the Agency's determination as to these disputed claims was correct--the Medicaid Handbooks in effect during the audit prohibited Petitioner Norris from separately billing for these tests because they were done during an office visit. The one disputed claim concerning an EPSDT and office visit billed on the same day when the patient was only seen once was for the treatment of the patient's oral infection (thrush). Petitioner Norris admitted that she received reimbursement for office visit procedure Code 99202, in addition to being reimbursed for an EPSDT, even though the patient was seen only once on that day. It was undisputed that prior to the issuance of the Agency's audit report, a peer review was performed by Dr. Larry C. Deeb, a pediatrician in active practice pursuant to Section 409.9131, Florida Statutes (2000 Supp.) Based on the documentation that Petitioner Norris provided to the Agency before the issuance of the Agency audit report, the Agency audit report and related work papers, the adjustment made because of stipulations between the parties after the Agency Audit Report was issued, a preponderance of the evidence establishes there is a Medicaid claims overpayment of $4,000.48 to Petitioner Norris for paid Medicaid claims for the audit period. On April 1, 2002, at the final hearing, Petitioner Norris announced that she disputed the appropriateness of the Agency's statistical formula regarding the extrapolation of the Agency's audit findings concerning the paid claims in the cluster sample to the universe/population of all paid claims during the audit period. The Agency objected on numerous grounds, all of which were overruled. The Agency was permitted to present rebuttal testimony at the conclusion of the presentation of evidence by Petitioner Norris, which the Agency did on June 3, 2002. The statistical formula utilized by the Agency when it made findings based on the cluster sample audit and applied to extrapolate those findings to the population of patient claims paid during the audit period is found on page two of the agency audit report. It was undisputed that during the audit period, Petitioner Norris saw 305 Medicaid patients and had a total of 3,035 Medicaid claims paid. It also was undisputed that a random sample of 24 Medicaid patients who were provided services by Petitioner Norris during the audit period was selected by the Agency for this audit, and all Medicaid paid claims during the audit period for each of the 24 randomly selected patients were reviewed in this audit. Petitioner Norris presented the expert testimony of Dr. Ibrahim Ahmad, regarding the Agency's challenged formula.1 The formula used by the Agency is the one used for infinite populations. In this case, the audited cases were a sample of a finite population. This builds an error into the calculation which can only be corrected by testing the sample against the population to determine if it is reflective of the population. Dr. Ahmad observed that this "proofing" had not been done and in the absence of such a proof of the sample he could not deem the results accurate. The Agency presented the expert testimony of Dr. Mark Johnson on the statistics issue.2 Dr. Johnson explained that there is an adjustment term in the challenged formula--"U" minus "N" under the square root--that adjusts the challenged formula for finite populations.3 In addition to reviewing the Agency's final audit report letter and Agency materials related to the generation of the sample in this case, Dr. Johnson conducted his own analysis of the data, using an Excel spreadsheet program and a statistical package. He was able to reproduce, independently, the same numerical results as the Agency--the estimated overpayment, variance estimates, and the lower 95 percent confidence interval limit. In this case, Dr. Johnson determined the sample was representative of the population because, looking at some of their summary values, they were consistent with the population as a whole. Dr. Johnson indicated that by using the Agency's formula, he arrived at the same calculated values as the Agency. He also investigated assumptions underlying the procedures used in the analysis of this cluster sampling design. Dr. Johnson reviewed the random distribution of the 24 clusters, compared the dollar per claim values in the sample with the figures for the population, and compared the number of claims per patient in the sample with the number of claims per patient in the population. Dr. Johnson's investigation of these properties of the random sample in comparison to the properties of the whole population led him to the conclusion that the sample was representative of the population in this case. The Agency's statistical formula adjusts the "best guess" estimate the total Medicaid overpayment ($7,803.10) downward based on the lower end of the 95 percent confidence interval, causing the overpayment being sought by the Agency to be 4,000.48. The confidence interval is plus or minus the estimate--in this case, the 95 percent confidence interval is $4,000.48 to $11,605.62 (i.e., $7,803.10 plus or minus $3,802.62). Statistically, there is 95 percent confidence that the true overpayment lies within this interval, and the Agency, by seeking the overpayment at the low end of the confidence interval, is giving Petitioner Norris the entire benefit of all of the uncertainty associated with the sampling process. Prior to the commencement of the final hearing in this cause, the Agency had filed its notice of intent to seek investigative costs, expert witness costs, and attorney's fees. At the final hearing, it was determined, as a matter of record, that jurisdiction would be retained for the determination of the Agency's request for such costs and fees. The procedural record of the case reveals that this case was forwarded to DOAH precipitously and before the Petitioner Norris would informally present information which reduced the claim from almost $40,000 to $4,000. At the commencement of the hearing, the parties stipulated to most of the operative facts. The statistical formula was a real issue, and in sum, Petitioner Norris was right; the formula reported was inappropriate. The Agency showed it did not use the reported formula, but one that adjusted for a finite population. Further, the testimony of Petitioner Norris' expert witness was not that the amount of alleged overpayment was wrong, but that the formula was not appropriate. The Agency's expert testified that a factor not stated in the letter was used to adjust the challenged formula for a finite population. Further, the Agency's expert testified he normed the stratified sample against the sampled population, and it did represent that population. This was one of the approaches Dr. Ahmad had suggested to validate the process when using the stated formula. However, Dr. Johnson did this after the challenge, not before. In sum, the burden was on the Agency to prove its case, and by failing to adopt its formula by rule, the Agency placed itself in the position of proving the formula's appropriateness at every hearing. It is so in this case. The request for costs and fees is denied.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED: That the Agency for Health Care Administration issue a final order requiring Petitioner Norris to reimburse the Agency for Medicaid overpayments in the total amount of $4,000.48, plus such interest as may statutorily accrue. For the reasons found above, the Agency's motion for investigative costs, expert witness fees, and attorney's fees is denied. DONE AND ENTERED this 28th day of February, 2003, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of February, 2003.
