The Issue The issues to be resolved in this proceeding concern whether the Respondent properly maintained and supplied required records to support and document prescription claims, which it billed to Medicaid and for which it received payment from the Medicaid program during the audit period of April 1, 2000 through December 31, 2001. If that is not the case, it must be determined whether the Agency is entitled to recoup from the Respondent the sum it seeks of $108,478.77, as the purported amount overpaid to the Respondent by the Agency. It must also be determined whether the applicable laws and regulations referenced herein were complied with by the Respondent, in terms of its accepting and filling prescriptions, dispensing relevant drugs, and recording and documenting such activities in its pharmacy records. Finally, it must be determined whether the statistical methodologies employed by the Agency, through its audit and investigation of the Respondent, were sufficiently representative and accurate so as to support the calculation of estimated overpayments.
Findings Of Fact The Petitioner is an Agency of the State of Florida charged by the statutes and rules referenced herein with ensuring that proper reimbursement is effected to providers, including pharmacies, by the Medicaid system. Because of its duty to enforce and regulate the Medicaid system, the Petitioner Agency has an audit and oversight function, as well as an enforcement function, to ensure that Medicaid payments and the general operations of the Medicaid system are carried out correctly. It is through this duty imposed by the cited Florida Statutes and rules, as well as the federal regulations it is charged with enforcing, that the Petitioner carried out an audit of the Respondent, Brown Pharmacy, concerning the audit period of April 1, 2000 through December 31, 2001. The Petitioner conducts audits of providers such as Brown in order to ensure compliance with the Medicaid provisions and Medicaid provider agreements. These are called "integrity audits" and are routinely performed by auditors contracted from private firms such as Heritage. Brown Pharmacy (Brown) is licensed in the State of Florida as a pharmacy (license Number PH562). Brown maintained a business location at 312 West 8th Street, Jacksonville, Florida 32206, at times pertinent to this case. During the audit period Brown was an enrolled Medicaid provider authorized to provide Medicaid prescriptions pursuant to a provider agreement with the Agency. The terms of the provider agreement governed the contractual relationship between Brown and the Agency. Pursuant to that provider agreement, Brown was to maintain the Medicaid-related records and documentation for at least five years. Any Medicaid provider, such as Brown, not in compliance with the Medicaid documentation and record retention policies may be subject to the recoupment of Medicaid payments. During the audit period, Brown dispensed prescription drugs to Medicaid recipients. Medicaid claims were filed and paid electronically as "point of sale" transactions during the audit period. Each claim reviewed and at issue in this case was a paid Medicaid claim subject to the provider agreement and pertinent regulations. As a condition of participating in the Medicaid program, a Medicaid provider must comply with all provisions of a provider agreement, which is a voluntarily agreement between the Agency and the provider. Those provisions include the provider's agreement to comply with all relevant local, state and federal laws, rules, regulations, licensure laws, bulletins, manuals, and handbooks, etc. The provider must agree to keep and maintain, in a systematic and orderly manner, all Medicaid- related records as may be required by the Agency and make them available for state and federal agencies and review. It must maintain complete and accurate medical, business, and fiscal records that will justify and disclose the extent of goods and services rendered to customers or patients and rendered as billings to the Medicaid system. Florida Administrative Code Rule 59G-4.250 promulgates, as part of the rule, the above-referenced handbook (handbook) which sets out Medicaid polices and rules. The polices and rules govern the rights and responsibilities of drug providers, such as Brown, including coverage and payment methodologies for services and goods rendered to Medicaid recipients and billed to the Medicaid program. The types of records that must be maintained are as follows: Medicaid claim forms, professional records such as patient treatment plans, prior and post authorization information, prescription records, business records, including accounting ledgers, financial statements, purchase and acquisition records etc., tax records, patient counseling information and provider enrollment documentation. Providers who are not in compliance with the Medicaid documentation and record retention policies described in the handbook are subject to administrative sanctions and/or recoupment of Medicaid payments. Medicaid payments for services that lack required documentation and/or appropriate signatures will be recouped. Chapter five of the handbook, in defining overpayment provides that any amount not authorized to be paid by the Medicaid program, whether paid as a result of inaccurate or improper cost reporting, improper claims, unacceptable practices, fraud, abuse or mistake, constitutes overpayment. Incomplete records are records that lack documentation that all requirements or conditions for the providing of services have been met. Medicaid may recoup payments for services or goods when the provider has incomplete records or cannot locate the records. The Agency contracted with Heritage to conduct an on- site audit at Brown. The audit was conducted March 18th through March 20, 2002. Heritage isolated a sample of 205 prescription claims, known as the "judgmental sample" out of a total universe of paid pharmacy claims from Brown totaling 16,727 for the audit period. Heritage also selected 250 random prescription claims out of the remaining total universe of paid pharmacy claims of 16,522, which remained after the 205 judgmental sample claims had been removed or isolated from the remainder of the total claims. With the acquiescence of the Agency, Heritage chose the 205 claims by weighing it in favor of the "high dollar" or more expensive drug prescriptions. Those prescriptions are primarily for HIV and Aids therapy drugs and psychotherapeutic drugs for various mental conditions, including schizophrenia. Weighing of the judgmental sample strongly in favor of the high dollar prescription claims would seem to render the judgmental sample fundamentally unfair against Brown if the judgmental sample had then been extrapolated to the entire universe of claims ($16,727). This was not done, however. The judgmental sample was audited and compiled by doing an actual count and totaling of claim amounts in dollars represented by all the discrepant prescriptions, including all those the Agency and Heritage maintained resulted in "overpayments" to Brown. Therefore, the judgmental sample is an actual number rather than an extrapolated calculation so that weighing the sample in favor of the high dollar prescriptions does not result in an unfair or biased sample, as to the judgmental sample. Because the judgmental sample was drawn from the total pool of audited claims and removed from that claim pool prior to the identification and drawing of the random sample, the two are mutually exclusive and the amounts calculated do not represent a duplication or overlap. Thus the findings from the judgmental sample and then the random sample may be properly added together. The randomly selected claims (random sample) were taken of the remaining 16,522 claims in the audit claim pool after the judgmental sample of 205 claims had been removed. According to the report rendered by Heritage, the 250 randomly selected claims totaled $10,632.59 in paid Medicaid dollars. The Heritage auditors determined that there were 56 discrepant claims out of these which totaled, according to their calculation, $2,450.13 in apparent overpayments. This resulted in an average overcharge per claim of $9.80 (determined by dividing the documented "sanction amount" by the total number of claims in the random sample (250), multiplied by the universe of claims from which the random sample was taken (16,522) which yielded an extrapolated overcharge of $161,924.19. Applying the statistically appropriate 95 percent "one-sided" lower confidence limit of this extrapolation resulted in a purported overpayment extrapolated from the randomly selected claims of $102,700.85. This means that the overpayment amount calculated by Heritage represents an amount statistically 95 percent certain to be the lowest amount overpayment based on the extrapolation of the overpayment represented in the 250 randomly selected claims. The non-extrapolated judgmental findings showed, according to Heritage, that there were 72 discrepant claims. Heritage then determined that, of these, there were $29,381.09 in apparent actual overcharges. The discrepancies determined by Heritage involved the failure to produce documentation of refill authorizations for 80 prescription claims; 31 prescription claims containing an incorrect Medicaid provider number; the failure to produce 12 "hard copy" prescriptions representing 25 claims; four claims that did not have the prescriber's DEA number on the prescription for controlled substances; three claims for prescriptions that did not contain the original date of service; two claims that were billed for quantities greater than that authorized by the physician; one claim that was billed for an incorrect day's supply; one claim that was billed in excess of the maximum allowable quantity of prescription of the drug, set by Medicaid policy; and one prescription claim that was billed for an incorrect prescriber's Medicaid provider number (although this should not be a discrepancy because the correct prescriber was documented in the pharmacy's computer, which the regulations allowed). Additionally, there was one claim billed for a drug different than that prescribed by the physician, according to Heritage in its report. Heritage also conducted an invoice review using utilization reports provided by the Respondent. This was apparently a review of 25 different drugs that purportedly showed that the prorated purchases of those drugs were insufficient to cover the number of units billed to Medicaid for all 25 drugs reviewed, and thus yielded a purported shortage of $87,942.13, representing the amount billed to Medicaid above the amount the records of purchases from suppliers proved that Brown had purchased of those drugs. Based upon the Heritage audit as well as documentation findings and overpayments calculations (see Exhibit 8), the Agency issued a PAAR dated September 27, 2002, determining that Brown had been overpaid $150,036.71 for Medicaid claims during the audit period. That report advised Brown that it was a provisional report only and encouraged Brown to submit any additional information or documentation which might serve to change the overpayment. The report listed examples of documentation that the Agency would consider for a possible reduction in the overpayment amount initially claimed. Thereafter, the Agency agreed to an extension of time for Brown to submit additional documentation and sent a letter to Brown dated October 31, 2003, advising that the audit had been placed in abeyance pending the outcome in a related case, but that the Agency expected to resume the audit and that therefore all Medicaid-related records and documentation regarding paid claims should be maintained and preserved until the audit was finalized. The FAAR was addressed in the testimony of Ms. Stewart for the Agency. Through her testimony it was revealed that certain corrections should be made to the FAAR updating it from the findings in the Heritage initial audit report. The Agency corrected the information in the FAAR for this reason and for the reason that it secured some additional information from the Respondent. Thus, for the audit period it was established that there were 16,727 total claims for prescriptions dispensed by Brown, for which it was paid $795,564.59 during the 21-month audit period, of those claims, 205 were pulled out from the total universe of claims as the judgmental sample. There were some 72 allegedly "discrepant claims" totaling $36,393.51 in dollars paid to Brown. The Agency's position is that $29,381.09 of those are so called "documented overcharges." The random sample of 250 claims was extrapolated to the remaining universe of 16,522 prescription claims. The Agency now takes the position that it found 49 "discrepant claims" in the random sample which totaled $2,154.40 in dollars paid to Brown's pharmacy and of that it maintains that $1,927.55 are "documented overcharges" for the 250 randomly selected claims (for which Brown had been paid $10,632.59). Thus the Agency found an average overcharge for the 250 randomly sampled claims of $7.71 per claim. The $7.71 average per claim overcharge was then multiplied by the remaining universe of 16,522 claims, yielding an extrapolated purported overcharge of $127,387.92. The Agency then applied the 95 percent "one-sided lower confidence limit" to this extrapolation, that is, that it or its statistician, Dr. Johnson, felt that there was a 95 percent chance that the lower confidence limit number it calculated was accurate. That number is $79,097.68. When that number is combined with the Agency's position as to overcharges from the judgmental sample results in a total postulated overcharge of $108,478.77. This is the final amount the Agency claims as an overpayment that must be recouped for Medicaid. The FAAR summarized the discrepant claims for the judgmental sample as follows: 61 claims involve refills which exceeded the authorized number of refills without documentation of reauthorization; 10 claims showed an incorrect prescriber license number but the correct prescriber license number was documented in the pharmacy's computer; and For two claims the hard copy description did not have an original date of service depicted on it and did not reference a DEA number. The discrepant claims shown in the FAAR as to the random sample were as follows: There were 19 claims for refills without documentation of refill authorization (refills had been previously authorized, but for the 19 claims at least one refill had been issued beyond the authorization limit); Fifteen claims showed an incorrect prescriber license number on the claim and the license number was not documented in the Respondent's computer; Seven claims showed an incorrect prescriber license number, but the correct license number was documented in the pharmacy's computer; There were seven claims for which the original hard copy prescriptions could not be found on file during the audit period; For one claim the hard copy prescription did not have an original date of service or DEA number; For one claim the quantity paid exceeded the quantity authorized by the prescriber or dispensed to the recipient; and For one claim the number of days supply submitted by the pharmacy was not consistent with the quantity and directions of the prescriber and the quantity exceeded the limit set by the plan. The most common discrepancies with regard to the judgmental sample and the random sample occurred when the Respondent billed refills in excess of the number authorized by the prescriber, without any written authorization for such being provided in the audit process or later. Concerning the random sample, the second most common discrepancy occurred when the claim depicted an incorrect precriber number on the claim and the license number of the prescriber was not documented in the computer. In the judgmental sample the second most common discrepancy occurred when the claim showed an incorrect prescriber number, but the correct prescriber number was documented in the pharmacy's computer. The discrepancies in the FAAR with the indication "UR", references "unauthorized refills." The records of the pharmacy showed that Brown issued refills of prescriptions to Medicaid recipients in excess of the presriber's limit depicted on the prescriptions but showed no written record of a telephonic or written authorization by the prescriber allowing the additional refill or refills. It is also true that as to some or even many of these the Respondent may have obtained verbal authorization, but failed to document that re- authorization. Medicaid policy, the statutory authority cited herein, and the PDSCLR Handbook provide that all verbal orders authorized by the prescriber of a prescription must be recorded either as a "hard copy" or noted in the pharmacy's computer in order to comply with the relevant law cited herein, for record- keeping and auditing purposes under Medicaid policy. The Agency's Statistical Methodology Mark E. Johnson, Ph.D., testified on behalf of the Petitioner. He was qualified as an expert witness in the area of statistical formulas, statistical methodology, and random sampling, including the random sample statistical methodology employed by the Agency in determining the overpayment amount. He is a professor of statistics at the University of Central Florida. Dr. Johnson reviewed the statistical methodology, numbers and calculations arrived at by the Agency and its extrapolation method of arriving at the overpayment amount. He also used his own independent analysis based upon a software package he commonly uses in the practice of his discipline in testing the methodology employed by the Agency and the random sample employed by the Agency and Heritage. The statistical formula employed by Dr. Johnson and the Agency is a standard one routinely used in Dr. Johnson's profession and statistical sampling. He established through his own testing of the methodology that the random sample was appropriate for Medicaid program integrity audits and determinations as employed in this case. The random sampling, according to Dr. Johnson, was employed because it would be time and cost prohibitive to examine individually each of 16,522 claims regarding overpayment issues. The random sampling methodology using 250 randomly chosen samples is a time and cost saving device and yet still presents a "plausible estimate" as established by Dr. Johnson. He established that for the universe of 16,522 claims which were subjected to the random sample and extrapolation statistical analysis and calculation, that such is a reasonable sample for purposes of this audit and that the 250 random samples employed by the Agency are indeed statistically appropriate random samples. His calculation of overpayment was at variance with the Agency's by 55 cents. He established that is not a significant difference since the 95 percent certainty limit of $79,097.68 for the random sample extrapolation analysis is so much lower than the estimate established at $108,478.22. Dr. Johnson established that the Agency had employed appropriate and valid statistical methods in its determination of the above-referenced overpayment amount based upon the random sample of paid claims. The expert testimony of Dr. Johnson, together with his written report in evidence, is credible and persuasive as to the validity of the random sampling of the claims during the audit period and as to the random sample portion of the analysis employed in arriving at the final overpayment calculation and numbers depicted in the FAAR. Dr. Johnson established the appropriateness of the statistical formula, including extrapolation, used to calculate the overpayment amount, the appropriateness of the sample size relative to the universe of claims, and the improbability that the overpayment amount is attributable to chance causes alone. Thus Dr. Johnson's testimony is accepted as credible and persuasive in establishing the validity of the Agency's method of overpayment calculation, and the overpayment calculation in conjunction with the statistical evidence in this record, except as modified by the findings below.1/ The Respondent's Position Gary Steinberg testified on behalf of the Respondent, Brown Pharmacy. He was accepted as an expert witness in the areas of Medicaid policy, audits and pharmacy practice, including Florida pharmacy practice. Mr. Steinberg acknowledged that Brown had not properly documented all claims that had been paid by the Medicaid program nor maintained all required records. He emphasized in his testimony, however, that Brown had not fraudulently billed the Medicaid program with claims for prescription medications that it had not actually dispensed to the patients or recipients. Rather, all medications involved in the subject prescription claims had actually been dispensed. There is no evidence or claim on the part of the Agency that Brown charged and collected more than the appropriate approved price for the prescriptions at issue. Through the explanation given in his testimony, Mr. Steinberg opined that although Brown was guilty of technical errors in record keeping and documentation as to the prescriptions involved in the subject claims, Brown had made substantial compliance with the Medicaid program requirements of the Medicaid provider agreement and the statutes and rules at issue and policies embodied in the subject handbook. He explained in his testimony that in the pharmacy practice setting in which Brown has operated, whereby it serves a large indigent population in an inner city environment, it is difficult to contact a prescriber at the time when a patient needs a critical prescription refilled in order to get a refill authorization. The prescriptions at issue mostly involve critical medications for HIV/Aids and psychotropic medications for severe mental conditions such as schizophrenia. The patients who need these critical medications (and there are very few patients, since most of the procedures involve filling and refilling for a small number of such recipients) are patients of clinics operated at the nearby university hospital (Shands). In these circumstances, where the patient literally needs the HIV/Aids medication refilled on an immediate basis, possibly even to prevent death, and the mental health patient critically needs a refill in order to prevent harm to the patient or harm to the members of the public if the patient goes without medication and "decompensates," the ethical thing for a pharmacist to do is to refill the prescription and seek authorization later. Mr. Steinberg established that it is often difficult to obtain authorization from the original prescriber since the medication were prescribed by residents practicing in the various clinics at the Shands Hospital and that the residents can not always be identified or contacted easily since they do not maintain a fixed medical practice in the area. Consequently, some of the prescriptions were not documented as to authorization, although in some cases the pharmacy actually obtained authorization and entered it in its computer. In some cases, being unable to obtain re-authorization from the resident who originally prescribed the medication the pharmacy used the DEA license or prescribing number of the hospital itself. He explained that although under the law a pharmacy can refill a prescription on an emergency basis for up to a 72-hour supply, that this is generally impracticable and unsafe for patients in this plight because such indigent, mental health and HIV/Aids patients tend to be non-compliant with their medication regimes quite often anyway, and it is often unreasonable to expect them to return to the pharmacy for another refill within two or three days. He thus opined that the ethical and safe thing for the pharmacist to do was to refill and re-dispense the medical approved medication for up to a 30 or 34-day supply (the normal refill supply duration). He further explained that the Shands Hospital license number was used in some of these circumstances because the resident doctor who originally issued the prescription could not be identified on the Shands Hospital prescription forms and because the resident doctors at the Shands clinics only have and can use Shands Hospital prescription forms in any event. Mr. Steinberg thus established that 35 percent of those prescription claims classified as "WMP," that is the prescription claims contained an incorrect prscriber license number were for these reasons and the pharmacist could only use the Shands Hospital license number because the resident could not be identified from the Shands Hospital prescription forms. He thus opined that 35 percent of the random sample extrapolation amount, the 95 percent statistical confidence limit amount of $79,097.00, should be deleted from that amount in determining the correct amount of overpayment predicated on the random sample. Likewise, with regard to the judgmental sample concerning the HIV/Aids and mental health patient prescriptions and related claims, he opined that, in effect, $19,500.00 of the total $29,381.09 overpayment amount claimed by the Agency pursuant to the judgmental sample portion of the claims, should be deleted from that portion of the overpayment claim by the Agency; this is a result of his explanation regarding "substantial compliance" in the critical refill situation he described concerning the HIV/Aids and mental health patients and their prescription drugs. The preponderant, persuasive evidence does establish (and indeed the Agency acknowledged in its Proposed Recommended Order) with regard to the judgmental sample, that 10 of the claims at issue listed an incorrect prescriber license number, but that the correct prescriber license number was actually documented in the pharmacy's computer record with the name of the prescriber. This circumstances comports with the law referenced below and in the Petitioner's Proposed Recommended Order. This results in a reduction in the overpayment claim with regard to the judgmental sample of 13.88 percent of the judgmental sample claims or a reduction of $4,078.09. Likewise, with regard to the random sample extrapolation calculation of overpaid claims, the preponderant, persuasive evidence, also as acknowledged by the Agency in its Proposed Recommended Order, disclosed that seven claims listed an incorrect prescriber license number on the claims, but had been correctly documented in the pharmacy's computer system and therefore were in compliance with the relevant statutes, rules, and the subject handbook. Thus the discrepant claims and the overpayment amount related to the random sample portion of the audit claims should be reduced by 14.28 percent of the total amount of $79,097.00 for a $11,295.05 reduction of that $79,097.00 random sample overpayment amount. Mr. Steinberg demonstrated that Brown was not overcharging on the drugs prescribed and dispensed and was charging the Medicaid-authorized amount for the drugs involved in the prescription claims at issue. The Agency is not claiming that there was any fraudulent practice or illegal overcharging for the prescriptions involved. In fact, Brown was earning only a very small profit on the drugs dispensed that are the subject of the prescription claims at issue. Mr. Steinberg thus opined that since Brown did indeed dispense all the drugs at issue and was only paid the legal authorized amounts for the drugs and prescriptions at issue that recoupment of the amounts sought by the Agency or, in effect, established in these findings of fact, would be fundamentally unfair. He and the Respondent contend, rather, that since Brown performed substantial compliance, but was guilty of technical non-compliance with the relevant rules, agreement, and Medicaid policy, that the Agency should impose a lesser fine instead of seeking recoupment. In summary, in view of the preponderant persuasive evidence establishing the above facts, it has been shown that the documentation and record-keeping, dispensing errors, and omissions in the manner found above, with regard to the prescription claims and types of claims addressed in the above findings of fact, occurred. If those deficiencies amount to violations of the authority cited and discussed below which justify recoupment, then the amount of overpayment established by the above findings of fact is $93,104.95.
Recommendation Having considered the foregoing findings of fact, conclusions of law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Agency for Health Care Administration providing for recoupment of $93,104.95, and that the Respondent, Brown Pharmacy, must re-pay that amount to the Petitioner Agency, through a reasonable re- payment plan established between the parties. DONE AND ENTERED this 3rd day of November, 2006, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF 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 Clerk of the Division of Administrative Hearings this 3rd day of November, 2006.
The Issue Whether Petitioner, Agency for Health Care Administration (AHCA or Petitioner), is entitled to a recoupment for a Medicaid overpayment to Respondent, Humane Minority, Inc. (Humane or Respondent), in the amount of $177,581.26.
Findings Of Fact Petitioner is the state agency responsible for administering the Florida Medicaid Program. As part of its duties, Petitioner attempts to recover Medicaid overpayments from Medicaid providers. At all times material to this case, Humane was licensed to provide various health care services to Medicaid recipients under a contract to AHCA as a Medicaid provider. As provider number 255724000, Humane participated in the Medicaid program from January 1, 2005, to February 8, 2006 (audit period). As a Medicaid provider, Respondent was subject to audit. This case arose when the Discovery Unit of Medicaid Program Integrity (MPI) identified that during the audit period Humane billed 1.5 times as much for one week as compared to ten other weeks, which is an indicator of billing irregularities. As a result, the Discovery Unit of MPI recommended a comprehensive audit of Humane. Gary Mosier, a Registered Nursing Consultant employed by AHCA in the bureau of MPI, initiated the audit of Humane after receiving the Discovery Unit’s File #47650 Recommendation memo dated May 19, 2006, referring Humane for a comprehensive audit. On or about June 13, 2006, MPI requested 30 random Medicaid patients' records from Humane’s entire Medicaid patient group for the audit period. Humane complied with the request and supplied records. The submitted medical records included a Certificate of Completeness of Records from Humane stating the documents supplied constituted all of the Medicaid-related records for the 30 patients during the Audit period. After Humane provided the requested medical records to Mosier, he forwarded the records to three physician consultants: Machado, a general practitioner; Edgar, a psychiatrist; and Reisman, an urologist. Each physician consultant reviewed Humane’s records relevant to his area of expertise and filled out agency worksheets detailing why claims should be disallowed. MPI reviewed Humane’s records provided and the worksheets filled out by the three physician consultants and determined that overpayments were made to Humane due to numerous services in whole or in part not being covered by Medicaid, which violated various Medicaid policy guidelines set forth in both the Florida Medicaid Provider General Handbook (General Handbook)1 and the Florida Medicaid Physician Services Coverage and Limitations Handbook (Physician Services Handbook).2 Humane violated policy by providing documentation that supported a lower level of office visit than the one for which Humane billed and received payment. Humane violated policy by billing and receiving payments for some services that were not documented. Humane violated policy by billing and receiving payment for services rendered by a practitioner who was not a member of Humane’s group. Humane violated policy by billing for procedure codes that have time requirements but not documenting the time spent providing the service. Humane violated policy by billing and receiving payment for services performed by another practitioner who was not enrolled in Medicaid at the time the services were rendered. Humane violated policy by billing and receiving payment for services for which the medical records, when reviewed by a Medicaid physician consultant, indicated that the services provided did not meet the Medicaid criteria for medical necessity. Humane violated policy by billing for radiology services when the reading and interpretation was done by a radiologist outside of the physician’s group. Humane violated policy and was paid for billing and received payment for portable x-ray services where Humane performed only the technical component and an independent interpreter performed the professional component. Humane violated policy and received payment when Humane did not bill according to the current procedural terminology guidelines in certain instances. On March 13, 2007, MPI issued its Preliminary Audit Report (PAR). The report detailed the Medicaid policy violations, overpayment amounts, and provided Humane the opportunity to submit an explanation or additional documentation demonstrating that some or all of the claims were properly paid. The report also notified Humane that a Final Audit Report (FAR) would be issued identifying the amount of overpayment due. Humane did not respond to the PAR. Consequently, on April 27, 2007, MPI issued a FAR, that included the amount of $177,581.26 that Humane received from Medicaid that was not authorized to be paid. This grand total of $177,581.26 constitutes an overpayment that Humane must return to the agency. A Final Audit Report-Corrected Copy was issued on May 22, 2007, correcting the total amount due.3 In addition to the overpayment amount, Petitioner also seeks a fine in the amount of $3,000.00. The fine is a calculated amount as authorized by rule.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency enter a final order requiring Humane to repay the Agency for the principal amount of $177,581.26 together with an administrative fine of $3000.00. DONE AND ENTERED this 22nd day of June, 2009, in Tallahassee, Leon County, Florida. S JUNE C. McKINNEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of June, 2009.
The Issue Whether the Petitioner, Agency for Health Care Administration (Petitioner or Agency), is entitled to a Medicaid reimbursement and, if so, in what amount.
Findings Of Fact The Petitioner is the state agency charged with the authority and responsibility of administering the Florida Medicaid Program. As part of this authority, the Petitioner is required to recover Medicaid overpayments when appropriate. See § 409.913, Fla. Stat. (2006). At all times material to the allegations of this case, the Respondent was a licensed physician and a Medicaid provider subject to the provisions of Chapter 409. As a Medicaid provider, the Respondent was authorized to provide services to eligible patients but was obligated to comply with the Medicaid Provider Agreement in doing so. The Medicaid Program contemplates that authorized providers will provide services to eligible patients, bill the program and be paid according to the Medicaid standards. All Medicaid providers must practice within the guidelines of the Physicians Coverage and Limitations Handbook and applicable law. Providers may be audited so that it can be verified the process was appropriately followed. In this case, the Respondent was audited. According to the audit findings, the Respondent received payment for services that he did not perform. Dr. Eiber (a physician not part of the Respondent’s practice group) reviewed and signed off on x-ray studies and reports for which the Respondent billed and was paid by Medicaid. Dr. Eiber is a Medicaid provider but he is not affiliated with the Respondent or the Respondent’s group. In order for the Respondent to bill and receive payment for Dr. Eiber’s work, the latter physician would have to be listed and identified within the group in which the Respondent practiced. The Respondent was responsible for all billings for which he received payments. In connection with billing, the Respondent was required to maintain and retain all Medicaid- related invoices or claims for the audit period. In this regard, the Physician Coverage and Limitations Handbook specifies that when a radiological study is performed in an office setting, either the physician billing the maximum fee must have performed or indirectly supervised the performance and interpreted the study; or if a group practice, a member of the group must perform all components of the services. That procedure was not followed. When the Agency disallows a paid Medicaid claim, it must seek to recover the overpayment from the Medicaid provider who received payment on the claim. This is the basis of the “pay and chase” methodology used in the Medicaid program. The claims are paid, subject to audit, and recovery is sought when the claim is disallowed. Based on the audit findings in this cause, the Agency seeks $32,935.96 as an overpayment of Medicaid claims paid to the Respondent. The Petitioner also seeks an administrative fine in the amount of $1000.00. The Respondent was given the results of the audit and afforded an opportunity to respond and provide additional information to the Agency to show that the amounts billed were correct. The Respondent has presented no supplemental information to corroborate the correctness of the claims at issue.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Agency for Health Care Administration enter a Final Order sustaining the Final Audit Report and finding an overpayment against the Respondent in the amount of $32,9935.96. The Final Order should also impose an administrative fine in the amount of $1,000.00. S DONE AND ENTERED this 21st day of February, 2007, 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 February, 2007. COPIES FURNISHED: Craig A. Brand, Esquire Law Offices of Craig A. Brand, P.A. Grove Forest Plaza 2937 Southwest 27th Avenue, Suite 101 Miami, Florida 33133 Willis Melvin, Esquire Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox Building III, Mail Stop 3 Tallahassee, Florida 32308 Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308 Craig H. Smith, General Counsel Agency for Health Care Administration Fort Knox Building, Suite 3431 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308 Dr. Andrew C. Agwunobi, Secretary Agency for Health Care Administration Fort Knox Building, Suite 3116 2727 Mahan Drive Tallahassee, Florida 32308
The Issue Whether Respondent, Sun States Services, Inc., a/k/a Always Care Nursing Service, received Medicaid overpayments that Petitioner, Agency for Health Care Administration (AHCA), is entitled to recoup, and whether a fine should be imposed against Respondent.
Findings Of Fact AHCA is the state agency responsible for administering the Medicaid program in Florida. The Medicaid program is a federal and state partnership to provide health care services to certain qualified individuals. From January 1, 2005, through December 31, 2008, Respondent was an enrolled Medicaid provider operating under provider number 6815065-96. Beginning in 2003, the State of Florida accepted Lynk Services, Inc. (Lynk), as a waiver support coordinator for Medicaid. Lynk was, at all times material to this matter, an enrolled waiver support coordinator for Medicaid. In January 2004, there were discussions between Lynk and Respondent about the possibility of Respondent providing Medicaid services to a Medicaid recipient identified as B.L. B.L. required insulin injections. In a letter dated January 16, 2004, Lynk's waiver support coordinator supervisor, Thomas Engelke, wrote the following to Respondent (addressed to "To Whom It May Concern"): [B.L.] is authorized to receive nursing services from [Respondent] at an accelerated rate of $6.65 per quarter hour. He is to receive 9 quarter hours for a total of $59.85 per visit. The Department of Children and Families has approved this rate on December 22, 2003 by Cindy Totten and Linda Schneider department liaisons. Per the Service Authorization form that was sent to you on December 22, 2003,[8/] you [Respondent] are to provide service to [B.L.] for the duration of his current support plan year. Should you have any further concerns or questions please contact Julie Buckner [B.L.'s] support coordinator. . . . (emphasis added). Later on January 22, 2004, Lynk and Respondent exchanged emails. The first email is from Howard Gruensfelder, Respondent's "VP," to Mr. Engelke and Julie Buckner, support coordinator of Lynk. It reads: I have a concern that billing 9 units says that the nurse is there for a full hour and forty five minutes administering his injection, when the nurse is not there for a full hour and forty five minutes. I want to make sure that we are not committing any type of fraud by doing this. This message is to confirm that the negotiated price for LPN insulin injections for [B.L.] is $59.85 per injection under the Skilled Waiver program. To do this, administratively we must bill nine units to achieve this price for service. You have waved [sic] the normal definition of unit (one quarter hour) for us in this case in order to end up with the agreed upon rate. According to your instructions we are to bill for nine units for each injection regardless of how much or how little time is required to complete the nursing service visit. Please confirm our understanding by replying to this message with an affirmative answer. Less than an hour later, Lynne Ballou, Lynk's president, sent the following response to Mr. Gruensfelder: Per the Service Authorization[9/] we sent to you 1/5/04 you can bill 9 quarter hours each visit. The negotiated rate was approved by the Department of Children and Families liaison and liaison's supervisor. Your company stated they needed this amount to provide the service. The actual time spent with the individual is no where [sic] near the 2 hours and 15 minutes that is being charged but the only way you can bill in the system is using the quarter hour. By DCF approving the 9 quarter hours a visit they are waiving the time requirement to be able to have the service provided to the client. Shortly after the letter and emails, Respondent began to provide medical services to B.L. During the audit period, Respondent provided skilled nursing services to B.L., submitted claims to AHCA for services allegedly provided to B.L., and received payment from AHCA on those claims. The claims identified in AHCA's Exhibit 9 represent claims submitted by Respondent for services to B.L. and paid by AHCA. Respondent billed $59.85 "per visit," regardless of the actual time spent by Respondent's employees providing the services. In all but 12 of the claims identified in AHCA's Exhibit 9, Respondent billed AHCA for nine units of service ($59.85), each unit of service representing 15 minutes of time. In the other 12 claims identified in AHCA's Exhibit 9, Respondent billed AHCA for 18 units of service and received a higher reimbursement. The nursing notes, contained in AHCA's Exhibit 15, reflect that Respondent did not spend two hours and 15 minutes performing the services for which it billed nine units of service, nor did it spend four hours and 30 minutes performing the services for which it billed 18 units of service. No evidence was offered or received to define the term "current support plan year." However, common sense dictates that without any other definition, the entities operated on a calendar year of January 1 to December 31 of each year.10/ Thus, the letter itself (AHCA's Exhibit 10, page 347) reflects that the 2004 current support plan year would have ended on December 31, 2004, six months prior to the audit period. AHCA conducted an audit of the claims submitted by Respondent between July 1, 2005, and December 31, 2008.11/ AHCA determined that Respondent was overpaid $16,518.60, which figure was later reduced by AHCA based on further review of the claims at issue. All communications regarding services to be provided to B.L. were between Respondent and Lynk. Respondent relied on the January 16, 2004, letter and subsequent email exchange as authorization to bill "per visit," rather than on an hourly basis. However, it is undisputed that the audit period was between July 1, 2005, through December 31, 2008. AHCA is responsible for conducting investigations and audits to determine possible fraud, abuse, overpayment, or neglect, and must report any findings of overpayment in audit reports. AHCA is not only authorized to conduct random audits; AHCA is required to conduct at least five percent of its audits on a random basis. In this instance, in February 2010, AHCA notified Respondent that it was in the process of reviewing claims billed to Medicaid between July 1, 2005, and December 31, 2008. The purpose of the audit was to verify that claims for which Respondent had already been paid by the Medicaid program were for services that were provided, billed, and documented in accordance with Medicaid statutes, rules, and provider handbooks. While Respondent certified with each claim submission that the claim was proper and that all records required to be maintained in support of each claim were in fact maintained, the audit goes behind that certification by actually reviewing those records. The medical records for B.L. were provided to AHCA for review. AHCA established the amount of overpayment for the claims. No evidence was offered of any additional "authorization letter" (to support a "flat fee" payment for services to B.L.) from AHCA, DCF, or Lynk for any period between July 1, 2005, and December 31, 2008. No credible evidence was offered that AHCA authorized that the Medicaid payment to Respondent would be by a flat "per visit" payment between July 1, 2005, and December 31, 2008.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner, Agency for Health Care Administration, enter a final order requiring Respondent, Sun States Services, Inc.: To repay the sum of $15,627.50 for overpayments on claims that did not comply with the requirements of Medicaid laws, rules, and provider handbooks; and To pay a fine of $1,000.00 for the violations of the requirements of Medicaid laws, rules, and provider handbooks. DONE AND ENTERED this 1st day of November, 2012, in Tallahassee, Leon County, Florida. S LYNNE A. QUIMBY-PENNOCK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of November, 2012.
The Issue Whether Petitioner failed to maintain required records to support and document Medicaid prescription claims paid by the Medicaid program for the audit period (June 24, 1998, to June 1, 2000). If so, whether Petitioner received overpayments from the Medicaid program. If so, whether extrapolation was appropriately used to determine the amount of that overpayment (alleged by Respondent to be $1,053,137.49).
Findings Of Fact PETITIONER At all times relevant to the allegations of this case, the Petitioner was licensed pursuant to Chapter 465, Florida Statutes, to provide pharmacy services in Florida with pharmacy license number PH0012223. At all times relevant to this proceeding, Petitioner was an authorized Medicaid provider with provider number 102126500. At all times relevant to this proceeding, Petitioner had a valid Medicaid Provider Agreement with Respondent. During the audit period, Petitioner provided pharmacy services to Medicaid recipients and billed those services to the Medicaid program under its Medicaid provider number. Specifically Petitioner sold or dispensed drugs to Medicaid recipients who resided in nursing homes. Petitioner operated solely to serve nursing home populations. Petitioner usually received pharmacy orders by telephone or facsimile transmission from a nursing home. Typically, the staff at Petitioner’s facility would take the call or receive the facsimile transmission, write down the pertinent information, enter the data into the pharmacy’s computer system, dispense the item, and route the drugs to the nursing home via courier. All drugs are dispensed in sealed containers and are delivered with a manifest listing all the medications by name and patient. Jerry Kelly, a pharmacist employed by Petitioner’s parent corporation, described how nursing home orders or prescriptions were obtained and taken, beginning on line 11, page 716, of Volume VI of the hearing transcript: The vast majority, probably 90, 95 percent, are faxed over from the nursing home by nurses. A few may be called in with the nurse acting under the regulatory authority to act as the agent of the physician. These orders are then reviewed by the pharmacist. An order issue technician will enter that information into the computer, creating the original prescription.[2] The pharmacist then checks that data that was entered into the prescription to make sure all elements are there and the order entry is correct. Labels are then printed, which go to the floor to be filled by technicians. The pharmacist then checks the final product. That product is sent to a staging area where delivery manifests are printed. Those orders are then checked off the delivery manifest to make sure that no orders have been missed. The tote is sealed and then delivered to a nursing home by courier service. At the nursing home, the nurse and the driver check these orders off together, both sign that delivery manifest, and a copy of that delivery manifest comes back to the pharmacy. Q. Can you explain to the Court the typical process at [Petitioner’s parent corporation] by which refills, so to speak, are received and handled. A. Back then refills were handled by pulling a label off of the prescription container, apply it to a refill order sheet or a piece of paper of any kind that would fax . . . those are faxed to the pharmacy, those labels are pulled and faxed to the pharmacy by a nurse acting again under the regulatory authority of a -- to act as the agent of the physician. That’s also verifying to us that those orders are continued for another month. The prescription number is put in by an order entry tech. Those labels are printed and filled. From there on, the process is exactly the same. Prior to the audit period, Petitioner was purchased by another corporation. Subsequent to the audit, Petitioner ceased to operate as a pharmacy. RESPONDENT Respondent is the state agency charged with the responsibility and authority to administer the Medicaid program in Florida. Respondent’s OMPI is responsible for overseeing the integrity of the Medicaid program in Florida. Pursuant to this authority Respondent’s OMPI oversees audits to assure compliance with the Medicaid provisions and provider agreements. These integrity audits are routinely performed and Medicaid providers are aware that they may be audited. At all times material to the allegations of this case, the Medicaid program in Florida was governed by a “pay and chase” procedure. Under this procedure, Respondent paid Medicaid claims submitted by Medicaid providers and then, after- the-fact, OMPI audited such providers for accuracy and quality control. These integrity audits are to assure that the provider maintains records to support the paid claims. HERITAGE In 1999 OMPI contracted with Heritage through Consultec, L.L.C. (Medicaid’s fiscal agent), to perform and report pharmacy audits of pharmacy providers within the state. Auditors from Heritage were assigned Petitioner’s audit. The Heritage employees in charge of the subject audit were experienced and appropriately trained. THE AUDIT Respondent’s audit no 01-1017-00-3/H/JDJ reviewed Petitioner’s Medicaid claims paid by Respondent for the period June 24, 1998, through June 1, 2000. Ken Yon is the OMPI administrator who was responsible for managing the instant case and who worked with the Heritage auditors to assure the policies and practices of Respondent were met. In this case, the Heritage auditors presented at Petitioner’s facility unannounced on July 31, 2000 and sought 250 randomly selected claims for review. By limiting the number of claims, the auditors were not required to sift through the records of 139,036 claims (the total number of claims that the Petitioner submitted during the audit period). For the universe of 139,036 claims, 250 randomly selected claims is a reasonable sample to audit. The adequacy of the sample number as well as the manner in which it was generated is supported by the weight of credible evidence presented in this matter. Also, the results of extrapolating a sample of 250 claims to the universe of 139,036 claims would be statistically valid if the sampled claims were randomly chosen. The 250 sample claims selected for the subject audit were randomly chosen. Heritage asked the Petitioner to present prescription records it was required to retain to support the claims for the audit period. Petitioner offered the auditors its computerized records for many of the 250 samples in lieu of the hard copies the auditors requested. The auditors refused to accept the computerized records and, as reflected by the Audit Report, Petitioner was unable to produce acceptable evidence of prescriptions for a great many of the 250 samples.3 The auditors found that 171 of the 250 claims sampled were discrepant, in that they did not meet standards for payment. The auditors analyzed the number of discrepant claims and determined that the average overcharge per sampled claim was $36.3434 (sic). Multiplying the number of claims in the universe by that average yielded an initial estimate of the overcharge in the amount of $5,053,040.96. The 95% one-sided, lower-confidence limit4 for the initial estimate was determined to be $3,946.215.96, which is the amount of the overpayment alleged in the FAAR. THE FAAR AND SUBSEQUENT COMPUTATIONS After the auditors completed their review of the records at Petitioner’s facility, JoAnn Jackson, a licensed pharmacist with extensive experience in auditing pharmacies, was assigned by Respondent to review Heritage’s audit report and to prepare the Respondent’s FAAR. The vast majority of the discrepant claims (165 of the 171) were categorized as CF, which meant that the auditors could not find required documentation of the subject prescription or could not find required documentation for the refill of a prescription. These findings were reported to the Petitioner, who was given additional time to locate and produce documents to support the claims. Respondent was willing to accept documentation for claims up through the time of hearing.5 Based on additional documentation submitted by Petitioner after the auditors had completed their field work, Respondent’s staff recalculated the amount of the overpayment by the use of extrapolation (including the reduction of the initial estimate to the 95% one-sided, lower confidence limit) to be the amount of $1,053,137.49, which is the amount of the overpayment at issue at the formal hearing. Respondent established that each alleged discrepant claim that it used to recalculate the amount of the overpayment was, in fact, discrepant and did not meet Medicaid record-keeping standards. RECORD RETENTION REQUIREMENTS Although Petitioner’s manner of doing business was different from the conventional pharmacy (the so-called corner drugstore), it was subject to the same Medicaid records retention requirements as a conventional pharmacy that serves as a Medicaid provider. Pursuant to the applicable Medicaid Provider Agreement between Petitioner and Respondent, Petitioner was to comply with all Medicaid handbooks in effect during the audit period. Petitioner was also required to comply with all applicable state and federal Medicaid Program rules and laws in effect during the audit period. For each claim submitted during the audit period by Petitioner to Respondent for payment under the Medicaid Program, Petitioner was required to “keep, maintain, and make available in a systematic and orderly manner all medical and Medicaid- related records as Respondent requires for a period of at least five (5) years.” Petitioner was also required to make these supporting records available to Respondent upon Respondent’s request. A Medicaid provider must retain all medical, fiscal, professional, and business records on all services provided to a Medicaid recipient. In addition to the foregoing, a Medicaid provider must maintain a patient record for each recipient for whom new or refill prescriptions are dispensed. Specific to the issues of this case, a Medicaid provider must retain prescription records for five years from the date the prescription was last filled or refilled. For the audit period in this case, the prescription that authorized the dispensing of each drug for which Petitioner claimed payment under the Medicaid program should have been maintained and made available for the auditors since each prescription would have been within the five-year period. The records may be kept on paper, magnetic material, film, or other media. However, in order to qualify for reimbursement, the records must be signed and dated at the time of service, or otherwise attested to as appropriate to the media. Rubber stamp signatures must be initialed. The records must be accessible, legible and comprehensive. Applicable records that must be kept for quality control so that an after-the-fact audit can verify the integrity of the Medicaid claims that were paid by Respondent. Each claim reviewed and at issue in this cause was a paid Medicaid claim subject to the Petitioner’s provider agreement and the pertinent regulations. In order to stand as a sufficient prescription form, a writing must be created contemporaneous to the order (phone requests that are transcribed are acceptable), must contain specific information (type of drug, strength, dose, patient, doctor, DEA number, refill, etc.), and it must be kept for the requisite time. It would be acceptable for the prescription to be computer generated so long as it was written contemporaneous to the order and preserved as required by law. At the times relevant to this proceeding, Florida Administrative Code Rule 64B16-28.140(1)(d) and (e), provided, in part, as follows: Original prescriptions . . . shall be reduced to writing if not received in written form. All original prescriptions shall be retained for a period of not less than two years from date of last filling. To the extent authorized by 21 C.F.R. Section 1304.04, a pharmacy may, in lieu of retaining the actual original prescriptions, use an electronic imagining record keeping system, provided such system is capable of capturing, storing, and reproducing the exact image of the prescription, including the reverse side of the prescription if necessary, and that such image be retained for a period of no less than two years from the date of the last filling. Original prescriptions shall be maintained in a two or three file system as specified in 21 C.F.R. 1304.04(h). PETITIONER’S COMPUTERIZED RECORDS There was a dispute between the parties as to whether Petitioner’s computer records should have been accepted as evidence that valid prescriptions underlie each dispensed drug within the sample. That dispute is resolved by finding that the computer records maintained by the Petitioner did not retain prescriptions in the format dictated by rule. An electronic imaging recording system may be used when the system captures, stores, and can reproduce the exact image of the prescription, including the reverse side of the prescription if necessary. The Petitioner’s system did not do that. An electronic system must be able to produce a contemporaneous hard-copy printout of all original prescriptions dispensed and refilled. The original prescriptions must be maintained in a two or three file system as specified in 21 C.F.R. 1304.04(h). If the Petitioner’s system could do that, it did not. Fundamentally, a Medicaid claim for a drug that has been dispensed by a Medicaid provider must have as its basis a valid prescription. While Petitioner’s computer records established what drugs had been dispensed, those records did not meet the requirements for establishing that the drugs were dispensed pursuant to valid prescriptions. OVERPAYMENT Any Medicaid providers not in compliance with the Medicaid documentation and record retention policies may be subject to the recoupment of Medicaid payments. As set forth in the Conclusions of Law section of this Recommended Order, the term “overpayment” is defined by Section 409.913(1)(d), Florida Statutes (2000). EXTRAPOLATION At hearing, Petitioner continued to dispute the procedure of applying the audit sample overpayment to the population of claims to mathematically compute the overpayment for the audit period. Extensive testimony was taken as to the extrapolation process used in this proceeding. Respondent has used a statistical extrapolation method to compute overpayments for years. The statistical concept and process of applying a sample to a universe to mathematically compute an overpayment is not novel to this case. All testimony, including the testimony of Dr. Intriligator, has been fully considered in the findings reached in this case. The testimony of Dr. Mark Johnson, an expert in statistical sampling and analysis, has been deemed credible and persuasive as to the issues of the appropriateness of the sample (as to size and how it was generated), the use of the sample overpayment to calculate an overall payment, and the statistical trustworthiness of the amounts claimed in this case. The only way to determine the amount of the actual overpayment is to examine each of the 139,036 claims that were made during the audit period. Dr. Johnson’s testimony established that the probability is overwhelming that the amount of the alleged overpayment is substantially less than the actual overpayment. Respondent established that Petitioner received an overpayment during the audit period as alleged in the FAAR and it established that the amount of the overpayment is at least $1,053,137.49.
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 that finds that Petitioner has received an overpayment from the Medicaid program in the amount of $1,053,137.49. It is further recommended that the final order require Petitioner to repay that overpayment. DONE AND ENTERED this 28th day of February, 2006, in Tallahassee, Leon County, Florida. S CLAUDE B. ARRINGTON 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 of February, 2006.
The Issue The issue is whether Petitioner received a Medicaid overpayment in the amount of $11,077.65 for claims filed between April 15, 1998, and December 31, 2001.
Findings Of Fact Respondent is the agency responsible for administering the Florida Medicaid Program. One of its duties is to recover Medicaid overpayments from physicians providing care to Medicaid recipients. Petitioner is a licensed chiropractor in the State of Florida. His Medicaid provider number is No. 3801578-00. At all times relevant here, Petitioner provided services to Medicaid patients pursuant to a valid Medicaid provider agreement. Therefore, Respondent was subject to all statutes, rules, and policy guidelines that govern Medicaid providers. Specifically, Petitioner was required to follow the guidelines set forth in the Medicaid Coverage and Limitation Handbook and the Medicaid Reimbursement Handbook. Additionally, Petitioner was required to maintain all "Medicaid-related records" that supported his Medicaid invoices and claims and to furnish those records to Respondent upon request. In 1997 and until April 1998, Petitioner's advertisement in the yellow pages of the Panama City, Florida, telephone book invited the public to make an appointment for a "free spinal exam," which specifically included two X-rays, if medically necessary. The advertisement indicated that Petitioner's office accepted patients with major medical insurance, workers' compensation insurance, and Medicare and Medicaid coverage. The advertisement did not specifically exclude Medicare and Medicaid patients, but specifically stated that the free spinal exam did not include further examination, treatment, or workers' compensation and personal injury cases. However, Petitioner's subsequent advertisements in the telephone book specifically included Medicaid as a type of case that Petitioner excluded from the offer of free services. The original and subsequent advertisements further stated as follows: Our office policy: The patient and any other person responsible for payment has the right to cancel payment, or be reimbursed for payment for any other service, exam, or treatment which is performed as a result of and within 72 hours of responding to the ad for the free service, exam or treatment. ($99.00 value) Respondent's investigator, Julie Canfield-Buddin, saw the advertisement excluding Medicaid patients as recipients of the free services. After confirming that Petitioner was a Medicaid provider, Ms. Canfield-Buddin performed an audit of Petitioner's paid Medicaid claims between April 15, 1998, and December 31, 2001. The audit revealed that Petitioner had not provided the advertised free services to Medicaid patients. In other words, Petitioner had received Medicaid reimbursements for initial office visits and X-rays of new patients who were Medicaid eligible. Petitioner received reimbursements for these services even though Medicaid policy prohibits payments to providers for services that are given to non-Medicaid patients free of charge. In April 2002, Respondent sent Petitioner a preliminary audit report. The preliminary report indicated that for the period beginning April 15, 1998, up to and including December 31, 2001, Petitioner had received $13,522.02 for certain claims that were not covered by Medicaid. The report included a request for Petitioner to send Respondent that amount for the Medicaid overpayment. After receiving the preliminary report, Petitioner's office contacted Ms. Canfield-Buddin, stating that Petitioner had some issues with the denied claims. Ms. Canfield-Buddin responded that Petitioner should state his concerns in writing and furnish Respondent with any additional medical documentation that would serve to reduce the overpayment. Petitioner sent Ms. Canfield-Buddin a letter dated April 25, 2002. Petitioner did not send Respondent any additional medical documentation with the letter to substantiate his position regarding the denied claims. Additionally, Petitioner did not provide Respondent with any written office policy that delineated any difference in the services provided to Medicaid and non-Medicaid patients. In a final audit report dated May 9, 2002, Respondent informed Petitioner that he had been overpaid $13,522.02 for Medicaid claims that, in whole or in part, were not covered by Medicaid. The final audit report included a request for Petitioner to pay that amount for the Medicaid overpayment. Ms. Canfield-Buddin subsequently received a telephone call from Petitioner's office on May 30, 2002. She received Petitioner's written request for a formal administrative hearing on June 3, 2002. After receiving Petitioner's request for a hearing, Ms. Canfield-Buddin reviewed Petitioner's account statements that related to the Medicaid overpayments. Based on that review, Ms. Canfield-Buddin reduced the amount of overpayment to $11,077.65. The revised overpayment reversed denied charges for X-rays of Medicaid patients in excess of the two X-rays that should have been provided free of charge pursuant to the offer for free services. For example, Petitioner was reimbursed for services provided to B.A. on August 10, 2001. These charges included an initial office visit under the Current Procedures Terminology (CPT) code 99203, two X-rays under the CPT code 7240, two X-rays under the CPT code 72072, and two or three X-rays under the CPT code 72100. The final audit denied reimbursement for all charges except the two or three X-rays under CPT code 72100. The revised overpayment reversed the denied charges for two X-rays under the CPT code 72070. The end result was that Respondent denied Petitioner reimbursement only for the initial office visit and two X-rays that ordinarily would have been provided free to non-Medicaid patients. Medicaid allows reimbursement for services equal to the lesser of the Medicaid fee or the provider's usual and customary charge. Petitioner's advertisement offered free services to the public at large with certain exceptions. Petitioner cannot exclude Medicaid patients from that offer by also excluding patients with personal injury or workers' compensation claims. All patients who are not Medicaid eligible are non-Medicaid patients regardless of their payment source. Just because Petitioner excludes free services to non-Medicaid patients with personal injury and workers' compensation claims, does not mean that he can deny those free services to Medicaid patients when his usual and customary practice is to provide the services free to non-Medicaid patients. Some of the denied charges at issue here allegedly involve spinal manipulations that Petitioner claims he performed on Medicaid patients during their initial office visits. Medicaid reimbursement policy requires a spinal manipulation performed during an initial office visit under a 99203 CPT code for a new patient visit to be included as part of the examination conducted during that visit. Medicaid does not allow Petitioner to be separately reimbursed for a spinal manipulation performed on the same day of service as an initial office visit. Petitioner did not include more than two X-rays or any spinal manipulations in his offer of free services for any patient. When a patient has an initial office visit in response to Petitioner's offer of free services, Petitioner first takes the patient's history, performs an examination, and reviews the first two free X-rays. Depending on the results of the evaluation, Petitioner may or may not advise the patient that additional X-rays and/or a spinal manipulation are medically necessary. Petitioner then allows the patient to arrange for payment of those services with his office staff. If the patient is non-Medicaid eligible and is able to pay for services, Petitioner proceeds to take the additional X-rays and/or to perform the spinal manipulation immediately or during a subsequent visit with payment due as arranged. If a non-Medicaid patient requires subsequent examinations during the course of treatment, Petitioner bills the patient or his or her insurance carrier for those services. If the patient is Medicaid eligible, Petitioner may either proceed with taking the X-rays and/or performing the spinal examination immediately, knowing that he will not be separately reimbursed for the spinal manipulation, or make an appointment for the Medicaid patient to return on another day so that he can be reimbursed for the spinal manipulation. In any event, Medicaid regulations do not allow reimbursement for further examinations within a three-year period. During the hearing, Petitioner testified that some of the denied charges for initial office visits under the CPT code 99203 included spinal manipulations that he never intended to be free and that he did not provide spinal manipulations as a free service to non-Medicaid patients. Petitioner's testimony in this regard is not credited for two reasons. First, he did not produce any medical documentation to support his testimony as to any Medicaid patient receiving a spinal manipulation during an initial office visit. Second, he did not identify any such patient during his testimony. Respondent performs Medicaid audits after a provider renders services. Therefore, it is essential for providers like Petitioner, who contest denied claims, to be able to substantiate their billing with appropriate documentation. Such documentation must be created at the time of service, maintained pursuant to statutory and rule requirements, and furnished to Respondent upon request. Petitioner never responded to Ms. Canfield-Buddin's request for medical documentation to substantiate Petitioner's challenge to the denied claims. Additionally, Petitioner testified that the services he performed for some Medicaid patients were not equivalent to the free services he performed for non-Medicaid patients because they often involved a higher level of service, including additional services, tests, or examinations. According to Petitioner, some of the Medicaid patients required more extensive screening and counseling that consumed more of Petitioner's time. Despite this testimony, Petitioner admitted that the histories he took of Medicaid patients and non-Medicaid patients were basically the same. Petitioner testified that the difference in the level of service provided to all patients varied based upon the individual patients and did not depend on whether they were or were not Medicaid patients. He had no written or unwritten guidelines or policies that limited the scope of screening or level of service in an initial office visit for either type of patient. Petitioner's testimony that the level of services provided to Medicaid patients differed from the level of services offered to non-Medicaid patients is not persuasive. Once again, Petitioner failed to provide the required medical documentation to support his testimony or to identify in his testimony Medicaid patients who required a higher level of service. Moreover, Petitioner knew, when he made his offer of free services, that he would not be able to claim reimbursement for services provided to Medicaid patients that were not separately reimbursable even if Petitioner was entitled to exclude Medicaid patients from the offer. This includes cases where a Medicaid patient may have required a high level of service in terms of the time expended during the screening or a spinal manipulation during the initial office visit. Petitioner provides free services to members of his family. The provision of free services to family does not establish that Petitioner had a usual and customary practice of providing free services. At times, Petitioner treats police officers and indigent persons free of charge. However, Petitioner does not publicly advertise that he treats these patients free of charge because he does not want to be overrun with people taking advantage of the offer. There is no persuasive evidence that Petitioner routinely treats police officers covered by private health insurance and indigent patients covered by Medicaid free of charge. Therefore, it cannot be said that Petitioner's usual and customary practice is to furnish services to these patients free of charge. A Medicaid provider is allowed to use the CPT code 99203 for a new patient visit once per recipient every three years. Petitioner's offer of free services for non-Medicaid patients allows them one free office visit and two free X-rays regardless of the passage of time. According to Petitioner, this means that Respondent's interpretation of Medicare regulations would entitle a Medicaid patient to the free services every three years whereas a non-Medicaid patient would not be so entitled, showing yet another difference in the services provided to Medicaid and non-Medicaid patients under the offer of free services. However, Petitioner's testimony in this regard is not persuasive because it is not based on medical documentation or testimony showing that Petitioner ever treated a Medicaid patient as a new patient more than once.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Respondent enter a final order determining that Petitioner owes $11,077.65 for Medicaid reimbursement overpayments. DONE AND ENTERED this 18th day of November, 2002, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of November, 2002. COPIES FURNISHED: Anthony L. Conticello, Esquire Grant P. Dearborn, Esquire Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308-5403 Hal Cowen ChiroNetwork Health Care Centers 127 West 23rd Panama City, Florida 32405 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
The Issue The issues are whether Petitioner is liable to Respondent for Medicaid reimbursement overpayments, and if so, in what amount.
Findings Of Fact Respondent is the agency charged with administration of the Medicaid program in Florida pursuant to Section 409.907, Florida Statutes. Petitioner provides services to Medicaid beneficiaries under provider No. 1000098-00 pursuant to a contract with Respondent. Under the provider agreement dated March 31, 1997, Petitioner agreed to comply with all local, state and federal laws, rules, regulations, licensure laws, Medicaid bulletins, manuals, handbooks, and statements of policy. The contract also sets forth Petitioner's responsibilities to keep and maintain in a systematic and orderly manner all medical and Medicaid-related records, and to make them available for state and federal audits for five years. Heritage Information Systems, Inc. (Heritage) is and has been a pharmacy audit company since 1980. In 1999, Respondent contracted with Heritage to perform audits of pharmacies enrolled in the Florida Medicaid program. Respondent and Heritage subsequently created a list of violations to be investigated during an audit. The list is based upon provisions in the Florida Statutes and federal Medicaid policies and regulations. The purpose of the list is to guide Heritage in performing its duty during an audit. Heritage conducts its audits based on a standard methodology and protocol. During the course of an audit, Heritage examines a provider's records to determine whether a pharmacy is compliant with all rules and regulations that apply to the pharmacy. Heritage uses an established set of neutral criteria to select pharmacies for participation in an audit. Using these criteria, Heritage selected Petitioner as a candidate for audit. By letter dated January 17, 2000, Heritage advised Petitioner that it would be audited on January 26, 2000. The letter stated as follows in relevant part: The auditor(s) will require access to original hard-copy prescription records, third party signature logs, and, in some cases, pharmacy computer screens relating to a sample of prescription claims billed by your pharmacy between 12/25/1998 and 12/24/1999. Please note that the sample claim may actually be a refill of a prescription originally dispensed prior to the audit period. Because of this, we recommend that you also have the prior twelve months of prescription records available the day of the audit. For your reference, the audit terms are defined in your participating provider agreement and the prescribed drug services handbook. If you have any additional questions prior to the audit, please call Heritage Information Systems, Inc. . . . Between December 25, 1998, and December 24, 1999, Petitioner submitted claims and received payments from the Medicaid program for 7,065 claims. Using an industry standard software application, Heritage selected a random sample of 101 of Petitioner's claims to be analyzed during the audit. In performing the audit, Heritage utilized a methodology similar to that used by auditing agencies who examined Medicaid providers in previous years. During the audit, Heritage identified four areas of noncompliance for Petitioner. First, Heritage requested Petitioner's staff to produce hard-copy prescription records for the 101 sampled claims. Hard-copy prescriptions include those ordered and signed by a physician on a handwritten form and the records created by the pharmacists immediately after receiving verbal authorization from a physician by telephone. In this case, Petitioner could not produce hard-copy prescriptions for five claims. The second area of noncompliance involved unauthorized refills. In seven instances, Petitioner refilled prescriptions more times than the number authorized on the documented prescription. There were no notations on the hard-copy prescriptions or in the pharmacy computer to indicate that the doctors or someone from their office called to increase the number of authorized refills. The third area of noncompliance involved one instance in which Petitioner claimed payment for a "days supply value" that was inconsistent with the quantity and directions on the prescription. The prescription at issue was for sixty tablets with directions for the patient to take the drug once a day, constituting a sixty-day supply of medicine. Petitioner filled this prescription as a thirty-day supply and claimed Medicaid payment accordingly. Respondent did not include this violation in the calculation of overpayment. The fourth area of noncompliance involved a prescription that was refilled 30 days earlier than appropriate with respect to the quantity and directions for use that appeared on the prescription. This was the same prescription referenced above in paragraph twelve. After completing the audit, Heritage completed a final audit report. Said report documents the following: (a) 7,310 claims submitted by Petitioner; (b) $350,639.95 paid by Respondent for all claims; (c) 101 claims in total random sample; (d) $3,839.33 paid by Respondent for claims in total random sample; (e) 13 discrepant claims in random sample; $778.09 paid by Respondent for discrepant claims; 13 documented sanctions in random sample; (h) $724.91 paid by Respondent for documented sanctions in random sample; (i) $52,466.25 as the total calculated overpayment; and (j) $13,798.70 as the amount of the overpayment based on a 95 percent one-sided lower confidence limit. The final audit report also contained a listing of the violations discovered during the audit. The final audit report contained the following comments/notes in relevant part: Five prescriptions could not be found by auditors and could not be found by pharmacist Geiger and technician Daniels either. Many unauthorized refills were noticed. Pharmacy staff stated some information may be on the old computer system that was not functioning because of Y2K problems. Any authorization or documentation that was found on the computer system was accepted. Under cover of a letter dated March 2, 2000, Petitioner furnished Respondent with statements relative to the discrepant claims/documented sanctions signed by several physicians. All of the statements included the following: (a) statements that the doctors had prescribed the medication(s) for their patients; (b) the patient name; (c) the prescription number; (d) a print-out of a computer screen; and (e) opinions that Petitioner would not fill or refill prescriptions without authority and approval. None of these physicians testified at the hearing. By letter dated August 16, 2000, Respondent notified Petitioner of the determination of a Medicaid overpayment in the amount of $13,798.70. The greater weight of the evidence indicates that Petitioner received an overpayment in that amount or more.
Recommendation Based upon the findings of fact and conclusions of law, it is RECOMMENDED: That Respondent enter a final order finding that Petitioner must timely pay Respondent $13,798.70 for Medicaid reimbursement overpayments from December 25, 1998, through December 24, 1999. DONE AND ENTERED this 30th day of January, 2001, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of January, 2001. COPIES FURNISHED: Melvin H. Fletcher, R.Ph. Corporate Representative Mayhugh Drugs, Inc. 200 South Orange Avenue Green Cove Springs, Florida 32043 L. William Porter, II, Esquire Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308 Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308 Julie Gallagher, General Counsel Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308 Ruben J. King-Shaw, Jr., Director Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3116 Tallahassee, Florida 32308
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 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
