The Issue Whether Respondent failed to comply with several requirements set forth in the Florida Medicaid Assistive Care Services Coverage and Limitations Handbook, thereby incurring a $15,000 fine according to Florida Administrative Code Rule 59G- 9.070(7)(e).
Findings Of Fact Embassy is an assisted living facility that provides assistive care services, and was enrolled as a provider in the Florida Medicaid program at all times pertinent to the instant case. AHCA is the state agency charged with the administration of the Medicaid program in Florida. Within AHCA is the Bureau of Medicaid Program Integrity (MPI), whose duty is to ensure the integrity of the Medicaid program by conducting audits of claims and by investigating providers to ensure compliance with all requirements of the Medicaid program. At all relevant times, Embassy has been subject to a Medicaid Provider Agreement. Pursuant to the agreement, Embassy agreed to comply with all federal, state, and local laws, including rules, regulations, and statements of policy applicable to the Medicaid program. Embassy also agreed to comply with AHCA's Medicaid handbooks. The Medicaid Provider Agreement includes the requirement that providers keep, maintain, and make available in a systemic and orderly manner all medical and Medicaid-related records as AHCA requires. On December 6, 2011, AHCA conducted a site visit at Embassy's facility. In a letter dated February 8, 2012, Embassy was notified that a fine of $15,000 was being assessed. The letter read as follows: In accordance with Section 409.913, Florida Statutes (F.S.), and Rule 59G-9.070, Florida Administrative Code (F.A.C.), the Agency for Health Care Administration (Agency), shall apply sanctions for violations of federal and state laws, including the failure to maintain a Resident Service Plan for Assistive Care Services within fifteen (15) days of a Resident Health Assessment for Assisted Living Facilities for Medicaid consumers P.A., D.B., D.D., R.E., M.G., F.G., P.N., K.T., E.V., and G.W., the failure to maintain a complete Resident Health Assessment for Assisted Living Facilities for Medicaid consumers D.B., M.G., and F.G., the failure to maintain a physician statement indicating that employee M.J.D. is free of communicable diseases, the failure to maintain current tuberculosis skin test results for employees M.J.D., E.J., and B.R., and failure to maintain current Level II background screening results for employees E.D., M.J.D., J.R., and B.R. A review of the recipient files revealed that service plans were missing in ten files. Service plans are required for each recipient, and they must be signed or provided within 15 days of the annual health assessment, or within 15 days of an assessment that causes a significant change in the recipient's condition. Embassy admitted at the final hearing that ten recipient files did not contain service plans. The documentation provided also did not contain a Level II Background Screening for four Embassy employees; these screenings must be conducted every five years. Embassy admitted that the required background screenings were conducted on December 16, 2011-- after the site visit, and after they had expired. Lastly, the documentation provided during the site visit did not contain tuberculosis screening results for three employees. Two of those employee files also did not contain the Level II Background Screenings as noted above; one employee file was only missing the tuberculosis screening. The Agency properly imposed sanctions for each of the fifteen violations of Medicaid policy; that is: ten recipient files that did not contain service plans, four employee files that did not contain a Level II background screening and therefore were not maintained properly for inspection, and one employee file that did not contain a tuberculosis screening. There is no evidence establishing that Embassy has been previously charged with, or been determined to have committed, any violation of Medicaid law.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that pursuant to Florida Administrative Code Rule 59G-9.070(7)(e), Respondent should be fined a total of $15,000 for 15 violations of Florida's Medicaid laws. DONE AND ENTERED this 31st day of January, 2013, in Tallahassee, Leon County, Florida. S JESSICA E. VARN 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 31st day of January, 2013.
Findings Of Fact The Respondent, Frederick L. Peacock, D.V.M., is a licensed veterinarian, having been issued license No. 0000567. The Petitioner is an executive agency of the State of Florida, having authority over the licensure and regulation of the licensure, professional practice and operations of veterinarians within the State of Florida. The Respondent operates a veterinarian establishment known as The Animal Clinic of South Homestead, 60 North Homestead Boulevard, Homestead, Florida 33030. On or about February 8, 1982, Eva M. Pohner presented her dog named "Bruno" to the Respondent to be tested for heartworm microfilaria. On that day the Respondent drew approximately one cc of blood from the canine Bruno for the purpose of performing a blood test for heart worm microfilaria. The Respondent used the EVSCO difil test. The blood test was negative for heart worm microfilaria, but Respondent recommended that another test be performed for certainty, and recommended to Ms. Pohner that heart worm preventative treatment be started immediately in order to prevent any new infestation of heart worm larvae or microfilaria. The Respondent dispensed one hundred tablets of 200 mg. each of Diethylcarbamzine to Ms. Pohner for administration to her dog, advising her that she should not leave the dog unattended when giving him the medication. He told her to give the medication immediately in order to avoid an adverse reaction in case heart worm larvae should become implanted in Bruno's circulatory system in the next few days. The reason he recommended that she give the medication to the dog immediately was that an adverse and possibly fatal reaction could occur if the dog contracted heart worm larvae a short time after the negative test results and before the medication was given. In fact, Ms. Pohner waited for several days so that she could ascertain that she would be home all day on the day she gave the dog the medication. She gave the dog the medication on approximately February 10, 1982. The dog immediately became distressed and his condition steadily worsened, with labored breathing, and by two o'clock on the afternoon of that day at a nearby veterinary clinic the dog died. The test performed by Respondent, and the treatment and medication he recommended, were the latest and best accepted method of dealing with heart worm infestation or the prevention of heart worms in canines. The EVSCO difil test has the smallest margin for error of any of the three commonly used tests. However, it is important that the medication be administered as soon as possible after the negative test results are obtained to ensure that no infestation occur prior to the giving of the medication and after a negative test. In the opinion of recognized experts in the field, the test performed by Respondent was the best accepted of the three tests commonly done by veterinarians and the medication recommended, as well as the method and manner of treatment recommended, was of the highest professional acceptability. Ms. Pohner was also advised by the Respondent that there was a chance that the test could be a false negative test, and that heart worms might be latently present, and that another test was in order. Ms. Pohner informed the Respondent that she would ask her mother about performing another test, but did not think she would do so because of the expense.
Recommendation Having considered the foregoing facts and conclusions of law, the evidence in the record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that the Administrative Complaint filed against the licensure status of Dr. Frederick L. Peacock be dismissed with prejudice. DONE and RECOMMENDED this 4th day of May, 1983, at Tallahassee, Florida. P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of May, 1983. COPIES FURNISHED: James H. Gillis, Esquire Staff Attorney Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Lister Witherspoon, IV, Esquire Attorney at Law 542 Northwest 12th Avenue Miami, Florida 33136 Jane Raker, Executive Director Board of Veterinary Medicine Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Fred M. Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue The issues for determination are whether Respondent must reimburse Petitioner an amount up to $1,051,992.99, which sum Respondent received from the Florida Medicaid Program in payment of claims arising from his treatment of pediatric patients between September 1, 2008, and August 31, 2010; and whether Petitioner is entitled to sanctions in the amount of $210,398.60, and costs of $3,349.86.
Findings Of Fact Petitioner is the state agency responsible for, inter alia, administering the Florida Medicaid Program. Respondent is, and at all times relevant was, a physician licensed to practice medicine in Florida. Respondent was certified by the American Board of Pediatrics in General Pediatrics in 1989. Additionally, Respondent was certified by the American Board of Pediatrics in Pediatric Infectious Diseases in 2005. Respondent's practice is solely hospital-based and exclusive to pediatric infectious disease. Respondent evaluates, and provides care and treatment to, patients in Level III Neonatal Intensive Care Units ("NICU") and Pediatric Intensive Care Units ("PICU") in Miami-Dade, Broward, and Palm Beach County, Florida hospitals.1/ Respondent has never been the subject of any disciplinary proceedings. Exercising its statutory authority to oversee the integrity of the Medicaid program, Petitioner identified Respondent as a Medicaid provider who had submitted a high volume of claims for inpatient recipients. Accordingly, Petitioner conducted a review or audit to verify the claims paid by Medicaid during the audit period. On or about September 14, 2011, Petitioner issued a request for records letter to Respondent. Said correspondence notified Respondent that Petitioner was in the process of completing a review of claims Respondent billed to Medicaid during the audit period to determine whether the claims were billed and paid in accordance with Medicaid policy. The request identified 30 of Respondent's patients and requested copies of the patients' Medicaid-related records, including all hospital records. The requested records were to be submitted within 21 days. Respondent provided records responsive to the September 14, 2011, request for records.2/ Upon receipt, Petitioner organized the submitted records and provided the same to a reviewing nurse, Blanca Nottman. The reviewing nurse preliminarily inspected the same to determine if any policy violations were apparent and noted any findings. Ms. Nottman, in turn, provided the records and notations to Petitioner's "peer coordinator." The peer coordinator maintains a list of all the peers that have a contract with Petitioner. A peer "means a Florida licensed physician who is, to the maximum extent possible, of the same specialty or subspecialty, licensed under the same chapter, and in active practice." § 409.9131(2)(c), Fla. Stat. The peer coordinator then forwarded all records and documents provided by Respondent to Richard Keith O'Hern, M.D., to conduct a peer review of Respondent's claims. Section 409.9131(2)(d), defines a peer review as follows: an evaluation of the professional practices of a Medicaid physician provider by a peer or peers in order to assess the medical necessity, appropriateness, and quality of care provided, as such care is compared to that customarily furnished by the physician's peers, and to recognized health care standards, and, in cases involving determination of medical necessity, to determine whether the documentation in the physician's records is adequate. Dr. O'Hern was certified, in 1979, by the American Board of Pediatrics in General Pediatrics. Dr. O'Hern completed a one-year infectious disease fellowship during his training at the University of Florida in 1977-78. Dr. O'Hern retired from a private general pediatric practice in December 2012. During his thirty-seven year career, he provided care and treatment to approximately 80,000 babies, of which approximately 16,000 were sick with infectious disease issues.3/ During his career, Dr. O'Hern was on three hospital medical staffs, and estimated that his practice involved working in the hospital setting approximately 10-20 percent of the time, with the balance in his office. Dr. O'Hern was never certified by the American Board of Pediatrics in pediatric infectious diseases and would not, at the time of the review, have been eligible to become certified in pediatric infectious diseases. Additionally, Respondent provided unrefuted testimony that Dr. O'Hern would not be permitted to treat Respondent's patients at Level III NICUs and PICUs. Dr. O'Hern received copies of the medical records submitted by Respondent as well as "copies of the worksheets that Medicaid uses to determine the appropriateness of medical reimbursement." For each of the thirty patients, whose encounters were under review for the audit period, Dr. O'Hern reviewed the patient's noted complaint; whether the patient was a new or existing patient; whether the patient was inpatient or outpatient; the medical history, physical exam, and assessment of the patient; and the amount of time spent with the patient. Dr. O'Hern would then, based upon the above information, "determine the level of coding that leads to reimbursement." Upon completion of his review, Dr. O'Hern notated his findings and returned the same to the peer coordinator, who in turn, provided them to the reviewing nurse. The reviewing nurse then "comes up with a review finding that gives the reason for the adjusted or denied claim." As there were findings for adjusting or denying Respondent's claims, Jennifer Ellingen, an investigator for Petitioner, prepared a Preliminary Audit Report ("PAR"). On April 18, 2012, Petitioner issued the PAR to Respondent. The PAR advised Respondent that Petitioner had completed a review of claims for Medicaid reimbursement for the audit period, and a preliminary determination had been made that Respondent was overpaid $1,051,992.99 for claims that in whole or in part were not covered by Medicaid. The PAR advised Respondent that the documentation he provided supported a lower level of office visit(s) than the ones for which he billed and received payment, and that some services for which he billed and received payment were not documented. The PAR notified Respondent that he could (1) pay the identified overpayment within 15 days and wait for the issuance of the final audit report ("FAR"); (2) submit further documentation in support of the claims within 15 days; however, such additional documentation may "be deemed evidence of non- compliance with [Petitioner's] initial request for documentation;" or (3) not respond, and wait for the issuance of the final audit report. The PAR further notified Respondent that the findings contained in the PAR were preliminary in nature, and that it was not a final agency action. Respondent opted to submit further documentation in support of his claims. Upon doing so, the process repeated itself, with the reviewing nurse, now Karen Kinser, reviewing all of the submitted documentation, which was then forwarded to Dr. O'Hern for an additional review. On January 8, 2013, Respondent issued a FAR. The amount previously determined as overpayment in the PAR remained unchanged in the FAR. The FAR further documented that a fine in the amount of $210,398.60 had been applied and costs had been assessed in the amount of $3,349.86. As noted above, upon receipt of the FAR, Respondent timely requested a formal hearing. Rather than examine the records of all recipients served by Respondent during the audit period, a random sample of 30 recipients (patients) was reviewed. For these patients, Respondent identified 701 reimbursements from Petitioner to Respondent during the audit period. At hearing, Petitioner presented evidence specific to three of the 30 patients. A review of the three patients is instructive. Patient 1 was born premature at 33 weeks gestation, with a birth weight of three pounds seven ounces, and was two months old at time of the subject hospitalization. At birth, Patient 1's medical condition necessitated placement in the NICU for three weeks and required nasogastric tube feeding. During the hospitalization under review, the patient's discharge diagnoses included, inter alia, septicemia and streptococcal meningitis. During the hospitalization, Respondent provided pediatric infectious disease care to the recipient. Patient 2 was born on January 27, 2009, at 27 weeks gestation. At the time of the subject admission, Patient 2 was 37 days old, with an adjusted gestation age of 32 weeks two days, weighing 1.040 kg (approximately two pounds five ounces). The admitting diagnoses were prematurity, possible sepsis, respiratory distress, and a femoral fracture. Respondent provided care and treatment concerning a pediatric infectious disease condition, sepsis. The patient was not discharged from the hospital until July 28, 2009. Patient 3 was born prematurely on July 15, 2009. On August 27, 2009, the child was 43 days old with an adjusted gestation of 32 weeks five days and weighed 1.180 kg (approximately two pounds ten ounces). The admitting indications were prematurity, possible sepsis, and respiratory distress. Respondent provided care and treatment concerning potential sepsis, a pediatric infectious disease medical condition. Consistent with the above-findings concerning Patients 1-3, Respondent testified that his typical patient/recipient is premature and weighs approximately 500 grams (approximately one pound). Respondent explained that his patients are immune-compromised and that patients under 28 weeks gestation do not possess an independent immune system. Respondent opined that the greatest cause of morbidity or mortality among these pediatric patients is infectious diseases.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration issue a Final Order dismissing the Final Audit Report. DONE AND ENTERED this 22nd day of May, 2014, in Tallahassee, Leon County, Florida. S TODD P. RESAVAGE 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 May, 2014.
The Issue Kindred Hospitals East, LLC (Kindred) filed CON Application 9831 with the Agency for Health Care (AHCA or the "Agency"). The application seeks the establishment of a 60-bed Long Term Care Hospital (an "LTCH") in Volusia County, AHCA Health Care Planning District 4. The Agency preliminarily denied the application. Kindred has challenged the denial. The issue in this case is whether the application should be approved.
Findings Of Fact The Parties Kindred, the operator of 22 LTCHs, is a wholly-owned subsidiary of Kindred Healthcare, Inc. Through its subsidiaries, Kindred Healthcare, Inc., operates 75 LTCHs nationwide, seven of which are in Florida. Of the seven Florida facilities, Kindred operates six. If CON Application 9831 is approved and the proposed facility becomes operational, therefore, Kindred will become the operator of 23 LTCHs, seven of which are in Florida. The Agency is the state agency responsible for administration of the Certificate of Need program. See § 408.031, Fla. Stat., et seq. Kindred North Florida and District 4 Kindred currently operates a 40-bed freestanding LTCH in Clay County ("Kindred North Florida"). Although in Clay County, Kindred North Florida is considered by Kindred to be in the area of Jacksonville or Duval County, a center of population greater than Clay County's. Kindred proposes to build and operate the project subject to CON Application 9831 in Volusia County, approximately 80 miles south of Kindred North Florida. Volusia County is one of seven counties that comprise District 4, a health service planning district established by the Health Facility and Services Development Act. In addition to Volusia, Clay, and Duval Counties, the other counties that make up District 4 are Baker, Nassau, St. Johns, and Flagler. Stipulated Facts The parties have stipulated to the following facts: Kindred's CON application complies with statutory and rule application content, submission, filing fee and review process requirements; and the Agency's review complied with review process requirements. Kindred has the ability to provide a quality LTCH program. Kindred has the necessary resources, including health personnel, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation. Kindred's project is likely to be financially feasible. Kindred's proposed costs and methods of construction are reasonable. There are no disputes regarding Kindred's proposed provision of services to Medicaid patients and the medically indigent. The statutory criterion relating to nursing home beds is not applicable. Kindred complied with the letter of intent requirements found in AHCA rules. AHCA did not at the time of review, and currently does not, calculate a fixed need pool for LTCH beds. Amended Stipulation, at pp. 4-6. LTCH Services The length of stay in the typical acute care hospital (a "short-term hospital") for most patients is three to five days. Some hospital patients, however, are in need of acute care services on a long-term basis ("LTCH services"), that is, much longer than the average lengths of stay for most patients. Patients in need of LTCH services often have lengths of stay in the hospital that exceed the typical three-to-five day stay in a short-term hospital by 20 to 22 days or more. Some patients who exceed the usual short-term lengths of stay by similar lengths are not appropriate for LTCH services. Their stays are regarded more as custodial in nature. Those in need of LTCH services, whose stays are not custodial, however, are generally better served in an LTCH than in a short- term hospital. Patients appropriate for LTCH services represent a small but discrete sub-set of all inpatients. They are differentiated from other hospital patients in that, by definition, they have multiple co-morbidities that require concurrent treatment. Patients appropriate for LTCH services tend to be elderly, frail, and medically complex and are usually regarded as catastrophically ill. Some LTCH patients, however, are not elderly. These younger LTCH patients are often victims of trauma. Whatever the age of LTCH patients, they are typically medically unstable for their entire hospital stay. Because of their status as medically unstable, complex and seriously ill, they require extensive nursing care and daily physician oversight. Very often their care involves some sort of technologically advanced support such as a ventilator. Case Mix and Patient Acuity A "case mix index" for a hospital is a measure of its average resource consumption. Resource consumption can be viewed as a surrogate measure of complexity and severity of illness. The case mix index of Kindred hospitals is high compared to the entire LTCH industry and, as would be expected, is higher than the average case mix index for short-term hospitals. A way to further refine the variation of patients' acuity within a diagnostic related group (DRG) is through the APRDRG system. Not routinely used in hospitals, it is a tool of health services research. The system assigns not only a DRG but a severity of illness as well on a scale of one (minor severity) to four (extreme severity.) Applying the system to Kindred's database as well as to federal data confirms that the distribution of severe and extremely severe cases is skewed toward LTCH patients. This confirmation is consistent with empirical observation that patients in LTCHs are sicker on average than those in general hospitals. A third measure of patient acuity routinely used in Kindred hospitals is an APACHE score. It was described by Dr. Muldoon in his deposition testimony in the following way: [A]n APACHE score . . . is a combination of physiologic derangement and concurrent illnesses. While not universally applied to the LTAC [sic] population, it is a routine measurement in Kindred Hospitals. Using that indicator, we find that the average Kindred patient has an APACHE III score of about 45, whereas the average critical care patient in all of short-term acute care has a score about two-and-a-half points higher. This further supports the observation that LTACs [sic] in the Kindred portfolio treat a severely ill population only a few points, on the APACHE measure, below that of critical care units across the country. (Kindred Ex. 2, p. 15). The comparisons of acuity levels between LTCHs in general and short-term hospitals or Kindred LTCHs and short-term hospitals, while they show that the Kindred LTCH population is at a higher acuity level than patients in short-term hospitals, do not prove that Kindred LTCH patients are all appropriate for LTCH services. The Agency does not by rule define the level of acuity for admission of a patient to an LTCH. Nor has it done so by order. Information on acuity level of patients in short- term hospitals is not available through the AHCA's health statistics data base. That acuity levels are higher for Kindred's LTCHs than short-term hospitals does not necessarily mean that all patients admitted to Kindred hospitals are appropriate LTCH patients. One of the bases Kindred advances for why LTCH beds are not available in the district, despite low occupancy rates of Specialty Hospital of Jacksonville (Specialty or "Specialty Jacksonville") for the last several years (see paragraph 36, below), is that Specialty lowers utilization of its beds by restricting admission to patients of higher acuity than threshold LTCH acuity. The assertion does not prove that LTCH beds are unavailable in District 4. Rather, it begs a series of questions: does Specialty refuse patients with LTCH-appropriate acuity levels, does Kindred admit some patients whose acuity level would allow them to be served appropriately in an alternative post-acute care setting, or is the answer a combination of both? Districts Without LTCHs: Restricted Choice In those health care planning districts that do not have LTCHs, hospital patients in need of long-term acute care typically have little choice but to stay in the short-term hospital. The short-term hospital is usually dissatisfied with such an arrangement and short-term hospital staff, oriented toward stabilizing and treating the patient on a short-term basis, may lose interest in the patient after the patient exceeds the average length of stay associated with the patient's diagnosis. The patient can opt to transfer to an LTCH a long distance from home or to be treated in a setting that is less than appropriate for their level of acuity such as a skilled nursing unit of a nursing home. Neither option presents much appeal to the patient in need of LTCH services or the patient's family. Transfer to a distant LTCH is difficult and inconvenient for the patient's family. Consequently, such a transfer creates a hardship for the patient in need of family visits. Such a transfer also presents the possibility of one of two less-than-optimal results: the family loses contact with the loved one or family members have to relocate to the area of the LTCH. Re-location frequently entails significant hardship. Opting for a nursing home in the family's locality is not adequate for a patient in need of LTCH services. With the intensive nursing and daily physician oversight LTCH services entail, a skilled nursing unit in a nursing home is not an adequate setting. Its medical services, quite simply, are not of adequate intensity to the true potential LTCH patient. This difference is but one of several between LTCHs and other providers. Differences between LTCHs and Other Providers Short-term hospitals and LTCHs do not have the same purpose. The gap is widening between the two. Over the last 20 years, short-term hospitals have evolved into setting that stabilize patients, diagnose, and develop treatment plans. Most admissions to the medical ward of a short-term hospital are through the emergency room where patients are so acute and so unstable that emergency care is required. In their role as diagnostic centers, short-term hospitals provide imaging and laboratory services and then develop a treatment plan based on the diagnostic work-up performed. Short-term hospitals have moved away from the function of carrying out a treatment plan. This is borne out by lengths of stay in short-term hospitals growing shorter over the last 20 years. Lengths of stay now average three to five days. As a result, short-term hospitals have limited capability to provide a prolonged treatment plan for patients with multiple co-morbidities. In contrast, LTCHs do not hold themselves out to be diagnostic or stabilization centers. LTCH have developed expertise in caring for the small subset of patients that require a prolonged treatment plan. A multi-disciplinary physician-based care plan is provided in LTCHs that is not provided in short-term hospitals or other post-acute settings. If there is no LTCH readily available to provide a hospital-level discharge, then the short-term hospital must either keep the patient or discharge the patient to a setting that is less than appropriate for the patients needs. If the hospital keeps the patient, it is often not staffed to give the patient the amount of therapeutic rehabilitation required. The patient is not stable enough to transfer to a comprehensive medical rehabilitation facility. The patient that qualifies for an LTCH has a very different set of needs from many patients in the intensive care unit and/or medical-surgical (med-surg) beds in a short-term hospital. A very low percentage of all med-surg patients are appropriate for LTCH services. Placing these patients in an LTCH preserves the resources of short-term hospitals and encourages their financial health, which are outcomes driven by Medicare Prospective Payment System (PPS) that provides incentives to discharge patients from short-term hospitals as quickly as possible. Skilled nursing facilities (SNFs) and LTCHs are different both in intent and execution. Stable patients who require minimum medical intervention, whose primary needs are nursing and who are unlikely to become unstable, are appropriate for SNFs. Conversely, LTCHs are appropriate when daily medical intervention is required. Access to diagnostics, laboratory, radiology and pharmacy services make LTCHs better able to respond to changes in conditions and care plans than SNFs. Comprehensive medical rehabilitation hospitals (CMRs) and LTCHs are distinctly different. Geared for patients with primarily neurologic or musculoskeletal orthopedic issues, the CMR care model is based on physical rather than internal medicine that requires a minimum of three hours per day of physical therapy. Internists, therefore, are required to oversee LTCHs rather than other types of medical doctors. While rehabilitation is a concurrent component of an LTCH, patients appropriate for an LTCH bed, because of their medical conditions, cannot tolerate the three hours per day of therapy per patient conducted at a CMR. A CMR may be an appropriate facility after a stay in an LTCH when the patient has improved to the point where typical CMR therapy can be tolerated. Home health care is no substitute for LTCH care needed by patients appropriate for admission to an LTCH. By definition, LTCH patients meet criteria for inpatient hospitalization. Home health care is designed for patients who are stable and have limited medical needs that can be administered by nurses or families that visit or are in the patient's home. In sharp contrast, LTCH patients require many hours a day of nursing, respiratory, and other therapies under the direct care of a physician. On the basis of regulation alone, short-term hospitals can provide LTCH-type care. Generally, however, they do not. Because of Medicare's PPS, short-term hospitals have evolved into centers of stabilization and diagnosis, where care plans are initiated but not carried out fully. With such an orientation, short-term hospital staff often cannot sustain the focus and interest in a patient whose length of stay greatly exceeds the average length of stay for patients with the same diagnosis. Case studies bear out that when patients who are not progressing in a short-term hospital are transferred to LTCHs, where a multi-disciplinary approach replaces the diagnostic focus, the patients improve in both medical and physical well- being. In short, in the health care continuum, LTCH care constitutes a component dedicated to catastrophically ill and medically complex patients in need of acute care services that exceed by a considerable amount the average length of stay of those patients in a short-term hospital. Typically medically unstable for the entire time of stay in the short-term hospital, these patients require extensive nursing care with daily physician oversight usually accompanied by some type of technologically advanced support. Federal Government Recognition of LTCHs The federal government recognizes the distinct place occupied by LTCHs in the continuum of care based on the high level of LTCH patient acuity. The PPS of the federal government treats LTCH care as a discrete form of care. LTCH care therefore has its own system of DRGs and case mix reimbursement that provides Medicare payments at rates different from what PPS provides for other traditional post-acute care providers. Medicare and the PPS System The federal definition of a "long term care hospital" is a hospital whose average length of stay for Medicare patients is greater than 25 days. The 25-day length of stay requirement only applies to Medicare patients, not to non-Medicare, such as commercial patients; some of Kindred's LTCHs have a substantial number of commercial pay patients where the average length of stay is not 25 days. The federal government clearly identifies LTCHs as hospitals, separate from SNFs, CMR hospitals, and short-term hospitals. The very earliest LTCHs were primarily chronic care hospitals, but over the past 20 years the LTCH has evolved into a place where people are cared for who require an extended stay in a hospital, not a SNF or CMR facility, and who will benefit from extra therapeutic care, nursing, and equipment that is more orientated toward therapy than the stabilization and diagnosis of acute conditions provided by short-term hospitals. The basic concept of the Medicare PPS is the classification of patients into DRGs based on the services they need and the expenditures the hospital will make to care for the patient. The federal government analyzes these patients by group and identifies what the average cost is for each kind of patient. The classification of the patient by DRG determines the amount the Medicare program will pay the hospital for caring for that patient. As an example, if a patient comes to a short- term hospital and, based on diagnosis and intensity, is classified in DRG 13, there is a certain payment rate attached to that DRG, and that payment rate will be different from a DRG 14 or 15. The weights determine whether a hospital is paid more or less than the average for a certain type of patient. PPS was designed for Medicare patients, but payers other than Medicare including Medicaid, commercial insurance, and managed care, now also reimburse hospital providers and SNF providers as some function of the PPS. Each sector of the health care industry has a some what different payment system. DRGs were first developed for short-term hospitals, and there are hundreds of DRGs used to determine reimbursement. Not designed to measure acuity and tied to the amount of Medicare reimbursement, DRGs relate to resource utilization. The difference between reimbursement for an LTCH and a short-term hospital has to do with the average rate, which is a figure that varies somewhat from market to market based on labor costs, and the weight which is attached to each of the DRGs. The rate times the weight determines the reimbursement. When a patient is in a short-term hospital much longer than a few days past the average length of stay that the federal government has established for that DRG, financial loss for the hospital mounts. The federal government recognized that problem. It has developed a system using an "outlier" reimbursement, an add-on to the normal DRG payment for a patient who stays for an unusually long time. But, the outlier payment is calculated to recover only 80 percent of what the federal government estimates to be the hospital's true costs. In response to the PPS system, short-term hospitals have to manage their patients very closely. If a patient falls into the outlier category and is going to be hospitalized substantially longer than the average, short-term hospitals can lose a significant amount of money, so short-term hospitals are constantly searching for discharge options for their patients. Every day of utilization that a short-term hospital can save benefits the short-term hospital financially; as a result, hospitals invest significant effort into developing case management, utilization review, and clinical management departments. Effective October 1, 2002, the Centers for Medicare and Medicaid Services (CMS) implemented categories of payment designed specifically for LTCHs, the "LTC-DRG." The LTC-DRG is a sign of the recognition by CMS and the federal government of the differences between short-term hospitals and LTCHs when it comes to patient population, costs of care, resources consumed by the patients and health care delivery. Existing LTCHs in District 4 There are currently two licensed LTCHs operating in District 4: Kindred's Green Cove Springs facility ("Kindred North Florida") in Clay County and Specialty's Jacksonville facility in Duval County. Kindred North Florida is approximately 80 miles (and a 1.5 hour drive) from Daytona Beach where Kindred intends to locate its proposed Volusia County facility. Specialty Jacksonville is within 85 miles of Kindred's proposed facility. The LTCH occupancy and utilization rates for District 4 is below 70 percent. Kindred North Florida is a 40-bed LTCH. Specialty Jacksonville is a 107-bed LTCH. Specialty Jacksonville has an occupancy rate that has been consistently below 60 percent. The most recently available data shows an occupancy rate for Specialty of 56 percent. In recent years, it has been even lower. Kindred North Florida has been operating near or above optimal occupancy. Specialty has not. Beds are available within the district. CON Application Process Kindred submitted CON Application 9831 in the first CON Application Review Cycle of 2005. Kindred was the only applicant for an LTCH CON in District 4 for the batching cycle. The Agency evaluated the application and reported the evaluation in a State Agency Action Report (SAAR) issued on June 1, 2005. The SAAR recommended denial of Kindred's application. A basis for the denial of Kindred's application is summed up in the "Need" section of the SAAR: The applicant intends to focus on the provision of complex LTCH services (many requiring ventilator/pulmonary services) and contends patients remain in less appropriate settings in District 4. It maintains that Volusia County is an appropriate service area for this project due to the travel distance to a current LTCH. Although support letters state that many patients would have benefited from LTCH services, the disposition of these patients is not known and access problems to LTCH services was not shown. The applicant did not demonstrate that area residents are unable to access needed care or that care currently being provided is inappropriate. The applicant's need analysis did not solely consider high acuity patients that are LTCH appropriate that could not be more appropriately treated in lower cost long- term care facilities such as nursing homes and rehabilitation hospitals. As stated earlier, CMS announced that it plans to make changes in its reimbursement to LTCHs this fall with other updates planned for October 1, 2005. The applicant stated opposition when another LTCH proposed to establish a hospital in this area indicating that its Clay County facility would be adversely impacted and that the establishment of a third LTCH in District 4 would be a duplication of services. AHCA Ex. 1, p. 28. On June 1, 2005, AHCA adopted the SAAR's recommendation that Kindred's application be denied. Kindred timely challenged the denial of its application and its petition was referred to DOAH for formal administrative proceedings. Post-stipulation Issues The parties have resolved a number of potential issues by way of the Amended Stipulation. The remaining issues relate to need, access and competition. LTCH Need Methodology and AHCA's Concerns The Agency has not adopted a need methodology for LTCH services. Consequently, it does not publish fixed need pools for LTCHs. In response to a rise in LTCH application over the last several years, the Agency has consistently voiced concerns about identification of the patients that appropriately comprise the LTCH patient population. Because of a lack of specific data from applicants with regard to the composition of LTCH patient populations, AHCA is not convinced that there is not an overlap between the LTCH patient populations and the population of patients served in other healthcare settings. In the absence of data identifying the LTCH patient population, AHCA has reached the conclusion that there are other options available to those patients targeted by the LTCH applicant, depending on such matters as physician preference. In denying Kindred's application, AHCA relied in part on reports issued to Congress annually by the Medicare Payment Advisory Committee (MedPAC), that discuss the placement of Medicare patients in appropriate post-acute settings. The June 2004 MedPAC report (MedPAC Report) states the following about LTCHs: Using qualitative and quantitative methods, we find that LTCHs' role is to provide post- acute care to a small number of medically complex patients. We also find that the supply of LTCHs is a strong predictor of their use and that acute hospitals and skilled nursing facilities are the principal alternatives to LTCHs. We find that, in general, LTCH patients cost Medicare more than similar patients using alternative settings but that if LTCH care is targeted to patients of the highest severity, the cost is comparable. AHCA Ex. 9, p. 121 (emphasis supplied.) The MedPAC Report, therefore, concludes that LTCHs should "be defined by facility and patient criteria that ensure that patients admitted to these facilities are medically complex and have a good chance of improvement." Id. There is some gross administrative data to support the hypothesis that SNFs are a substitute for LTCHs; the data is limited, however, for drawing such a conclusion definitively. This is because of the wide variation of patient conditions that may be represented by a single DRG. Dr. Muldoon explained this in his deposition with the example of DRG-475, which groups patients who were on life support for 96 hours: [P]atients . . . under DRG-475 . . . may be discharged in conditions that vary greatly, ranging from an alert, talking patient, no longer on life support, to a patient who is not on life support making no progress. There is no[] administrative data that describes patients at the time of their discharge and therefore the MedPAC analysis was just unable, from a pure data point of view, to determine why some of those patients went to a higher versus lower level of care. Kindred Ex. 2, pgs. 24-25. While the conclusion that there is overlap is suspect, so is the conclusion that there is no significant overlap. The data is insufficient to conclude that there are only an insignificant number of LTCH patients who are not appropriate for treatment in another post-acute care setting. The data is insufficient to make one judgment or another. The SAAR also concludes, based on a letter from the MedPAC Chairman, that LTCH patients cost Medicare more on average than patients in other settings. This conclusion was also critically analyzed by Dr. Muldoon: [The comment] is based on an analysis that is unable to differentiate patients within a DRG based on their severity at the time of discharge. The limitation on the DRG is that it is designed to describe the patient's need at the time of admission rather than discharge. So there is no way to tell whether someone is in good shape or poor shape at the time of discharge. So lumping them together and then observing how much they cost, depending on their site of care, is a very rough cut. Kindred Ex. 2, pgs. 27-28. In contrast, for patients at the extreme of severity and complexity there is a trend for lower cost of care for patients whose care included long-term acute care. Again, however, that the very sickest patients may be treated at a cost in an LTCH comparable to the cost in the short-term hospital does not demonstrate that there are patients who would be admitted to an LTCH at an acuity level not appropriate for an LTCH. This latter category of patients, if it exists, would be treated less expensively in a short-term hospital or a non-LTCH post-acute care setting. Need Demonstration: the Applicant's Responsibility The Agency analyzes LTCH applications on a district basis1 but it does not provide a specific formula or methodology by rule for determining need for LTCH beds as it does with some other types of beds and health care services. Consequently, AHCA does not publish a fixed need pool for LTCH beds. Nor did AHCA provide Kindred with any policy upon which to determine need for LTCH beds. Florida Administrative Code Rule 59C- 1.008(2)(e) (the "Rule"), therefore, applies to Kindred's application: . . . If an agency need methodology does not exist for the proposed project: The Agency will provide to the applicant, if one exists, any policy upon which to determine need for the proposed beds or service. The applicant is not precluded from using other methodologies to compare and contrast with the agency policy. If not agency policy exist, the applicant will be responsible for demonstrating need through a needs assessment methodology which must include, at a minimum, consideration of the following topics, except when they are inconsistent with the applicable statutory and rule criteria: Population demographics and dynamics; Availability, utilization and quality of like services in the district, subdistrict or both; Medical treatment trends; and Market conditions. Application of the Rule Population Demographics and Dynamics In assessing an area's population and demographics for the purpose of evaluating LTCH need, special attention is paid to the elderly population. The bulk of LTCH patients are patients over the age of 65 and on Medicare. Elderly patients in need of LTCH services do not heal as quickly as younger patients, are more difficult to wean from a ventilator, and do not improve through rehabilitation as quickly so that they can be discharged from the hospital setting. There are more than 100,000 "seniors," those 65 and over, in Volusia County. Seniors account for more than 20 percent of the county's population; the national average is between 12 and 13 percent. Volusia County was projected to have a senior population of 485,000 out of a total county population of 1.8 million as of January 1, 2005. According to AHCA population data, over the next five years Volusia's elderly population is expected to grow by another 10 percent. Volusia also accounts for a disproportionate share of all of the seniors in District 4. Its senior population is almost 40 percent of the senior population in the district. Availability, Utilization and Quality of Like Services In evaluating the availability, utilization and quality of like services under the rule, Kindred points out that there are a significant number of short-term hospitals in Volusia County and a relatively large senior population but no LTCH in the county. The LTCHs to which Volusia County residents have access are either in Orlando or the two other LTCHs in District 4: Kindred North Florida and Specialty Jacksonville. Access for Volusia County residents or patients in short-term hospitals in Volusia County was described at hearing by Clarence Joseph Wurdock, Director of Market Planning at Kindred Health Care: Both of these distances [to Orlando and the Jacksonville area] are very substantial. Orlando is more than an hour away, drive time, and then the Jacksonville hospitals [Kindred North Florida and Specialty] are 70 to 80 miles away. * * * So as far as access goes, it's not that Volusia County does not have access. The question is whether it's reasonable access for the majority of people who would benefit from the services that we offer. And given the distances involved, it would be very hard to argue that the typical potential long-term hospital patient of Volusia County really has access. Yes, we do get patients at our hospital in Green Cove Springs [Kindred North Florida], a few of them do go to Jacksonville Specialty and some of them go to Orlando, but generally, our understanding is that these patients tend to be the most acute, the patients who really need this type of care so much that they're willing -- they or their families are willing to go great distances for their care. On the other hand, the majority of long-term hospital potential patients, patient who would benefit from our services, who are still spending a fair amount of time in the short-term hospitals, those patients are at that point where they're not willing, they or their families are not willing to go that far, so consequently they're remaining in the short-term hospital. So there's an access problem. Tr. 70-71 (emphasis supplied). Of the two "Jacksonville area" LTCHs, Kindred North Florida has been operating around 90 percent occupancy; Specialty, licensed for 107 beds, according to most recently available data at 56 percent and for some time at various levels all below 60 percent. As Kindred concedes, reasonableness of access is a judgment call. See Kindred's Proposed Recommended Order, p. 20. Contrary to Kindred's present claim of "no reasonable access," Kindred North Florida indicated two years before the hearing that Volusia County patients had access in the District to LTCH services. See paragraphs 69 and 70, below. Relevant data has not changed in the two years between Kindred North Florida's statement and the final hearing in this case. A map in Kindred's CON application identifies the location of five short-term hospitals in Volusia County. The two largest (Halifax Medical Center and Florida Hospital-Ormond) are within two to five miles of Kindred's proposed location. Kindred's CON application contained letters of support from the CEOs of Halifax Community Health Systems and Florida Hospital Deland. Both hospital CEOs strongly support Kindred's application as a source of continued inpatient care for their medically complex patients. There were a number of letters of support in the application from Volusia physicians who have referred patients to Kindred North Florida in the past, and are familiar with Kindred's services and abilities. Medical Trends As to medical trends, as found earlier, LTCHs are recognized as a legitimate part of the health care continuum by the federal government. Medicare's PPS provides reimbursement for LTCHs under their own discrete set of DRGs so that reimbursement rates are different for LTCHs from short-term hospitals. LTCHs supplement acute care following the short-term hospital stay and they are complementary to SNFs and other post- acute care providers. The trend is for LTCHs to be increasingly used to meet the needs of patients in other settings who for a variety of reasons are better served in LTCHs. Market Conditions Market conditions do not favor the application. The occupancy rate overall in the District indicates that beds are available. Of the two "Jacksonville area" LTCHs, Specialty has had an occupancy rate below 60 percent. According to "data over the past few years . . . [it has] been operating at that level for some period of time."2 (Tr. 73). It is reasonable to assume that Volusia County patients in need of LTCH services and their families, no matter how inconvenient or what hardship may be entailed, will seek admission to the existing LTCHs in the District or to Orange County facilities if LTCH services are truly needed and valued. Other changes in the market that have occurred in the last several years also diminish Kindred's case. Besides approval to Kindred-North Florida to add another 20 beds at its facility in Clay County, additional beds can now be added by existing LTCH facilities at will. These include both the Kindred-North Florida facility and the Specialty facility. Kindred's claim of favorable market conditions is undercut, moreover, by recent objections to two other District 4 LTCH applications on the basis that there was no need in District 4, and the implication, if not direct statement, that there is no access problems for Volusia County residents in need of LTCH services. In a letter on Kindred Healthcare letterhead, dated April 12, 2004, Mr. Wurdock wrote: On behalf of Kindred Hospital North Florida, this letter is submitted in opposition to the Certificate of Need application (action number 9752) filed by Select Specialty Hospital - Duval, Inc. to establish a long- term acute care hospital of up to 40 beds at Shands-Jacksonville Medical Center. Kindred Hospital North Florida has consistently provided high quality long-term acute care in District 4 for many years. Approval of an application for an additional long term hospital in District 4 will have a significantly adverse impact on the future of Kindred Hospital North Florida and will result in a wasteful duplication of services in District 4. In January of 2004, the Agency for Health Care Administration (AHCA) granted Kindred Hospital North Florida a Certificate of Need to add 20 beds, increasing our total offering to 80 beds and enhancing our capacity to serve the residents of District 4. Including this bed increase, the long- term acute care occupancy of District 4 is approximately 59 percent. Utilizing existing providers is the most cost- effective option for the district, thus eliminating any duplication of services and minimizing additional start-up costs. The occupancies of existing providers in the district clearly indicate there is not a need for an additional long-term acute care hospital in District 4. AHCA Ex. 4, page 1 (emphasis supplied). Less than six months earlier, Mr. Simpson in a letter dated October 31, 2003, on Kindred Hospital North Florida letterhead, objected to a Volusia County LTCH CON application: On behalf of Kindred Hospital North Florida, I submit this letter in opposition to the Certificate of Need application (action number 9706) filed by SemperCare of Volusia, Inc. to establish a long-term acute care hospital of up to 50 beds at Florida Hospital Oceanside. Kindred Hospital North Florida has been providing high-quality long-term acute care in District 4, including many patients in Volusia Count, for the past nine years. Approval of an application for an additional hospital in District 4 will have a significant adverse impact on the future of Kindred Hospital North Florida and will result in a wasteful duplication of services in District 4. In December 2002, the Agency for Health Care Administration (AHCA) granted Kindred Hospital North Florida with preliminary approval to add 20 beds, increasing our total offering to 80 beds and enhancing our capacity to serve the residents of District 4. Including this bed increase, the long- term acute care occupancy of District 4 would be approximately 59 percent (Kindred Hospital North Florida: 68 percent and Specialty Hospital Jacksonville: 52 percent - Florida Hospital Bed Service Utilization by District, July 2003). Utilizing the existing providers is the most cost effective option for the district, thus eliminating any duplication of services and minimizing additional start-up costs that are ultimately passed on to the consumer. The occupancies of existing providers in the district clearly indicate there is not a need for an additional long-term acute care hospital in District 4. Kindred Hospital North Florida has a strong working relationship with hospitals in Volusia County. In 2002, approximately 26 percent of our patients were referred from hospitals in Volusia County. AHCA Ex. 5 (emphasis supplied). The evidence, as a whole, in this proceeding supports the claims made by Kindred North Florida in the two letters. Data has not changed significantly, moreover, since the letters were written. By way of explanation of its earlier position, Kindred pointed out that at the time of the submission of the letter opposing the establishment of a Volusia County LTCH, neither it nor Kindred North Florida had conducted a detailed need analysis for Volusia County. A need analysis conducted subsequent to the statement of opposition to a Volusia County LTCH is presented in the CON application in this proceeding. It includes Kindred's need methodology. Kindred's Need Methodology The need methodology employed by Kindred is a variation of commonly used and accepted methodologies3 in the LTCH industry for determining need in a proposed service area. In this case the proposed service area is Volusia County. The methodology provides a multi-step process. It begins with the examination of AHCA discharge data for short- term hospitals. Kindred began the process in this case, therefore, with identification of short term hospital patients in Volusia County and limited this population to Florida citizens. The methodology incorporates two assumptions: one, that patients will require five days to transfer from the short term hospital after the geometric mean of the length of stay (GMLOS) for the patient's DRG and that the patient will be in the LTCH for at least 10 days. The result of the assumptions in Kindred's calculation in this case is that the potential pool of Volusia County LTCH patients "had to have exceeded their [GMLOS] by more than two weeks." Tr. 88. Application of the assumptions to AHCA's database, therefore, arrived at a population "that could reasonably be expected to be long-term hospital admissions." Tr. 88. For that population, a population that exceeded the GMLOS by more than two weeks, the Kindred summed up the number of days the population spent in the hospital in excess of the GMLOS plus five days as required by the methodology. This sum equaled potential LTCH days. This grand total of days was divided by the number of days in a year, 365, as called for by the methodology. The calculation for the twelve month period ending in March of 2004 yielded an average daily census of 40.8. The methodology further considered Volusia County patients receiving services at Kindred North Florida. When they were added into the calculation, the average daily census of potential LTCH patients from Volusia County increased to 47.2. The methodology includes the impact of future population growth at an 8.2 percent rate. This yielded an additional average daily census of 3.9 so that the potential average daily census increased to 51.1. As a final step, the methodology assumes operation of a new LTCH at an 85 percent occupancy rate. Application of this assumption yielded a bed need in Volusia County of 60 beds. The methodology assumes that 100 percent of the eligible pool of potential LTCH patients are going to be referred to an LTCH. Kindred concedes that the actual referral rate is likely to be less than 100 percent and certainly so in the beginning. Kindred's application, therefore, provides a ramp up period. Kindred believes furthermore that the less than 100 percent referral rate is offset by patients that do not come from acute care hospitals. Application of the methodology in this case is flawed. It is also not applicable legally to this CON case. The methodology is flawed in this case first because it does not account for beds available elsewhere in the District. Kindred postulated that Specialty's sub-60 percent occupancy rates are due to Specialty's decision to limit utilization of the number of beds far below the licensed capacity for beds. This assertion by Kindred is rejected as unsupported by adequate proof. See endnote 2, below. The methodology, moreover, determines need generated solely by and within Volusia County, one county in District 4, a multi-county district. Consistent with the CON Law, AHCA approaches LTCH need on a district-wide basis. Methodologies for LTCH bed need on a county basis in a multi-county district have been held by AHCA to be invalid to legally establish need for CON purposes. See Select Specialty Hospital-Marion, Inc. vs Agency for Health Care Administration, Case No. 04-0444CON (DOAH October 31, 2005, AHCA December 21, 2005). Competition Kindred concedes that "[h]aving an LTCH in Volusia County would not foster competition in the traditional sense." Kindred's Proposed Recommended Order, p. 33. The Agency did not intend to give considerations of competition much weight in this proceeding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Agency for Health Care Administration deny CON application No. 9831 filed by Kindred Hospitals East, LLC. DONE AND ENTERED this 20th day of January, 2006, in Tallahassee, Leon County, Florida. S DAVID M. MALONEY 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 20th day of January, 2006.
Findings Of Fact The Petitioner, International Humanity Health Services, Inc., is a former Florida Medicaid provider, having been previously issued provider number 0270687-00. Dr. Imo John Akpaeti is the owner of International Humanity Health Services, Inc., and has been the owner at all material times. At all material times, Dr. Imo John Akpaeti has also had an ownership interest in Our Lady Health Care Services, which is another former Florida Medicaid provider, having been previously issued provider number 0278564. The Respondent, the Department of Health and Rehabilitative Services, is the state agency which administers the Florida Medicaid program pursuant to Sections 409.901 through 409.920, Florida Statutes (1991). Gary J. Clark, the Assistant Secretary for Medicaid, is responsible for the overall direction and administration of the Medicaid program in the State of Florida. The Medicaid Fraud Control Unit of the Auditor General's Office is the agency charged with the responsibilty for investigating fraud in the Florida Medicaid program pursuant to Section 409.920, Florida Statutes (1991). By emergency order issued on May 31, 1990, the Petitioner, International Humanity Health Services, Inc., was terminated for cause from participation in the Medicaid program "for violation of federal and state laws and regulations respecting the Medicaid program." The violations cited in the emergency order included billing for services that were not provided, submitting false billings for unperformed services, and receiving payments the provider was not entitled to receive. The emergency order of May 31, 1990, was never appealed or set aside and it continues to be in effect. By letter dated May 7, 1992, Dr. Imo John Akpaeti requested that International Humanity Health Services, Inc., be reinstated as a Medicaid provider. By letter dated June 3, 1992, Mr. Gary J. Clarke advised Dr. Akpaeti that the Department of Health and Rehabilitative Services intended to deny the request for reinstatement of International Humanity Health Services, Inc. The denial letter of June 3, 1992, included the following reasons: This office has been advised that International Humanity Health Services, Inc., as well as yourself, are under criminal investigation. In addition, this office is also aware that a number of investigations and administrative reviews are ongoing regarding various home health care agencies with which you are associated. In view of these circumstances, it would not be prudent for this office to allow your participation in the Medicaid program until these matters have been resolved. Prior to issuance of the denial letter, the Department of Health and Rehabilitative Services had been notified by the Director of the Medicaid Fraud Control Unit that a criminal investigation was being conducted into the activities of Our Lady Health Care Services, provider number 0278564. Records of International Humanity Health Services, Inc., were seized by agents of the Medicaid Fraud Control Unit in 1990, pursuant to warrant. Those records have since been forwarded to a U.S. Attorney and are now being considered by a federal grand jury. Records of Our Lady Health Care Services were also seized by agents of the Medicaid Fraud Control Unit pursuant to warrant. None of the seized records have been returned to either of the entitites from which they were originally seized. Both International Humanity Health Services, Inc., and Our Lady Health Care Services are the subjects of criminal investigations.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health and Rehabilitative Services issue a Final Order in this case denying the Petitioner's application for reinstatement as an active Medicaid provider and denying all other relief requested by the Petitioner. DONE AND ENTERED this 9th day of February, 1993, in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of February, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-3698 The following are my specific rulings on all proposed findings of fact submitted by both parties. Proposed findings submitted by Petitioner: The Petitioner's proposed recommended order consists of a one-page document in which it asserts, in paragraphs identified as A, B, C, and D, four things it believes the Petitioner established at the hearing. Those four paragraphs are addressed first. Paragraph A: This is rejected as constituting a proposed conclusion of law, rather than a proposed finding of fact. Further, the proposed conclusion relates to a matter which is not at issue in this case. Paragraph B: This is rejected as constituting a proposed conclusion of law, rather than a proposed finding of fact. Further, the proposed conclusion relates to a matter which is not at issue in this case. Paragraph C: This is rejected as constituting a proposed conclusion of law, rather than a proposed finding of fact. Further, the proposed conclusion relates to a matter which is not at issue in this case. Paragraph D: This paragraph is a mixed assertion of fact and conclusion of law. To the extent it is intended as an assertion of fact, it is rejected as contrary to the greater weight of the evidence. In the second portion of its proposed recommended order, the Petitioner asserts, in paragraphs identified as A, B, and C, three things it believes the Respondent failed to establish. Those three paragraphs are addressed as follows: Paragraph A: This is rejected as contrary to the greater weight of the evidence. Paragraph B: This paragraph is literally correct, but it should be noted that the greater weight of the evidence establishes that as of the time of the formal hearing, a criminal investigation was in progress regarding the billing practices of Our Lady Health Care Services, provider number 0278564. Paragraph C: This paragraph is literally correct, but is irrelevant to the disposition of this case. Proposed findings submitted by Respondent: Paragraphs 1 through 9: Accepted in Substance. Paragraphs 10 and 11: Accepted that at all relevant times Dr. Akpaeti had an ownership interest in Our Lady Health Care Services. The remainder of these paragraphs is rejected as subordinate and unnecessary evidentiary details. Paragraphs 12 through 15: Accepted in substance. COPIES FURNISHED: Dr. Imo John Akpaeti International Humanity Health Services, Inc. 561 Northeast 79th Street Suite 233 Miami, Florida 33138 Gordon B. Scott, Esquire Senior Attorney HRS Medicaid Office 1317 Winewood Boulevard Building 6, Room 234 Tallahassee, Florida 32399-0700 Robert L. Powell, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Slye, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue At issue is whether Aiymani Arlynne Emmanuelli Alicea, a minor, qualifies for coverage under the Florida Birth-Related Neurological Injury Compensation Plan (Plan).
Findings Of Fact Preliminary findings Vanessa M. Alicea is the natural mother and guardian of Aiymani Arlynne Emmanuelli Alicea, a minor. Aiymani was born a live infant on July 20, 2002, at Orange Park Medical Center, a hospital located in Orange Park, Florida, and her birth weight exceeded 2,500 grams. The physician providing obstetrical services at Aiymani's birth was R. Roland Powers, M.D., who, at all times material hereto, was a "participating physician" in the Florida Birth-Related Neurological Injury Compensation Plan, as defined by Section 766.302(7), Florida Statutes. Coverage under the Plan Pertinent to this case, coverage is afforded by the Plan for infants who suffer a "birth-related neurological injury," defined as an "injury to the brain . . . caused by oxygen deprivation . . . occurring in the course of labor, delivery, or resuscitation in the immediate postdelivery period in a hospital which renders the infant permanently and substantially mentally and physically impaired."1 § 766.302(2), Fla. Stat. See also §§ 766.309 and 766.31, Fla. Stat. Here, the parties have stipulated, and the proof is otherwise compelling, that Aiymani is permanently and substantially mentally and physically impaired. What remains to resolve is whether Aiymani's impairments resulted from an "injury to the brain . . . caused by oxygen deprivation . . . occurring in the course of labor, delivery, or resuscitation in the immediate postdelivery period," as required for coverage under the Plan. Aiymani's birth and immediate postnatal course At or about 6:30 a.m., July 20, 2002, Ms. Alicea, with an estimated delivery date of July 15, 2002, and the fetus at 40 5/7 weeks' gestation, was admitted to Orange Park Medical Center, for induction of labor. At the time, it was noted that during her prenatal care (on June 18, 2002), Ms. Alicea had tested positive for Group B Streptococcus (GBS) in the vagina, and had been provided antibiotic treatment. Otherwise, her prenatal course was without apparent complication. Upon admission, Ms. Alicea's membranes were intact; blood pressure was noted as 117/76; mild contractions were documented, at a frequency of 3-6 minutes, with a duration of 50-60 seconds; vaginal examination revealed the cervix at 1 centimeter dilation, 70 percent effacement, and the fetus at -2 station; and fetal monitoring revealed a reassuring fetal heart rate, with a baseline in the 140-beat per minute range. An IV was started at 7:20 a.m., antibiotics (Ampicillin) were started at 8:19 a.m., and Pitocin induction was started at 8:40 a.m. Ms. Alicea's labor slowly progressed, and at 11:12 a.m., her membranes spontaneously ruptured, with a small amount of clear fluid noted. At the time, vaginal examination revealed the cervix at 3 centimeters dilation, 80 percent effacement, and the fetus at -1 station. Mild contractions continued to be documented, at a frequency of 2-6 minutes, with a duration of 50-60 seconds. However, beginning at 11:40 a.m., her contractions were noted as moderate, at a frequency of 2-4 minutes, with a duration of 60 seconds, and fetal monitoring continued to reveal a reassuring fetal heart rate, with a baseline in the 130 to 140-beat per minute range. Nevertheless, an occasional decrease in long-term variability was noted, as well as "subtle" late decelerations. At 1:21 p.m., an epidural anesthesia was started; moderate contractions continued, at a frequency of 1.5-5 minutes, with a duration of 50-60 seconds; and by 3:41 p.m., vaginal examination revealed the cervix at 4 centimeters, 80 percent effacement, and the fetus at -2 station. In the interim, at 2:02 p.m., postepidural hypotension was noted, and addressed intravenously with ephedrine (at 2:02 p.m., 2:18 p.m., and 2:24 p.m.). Fetal monitoring continued to appear reassuring, with a baseline in the 130 to 140/140 to 150-beat per minute range. However, occasional decreases in long-term variability were noted, and addressed with position change, oxygen by mask, and IV bolus. Ms. Alicea's labor continued, with moderate contractions, and at 4:08 p.m., vaginal examination revealed the cervix at 5 centimeters, 80 percent effacement, and the fetus at -1 to -2 station. At the time, while fetal monitoring was otherwise reassuring (with a baseline of 140-150 beats per minute, and short and long-term variability present), variable decelerations were documented. Amnioinfusion, to relieve umbilical cord compression, was started at 4:26 p.m., but variable decelerations persisted; by 5:53 p.m., long-term variability had decreased; by 6:08 p.m., accelerations were no longer documented; and at 6:40 p.m., variable late decelerations were noted. In the interim, maternal blood pressure had fallen, fetal heart rate baseline had risen to 150-beats per minute, and at 6:14 p.m., vaginal examination revealed an arrest of active labor (with the cervix at 5 centimeters, 90 percent effacement, and the fetus at -2 station), and at 6:40 p.m., fetal heart rate was noted as "150's - 170's" beats per minute. At the time, Pitocin was discontinued, and intervention included position change, oxygen by mask, and IV bolus. According to the labor and delivery records, at 6:44 p.m., Dr. Powers was called to come to labor and delivery, and notified of fetal tachycardia, decreased long-term variability, late decelerations and low maternal blood pressure (hypotension). On his orders, Ms. Alicea was given an IV bolus, terbutaline, and ephedrine, and Ms. Alicea was taken to the operating room for stat cesarean section, secondary to arrest of active labor and nonreassuring fetal rhythm. Notably, at 6:57 p.m., a portable external fetal monitor was attached, and at 7:00 p.m., revealed a fetal heart rate as "110's - 120's," beats per minute, with accelerations up to "140's for 50 seconds." Ms. Alicea was noted in the operating room at 7:05 p.m., surgery started at 7:15 p.m., and Aiymani was delivered by cesarean section at 7:20 p.m., with Apgar scores of 8 and 9, or 7 and 9, depending on which records are consulted, at one and five minutes respectively.2 Aiymani's delivery was described in Dr. Powers' Operative Report, as follows: . . . the fetal vertex [was] delivered with a vacuum extractor. The oropharynx and nasopharynx were bulb suctioned after nuchal cord x1 was reduced. (This was a loose nuchal cord.) The infant was placed out of the field where it was continued to be bulb suctioned with clear fluid noted. Cord was doubly clamped and cut. The infant was handed to the nurse practitioner for further care and treatment. Cord blood and cord pH obtained . . . . According to the medical records, resuscitation efforts included blowby oxygen, as well as bulb and deep suctioning, and cord pH (arterial) was reported as 7.089, and below the reference range of 7.1 to 7.4. Following delivery, Aiymani was transferred to the newborn nursery, where she was admitted at 7:30 p.m., and remained until she was discharged with her mother at 8:00 p.m., July 22, 2002. Initial examination on admission to the nursery was grossly normal, and her subsequent newborn course was uncomplicated and without evidence of neurologic compromise. Aiymani's subsequent development Following discharge from Orange Park Medical Center, Aiymani's development was without apparent complication until November 20, 2002, when, at 4 months of age, Ms. Alicea voiced concerns to Aiymani's pediatrician (Daya Patel, M.D.) that Aiymani was not holding her head up and was not bearing weight on her legs.3 Dr. Patel diagnosed generalized hypotonia and motor developmental delay, and referred Aiymani for physical therapy. However, no diagnostic workup was undertaken at this point. On February 20, 2003, Aiymani was admitted to Wolfson Children's Hospital on referral from her pediatrician for difficulty breathing. The Admission Admitting Note concluded: IMPRESSION: Respiratory infection with mild wheezing. Severe generalized hypotonia of prenatal onset. Her wheezing seems to not require much in the way of treatment. Since she is on day 3, even if this is an RSV infection she seems to be handling it reasonably well. On the other hand, given her weakness and hypotonia, she will have to be watched more carefully. As far as the hypotonia, it is severe and early onset without detectable reflexes, the most likely cause would be spinal muscular atrophy Type I. Other possibilities would be severe cerebral palsy, myotonic dystrophy, hypothyroidism, congenital syndrome such as Prader-Willi or major CNS malformations. Primary muscle disease is possible as well as diseases of neuromuscular junction. We will involve Neurology early in this admission in order to be efficient in finding the diagnosis. We will do some basic labs and check the neonatal screening for thyroid problems. Other consultations will be obtained as suggested by Neurology. As proposed, neurology was involved early in the admission when Daniel Shanks, M.D., of Nemours Children's Clinic, was called for consultation. Dr. Shanks evaluated Aiymani on February 21, 2003, and reported the results of his consultation, as follows: REASON FOR CONSULTATION: Evaluation of hypotnoia Mother reports that the decrease in overall movement pattern may date back to the third trimester, when she was poorly active in utero. They have been particularly concerned over the last 2 to 3 months with poor head control, poor movement patterns, and very prominent hypotonia. Her mother does report that perhaps she is a little more active over the last couple of months. She has been in physical therapy through Nemours in Orange park. No diagnostic workup has been undertaken to this point. She cannot roll. She can left her legs against gravity to a limited degree. She has had good p.o. feeding. She has had no significant respiratory events other than the present URI symptoms, for which she is admitted. She has not been critically ill or hospitalized. She is the 7 pound 4 ounce product of a term infancy [sic], that was generally unremarkable, other than the decreased movements. She was discharged by 2 days of age, and has had no significant hospitalizations, surgeries, or serious injuries. * * * FAMILY HISTORY: There is no history of neurologic, neurodevelopmental or neuromuscular abnormalities, and specifically no history of infants with severe hypotonia. REVIEW OF SYSTEMS: Generally unremarkable, other than her low tone and movement patterns. She is alert, interactive. There are no constitutional, HEENT, cardiac, respiratory, GI, GU, musculoskeletal, hematologic, endocrinologic, or immunologic concerns. * * * On physical examination, height 67 cm; weight 8.15 kg; head circumference 42.5 cm (50th percentile); weight for height is approximately 90th percentile. Generally, she is a well appearing, alert, socially interactive infant. She lays in a very hypotonic frog-leg posture. Anterior fontanelle is 1 x 2 cm and flat. Cranium appears normal. Neck is supple. There are no chest deformities. Abdomen is benign. Extremities have full range of motion, no deformities or asymmetries, and in fact range of motion is mildly exaggerated due to the hypotonia. Back is without midline lesions, and no significant neurocutaneous lesions are noted. NEUROLOGIC EXAM: She is visually attentive and socially interactive. Cranial nerves: Pupils equal, round and reactive to light. Red reflexes are intact bilaterally. Extraocular movements are full and conjugate. Facial muscle movements are symmetric. She responds to auditory stimulation. There are no overt oral motor abnormalities and no fasciculations are noted in the tongue. Motor exam shows profound hypotonia and apparent weakness. She has very minimal anti-gravity movement. She has little movement when trying to pull her extremity away from a noxious stimulus. She is areflexic. Sensory exam appears grossly intact, and there are no adventitial movements. She has essentially no head control and negative support reflex. She is hypotonic both truncally and peripherally. She has limited mobility, in that she can do very little anti-gravity, and has no ability to get from one point to another. IMPRESSION: Likely profound hypotonia due to neuromuscular disease and anterior horn cell disease would be statistically the most likely. One cannot exclude other neuromuscular processes, however. I think it would be reasonable to send SMN DNA test to Athena, as well as to obtain baseline CPK and a nerve conduction study. Further evaluations can be based on these. If they are unrevealing, then proceeding to muscle biopsy and other metabolic work-up will be considered. An MR Brain scan of February 21, 2003, concluded: FINDINGS: Midline structures of corpus callosum, pituitary gland and cerebellar vermis are within normal limits. Mega cisterna magna is present. There is no mass effect or midline shift. The ventricles have a slightly undulating contour, particularly involving the bodies of the lateral ventricles. The periventricular white matter volume is decreased. Because of the patient's age of 7 months, bright signal is seen on the T2-weighted images in the periventricular and subcortical white matter, but this is expected for the degree of myelination at this age. It is difficult, therefore, to evaluate for true signal abnormality or normal lack of myelination at this age. The decreased white matter volume may represent periventricular leukomalacia. Imaging followup when the patient is 2 years of age or older is suggested to evaluate for periventricular white matter signal abnormality. Mildly prominent extra-axial CSF spaces adjacent to the frontal and parietal lobes bilaterally is a normal finding for the patient's age . . . . IMPRESSION: Abnormal contour of the bodies of the lateral ventricles with decrease in volume of periventricular white matter as discussed above. Finding may be secondary to periventricular leukomalacia, although presence of signal abnormality in the periventricular white matter is difficult to assess at this age due to normal bright signal in the periventricular white matter from lack of myelination. Imaging followup is recommended when the patient is 2 years of age to determine presence of abnormal periventricular white matter signal.[4] Mega cisterna magna. No other structional anomalies are identified. The myelination pattern of the white matter is compatible with the patient's age of 7 months. A motor and sensory nerve conduction study of February 25, 2003, was reported normal for Aiymani's age, with "[n]o evidence of neuropathy at the sites tested." Aiymani was seen at Nemours Children's Clinic for follow-up by Dr. Shanks on March 18, 2003. At the time, Dr. Shanks noted the following: PE: . . . GENERAL APPEARANCE: alert, healthy, not in distress. HEAD: atraumatic, normorcephalic. NECK: supple with full range of motion. EXTREMITIES: no asymmetries or deformities. NEUROLOGICAL EXAM: On neurological exam, . . . muscle tone was severely decreased in extremities and trunk. There is little antigravity movement and I suspect diminished strength. Deep tendon reflexes were absent bilaterally. Sensation was normal to light touch. IMPRESSION: Congenital hypotonia which is significant and appears associated with weakness. Neuromuscular hypotonia which most likely represents anterior horn cell disease. Unfortunately, the critical test is not paid by Medicaid. Athena (the only lab available for the test) is to be in touch with the family to see if arrangements can be made. Alternatively, we may have to proceed with muscle biopsy as another potentially confirmatory test. I will see her back when this is settled. She should continue with PT and oral feeding competence will need to be monitored. Aiymani continued to be followed at Nemours Children's Clinic by neurology (Dr. Shanks, and following his retirement, Dr. David Hammond), genetics (Dr. Pamela Arn), and multiple Nemours sub-specialists. However, despite multiple studies, no etiology or unifying diagnosis for Aiymani's severe hypotonia and developmental delay was identified, and at no time did her treating physicians postulate that a likely cause for Aiymani's neurologic impairments was a brain injury (hypoxic or otherwise) suffered during the course of birth. The parties' experts Apart from the medical records related to Aiymani's birth and subsequent development, salient portions of which have been addressed supra, the parties offered the opinions of three physicians to address the likely etiology of Aiymani's neurologic impairment. These physicians' statements were brief, and in written format. (Petitioner's Exhibit 1; Respondent's Exhibits 12-16). Offered on behalf of Petitioner was the statement of Dr. James O'Leary, a physician board-certified in obstetrics and gynecology, and maternal-fetal medicine. Dr. O'Leary wrote: I have evaluated the medical care rendered to Vanessa Alicea and her 7 pound, 4 ounce daughter. At this time, I am prepared to provide you with my opinions concerning the relationship of that care to the adverse outcome. These opinions are based on the standard care applicable at the time the events in this case occurred, namely 2002 and they are expressed in terms of a reasonable degree of medical certainty. It is my opinion that the permanent neurologic damage sustained by her daughter, Aiymani, which left her brain damaged, occurred during the course of labor, on July 20, 2002, because of the delay in proper treatment of postepidural hypotension and fetal distress which complicated her labor. In addition, Dr. Powers should have performed an emergency cesarean section much sooner. The prenatal care was within accepted standards of care. The ultrasound examinations have excluded any possible intrauterine causes of brain damage. The labor progress was not normal. The rate of dilation was abnormal. There was also an arrest of dilation at 5 cm/minus two station at 6:14 p.m. based upon SVE documentation. Review of the fetal monitoring tracings reveals evidence of late decelerations and an increasing baseline heart rate, variable decelerations and a decrease in the number of accelerations. The standard of care required that the persistent hypotensive episode be rapidly treated and the Pitocin stopped. The failure to do this led to worsening of the fetal heart rate abnormalities, and the ultimate ischemic brain damage from persistent utero-placental insufficiency. Had the physician and nurse midwife properly treated the hypotension and stopped the Pitocin, the fetal distress would have resolved and Aiymani's neurological injuries would not have occurred. In contrast, Dr. Donald Willis, also an expert in obstetrics and maternal-fetal medicine, whose observations were offered on behalf of Respondent, wrote: I have reviewed the medical records for the above named individual. The mother was a 20 year old admitted for induction of labor due to post dates. Cesarean delivery was done for a non-reassuring fetal heart rate pattern and failure to progress. Amniotic fluid was clear. The birth weight was 3,290 grams. The newborn was not depressed. Apgar scores were 8/9. The baby was described as "term, pink, alert, strong cry." The newborn hospital course was uncomplicated and the baby was discharged home with the mother at 48 hours. There was no apparent Obstetrical incident that led to this child's injury. Stated otherwise, Dr. Willis concluded: As such; it is my opinion that there was not an injury to the brain or spinal cord caused by oxygen deprivation or mechanical injury occurring in the course of labor, delivery, or resuscitation in the immediate postdelivery period in a hospital as required by Section 766.302(2), Florida Statutes, for a claim to qualify for compensation under Sections 766.301 through 766.316, Florida Statutes. Finally, Dr. Michael Duchowny, a physician board- certified in neurology with special competence in child neurology, and associated with Miami Children's Hospital, offered observations on behalf of Respondent. Notably, Dr. Duchowny examined Aiymani on January 14, 2004, and on October 19, 2005, and based on the results of his examinations and review of the medical records, was of the opinion that Aiymani suffered a substantial mental and physical impairment. However, similar to Aiymani's treating physicians at Nemours Children's Clinic, Dr. Duchowny was of the opinion that Aiymani's neurologic impairments were most likely developmentally based, and not birth-related. Dr. Duchowny concluded: . . . medical records provide [] no support for believing that Aiymani's neurologic impairments resulted from either oxygen deprivation or mechanical injury at the time of birth. [Moreover,] I believe that Aiymani most likely has ataxic cerebral palsy which was acquired prenatally and therefore do not believe that she is compensable under the NICA statute. The likely etiology of Aiymani's neurologic impairments Given the record, it must be resolved that the cause of Aiymani's neurologic impairments, while yet unidentified, was most likely developmentally based, as opposed to birth-related. In so concluding, it is noted that the medical records reveal that Aiymani was not depressed at birth and her immediate postnatal course was uneventful. Moreover, among the physicians who have examined or treated Aiymani, and were well qualified to address the cause of her impairments, there appears to be no disagreement that the likely cause of her impairments was developmentally based, and not birth-related. Consequently, Dr. O'Leary's opinion regarding causation is rejected, as unlikely. Moreover, given the studies that have been done to identify the cause of Aiymani's impairments, as well as the conclusion that the cause of her impairments was most likely developmentally based, Dr. O'Leary's observation that "[t]he [prenatal] ultrasound examinations have excluded any possible intrauterine cause of brain damage" is less than persuasive.
Findings Of Fact The Parties. The Respondent, the Department of Health and Rehabilitative Services, is a state agency charged with the responsibility for administering Florida's Medicaid program pursuant to Chapter 409, Florida Statutes. The Petitioner, Conval-Care, Inc., is a home health care agency of the State of Florida. Conval Care was created by Inez Browning in 1983. Conval Care is a Small Business Party. Conval Care has never employed twenty-five or more full-time employees. Conval Care's net worth has never equaled or exceeded $2,000,000.00. Medicaid Services Provided by Conval Care to Adult Congregate Living Facilities. In 1988, Conval Care qualified as a provider of medical services reimbursable pursuant to Florida's Medicaid program. Subsequent to becoming a Florida Medicaid provider, Conval Care began providing home health services to, among others, residents of three adult congregate living facilities (hereinafter referred to as an "ACLF"). Conval Care received Medicaid reimbursement for the services it provided to residents of the three ACLF's it serviced. Department Concerns About Services Provided to Residents of ACLFs by Home Health Care Agencies. Prior to May 1, 1991, various employees of the Department discussed various issues concerning the appropriateness of Medicaid reimbursement for services provided by home health care agencies to residents of an ACLF. At no time relevant to this proceeding did the Department conclude that under no circumstances would it be appropriate to make Medicaid reimbursements for services provided by a home health care agency to residents of an ACLF. To the extent that the Department had unresolved legal questions concerning the appropriateness of paying Medicaid reimbursements for services provided by a home health care agency to residents of an ACLF, it would not be reasonable for it to take action against Conval Care, or any other home health agency, based upon those unresolved legal questions. The evidence in this case, however, failed to prove that the actions which the Department ultimately took against Conval Care were based upon unresolved legal questions being discussed by the Department. The Department's Medicaid Program Integrity Office. The Department's Medicaid Program Integrity office is charged with responsibility within the Department for overseeing the integrity of the Florida Medicaid program. See Section 409.206, Florida Statutes (1989). The Department's Medicaid Program Integrity office carries out the Department's responsibility for review of the Medicaid program, including fraud investigations. Rule 10C-7.060(3), Florida Administrative Code, provides the following: Any suspected criminal violation or fraudulent activity by any provider shall be referred by the department to the Medicaid Fraud Control Unit in the Office of the Auditor General for investigation. Rule 10C-7.060(5), Florida Administrative Code, provides the following: (5) The determination that a violation has occurred is a function of the Medicaid Program Integrity Office. The determination shall be based upon investigations completed by that office or relevant information from other offices and agencies. Based upon Rule 10C-7.060(5), Florida Administrative Code, the Department is charged with the ultimate responsibility for determining if a violation of Medicaid law has occurred. Therefore, it would be unreasonable for the Department to take action against a Medicaid provider based upon the conclusions of any other agency without independent evaluation by the Department. Rule 10C-7.060(5), Florida Administrative Code, also requires that the Department, in determining whether a violation of Medicaid law has occurred, base its decision on its own investigation or "relevant information from other offices and agencies." The Department is, therefore, required to consider information provided to it by the Medicaid Fraud Control Unit of the Office of the Auditor General. Rule 10C-7.060(4), Florida Administrative Code, provides the circumstances pursuant to which the Medicaid Program Integrity office may impose administrative sanctions on providers of Medicaid services in Florida. The specific administrative sanctions which may be imposed, and the procedures to be followed, in imposing sanctions are set out in Rule 10C-7.060, Florida Administrative Code. "Guidelines for Administrative Sanctions" are set out in Rule 10C-7.063, Florida Administrative Code. The Medicaid Fraud Control Unit. The Medicaid Fraud Control Unit (hereinafter referred to as "Medicaid Fraud"), is a part of the Florida Office of the Auditor General. See Section 409.2664, Florida Statutes (1989)(repealed effective June 5, 1991, Chapter 91- 282, Laws of Florida). Section 409.2664, Florida Statutes (1989), provided, in pertinent part, the following: . . . the Auditor General shall: Investigate the possible criminal violation of any applicable state law pertaining to fraud in the administration of the Medicaid program, the provision of medical assistance, or the activities of providers of health care under the state Medicaid program. . . . . Refer to the Department of Health and Rehabilitative Services all potential noncriminal abusive activities. Refer to the Department of Health and Rehabilitative Services for collection all instances of overpayment, discovered during the course of investigation, made to any providers of health care under the state Medicaid program. . . . . Pursuant to Section 409.2664, Florida Statutes, investigative reports prepared by Medicaid Fraud are routinely referred to the Department's Medicaid Program Integrity office. The Medicaid Program Integrity office routinely relies on investigative reports prepared by Medicaid Fraud. The Investigation of Conval Care. Ellen Williams, a medical health care program analyst for the Medicaid Program Integrity office, first became aware of Conval Care in January or February, 1990, while Ms. Williams was reviewing a "Provider Top 100 Report." A "Provider Top 100 Report" is a report prepared by the Department on a routine basis which lists the top 100 providers of Medicaid services based upon the amount of Medicaid funds a provider is paid. The Provider Top 100 Report reviewed by Ms. Williams in early 1990 listed Conval Care as the top home health care services' provider for the first time. Ms. Williams had not seen the name Conval Care before on the list. Ms. Williams was curious about why Conval Care had appeared on the list. Ms. Williams decided to look into the matter further. Ms. Williams subsequently learned that Medicaid Fraud was involved in an investigation of Conval Care. Ms. Williams, therefore, discontinued her investigation of Conval Care. Ms. Williams referred the matter to Medicaid Fraud in March, 1990, as contemplated by Section 409.2664, Florida Statutes, and Rule 10C-7.060(3), Florida Administrative Code. The May 1, 1991, Investigative Report. At some time after May 1, 1991, Ms. Williams received an unsigned Investigative Report dated May 1, 1991, from Medicaid Fraud (hereinafter referred to as the "Investigative Report"). Respondent's exhibit 1. The Investigative Report includes conclusions concerning various possible violations of Medicaid laws which may have been committed by Conval Care. In support of those alleged violations, the Investigative Report also includes fairly substantial factual bases for the violations. The evidence in this case failed to prove that the facts recited in the Investigative Report, if proved to be true, would not support a finding that Conval Care had committed serious violations of various Medicaid provisions. In particular, the Investigative Report concludes that Conval Care has served patients, who reside in and out of ACLFs, that were not "homebound" as required by the Medicaid providers' manual. The Investigative Report also concludes that Conval Care provided services which were rendered "while no valid signed physician's authorization was in effect . . . " as required by the Medicaid providers' manual. Further, the Investigative Report concludes that Conval Care provided services which were not "medically necessary". The facts relied upon by Medicaid Fraud to reach these conclusions are set out in the ten page Investigative Report. The Investigative Report concludes that Conval Care improperly received $591,082.00 from Medicaid for services to individuals (ACLF residents and non-ACLF residents). It also concludes that $241,582.00 of the $591,082.00 were improperly received for services that were rendered while no valid signed physician's authorization was in effect and the remaining $349,500.00 was improperly received for services that were not "medically necessary". The Department's Reliance on the Investigative Report. Based upon a review of the Investigative Report, Ms. Williams applied the provisions of Rule 10C-7.063, Florida Administrative Code, to determine the appropriate administrative sanction to be imposed on Conval Care. The weight of the evidence proved that the Department properly applied the provisions of Rule 10C-7.063, Florida Administrative Code. Based upon Ms. Williams determination of the appropriate administrative sanction to be applied to Conval Care, Ms. Williams prepared a draft of a letter which she recommended the Department send to Conval Care. The draft letter prepared by Ms. Williams and the Investigative Report were reviewed by appropriate officials of the Department. The draft letter was ultimately approved. Ms. Williams, and the Department's, only basis for the action the Department took against Conval Care was the Investigative Report. Ms. Williams also relied on an investigation of what appeared to be a similar home health care agency named Underhill Personnel Services (hereinafter referred to as "Underhill"). Underhill, another home health care agency, was providing home health care services to residents of ACLF's. The services being provided by Underhill were similar to the services reported in the Investigative Report. Ms. Williams, however, had no independent basis for concluding what services Conval Care was, or was not, providing to ACLF's except as reported in the Investigative Report. The Investigative Report was an interim report. The Department was informed in July, 1991, that Medicaid Fraud's investigation of Conval Care was still ongoing. The evidence failed to prove that the conclusions recited in the Investigative Report, however, were of an interim nature or that the Department should have waited to act on the facts related in the Investigative Report. The Termination Letter. The draft letter prepared by Ms. Williams and approved by the Department was dated May 20, 1991, was signed by John M. Whiddon as Chief of the Department's Medicaid Program Integrity office and was sent to Conval Care (hereinafter referred to as the "Termination Letter"). The Termination Letter informed Conval Care that its participation in the Medicaid program in Florida was being terminated "for violation of federal and state laws and regulations respecting the Medicaid program, effective on the date of your receipt of this letter, subject to your right of appeal as discussed below." The Termination Letter also informed Conval Care that the Department was seeking reimbursement of $591,082.00 in Medicaid funds paid to Conval Care which the Department believed were for services that did not constitute "home care" as defined in Section 11.3 of the Medicaid Home Health provider handbook. The Termination Letter further informed Conval Care of the following: $349,500.00 (of the $591,092.00) had been paid to Conval Care for services that were not "medically necessary" as required by Rules 10C- 7.044(1)(e) and (i), (5)(a)3 and (14), Florida Administrative Code; $241,582.00 (of the $591,092.00) had been paid to Conval Care for services that were rendered while no valid signed physician's authorization was in effect in violation of Rules 10C-7.044(1)(e) and (i) and (5)(a)1-2, Florida Administrative Code; The Department, in addition to terminating Conval Care's participation in the program, was seeking reimbursement of the $591,092.00 overpayment and imposing an administrative fine of $5,000.00; and No further Medicaid payments would be made to Conval Care. The information contained in the Termination Letter was taken by Ms. Williams from the Investigative Report. For some reason which has not been explained in this case by either party, the Department did not inform Conval Care in the Termination Letter that the $591,092.00 reimbursement was also being sought by the Department because the persons who received the services were not "homebound", as concluded in the Investigative Report, even though Ms. Williams agreed with the conclusions of the Investigative Report concerning the fact that the recipients of services were not homebound. After Conval Care received the Termination Letter, the Department stopped all Medicaid payments to Conval Care. As a result, Conval Care closed within three months after receiving the Termination Letter. The Department should have been aware of this possible consequence. The weight of the evidence in this case failed to prove that the conclusions reached by the Department concerning possible violations of Medicaid law by Conval Care as set out in the Termination Letter were not reasonably supported, both factually and legally, by the allegations contained in the Investigative Report. If the alleged facts contained in the Investigative Report proved to be true, it cannot be concluded that the acts which the Department concluded Conval Care may have committed were not in fact violations of Medicaid law. Conval Care's Attempts to Obtain Advice. Prior to receiving the Termination Letter, but after the investigation of Conval Care had begun, Inez Browning, the President of Conval Care, attempted to discuss the propriety of providing Medicaid services through Conval Care to residents of ACLFs. Ms. Browning contacted several Department employees, including Ms. Williams, to discuss the matter. The only concern expressed by Department employees to Ms. Browning about the propriety of a home health care agency providing Medicaid services to residents of an ACLF in response to her inquiries involved the unavailability of Medicaid funds to cover such services. In light of the fact that the Department was aware that there was an ongoing criminal investigation of Conval Care by Medicaid Fraud, the evidence failed to prove that the Department's actions in failing to warn Ms. Inez of any potential violations Conval Care may have been committing was unreasonable. The Prosecution of the Termination Letter. After receiving the Termination Letter, Conval Care filed a request for a formal administrative hearing pursuant to Section 120.57(1), Florida Statutes, to contest the proposed actions of the Department expressed in the letter. Conval Care's request for hearing was filed by the Department with the Division of Administrative Hearings in June, 1991. The matter was designated case number 91-4020 and was assigned to the undersigned. Between June, 1991, and December, 1991, the parties pursued discovery and began preparations for the formal hearing in case number 91-4020. On December 18, 1991, the parties requested that case number 91-4020 be continued to give the parties an opportunity to pursue a possible settlement of their dispute. Case number 91-4020 was continued from December, 1991, until March, 1992. On March, 18, 1992, a Fourth Notice of Hearing was entered rescheduling the final hearing of case number 91-4020 for July 27-31, 1992. Between March, 1992, and July, 1992, discovery continued in case number 91-4020. On July 14, 1992, the Department filed a Motion for Leave to Amend Termination Letter and an Amended Termination Letter. In the Amended Termination Letter, the Department, for the first time, attempted to raise the issue of whether certain recipients of care provided by Conval Care were "homebound". The Department also attempted to add three other "counts" which Conval Care had not previously been put on notice of. The Department's effort to amend the Termination Letter, in light of the fact that it had been over a year since the original Termination Letter had been issued, and the fact that the final hearing of case number 91-4020 was scheduled for the week after the request to amend was filed, was denied. The Department requested, and was granted, a continuance of the final hearing scheduled to commence July 27, 1992, due to the hospitalization of counsel for the Department in case number 91-4020. The hearing was rescheduled to commence August 7, 1992. On August 5, 1992, only two days before the scheduled commencement of the final hearing in case number 91-4020, the Department filed a "Notice of Voluntary Dismissal". After the undersigned informed the Department that it was not in a position to "voluntarily dismiss" case number 91-4020, the Department informed the undersigned that the filing of the Notice of Voluntary Dismissal by the Department was intended as a notice of withdrawal of the Termination Letter by the Department. Therefore, an Order Closing File in case number 91-4020 was entered on August 13, 1992. The Department's compliance with discovery requests of Conval Care during the pendency of case number 91-4020, was less than adequate. On more than one occasion, it was necessary to order the Department to respond to reasonable discovery requests of Conval Care. While the Department's failure to reasonably respond to discovery requests may suggest a lack of evidence to support the Department's actions, the evidence failed to support a finding that there were not other reasons for the Department's actions. The evidence also proved that there were indications to the Department during discovery in case number 91-4020 that there could be problems with some of the facts of the Investigative Report which had been relied upon by the Department. Those problems and alleged problems which Conval Care has suggested in Conval Care's proposed final order in this case are not, however, sufficient to prove that the Department should have known that the alleged facts of the Investigative Report it had relied on in issuing its Termination Letter were insufficient to continue to pursue the charges it had made in case number 91- 4020. The weight of the evidence in this case, including the file in case number 91-4020, failed to prove why the Department chose not to pursue the charges of the Termination Letter. The evidence failed to prove that the Department "knew by [the time it withdrew the Termination Letter] that it couldn't win."
Findings Of Fact In early August of 1992, petitioner Howard D. Kline began work as a waiter for respondent, making at least $189 per week. Fearing he might be infected, he gave blood samples on September 21, 1993, at the Bay County Public Health Unit and asked that they be tested for human immunodeficiency virus (HIV). The samples were sent to Jacksonville, and one was forwarded to the Center for Disease Control in Atlanta, Georgia. On September 28, 1992, a report of diagnostic testing done on petitioner's blood in Jacksonville, Petitioner's Exhibit No. 1, was mailed to the health department in Panama City. It reached Nancy S. Nichols, who worked at the Bay County Public Health Unit, on or before October 6, 1992. She had seen the results by the time she talked to Mr. Kline on October 6, 1992, and advised him that he had tested positive. The following day Mr. Kline stopped by the Four Winds restaurant to speak to Barbara Zaleski; wife of (one of) respondent's owners (and possibly herself a co-owner.) Although the restaurant had both a manager and an assistant manager, Ms. Zaleski had authority to hire and fire staff. When Mr. Kline told her of his affliction, she wept sympathetically, then told him he could no longer work at the restaurant because it was bad for business. On October 8, 1993, word reached Mrs. Nichols that the diagnostic testing of petitioner's blood done in Atlanta confirmed the earlier, positive diagnosis. Approximately a week later petitioner stopped by the restaurant to pick up his final paycheck. Two weeks elapsed after his discharge before he found another job. During the two-week hiatus, he lost wages totalling $378. The restaurant hired a waitress to take petitioner's place. The evidence did not reveal her status as regards human immunodeficiency virus. Respondent employed (a) cook(s) and (a) bookkeeper(s) as well as serving staff, an assistant manager and a manager, until it closed, more than three months after petitioner's discharge. The total number of respondent's employees was not proven, nor the total number of people respondent employed at any one time. Services of an attorney worth $4,700 have reasonably been required in the presentation of this claim, but these services would, except for $125 have also been necessary for the presentation of the same claim in court.
Recommendation It is, accordingly, RECOMMENDED: That the FCHR dismiss the petition, without prejudice to petitioner's proceeding in circuit court on any claim not predicated on the Florida Civil Rights Act of 1992, Sections 760.01-760.11 and 509.092, Florida Statutes (1993). DONE AND ENTERED this 14th day of December, 1993, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of December, 1993. COPIES FURNISHED: David L. Jernigan 3020 Kingswood Drive Panama City, Florida 32405 Nancy L. Jones Post Office Box 2062 Panama City, Florida 32401 Sharon Moultry, Clerk Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32303-4149 Dana Baird, General Counsel Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32303-4149
