The Issue Are the Medicaid payment claims of Respondent Alternative Care Staffing, Inc. (Alternative), for companion care services authorized by support plans and waiver support coordinators and provided in the community to recipients residing in group homes reimbursable services under the Home and Community-Based Wavier (HCB Waiver) program? Are Alternative’s Medicaid service claims for allegedly unauthorized activities reimbursable under the HCB Waiver program, or may the Agency for Health Care Administration (Agency) recoup payment for the claims? Did Alternative receive payment for services provided by ineligible staff? Are Alternative’s allegedly overlapping Medicaid service claims actually overlapping? Did the Agency meet: (1) its burden of proof for imposing fines, and (2) its statutory obligations before imposing fines? Whether or how much, due to mitigating factors, the Agency can fine Alternative for the items identified as overpayments in Agency’s Exhibit 6, Amended Final Audit Report dated May 25, 2011; subsequently, modified in Agency’s Exhibit 7, Current Overpayment Calculations and Agency Work Papers; and finally modified during the hearing as shown in Exhibit A to the proposed recommended orders and this Recommended Order.
Findings Of Fact Background The Medicaid program is a federal and state partnership that pays the costs of providing health care and related services to qualified individuals, including people with developmental disabilities. The Agency is the single state agency authorized to make payments for medical assistance and related services under Florida’s Medicaid program. § 409.902, Fla. Stat. (2013). The Legislature charged the Agency with overseeing the activities of Medicaid recipients and their providers and with recouping overpayments. §§ 409.913 and 409.913(1)(e), Fla. Stat. Florida law defines an “overpayment” as “any amount that is not authorized to be paid by the Medicaid program whether paid as a result of inaccurate or improper cost reporting, improper claiming, unacceptable practice, fraud, abuse, or mistake.” During the relevant time period, Florida law defined “abuse” as “provider practices that are inconsistent with generally accepted business or medical practices and that result in an unnecessary cost to the Medicaid program or in reimbursement for goods or services that are medically unnecessary, upcoded, or fail to meet professionally recognized standard of health care.” § 401.913(1)(a), Fla. Stat. “Abuse may also include a violation of state or federal law, rule or regulation.” (Pet. Ex. 11, Provider General Handbook (Jan. 2007), p. 1083; Pet. Ex. 11, Provider General Handbook (July 2008), p. 1092). This definition is much broader than the everyday definition of abuse as a “corrupt practice or custom.”1/ “Overpayment includes any amount that is not authorized to be paid by the Medicaid program whether paid as a result of inaccurate or improper cost reporting, improper claims, unacceptable practices, fraud, abuse or mistake.” (Pet. Ex. 11, Provider General Handbook (Jan. 2007), p. 1083; Pet. Ex. 11, Provider General Handbook (July 2008), p. 1092). As part of the Agency’s fulfillment of the statutory directive to investigate overpayments, the Bureau of Medicaid Program Integrity (MPI) in the Office of the Inspector General routinely conducts audits. A Medicaid provider is a person or entity that has voluntarily chosen to provide and be reimbursed for goods or services provided to eligible Medicaid recipients. A provider’s participation requires an agreement with the Agency to provide services. Alternative has been a Medicaid provider since 2004. Florida’s Medicaid program includes a program for people with developmental disabilities. It uses the state and federal Medicaid funds for home and community-based services. The program is known as the Home and Community-Based Waiver or HCB Waiver. Florida’s Agency for Persons with Disabilities (APD) administers the HCB Waiver pursuant to statute. APD is responsible for the day-to-day operation of the HCB Waiver. APD is the primary point of contact and source of information for HCB Waiver providers, such as Alternative. The Interagency Agreement (Agreement) between the Agency and APD establishes the relationship between the two agencies and their obligations and roles in this mutual undertaking. Alternative and other providers are not parties to the Agreement The Agreement’s Delegation of Authority for Waiver Operation, Section B(2) (R. Ex. B), states: Pursuant to the approved development disabilities home and community-based waivers, [the Agency] has authorized [APD] to operate the waivers on a day-to-day basis, in accordance with this agreement. This agreement memorializes an arrangement under which APD will operate and make appropriate decisions based upon approved policy on behalf of and under the oversight of [the Agency]. The Agreement obligates both agencies to operate the waiver in accordance with laws, rules, regulations, and handbooks. Section B(4)(c) of the Agreement requires the Agency to coordinate with APD “on all [waiver] administrative rules, amendments to rules, policies or regulations that pertain to the waiver.” Section B(4)(g) places responsibility for recouping overpayments to HCB Waiver providers on the Agency. Section B(4)(a) reserves to the Agency “final authority on all policies, procedures, rules, regulations, manuals, handbooks, and statewide quality assurance monitoring procedures pertaining to the development disabilities waivers.” Section B(5)(e) requires APD to advise the Agency in advance of any proposed regulations or manuals developed by APD. Section 5(g) obligates APD to assure payments to “providers are reconciled based upon individual cost plans in the DD [Developmental Disability] and F/SL [Family and Support Living] Waiver programs and are within the annual program budgets.” Under the HCB Waiver, recipients working with independent waiver service coordinators plan their services according to the recipient’s needs. The result is a detailed support or cost plan. The support plan articulates the services and the goals for each type of service needed. It is updated annually. A service authorization is developed from each support plan to specify the amount, by time and dollars, approved for each type of service. The service authorization documents also identify which Medicaid-contracted providers will provide each of the approved services. APD reviews and approves the support plans. The 2007 and 2008 versions of the Developmental Disabilities Services Coverage and Limitations Handbook (DD Handbook) specify in chapter 2-5 that in order for a recipient to receive a service, the service must be identified on the recipient’s support plan approved by APD. Providers, like Alternative, rely upon the support plans and service authorizations to determine what services to provide and if the services are authorized for payment. At all times material to this case, Alternative has been a provider of HCB Waiver services to Medicaid recipients, pursuant to a Medicaid provider contract with the Agency and a Medicaid Waiver Services Agreement with APD. Alternative provides most services through independent contractors. The complex requirements governing providers in the Medicaid program are explicated in rules of the Agency and in the Medicaid Provider General Handbook, adopted by rule. More requirements for providers in the HCB Waiver are imposed by rules of APD and the DD Handbook, developed by APD and the Agency, and adopted by Agency rule. For the time period in this case, the June 2007 and June 2008 versions of the Medicaid Provider General Handbook were in effect. For the time period of this case, the June 2007 and December 2008 versions of the DD Handbook were in effect. The Chase The Medicaid payment process differs from a typical commercial transaction. Robi Olmstead, administrator for the Agency’s Office of the Inspector General, Medicaid Program Integrity, described the process as “pay and chase.” The Agency accepts claims for payment at face value with very little review and promptly pays them. But the Agency has the authority to review claims long after payment and seek recoupment, “chase,” if it determines the claim was not proper. The Agency’s MPI office does the “chasing” by conducting provider audits. In 2011, the Agency audited Alternative’s claims for the period January 1, 2008, through June 30, 2009. Kristen Koelle, who conducted the audit, selected the time period to take into account the fact that Alternative was a relatively new provider and had a 12-month window of opportunity to submit new claims or void submitted claims. Typically, the Agency audits a two-to-three year period of payments for providers with a longer history. On November 4, 2010, the Agency sent a letter requesting records from Alternative and advising that it was conducting an audit. The letter sought records for 35 of Alternative’s 85 Medicaid recipients to use as a cluster sample. Alternative responded promptly and provided very organized records. The majority of issues identified in the audit involved documentation, not a failure to provide services. The Agency uses a statistical formula to extrapolate overpayments from the records and claims of the samples. The Agency issued a Preliminary Audit Report concluding that Alternative owed $719,680.09 for overpayments for wrongly made and paid claims. After a typical process of communication, supplementation of records, and review of documents, the Agency issued a Final Audit Report reducing the amount to $452,821.65. By the time the hearing started, the Agency had reduced the amount in an Amended Final Audit Report to $155,747.97 and had reduced the proposed fine from $90,564.33 to $31,149.59. By law, the Agency’s audit report creates prima facie proof of overpayments, which a provider has a right to dispute. In this case, there is no dispute about the acceptability or application of the Agency’s statistical formula for extrapolation. The disputes are about which representative claims are properly input into the extrapolation formula. During the hearing, Alternative agreed to several additional claims. The parties jointly prepared an Appendix to their proposed recommended orders identifying the remaining disputed claims. It is attached as Exhibit A to this Recommended Order and adopted by reference. These are the claims the Agency maintains should be used in the formula to determine the full amount of the asserted overpayments. Alternative disagrees. The remaining claims fall into four categories. They are: (1) companion services provided to recipients living in group homes; (2) unauthorized activities; (3) overlapping of support services; and (4) ineligible staff. Services are measured in “units of service” of 15 minutes each. Companion Services for Recipients Living In Group Homes During the time period when the June 2007 DD Handbook was in effect, Alternative collectively provided and was paid for 640 units of service to four waiver recipients who resided in licensed residential facilities or group homes. The recipients are identified in this record as Recipients 7, 13, 14, and 25. Companion services are non-medical care supervision and socialization activities provided to an adult individually. They may be activities such as assistance with grocery shopping, housekeeping, or visiting the library. (DD Handbook, 2007, Chap. 2-27). The June 2007 version of the DD Handbook states: “Recipient’s [sic] living in licensed residential settings, excluding foster homes, are not eligible to receive these [companion] services.” (DD Handbook, 2007, Chap. 2-28). The December 2008 version of the DD Handbook states that companion care services may be provided to residents of a licensed group or foster home. APD approved the support plans for Recipients 7, 13, 14, and 25. The plans plainly stated that each recipient lived in a residential living facility (group home). The support plans also plainly identified companion services among the services to be provided. (Pet. Ex. 8, pp. 491-501; 591-604; 628-636; and 857-864.) In addition, each recipient’s waiver support coordinator provided a service authorization for the companion services. Alternative provided companion services as indicated in the APD approved support plans and the service authorizations. Alternative’s consistent experience with providing companion services to residents in living facilities was that APD approved and paid for providing those services under the June 2007 DD Handbook. Because of the issues raised in the audit, in an e-mail dated May 19, 2011, Joyce Rowe, president of Alternative, wrote Denise Oetinger, regional program supervisor for APD, asking about authorized services during the period January 2008 to June 2009. Ms. Oetinger was an APD liaison to providers who Alternative relied upon to explain the many requirements and conditions of the DD Handbook. Ms. Rowe’s e-mail said: In our preliminary [Agency audit] review we had four individuals which Alt Care received services authorizations for that lived in a group home [stet]. We provided the services out in the community. Kristen Koelle with AHCA Audit Recovery stated in the handbook of limitations up to 12/3/2008 we were not allowed to provide companion services to any individual living in a licensed facility. Of course they wanted to recoup thousands of dollars from our company. Do we have any special provisions or documentation why we were getting these service authorizations sent to us and getting paid for a service which was unauthorized? I called one of the support coordinators because they are responsible in a sense for sending the authorizations. I was told to e-mail you in hope for some answers. Ms. Oetinger replied2/: Ms. Rowe, Companion can be provided to an individual living in a licensed facility, but it must be delivered in the community. So they must leave the home they live in and do something outside the home. This has not changed from handbook to handbook. I will ask that our inter-agency liaison communicate with Kristen Koelle. Thank you for bringing this to our attention and I will get back to you as I have more information. In light of the Agreement, the way in which the Agency and APD held themselves out to providers, the relationship between APD and providers, the practice of relying upon APD for guidance about the HCB Waiver, the approval of the support plans, and the subsequent issuance of service authorizations, Alternative reasonably relied upon APD-approved support plans and the waiver support coordinator-provided service authorizations when providing and obtaining payment for companion services to Recipients 7, 13, 14, and 25. In addition, the weight of the persuasive evidence establishes that Recipients 7, 13, 14, and 25 are the only recipients living in a licensed residential facility for which Alternative received payments for companion services provided during the audit period. Consequently, using those claims to extrapolate to a recipient-wide population is not factually supported. Ineligible Staff Alternative employee Ben Alvarez provided personal care assistance and companion services to Recipient 3. He also provided in-home support services to Recipient 15. For the time period during which Mr. Alvarez provided personal care assistance services, the December 2008 DD Handbook was in effect. Chapter 1-25 required individuals providing the service to “have at least one year of experience working in a medical, psychiatric, nursing or childcare setting or working with recipients who have a developmental disability.” It permitted substitution of specified educational achievements for the experience. Alternative did not have documentation that Mr. Alvarez had the specified alternative educational achievements. It did not have documentation that Mr. Alvarez had worked in a medical, psychiatric, nursing, or childcare setting. Alternative did have documentation that Mr. Alvarez had six years’ experience caring for an adult with developmental disabilities, providing services, including personal care, hygiene, grooming, bathing, and feeding. This individual was a relative of Mr. Alvarez. Nothing in the documentation establishes that the relative Mr. Alvarez was caring for was a Medicaid recipient. Deposition testimony establishes that the individual was a waiver recipient at the time of the deposition, February 13, 2014. But it does not establish that he was a recipient at the time Mr. Alvarez provided services. The deposition is also not part of the documentation maintained by Alternative. In sum, the weight of the persuasive evidence shows Alternative did not have documentation that Mr. Alvarez met the experience or substitute educational requirements of chapter 1-25. For the time period during which Mr. Alvarez provided companion services, the December 2008 DD Handbook was in effect. Chapter 1-18 required individuals providing the service to “have at least one year of experience working in a medical, psychiatric, nursing or childcare setting or working with recipients who have a developmental disability.” It also permitted substitution of specified educational achievements for the experience. The weight of the persuasive evidence shows that Alternative did not document that Mr. Alvarez met the experience or substitute educational requirements of chapter 1-18. Chapter 1-23 of the DD Handbook imposes the same experience and substitution education requirements for providers of in-home support services as required for companion and personal care services. As with them, the weight of the persuasive evidence shows that Mr. Alvarez did not meet the experience or substitute educational requirements. An Alternative employee, known as Ora or Paul Richmond, provided 16 units of companion services to Recipient 11 on March 2, 2009. At that time, the December 2008 DD Handbook was in effect. Chapter 1-18, above, established the experience and requirements for providers of the service. Alternative’s documentation establishes that Mr. Richmond lived with, and helped care for, his disabled father from 2006 to 2008. Among other things, he helped his father with cooking, cleaning, laundry, and bill paying. Alternative’s documentation does not identify what disability Mr. Richmond’s father had, and it does not indicate that Mr. Richmond’s father was a Medicaid recipient. The weight of the persuasive evidence shows Alternative did not document that Mr. Richmond met the experience or substitute educational requirements of chapter 1–18. The Agency paid Alternative for companion services provided by Christopher Rose to Recipients 13 and 14. Mr. Rose provided the services during a period governed by the 2007 DD Handbook. The companion provider requirements of chapter 1-18 of that DD Handbook are the same as those of chapter 1-18 of the 2008 version. Alternative’s documentation for Mr. Rose showed that he had worked as a private-duty companion for an individual with retardation for approximately three years. The documentation did not indicate who the individual was, whether the individual was a Medicaid recipient, or where the services were provided. The weight of the persuasive evidence shows Alternative did not document that Mr. Rose met the experience or substitute educational requirements of chapter 1-18. Documented Activity Support for Billing The Agency paid Alternative for 16 units of service for companion services provided to Recipient 6 on March 27, 2008. The sole documented description for the activity involved was “enjoyed attending alternative office party.” It does not document what the activities were or where the party was. Ms. Rowe testified that the party was not accurately described and that the office social was held in Bradenton, Florida, at Bayshore Gardens. But that is not what the documentation shows. The support plan for Recipient 6 provided that the companion provider “will help [the recipient] participate in activities outside of his home. [Recipient] will also explore volunteer opportunities available to him.” This is in support of the larger goal of teaching him to interact in the community. The documentation for the office party does not document a connection between the support plan and the activity. The Agency paid Alternative for 14 units of companion services provided to Recipient 12 on April 16, 2008. The support plan goals for Recipient 12 are to stay home, be active with his family, identify someone to care for him, go out into the community, be involved in community activities, maintain a healthy weight, and maintain good dental health. Alternative’s documentation for the services on April 16 reports only “[a]ss. with indoor activities.” It provides no other descriptions of the activities. The information is not sufficient to determine what relationship, if any, the activities had to the recipient’s goals. Ms. Rowe testified that the recipient had gone to his community clubhouse that day. But that is not what the entry says, in contrast to an April 17, 2008, entry which specified clubhouse activities. In addition, Ms. Rowe was not the service provider and did not provide information about how she knew what that individual did that day. Her testimony was not persuasive. The Agency paid Alternative for 14 units of service for companion services provided to Recipient 12 on April 30, 2008. Alternative’s documentation for the services on April 30, 2008, reports only “[a]ss. with activities at home.” It provides no other descriptions of the activities. The information is not sufficient to determine what relationship, if any, the activities had to the recipient’s community-oriented goals. The Agency paid Alternative for 20 units of service for companion services provided to Recipient 18 on January 7, 2008. The recipient’s support plan for companion services focuses on going out into the community to eat, visit parks, go to places of interest, and attend parties. Alternative’s documentation for the services describes the activities from 1:30 p.m. to 4:30 p.m., as “[p]repare lunch, ate 100%, change underwear, small walk, watch some TV by request, lie for a rest on sofa.” Lunch preparation and changing clothes are not companion services. They are personal care assistance services. The Agency reasonably deducted two units of service for these claims. Also on January 7, 2008, a different provider of companion services describes the activities from 4:30 p.m. to 6:30 p.m., as “watched t.v. [and] chilled out today.” These activities are not activities related to the companion services of the support plan. There is no documentation supporting the claim for payment for the time between 4:30 p.m. and 6:30 p.m. The Agency reasonably denied payment for two units of service for this time period. The Agency paid Alternative for 20 units of service for companion services provided to Recipient 18 on March 1, 2009. The documentation for those services states only: “We stayed in due to weather.” It provides no information about the weather, what activities the recipient engaged in while “in,” or why the weather precluded all community activities. The documentation does not support the claim for billing 20 units of service. Unauthorized Activities The Agency paid Alternative for 12 units of service for in-home support services provided to Recipient 15 on February 21, 2008. The recipient’s support plan described his goals to be advanced by in-home support services as “learn how to better take care of his apartment, cook for himself, clean his apartment, do his laundry, and learn to make independent life decision[s].” Alternative’s documentation describes the day’s activities as “[Recipient] and I went to the library. Then watch [sic] a little TV. I left early because he said he was tired.” Watching television is not an activity within the authorized in-home support services. It is reasonable to reduce the claimed units of service by one to adjust for the time spent providing an unauthorized service. The Agency paid Alternative for 20 units of service for in-home support services provided to Recipient 15 on April 2, 2008. Alternative’s documentation from the caregiver describing the services states: “[Recipient] and I went to the store to pick up several items. Then came back to his place and played dominos.” The weight of the persuasive evidence establishes that there is no connection between playing dominos and the services for which in-home support was authorized. Deducting one unit of service from the services paid for to account for time spent playing dominos is reasonable. The Agency paid Alternative for 20 units of service for in-home support services provided to Recipient 15 on June 25, 2009. The caregiver provided multiple services that day. The documented activities included watching two movies, Bolt and the Spiderwick Chronicles. The weight of the persuasive evidence establishes that there is no connection between watching the movies and the services for which in-home support was authorized. Deducting the claimed units of service to Recipient 15 by one, as the Agency recommends, is a reasonable accounting for the time spent watching the movies. On February 20, 2008, Alternative billed for 32 units of service for companion services for Recipient 26. The support plan for Recipient 26 identifies Alternative as providing the companion services for his goal to “want to do some volunteer work and learn how to socialize with others [sic] people that will not take advantage of me.” Alternative’s documentation for the companion services on February 26, 2008, includes “doing laundry at home and babysitting nephew.” These activities are not within the scope of the support plan for companion services or directed to a related goal. Deducting a unit of service for Recipient 26 on February 20, 2008, by one to account for the laundry and babysitting is reasonable. On January 22, 2008, Alternative billed for 24 units of service for companion services for Recipient 33. The recipient’s support plan lists the following goals that require companion services: “work on building practical skills, making choices, and verbally communicating opinions, wants and needs to others. I want to continue learning to be safe within [t]his community.” Alternative’s documentation to support payment describes the day’s activities as “[t]ook [Recipient] to the Library, [illegible] Target, Dollar, [illegible], watched a movie at his house.” Watching television at the recipient’s house does not fall within the scope of the Recipient’s companion services. Deducting a unit of service for that day by one to account for the time spent watching a movie is reasonable. Overlapping and Unsupported Claims The Agency paid Alternative for respite care to Recipient 16 from noon to 6:00 p.m., 34 units of service, on March 3, 2009. The narrative by Van Greenlaw for the respite care log entry on March 3, 2009, reports: “I arrived today got lunch ready, he went to the gym, came back, plays some of his games, after that he got ready to go to church with [illegible], day ends.” The work hours are changed by strike-throughs to 1:30 p.m. to 6:00 p.m. on another copy of the log. The log does not show the date of the change or who made the change. The personal care assistance service log for March 3 shows Mr. Greenlaw as working from noon to 6:00 p.m. Another copy of the personal care assistance log shows a struck-through revision indicating that personal care services were provided between noon and 1:30 p.m. The log does not show the date of the change or indicate who made the change. The revised service logs and the invoice for the week’s services by Mr. Greenlaw do not reconcile. The invoice shows a total of 2.5 hours (10 units of service) of companion services from 12:30 p.m. to 2:30 p.m. and 4.5 hours (18 units of service) respite care from 2:30 p.m. to 6:00 p.m. (Pet. Ex. 8, p. 752). There are no logs documenting provision of companion care services. Alternative billed for 18 units of respite service for March 3, 2009, and six units of service for companion services, not the personal care assistance services identified in the log. (Koelle, Tr. at 148-149, Pet. Ex. 752). In addition to the reconciliation inconsistency, the invoice has a math error. The actual amount of time between 2:30 p.m. and 6:00 p.m. is only 3.5 hours (14 units of service) for respite care, not the invoiced 4.5 hours. Alternative concedes one hour of overbilling. It offers no explanation for billing for companion services when the only record of services is for personal care and respite care. The documentation only supports billing for 14 units of respite care service on March 3, 2009, for Recipient 16. Therefore, the billable units of service for Recipient 16 on March 3, 2009, should be reduced by 20, from 34 to 14, when applying the Agency’s extrapolation formula. Training of Ora Richmond Alternative hired Ora (Paul) Richmond as a caregiver on February 7, 2009. The first date that there is a record of him providing recipient services is March 2, 2009. Mr. Richmond received his zero tolerance training on March 10, 2009. He received his “Core Competency” training on January 10, 2010. The Agency maintains that Mr. Richmond did not have the training required by the applicable DD Handbook when he provided services on March 2, 2009, and that the 16 units of service for that day should be disallowed. The Agency refers to the December 3, 2008, DD Handbook. The handbook took effect on December 3, 2008. The provision, section 2.1(H), imposing the new zero tolerance training requirement, provided: “All direct service providers hired after 90 days from the effective date of this rule are required to complete the Agency for Persons with Disabilities developed Zero Tolerance Training course prior to rendering direct care services (as a pre-service training activity).” Mr. Richmond was hired less than 90 days from the effective date of the requirement. Section 2.1(G) of the provision requiring “Core Competency” training stated: “All direct service providers are required to complete training in the APD’s Direct Care Core Competencies Training, or an equivalent curriculum approved by APD within 90 days of employment or enrollment to provide the service.” The 90th day after Mr. Richmond’s employment was May 8, 2009. Therefore, he was not in violation of the core competency requirement when he provided services to Recipient 11 on March 2, 2009. However, as determined in Findings of Fact 50 through 52, he did not have the experience required to serve as a caregiver.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration recalculate the amounts to be recouped applying the Procedure Codes, units of service, and amount per unit of service, as shown in the Appendix, with the following adjustments: The Agency will not include in recoupment calculations, for the reason that Alternative provided the services to residents of a licensed residential facility, any payments made for companion services provided to Recipients 7, 13, 14, and 25. The Agency will include in recoupment calculations the amounts and units of service paid to Alternative for Mr. Alvarez’s companion and personal care assistance services to Recipient 3 and his in-home support services to Recipient 15, as shown in the Appendix. The Agency will include in recoupment calculations the amounts and units of service paid to Alternative for Mr. Richmond’s services to Recipients 11, as shown in the Appendix. The Agency will include in recoupment calculations the amounts and units of service paid to Alternative for Mr. Rose’s companion services to Recipients 13 and 14, as shown in the Appendix. The Agency will include in recoupment calculations the amounts and units of service paid to Alternative for the 16 units of service shown in the Appendix, as provided to Recipient 6 on March 27, 2008. The Agency will include in recoupment calculations the amounts and units of service paid to Alternative for 14 units of companion service provided to Recipient 12 on April 16, 2008, as shown in the Appendix. The Agency will include in recoupment calculations the amounts and units of service paid to Alternative for 14 units of companion service provided to Recipient 12 on April 30, 2008, as shown in the Appendix. The Agency will include in recoupment calculations the amounts and units of service paid to Alternative for four units of service on January 7, 2008, to Recipient 18. The Agency will include in recoupment calculations the amounts and units of service paid to Alternative for 20 units of service on March 1, 2009, to Recipient 18, as shown in the Appendix. The Agency will include in the recoupment calculations the amounts and units of service paid to Alternative for one unit of in-home support service provided on February 21, 2008, to Recipient 15. The Agency will include in the recoupment calculations the amounts and units of service paid to Alternative for one unit of in-home support service provided on April 2, 2008, to Recipient 15. The Agency will include in the recoupment calculations the amounts and units of service paid to Alternative for one unit of service of in-home support services provided on June 25, 2009, to Recipient 15. (This should not be cumulative to the inclusion in the calculation of all 20 units of service that day due to an ineligible staff providing the services.) The Agency will include in the recoupment calculations the amounts and units of service paid to Alternative for one unit of companion service provided on February 20, 2008, to Recipient 26. The Agency will include in the recoupment calculations the amounts and units of service paid to Alternative for one unit of companion service provided on January 22, 2008, to Recipient 33. The Agency will include in the recoupment calculations the amounts and units of service paid to Alternative for 20 hours of service provided on March 3, 2009, for Recipient 16. The Agency will not impose a sanction upon Alternative. Jurisdiction is reserved to determine costs and interests, if the parties are not able to agree upon them and to consider a challenge, if any, to the extrapolation based upon the findings and conclusions of this Recommended Order. DONE AND ENTERED this 28th day of July, 2014, in Tallahassee, Leon County, Florida. S JOHN D. C. NEWTON, II 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 28th day of July, 2014.
The Issue The issues for disposition in this case are whether: (1) proposed rules 65G-4.0213 through 65G-4.0218 of the Florida Administrative Code (“the Proposed Rules”) constitute an invalid exercise of delegated legislative authority as defined in section 120.52(8), Florida Statutes (2015)1/; and whether (2) the Agency for Persons with Disabilities (“APD”) failed to follow applicable rulemaking procedures in seeking to adopt the Proposed Rules.
Findings Of Fact The Parties Petitioners face profound mental and physical challenges, and they receive services through the Home and Community-Based Services Medicaid Waiver Program for individuals with developmental disabilities (“the Waiver”). APD’s mission is to help people with developmental disabilities live and receive services in their communities. § 393.066(1), Fla. Stat. The Waiver Medicaid is the primary funding source for services to income-qualified, developmentally disabled individuals. See Russell v. Ag. for Pers. With Disab., 929 So. 2d 601, 602 (Fla. 1st DCA 2006). See also § 393.063(9), Fla. Stat. (defining “developmental disability” to mean “a disorder or syndrome that is attributable to intellectual disability, cerebral palsy, autism, spina bifida, or Prader-Willi syndrome; that manifests before the age of 18; and that constitutes a substantial handicap that can reasonably be expected to continue indefinitely.”). States participating in Medicaid must comply with federal requirements governing the program, but the Medicaid Act allows states to obtain waivers from those requirements. Russell, 929 So. 2d at 603. Florida provides services to APD’s clients2/ through the Waiver, and APD administers the Waiver. APD’s goal is to enable its clients to live productive lives in their communities rather than in costly institutions. See § 393.066(1), Fla. Stat. (mandating that APD “shall plan, develop, organize, and implement its programs of services and treatment for persons with developmental disabilities to allow clients to live as independently as possible in their own homes or communities and to achieve productive lives as close to normal as possible.”). Even though the services provided to APD’s clients are funded through the Waiver, those services must still comply with certain federal requirements. For example, all Waiver services must be medically necessary. Also, Waiver funding is funding of last resort. Therefore, a Waiver recipient must exhaust all other available resources from his or her state, local community, and family prior to receiving waiver funds. See § 393.0662(4), Fla. Stat. (mandating that “[a] client must use all available services authorized under the state Medicaid plan, school-based services, private insurance and other benefits, and any other resources that may be available to the client before using funds from his or her iBudget to pay for support and services.”). APD currently serves approximately 30,600 clients through the Waiver. Due to budgetary constraints, approximately 21,000 people are on a “wait list” for receiving Waiver services. The iBudget Statute In 2007, the Florida Legislature directed APD to develop and implement a comprehensive redesign of the waiver system. Moreland v. Ag. for Pers. with Disab., 19 So. 3d 1009, 1010 (Fla. 1st DCA 2009). This new system, referred to as the “Tier System,” placed each client into one of four different “tiers” based on that client’s need for services and the cost of providing those services. See § 393.0661(3), Fla. Stat. See also Moreland, 19 So. 3d at 1011 (noting that “[t]iers two, three, and four each have a different annual monetary cap; thus, the level of services available for each individual is contingent upon the tier into which the individual is placed.”). APD responded by promulgating proposed rules to implement the Tier System. However, the First District Court of Appeal invalidated them. Moreland, 19 So. 3d 1009. In 2010, the Florida Legislature shifted to the iBudget System. As discussed in the preamble to section 393.0662, Florida Statutes, the iBudget System was intended to assist APD with its budgeting so that the agency could avoid the budget shortfalls that had plagued the Tier System. The Legislature also intended to provide APD’s clients with greater flexibility in choosing the services that would enable them to remain in their local communities: The Legislature finds that improved financial management of the existing home and community-based Medicaid waiver program is necessary to avoid deficits that impede the provision of services to individuals who are on the waiting list for enrollment in the program. The Legislature further finds that clients and their families should have greater flexibility to choose the services that best allow them to live in their community within the limits of an established budget. Therefore, the Legislature intends that [APD], in consultation with the Agency for Health Care Administration, develop and implement a comprehensive redesign of the service delivery system using individual budgets as the basis for allocating the funds appropriated for the [Waiver] among eligible enrolled clients. The service delivery system that uses individual budgets shall be called the iBudget system. § 393.0662, Fla Stat. The increased flexibility that clients have under the iBudget system enables them to obtain necessary services without getting prior approval from APD. The Legislature also expressed a commitment to keeping clients in their local communities rather than in costly institutions: The Legislature finds and declares that existing state programs for the treatment of individuals with developmental disabilities, which often unnecessarily place clients in institutions, are unreasonably costly, are ineffective in bringing the individual client to his or her maximum potential, and are in fact debilitating to many clients. A redirection in state treatment programs for individuals with developmental disabilities is necessary if any significant amelioration of the problems faced by such individuals is ever to take place . . . . Further, the greatest priority shall be given to the development and implementation of community- based services that will enable individuals with developmental disabilities to achieve their greatest potential for independent and productive living, enable them to live in their own homes or in residences located in their own communities, and permit them to be diverted or removed from unnecessary institutional placements. § 393.0662, Fla. Stat. In order to accomplish the goals described above, section 393.0662(1), provides that “[t]he agency shall establish an individual budget, referred to as an iBudget, for each [client]. The funds appropriated to the agency shall be allocated through the iBudget system to eligible, Medicaid- enrolled clients.” Also, APD must utilize an algorithm in establishing each client’s iBudget: In developing each client’s iBudget, the agency shall use an allocation algorithm and methodology. The algorithm shall use variables that have been determined by the agency to have a statistically validated relationship to the client’s level of need for services provided through the [Waiver]. The algorithm and methodology may consider individual characteristics, including, but not limited to, a client’s age and living situation, information from a formal assessment instrument that the agency determines is valid and reliable, and information from other assessment processes. §393.0662(1)(a), Fla. Stat. The algorithm referred to in section 393.0662(1)(a) (“the Allocation Algorithm”), is a multiple linear regression model. In very simple terms, a multiple linear regression model is an equation with independent variables and a constant on one side and a dependent variable on the other. A very simple regression model would follow this format: dependent variable = constant + coefficient1(independent variable1) + coefficient2(independent variable2) + coefficient3(independent variable3) The amount of the dependent variable is correlated to some degree with each of the independent variables, and the coefficients next to each independent variable quantify the correlation between the dependent variable and that particular independent variable. Therefore, if one has amounts for each of the independent variables, then the expected amount for the dependent variable can be calculated by: (a) plugging the amounts for the independent variables into the regression equation; (b) multiplying the independent variables by their coefficients; and (c) adding those results to the constant. The Legislature intends for the Allocation Algorithm to establish each client’s iBudget. However, the Legislature has recognized that there may be instances in which a particular client’s needs will not be met through the iBudget amount or other resources. These instances are referred to as “significant additional needs” (“SANs”)3/, and they will lead to an increase to a client’s iBudget. The first SAN is characterized in section 393.0662, as “[a]n extraordinary need that would place the health and safety of the client, the client’s caregiver, or the public in immediate, serious jeopardy unless the increase is approved.” This first SAN category is very broad and encompasses situations such as: (1) a documented history of life-threatening behaviors; (2) a complex medical condition that requires intervention by a licensed nurse; (3) a chronic comorbid condition; and (4) a need for total physical assistance with the activities of daily living. See § 393.0662, Fla. Stat. The second SAN category encompasses “[a] significant need for one-time or temporary support or services that, if not provided, would place the health and safety of the client, the client’s caregiver, or the public in serious jeopardy ” A significant need for one-time services could include needs such as modifications to a home or services to address the temporary loss of a caregiver. Id. The third SAN category accounts for a significant increase in the need for services after the beginning of the plan year due to substantial changes in a client’s circumstances. This could encompass situations such as the permanent or long-term loss of a caregiver or a significant change in medical or functional status that requires the provision of additional services. Id. Section 393.0662, contains other important provisions. For instance, section 393.0662(1)(b), requires that APD “shall reserve portions of the appropriation for [the Waiver] for adjustments required pursuant to this paragraph and may use the services of an independent actuary in determining the amount of the portions to be reserved.” Also, section 393.0662(1)(c), mandates that “[a] client’s iBudget shall be the total of the amount determined by the algorithm and any additional funding provided pursuant to paragraph (b) [i.e. SANs]. A client’s annual expenditures for [Waiver] services may not exceed the limits of his or her iBudget.” The Florida Legislature gave APD the authority to adopt rules governing the implementation of the iBudget system: [APD] and the Agency for Health Care Administration may adopt rules specifying the allocation algorithm and methodology; criteria and processes for clients to access reserved funds for extraordinary needs, temporarily or permanently changed needs, and one-time needs; and processes and requirements for selection and review of services, development of support and cost plans, and management of the iBudget system as needed to administer this section. § 393.0662(9), Fla. Stat. APD’s First Attempt to Adopt iBudget Rules APD utilized its rulemaking authority by promulgating Proposed Rules 65G-4.0210 through 65G-4.027 (“the First Proposed Rules”) in 2012. The Petitioners in the instant case filed a petition alleging that the First Proposed Rules were an invalid exercise of delegated legislative authority. An Administrative Law Judge rejected their challenge, but the First District Court of Appeal held that the First Proposed Rules violated section 120.52(8)(c), by enlarging, modifying, or contravening section 393.0662: Here, the Legislature was clear: the algorithm is the sole mechanism to set a client's iBudget, save for three exceptions specifically delineated by statute. § 393.0662(1)(c), Fla. Stat. In contravention of this clear requirement, the Proposed Rules use the algorithm, instead, as merely a starting point. The algorithm amount is then put through various modification mechanisms—none of which are contemplated by the clear statutory mandate that the "iBudget shall be the total of the amount determined by the algorithm and any additional funding provided pursuant to paragraph (b)." Id. Further, the use of the review mechanisms to decrease the algorithm amount contravenes the iBudget Statute. Nowhere in the statutory language does the Legislature contemplate decreasing the algorithm amount. The Legislature directed the algorithm be the floor and then permitted increases to that algorithm amount based on three delineated circumstances. G.B. et al. v. Ag. for Pers. with Disab., 143 So. 3d 454, 457- 58 (Fla. 1st DCA 2014). Even though the First Proposed Rules were invalidated, APD transitioned its clients to the iBudget System on July 1, 2013, when the federal waiver for the Tier System expired. This was possible because APD enacted an emergency rule and the Legislature allowed APD to continue using the First Proposed Rules until a new set of rules was adopted. In order to comply with the G.B. ruling, APD increased the iBudgets for approximately 14,000 clients so that their iBudgets were at least the algorithm amount. Development of the Proposed Rules After the G.B. decision, APD published a notice of development of rulemaking on October 23, 2014. Over the next several months, APD held multiple public hearings and noticed multiple changes to the Proposed Rules based on public comment. APD staff analyzed whether a statement of estimated regulatory costs (“SERC”) was required by completing a standardized checklist form entitled “Proposed Rule: Is a SERC Required.” See § 120.541(1)(b), Fla. Stat. (mandating that “[i]f a proposed rule will have an adverse impact on small business or if the proposed rule is likely to directly or indirectly increase regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule, the agency shall prepare a statement of estimated regulatory costs as required by s. 120.54(3)(b).”); § 120.541(3), Fla. Stat. (mandating that “[i]f the adverse impact or regulatory costs of the rule exceed any of the criteria established in paragraph (2)(a), the rule shall be submitted” for legislative ratification). Denise Arnold, APD’s Deputy Director, testified at the final hearing that APD’s SERC analysis included an examination of rules that had already been adopted, an evaluation of public comments, and an analysis of whether the Proposed Rules would raise costs for those private entities providing services to APD’s clients. Using the SERC checklist, APD concluded that the direct and indirect regulatory costs associated with implementing the Proposed Rules would be “zero;” that “zero” entities would be impacted; and that there would be no adverse economic or noneconomic impact from the implementation of the Proposed Rules. During the final hearing, there was no persuasive evidence that regulatory costs incurred by those providing services to APD’s clients would be increased if the Proposed Rules were to be adopted. For example, no Waiver providers testified at the final hearing. In contrast, the greater weight of the evidence demonstrated that the Proposed Rules would not materially increase the costs of providing services to APD’s clients. Under both the current iBudget system and the Tier System, Waiver providers have substantially the same responsibilities and workloads. While the Proposed Rules may require Waiver providers to complete new forms, the evidence demonstrated that those new forms will simply replace ones Waiver providers are currently using. Accordingly, APD’s Director signed the SERC checklist on December 3, 2014, and thus certified that no SERC was required. APD published a version of the Proposed Rules on December 5, 2014. That notice stated that a SERC and legislative ratification were not required. However, the notice did not include a description of the information utilized by APD to make that determination. Accordingly, the Joint Administrative Procedures Committee (“JAPC”) addressed a letter to APD on May 13, 2015, advising APD that the legislative ratification statement was missing from the notice of proposed rulemaking. The letter continued by stating that because “a SERC was not prepared for the rules, please publish a notice of correction describing the information expressly relied upon by [APD] in determining whether the rules are expected to require legislative ratification.” APD responded by publishing a notice of correction on May 28, 2015 stating: The Notice of Proposed Rule did not state what information was relied upon in determining that the proposed rule is not expected to require legislative ratification. The information expressly relied upon is the analysis conducted by [APD] to determine whether a SERC was required and the nature of the rule. This information sufficiently described the information utilized by APD in its SERC analysis. However, even if that were not the case, there is no basis for inferring that any deficiency in the notice of correction impaired the Petitioners’ substantial interests or the fairness of the proceeding. Also, there was no evidence or testimony presented at the final hearing to suggest otherwise. The Proposed Rules A few key components of the Proposed Rules warrant discussion. For example, the completion of a Questionnaire for Situational Information (“QSI”) is the first step in establishing a client’s iBudget. Proposed Rule 65G-4.0213(18) defines a QSI as “[a]n assessment instrument used by [APD] to determine an individual’s needs in the areas of functional, behavioral, and physical status,” and Proposed Rule 65G- 4.0213(18) incorporates the QSI by reference. The QSI is a series of questions designed to gather information about a client’s functional ability (i.e., the client’s need for assistance with eating, bathing, walking, etc.), behavioral issues (i.e., aggression, elopement, self- injury, etc.), and physical issues (i.e., medical issues that require assistance). The answers each client provides to the QSI enable APD to identify that client’s level of need and the types of supports he or she requires. The University of South Florida verified that the questions set forth in the QSI elicit answers that enable APD to reliably evaluate each client’s level of need for services. Proposed Rule 65G-4.0213(18) identifies the QSI as a “valid and reliable assessment instrument.” Ms. Arnold testified that a QSI is to be completed for every client at least once every three years. However, Proposed Rule 65G-4.0214(1)(d) provides that a client may request that another QSI be completed if there has been a significant change in circumstances that could affect a client’s iBudget amount. The data gathered from a client’s QSI plays a substantial role in calculating that client’s iBudget. As discussed in more detail in a subsequent section, the answers from several of the QSI questions serve as inputs into the Allocation Algorithm. Proposed Rule 65G-4.0216(3) provides that after calculation of a client’s Allocation Algorithm amount, the client’s Waiver Support Coordinator meets with the client, the client’s representative, and/or the client’s advocate in order to evaluate whether the client has any SANs.4/ Proposed Rule 65G-4.0218(1) sets forth SAN categories that essentially mirror the three listed in section 393.0662. However, Proposed Rule 65G-4.0218(1) provides for an additional or fourth SAN category involving transportation services to a waiver-funded adult day training program or to a waiver-funded supported employment. This applies when the client’s need cannot be met through his or her iBudget amount without compromising the client’s health and safety and there are no other viable means of transportation. If the Waiver Support Coordinator in conjunction with the client, the client’s representative, and/or the client’s advocate determines that the client has a SAN, then Proposed Rule 65G-4.0216(3) provides that the Waiver Support Coordinator will complete an Amount Implementation Meeting (“AIM”) Worksheet and submit it to APD within 30 days of receiving a new algorithm amount. If no additional documentation is needed, then APD will have 30 days from receipt of the AIM Worksheet to issue a decision on the client’s iBudget amount. Proposed Rule 65G-4.0216(3) mandates that APD “shall approve an increase to the iBudget amount if additional funding is required to meet [SANs] subject to the provisions of the iBudget rules.” In contrast, if the Waiver Support Coordinator in conjunction with the client, the client’s representative, and/or the client’s advocate determines that the algorithm amount is sufficient to pay for all the services and supports the client will need, then the individual review is complete and no further action is necessary. The client or someone acting on the client’s behalf signs the AIM form and notifies APD that there are no SANs. Once a client’s iBudget amount is established, Proposed Rule 65G-4.0217(1) requires the client’s Waiver Support Coordinator to submit a cost plan proposal to APD reflecting the specific waiver services and supports that the client will utilize and the providers of those services and supports. APD then reviews the cost plan to ensure that it conforms with the iBudget rules and the rules governing Waiver services in general. The Allocation Algorithm Section 393.0662(1)(a) directs APD to use an algorithm with variables that have been determined by APD to have a statistically validated relationship to the client’s level of need for services provided through the Waiver. In 2009 to 2010, APD contracted with Dr. Xu-Feng Niu, the chair of the statistics department at Florida State University, to develop and recommend options for an algorithm for the First Proposed Rules. Dr. Niu has performed statistical work for other Florida state agencies, including developing models and algorithms for the Department of Environmental Protection and the Department of Transportation. Dr. Niu has an extremely long and distinguished career as a statistician. He earned his Ph.D. in statistics from the University of Chicago in 1991. After being hired by Florida State University to teach statistics in 1991, Dr. Niu became the Chair of the University’s statistics department in 2011 and still holds that position. Dr. Niu created the allocation algorithm that was incorporated into the First Proposed Rules. That allocation algorithm’s validity was at issue during the previous rule challenge, and the ALJ who considered that challenge found that Dr. Niu’s allocation algorithm was valid. G.B., Z.L. through His Guardian K.L., J.H., and M.R. v. Ag. for Persons with Disab., Case No. 13-1849 (Fla. DOAH Sept. 9, 2013). In the subsequent appellate decision that invalidated the First Proposed Rules, G.B., et. al v. Ag. for Persons with Disab., supra, the First District Court of Appeal in G.B. did not address the allocation algorithm’s validity. In 2014, APD contracted with Dr. Niu to update the Allocation Algorithm for the Proposed Rules. Dr. Niu developed the Allocation Algorithm in the Proposed Rules by using a linear regression statistical method. As explained above, a multiple linear regression model utilizes independent variables (predictors) to arrive at a response (dependent variable). The independent variables in the Allocation Algorithm include a client’s age, living setting, and certain individual characteristics and support needs specified in the QSI. To provide a baseline to begin constructing the allocation algorithm, Dr. Niu used the clients’ fiscal year 2013-14 waiver expenditures (also referred to as claims data) as the dependent variable. Use of that fiscal year was significant because that was the first year that the Tier system was no longer in place, and the iBudget statute had been in effect for a full year. According to APD, every client’s needs had been met during the 2013-14 fiscal year. In practice, the dependent variable will be unknown because the dependent variable is that particular client’s future expected need, and that is what the Allocation Algorithm is designed to calculate. Dr. Niu’s analysis did not include 2013-14 claims data for a significant number of APD’s clients. For instance, APD served approximately 30,600 clients during that fiscal year, but Dr. Niu justifiably did not rely on claims data for any clients who had not been on the Waiver for at least one year. Also, Dr. Niu excluded the claims date from approximately 2,410 clients who were deemed to be “outliers.” In this context, “outliers” were deemed to be clients whose total claims during the 2013-14 fiscal year were extremely high or extremely low. This exclusion was done partially because including such outliers in a regression model sometimes reduces the model’s predictive ability. In making the decision to exclude approximately 10 percent of the clients who had been receiving Waiver services for a full year or more as outliers, rather than five percent as suggested by Petitioners, Dr. Niu considered input from APD’s stakeholders. As discussed above, APD conducted several public meetings regarding the formulation of the Proposed Rules, and all stakeholders (i.e., interested parties such as parents or guardians of clients, service providers, and staff from the Agency for Healthcare Administration) had ample opportunity to provide input to APD. Dr. Niu presented the stakeholders with a choice of designating either five percent or 10 percent of clients as outliers and excluding their claims data from the Allocation Algorithm’s formulation. The stakeholders ultimately recommended that 10 percent be designated as outliers, and Dr. Niu agreed with their recommendation. According to Dr. Niu, designating either five percent or 10 percent of the clients as outliers would have been appropriate. However, designating 10 percent of the clients as outliers was more appropriate in this instance, and resulted in a better model, because the iBudget system had only been in place for one year. The 10 percent exclusion was also deemed appropriate because there was a great deal of variation in the claims data. Because the claims data was in dollars, Dr. Niu needed to transform the data in order to create a bell curve. He accomplished that by performing a square root transformation on the data. While Dr. Niu could have used a logarithmic transformation, he determined that the square root transformation made the data more bell-shaped. Though either transformation could have been used, the preponderance of the evidence indicated that the square root transformation was a reasonable and appropriate means for developing the bell curve. After transforming the claims data from the 2013- 14 fiscal year, Dr. Niu had a baseline or a dependent variable for the Allocation Algorithm, but he still needed independent variables. In order to satisfy section 393.0662’s requirement that any allocation algorithm utilized by APD use independent variables that “have a statistically validated relationship to the client’s level of need for services provided through [the Waiver],” Dr. Niu turned to the QSI. As noted above, the QSI questions have already been validated as having a statistically valid relationship to a client’s level of need. However, Dr. Niu still had to determine what data from the QSI to use as independent variables in the algorithm. While Dr. Niu could have constructed an algorithm that utilized every piece of data from a client’s QSI, such a model would have been overly complex. Accordingly, Dr. Niu tested over 100 different regression models, each with different combinations of QSI data points as independent variables. After considering several different regression models, Dr. Niu ultimately determined that a regression model he designated as “5B” was the best one at predicting a client’s expected future need for services. That model’s independent variables include the client’s age, living setting status, and certain individual characteristics and support needs specified in the individual’s QSI. That QSI information included questions (among others) pertaining to a client’s ability to eat, dress, and protect himself or herself. Other questions assessed whether a client engages in inappropriate sexual behavior or experiences episodes of aggression. Dr. Niu determined that Model 5B was the best one by performing a bootstrapping analysis. Bootstrapping is a statistical method used for testing regression models. The method involves running a model with the original data while randomly repeating some claims and randomly dropping others. Dr. Niu performed this test approximately 10,000 times in order to test the reliability of Model 5B. Dr. Niu’s conclusion about Model 5B was also influenced by its R-squared value. The R-squared value quantifies how much of the variation from the average claim is explained by a particular model, and the R-squared value is a number between zero and one. If a particular model’s R-squared value is 1, then that model explains 100 percent of the deviation from the average claim. Model 5B had an R-squared value of .80. Therefore, that model explained 80 percent of the deviation. Dr. James McClave5/, Petitioner’s expert statistician, testified during the final hearing that the Allocation Algorithm’s margin of error was 90 percent when used to calculate actual claims totals by APD’s clients in 2013-14. In response, Dr. Niu testified that Dr. McClave was testing for the wrong thing. According to Dr. Niu, evaluating the Allocation Algorithm by its ability to predict past claims for the 2013-14 fiscal year was not a valid test of what the Allocation Algorithm was designed to accomplish. Specifically, Dr. Niu testified that the Allocation Algorithm is not attempting to predict past expenditures. Instead, it is trying to predict or calculate a claimant’s future expected need. A client’s future expected need is driven by that particular client’s individual characteristics and circumstances (i.e., the independent variables in the Allocation Algorithm). That same client’s future expected need can differ from his or her actual future need due to unexpected circumstances such as a drastic change in the client’s condition or the death of a caregiver. The evidence and testimony presented at the final hearing indicated that it would be extremely difficult to construct an algorithm that could account for such unexpected circumstances and thus be effective in calculating or predicting that client’s actual future need. Accordingly, the Allocation Algorithm is intended to calculate or predict a client’s future expected need based on the information that is known about that client. Dr. Niu’s testimony was credible and is accepted. To that point, Ms. Arnold persuasively explained why an individual client’s expenditures may unexpectedly change from one year to another. Ms. Arnold is the Deputy Director of Programs for APD and has been involved in implementing the iBudget System since its inception. She has worked for APD for over 30 years, and she was a service provider prior to her service at APD. Ms. Arnold has been working on the iBudget implementation and development for ten years, spending about 75 percent of her time on it. Ms. Arnold has spent numerous hours in meetings regarding the Proposed Rules and has spent many hours in meetings with Dr. Niu discussing the Allocation Algorithm. Thus, Ms. Arnold understands the Proposed Rules, what the Allocation Algorithm is supposed to do, and what the QSI does. As Ms. Arnold testified, the Allocation Algorithm is based on characteristics that identify a client’s future expected need. Therefore, clients with the same characteristics will receive the same Allocation Algorithm amount. However, this statistical process, which predicts need based on individual characteristics, does not account for all of the social variables that can create totally different situations for one client as opposed to another. For example, Ms. Arnold testified that you could have two individuals with similar characteristics; however, one client lives with a single mother and the other lives with a brother and sister who provide a great deal of support. As a result, the client with a single parent who works may need support during the day (such as a day program), while the client with sibling support may not have that same need. Ms. Arnold also testified that clients’ lives can change rapidly, and an algorithm relying on immature data cannot capture all of those changes. In addition, there are other reasons why a client’s future expected need may differ from his or her future actual need. Clients living in rural communities may receive services less often, a caregiver’s condition could change, an individual could go on vacation, or an individual may go into a hospital for an extended period. Also, Waiver funding is funding of last resort. § 393.0662(4), Fla. Stat. Therefore, a client’s need for Waiver funds may be accurately predicted by the Allocation Algorithm, but that client may not end up using all of the Waiver funds because his or her need is being met through other resources. As mentioned above, section 393.0662(1)(b), requires that the Allocation Algorithm “use variables that have been determined by [APD] to have a statistically validated relationship to the client’s level of need” for Waiver services. APD proved by a preponderance of the evidence that the Allocation Algorithm satisfies that requirement. During the final hearing, Petitioners attempted to undermine the Allocation Algorithm developed by Dr. Niu by noting that it was ineffective in “predicting” the Waiver claims made by APD’s clients during the 2013-14 fiscal year. This was evidenced by the 90 percent margin of error discussed above. Petitioners argued that if the Allocation Algorithm does a poor job of predicting claims made during the 2013- 14 fiscal year, then the Allocation Algorithm is not satisfying section 393.0662(1)(b)’s requirement to use variables having a statistically validated relationship to the client’s level of need. However, APD’s witnesses persuasively testified that the test put forth by Petitioners was not the appropriate way to ascertain whether the Allocation Algorithm uses variables having a statistically validated relationship to the client’s level of need. As discussed above, APD is not attempting to use the Allocation Algorithm to predict or calculate a client’s actual future need. Instead, APD is attempting to use the Allocation Algorithm to predict or calculate a client’s future expected need based on certain facts known about that client. Unexpected events may cause that client’s actual future need to substantially differ from that client’s future expected need. Moreover, Petitioners presented no other evidence that the information utilized in the Allocation Algorithm (such as the QSI information) did not have a statistically validated relationship to the client’s level of need. However, a cursory examination of the independent variables utilized in the Allocation Algorithm indicates they would have a substantial influence on a client’s level of need. Dr. Niu simply determined that a particular combination of variables had the strongest correlation to a client’s future expected need. As noted above, APD transitioned its clients to the iBudget System on July 1, 2013, and has been utilizing the First Proposed Rules. The finding that the Allocation Algorithm uses independent variables having a statistically validated relationship to the client’s level of need is corroborated by the fact that the iBudget System has been successful during the short amount of time that it has been implemented. The First Proposed Rules also had an Allocation Algorithm, and its R-squared value was .67 while the R-squared for the Allocation Algorithm at issue in this case is .80. Nevertheless, Ms. Arnold testified that only about 2,500 clients had to utilize the SANs process in a recent year. Also, Ms. Susan Chen, a statistician employed by APD, testified that APD’s clients generally spent only about 80 percent of their iBudgets during the 2013-14 fiscal year. If the iBudget system was not working, then the clients’ needs would have exceeded their iBudget allocation. Ms. Chen also testified that three of the Petitioners did not spend all of the money they had received via the Allocation Algorithm currently in effect. Specifically, two of the Petitioners spent only 80 percent of their allocations, and a third spent approximately 90 percent of what he or she was allocated. Finally, APD had budget surpluses during the 2013- 14 and 2014-15 fiscal years. This is additional evidence that the needs of those clients receiving Waiver services are being met. It is also evidence that the Allocation Algorithm (with a higher R-squared value than the one currently being utilized) has a statistically validated relationship to the client’s level of need. In sum, the evidence and testimony presented by APD was more persuasive than the evidence and testimony presented by Petitioners. Petitioners raised several other issues that will be addressed below.
The Issue Did the Department of Children and Family Services (Department) improperly deny the in-home subsidy of $400.00 per month to Petitioner?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: The Department is the agency of the State of Florida charged with the responsibility of administering the Medicaid Developmental Disabilities Home and Community-Based Services Waiver Program (Medicaid Waiver Program), the Family Care Program, and the provisions of in-home subsidies. Petitioner is a 30-year-old severely developmentally disabled woman who suffers from cerebral palsy and is totally blind. Petitioner is confined to a wheelchair, cannot care for herself, and is totally dependent on others for her care 24 hours a day. Petitioner lives with her mother and legal guardian, Jo Anne Weaver, and her stepfather, in the Weaver's home, which was purchased by the Weavers in March 2001, with a mortgage, after renting the home for three years. The Weavers have made modifications to the home to accommodate Petitioner's needs, including a ceiling lift that takes Petitioner from her bed, through the hall, and into her bathroom. Mr. Weaver is school teacher who works two nights a week in addition to daytime employment. Jo Anne Weaver sells advertising for the Jewish Press and earns $170.00 per week, plus $50.00 per week for expenses. In addition to the in-home subsidy, Petitioner receives assistance through the Department under the Medicaid Waiver Program, which allocates funds to provide Petitioner with in- home caregivers and other in-home services, such as companion services, personal care assistance, respite care, and consumable medical supplies. The funds under the Medicaid Waiver Program are paid directly to the caregivers and service providers and not to Petitioner or her guardian. The Medicaid Waiver Program, through a cost plan established and approved each year for Petitioner, allocates funds to provide a maximum of ten hours per day of caregiver services to Petitioner. Petitioner's family, primarily her mother and stepfather, provide uncompensated care to Petitioner the remaining 14 hours of each day. Petitioner's mother gets up several times each night to diaper Petitioner and to reposition her in the bed. Due to a number of factors, Medicaid Waiver Program services that have been approved under a support plan may not ultimately be received by the disabled person. Petitioner has never used all the funding allocated under her support plan. Although the Medicaid Waiver Program authorizes the provisions of funds for caregivers for 10 hours each day, Petitioner's mother has been unable to arrange consistently for caregivers to come to the home for the full 70 hours each week because it is very difficult to find, secure, and keep caregivers who will provide services under the terms of the Medicaid Waiver Program. In addition to the services authorized under the Medicaid Waiver Program, Petitioner has been, since 1995, receiving a monthly in-home subsidy of $400.00 per month in accordance with Section 393.0695, Florida Statutes. The in-home subsidy is paid from general revenue funds and is not part of Medicaid program, and is the only payment that Petitioner or the Weavers receive directly from the Department. However, Petitioner receives $74.00 per month Supplemental Security Income and $478.00 per month court-ordered support payment from her father. Additionally, Petitioner's father pays for her Blue Cross/Blue Shield health insurance coverage. The Weavers pay for Petitioner's out-of-pocket medical and dental expenses. Petitioner's Proposed Developmental Services Cost Plan (Support Plan) with a development date of December 15, 2000, shows a proposed cost of $87,518.96. This amount included a $400.00 per month ($4,800.00 per year) in-home subsidy for basic living necessities as set forth in Subsection 393.0695(2), Florida Statutes. At the time the proposed support plan was submitted, the average cost for institutional placement was $71,424.44. On August 27, 1999, the Department issued the Developmental Services Home and Community-Based Services, WAIVER CLARIFICATION P.D.#99-05 REV02, Waiver Cost Review Policy with an effective date of October 1, 1999 (Policy Directive), which stated in pertinent part as follows: Effective October 1, 1999, individuals with an annual average cost in excess of Intermediate Care Facilities for persons with Developmental Disabilities (ICF/DD) shall only be enrolled into the waiver if the Secretary of the Department approves an exception. . . If the total costs to support an individual in the community exceed the ICF/DD cost, the plan must be submitted for review and approval or denial before the individual is added to the waiver. . . . On December 29, 2000, in accordance with the above Policy Directive, Petitioner's Proposed Support Plan was submitted to the Department's Tallahassee office for review. On January 19, 2001, Susan Dickerson, Chief concurred in the recommendation to approve the Proposed Support Plan with the following exceptions: Other Adaptive Equipment and stroller repairs and adaptations should be determined as medically necessary before approval. Physical therapy approved only for the amount in excess of coverage by Medicaid state plan. Family subsidy for $400.00 of general revenue funds monthly is not approved. WSC should explore other less costly options for providing services including attending a day program. (Emphasis furnished) On January 23, 2001, a reconsideration of Susan Dickerson's decision was requested, and on February 15, 2001, Kathleen A. Kearney, Secretary, concurred in the earlier recommendation, which included the same exceptions. By a Notice of Denial of Requested Service Funded Through General Revenue dated March 8, 2001, the Department advised Petitioner that her request for in-house subsidy had been denied because "Medical necessity for this service had not been demonstrated as defined in Chapter 59G-1.010(166), Florida Administrative Code." (Emphasis furnished). There was no other reason offered, including the unavailability of funds for this service under existing appropriations, given by the Department for denying Petitioner's request for the in-house subsidy. The Department has not alleged that funds were unavailable to provide the in-house subsidy to Petitioner. The final cost approved for the support plan was $82,718.96. The Petitioner has demonstrated a need for the in-home subsidy in the amount requested.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department enter a final order approving Petitioner's request for in-home subsidy in the amount of $400.00 per month. DONE AND ENTERED this 4th day of February, 2002, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 4th day of February, 2002. COPIES FURNISHED: Susan Haubenstock-Greenburg, Esquire Post Office Box 1588 Tampa, Florida 33601-1588 Frank H. Nagatani, Esquire Department of Children and Family Services 11351 Ulmerton Road, Suite 100 Largo, Florida 33778-1630 Peggy Sanford, Agency Clerk Department of Children and Family Services 1317 Winewood Boulevard Building 2, Room 204B Tallahassee, Florida 32399-0700 Josie Tomayo, General Counsel Department of Children And Family Services 1317 Winewood Boulevard Building 2, Room 204 Tallahassee, Florida 32399-0700
The Issue The issue for determination is whether Respondent was overpaid $312,773.67 for claims which, according to Petitioner, did not comply with Medicaid requirements.
Findings Of Fact Petitioner Agency for Health Care Administration ("AHCA") is the state agency responsible for administering the Florida Medicaid Program ("Medicaid"). At all relevant times, Respondent has been a Home and Community Based (HCB) Medicaid provider that is authorized to receive reimbursement for covered services rendered to Medicaid recipients. Developmental Disability Home and Community Based Services Waiver Program The alleged overpayment in this case relates to services Respondent provided through the Medicaid Developmental Disability Home and Community Based Waiver Program ("the Program"). As explained during Ms. Olmstead's final hearing testimony, the Program was established to help developmentally- disabled individuals remain in their homes or home-like settings within the community, as opposed to institutions such as nursing homes or intermediate care facilities. Medicaid recipients that desire to receive services through the Program undergo an initial evaluation performed by a waiver support coordinator. The support coordinator is a Medicaid provider that is selected by the Medicaid recipient or his or her guardian. To determine the services needed by the recipient to remain in the home, the support coordinator assesses the recipient by conducting an in-home visit. Upon completion of this initial assessment, the support coordinator formulates a "support plan," a document which describes the recipient's personality, likes, dislikes, strengths, and weaknesses, as well as the recipient's existing support system, such as family, friends, and neighbors. In addition, the support plan details the services the recipient needs to stay in the home and identifies who will provide the services. The expected costs of the proposed services are described on a form titled "cost plan," which, combined with the support plan, comprise the plan of care for the recipient. The support coordinator is required to submit the plan of care, as detailed in the support plan and cost plan, to the Department of Children and Families ("DCF"). If the plan of care is approved, DCF staff will create a "service authorization form." This form, which the support coordinator forwards to the service provider, describes the services to be rendered, as well as the duration and frequency of each service. Without the service authorization form, a provider cannot be assured payment from Medicaid. At least one time per year, the support coordinator must assess the recipient's needs, complete updated support and cost plans, and submit the updated plans for approval. If the updated plan of care is approved, DCF will draft a new service authorization form, which is forwarded to the provider by the support coordinator, along with copy of pertinent support plan information. Should the recipient's services or support require modification, the support coordinator is required to update the cost report and submit it for approval. Communication between the support coordinator and providers such as Respondent is encouraged, as the support coordinator reviews with the provider the goals to be achieved for the recipient. A service provider is expected to assist in establishing support plan outcomes for a recipient's goals and participate in the personal outcome process. Moreover, a service provider expressly consents to such communication by virtue of the provider's contract with Medicaid, which includes an agreement to participate in discussions with the support coordinator on matters such as a recipient's progress, the extent to which a recipient's needs are being met, and modifications to the recipient's support plan. The Preliminary Audit and Final Audit Exercising its statutory authority to oversee the integrity of Medicaid, Petitioner conducted a review or audit of Respondent's records to verify that claims paid by Medicaid during the period from January 1, 2003, through December 31, 2004 (the "audit period"), were billed and paid in accordance with Medicaid statutes, rules, and policies. As the average number of claims per recipient during the audit period was substantial, Petitioner utilized "two stage cluster sampling." This first stage involved a random selection of 34 receipts for whom Respondent submitted claims during the audit period. Next, from those 34 recipients, a total of 255 claims was randomly selected. On October 7, 2005, AHCA requested that Respondent provide "the documentation for services paid by the Florida Medicaid Program" in connection with the 255 claims that comprised the random sample. On or about October 21, 2005, Respondent submitted 37 packages of documents in response to Petitioner's request. Respondent also executed an affidavit which alleged that the documents were true and correct copies, and that the records were made at or near the time that the services were rendered. The documents submitted by Respondent were initially examined by Ms. Effie Green, a program analyst employed by Petitioner. Ms. Green immediately noticed that the records from at least some of the packages were covered in dust with a crystal-like appearance. Law enforcement officers called to the scene ultimately determined that the substance was harmless. There is no evidence that any of the records were tampered with or removed from Petitioner's offices during the investigation. On the contrary, the evidence demonstrates that the documents remained in Ms. Green's office until the dust was analyzed. Following the events described above, the audit of Respondent's records was delayed for approximately one year while an appeal, which involved a different Medicaid provider, was completed. The appeal, which was resolved in AHCA's favor, concerned the validity of the statistical formula utilized in calculating probable Medicaid overpayments.4 The responsibility of reviewing the documents provided by Respondent was later transferred to Ms. Robin Satchell, an investigator employed by Petitioner in the Bureau of Program Integrity. Prior to her employment with AHCA, Ms. Satchell worked for eight years as an HCB Medicaid provider. Ms. Satchell fully reviewed the records previously submitted on October 20, 2005, and also examined additional records subsequently provided by Respondent to verify that the claims paid during the audit period were billed and paid in accordance with Medicaid statutes, rules, and policies. Rules applicable to the claims reviewed in this case are enumerated in the Florida Medicaid Developmental Services Waiver Services Coverage and Limitations Handbook, and include: Only those services that have been identified in a recipient's plan of care and which have been approved and authorized prior to delivery are covered. Providers are limited to the amount, duration, and scope of the services described on the recipient's support plan and current approved cost plan. Only those services that are medically necessary are covered. Services furnished through the developmental disability waiver program are deemed to be medically necessary only if certain elements are present, including but not limited to the following: the service is not in excess of the recipient's needs; and, the service is furnished in a manner not primarily intended for the convenience of the recipient, the recipient's caregiver, or the provider. In order to receive payment for services, the provider must document the service appropriately. Documentation is a written record that supports the fact that a service has been rendered. Depending upon the particular service provided (e.g., Personal Care Assistance, Homemaker Services, Chore Services), the documentation requirements may vary and are detailed in the Florida Medicaid Developmental Services Waiver Services Coverage and Limitations Handbook. On May 24, 2007, AHCA issued a Final Agency Audit Report, which alleged that Respondent was overpaid $1,647,960.81 during the audit period for services that were not covered by Medicaid. Following the issuance of the Final Agency Audit Report, and as announced at the outset of the final hearing in his matter, Petitioner now alleges that Respondent was overpaid $312,773.26. The manner in which AHCA reached the alleged overpayment of $312,773.67 is as follows: of the 255 claims examined by Ms. Satchell, 197 were allowed.5 Ms. Satchell made downward adjustments to 52 claims, and 6 were denied outright. Based upon the adjustments and denials, Ms. Satchell concluded that Respondent had received $1,287.26 in reimbursement of claims in the sample for services not covered by Medicaid, either in whole or in part. Having discovered this "empirical overpayment" of $1,287.26, AHCA employed a statistical formula to ascertain the "probable total overpayment" that Respondent received from Medicaid in connection with the total number of claims made during the Audit Period.6 As noted above, Petitioner contends that the "probable total overpayment" is $312,773.67. In her Proposed Recommended Order, Respondent asserts that with respect to the entire sample of claims, only one instance of incorrect billing occurred. In particular, Respondent concedes that that services provided to Recipient number 24 on September 2, 2003, were inadvertently overbilled in the amount of $0.96. Respondent disputes the remaining 51 downward adjustments and six outright denials, which are discussed separately below by recipient.7 Recipient No. 1 The support plan for this recipient authorized Personal Care Assistance, which is described in the Florida Medicaid Developmental Services Waiver Services Coverage and Limitations Handbook as follows: service that assists a beneficiary with eating and meal preparation, bathing, dressing, personal hygiene, and activities of daily living. The service also includes activities such as assistance with meal preparation, bed marking and vacuuming when these activities are essential to the health and welfare of the beneficiary and when no one else is available to perform them . . . . Personal Care Assistance is limited to the amount, duration and scope of the services described in the beneficiaries [sic] support plan and current approved cost plan.[8] (Emphasis added). The support plan indicates that this recipient lived with his mother and three siblings, all but one of whom were capable of completing homemaker tasks. AHCA alleges that of the five claims examined during the audit, one is problematic. In particular, AHCA contends that six of the activities performed on November 12, 2004, constituted unauthorized homemaker tasks, and therefore overbilling occurred in the amount of $12.90. According to AHCA, the unauthorized activities included organizing clothes, cleaning the kitchen, washing dishes, cleaning tables, cleaning the living room, and washing laundry. The undersigned finds that four of the six activities were unauthorized homemaker tasks: organizing clothes, cleaning the living room, washing laundry, and cleaning tables. The undersigned cannot agree, however, that Respondent inappropriately billed for washing dishes and cleaning the kitchen. Notably, and as demonstrated by the service log, meal preparation was one of the services provided to the recipient on November 12, 2004. There is no allegation that meal preparation was unauthorized, and the various exhibits submitted by AHCA plainly reveal that the service was appropriate (i.e., meal preparation was not included in AHCA's list of unauthorized activities for that date). In the undersigned's judgment, if a service provider is authorized to cook a meal for a beneficiary, it necessarily follows that the provider be permitted, and indeed expected, to wash the dishes and clean the kitchen. The undersigned's conclusion that Respondent appropriately billed for cleaning the kitchen and washing dishes is supported by the notes made by Ms. Satchell in one of AHCA's exhibits. In particular, page 3 of Petitioner's Exhibit H indicates that with respect to the October 17, 2004, services provided to Recipient No. 6 (who likewise received Personal Care Assistance), one unit of service was deducted for cleaning the kitchen because there was "no meal prep that day." The obvious implication of this notation is that cleaning the kitchen would not have been considered improper if a meal had been prepared. As Respondent was authorized to prepare a meal for the recipient on November 12, 2004, Respondent properly billed for the services of washing the dishes and cleaning the kitchen. Accordingly, the $12.90 alleged overpayment should be adjusted, as only four unauthorized activities (organizing clothes, cleaning the living room, washing laundry, and cleaning tables) were billed. Recipient No. 3 The service authorization for Recipient No. 3 provided for four hours of Homemaker Services per week. The service authorization further indicated that the Homemaker Services were intended to achieve the support plan goal of providing "the beneficiary with [a] clean environment. General household activities, such meal [sic] preparation, vacuuming, and routine cleaning." It appears from the support plan that the Homemaker Services were authorized due to the poor health of the recipient's mother. Homemaker Services are defined in the Florida Medicaid Developmental Services Waiver Services Coverage and Limitations Handbook as follows: Homemaker services are those general household activities such as meal preparation, laundry, vacuuming and routine household cleaning provided by a trained homemaker, when the person who usually handles these tasks is unable to perform them. The intent of this service is to ensure that the beneficiary's home environment remains clean, safe, and sanitary. Homemaker services are provided only when there is no one else capable of accomplishing the household tasks . . . . * * * Homemaker services shall be provided in the beneficiary's own home or family home. This service is available in the family home only when there is documentation as to why the family cannot provide the support If approved, homemaker services will be limited to the beneficiary's primary living areas such as bedroom and bathroom. This includes the kitchen and a common area, if regularly utilized by the beneficiary. (Emphasis added). On December 11, 2004, Respondent provided four hours of Homemaker Services, which were billed in the amount of $59.20. AHCA concedes that nine of the services provided on December 11, 2004, were authorized and therefore appropriately billed: making the bed; changing the bed sheets; throwing garbage away; cleaning the room; organizing the room; organizing the clothes; cleaning the bathroom; changing the towels; organizing the bathroom; vacuuming; cleaning the rugs; and meal preparation. However, AHCA contends that ten other activities provided on December 11, 2004, were unauthorized: cleaning the kitchen; washing the dishes; cleaning the tables; cleaning / organizing the cabinets; cleaning the stove; cleaning the refrigerator; cleaning the living room; washing laundry; ironing; and cleaning windows. It is evident from Ms. Satchell's notes (in the "MPI worksheet") that she found these tasks unnecessary because they occurred "outside of recipient's bedroom / bathroom."9 As a consequence, Ms. Satchell concluded that Respondent was overpaid for one hour of services in the amount of $14.80 Once again, the undersigned cannot agree that Respondent inappropriately billed for cleaning the kitchen, washing dishes, and cleaning the stove. Cooking was permitted by the service authorization, and there is no allegation that Respondent should not have billed for the meal that was prepared for the recipient on December 11, 2004. If a provider is authorized to prepare a meal, it is only logical that he or she clean up afterward and bill for the time. Nor can the undersigned agree that Respondent should not have billed for cleaning the living room, tables, windows, and refrigerator. These four activities plainly fall within the services contemplated by the service authorization, which directed Respondent to provide "the beneficiary with [a] clean environment" and carry out "general household activities . . . such as routine cleaning." Moreover, these activities are comparable to "cleaning rugs," an activity performed on the same date that was not alleged to be improper. Although, as AHCA point out, these activities may have occurred outside of the recipient's bedroom and bathroom, that fact is not controlling, as the Florida Medicaid Developmental Services Waiver Services Coverage and Limitations Handbook provides that Homemaker Services extend to "the kitchen and a common area, if regularly utilized by the beneficiary."10 The undersigned also finds that washing laundry was not an unauthorized activity, as it falls within the definition homemaker services. Further, in light of the recipient's incontinence, washing laundry is obviously essential to achieving the support plan goal of providing "the beneficiary with [a] clean environment." The undersigned does agree with AHCA that ironing and "cleaning / organizing cabinets" were unauthorized because these activities were not related to the support plan goals. Based on the findings herein that only two of the activities were unauthorized (ironing and "cleaning / organizing" cabinets), an adjustment should be made to the alleged overpayment of $14.80. Recipient No. 6 This recipient was authorized to receive six hours of Personal Care Assistance per day. Pursuant to the support plan, Respondent was authorized to provide bathing, dressing and eating assistance to the recipient. On October 17, 2004, Respondent provided six hours of services to the recipient, at a cost of $120.96. AHCA alleges, correctly, that one of the services provided on that date, cleaning the kitchen, was unauthorized because the service documentation provided by Respondent reflects that no meal was prepared. Accordingly, the undersigned finds that Respondent was overpaid $5.04. Although Respondent has suggested that cleaning the kitchen may have been necessary due to the recipient (who is incontinent) defecating on the kitchen floor, no documentation has been provided that would support such a finding. In the absence of appropriate documentation, AHCA appropriately found that an adjustment of one unit was required for the October 17, 2004, services. Respondent also provided six hours of services to the recipient on November 26, 2004, at a cost of $120.96. With respect to this date, AHCA contends, and the undersigned agrees, that overbilling for one unit in the amount of $5.04 occurred, as one of the activities performed, "organizing clothes," constituted an unauthorized homemaker service. For the reasons expressed above, AHCA demonstrated by a preponderance of the evidence overbilling totaling $10.08 with respect to this recipient. Recipient No. 7 This recipient was authorized to receive Personal Care Assistance. Significantly, the recipient's support plan clearly indicated that her mother prepared meals for her. The service logs indicate that Respondent provided four hours of services to the recipient on the following dates: September 4 and November 25, 2003, and February 10 and April 26, 2004. AHCA contends that on each of the four dates listed above, Respondent provided the unauthorized service of meal preparation, and as a result, Respondent was overpaid a total of $18.68. As the recipient's support plan clearly indicated that meals were prepared by a parent, AHCA has demonstrated an overpayment of $18.68 by a preponderance of the evidence. Recipient No. 8 Recipient No. 8 was authorized to receive Personal Care Assistance and Companion Services, both of which were provided by Respondent. AHCA alleges that of the eleven claims reviewed pursuant to the audit, two were problematic. Specifically, AHCA contends the service logs associated with the personal care assistance provided on October 26 and November 19, 2004, were obvious photocopies of Respondent's service log from March of 2004 for the same recipient. Accordingly, AHCA asserts that the records submitted by Respondent in connection with the October 26 and November 19 services were not contemporaneous and therefore inadequate. As no contemporaneous records document the services provided on October 26 and November 19, 2004, AHCA contends that Respondent was overpaid $275.20 ($137.60 for each of the dates). The undersigned has examined the service logs for October and November 2004 for this recipient and finds that they do not constitute contemporaneous records. As such, Respondent was overpaid in the amount alleged by AHCA. Recipient No. 9 This recipient was authorized to receive Homemaker Services. AHCA alleges, and the undersigned agrees, that of the five claims audited, two involved overpayments. In particular, Respondent's service log reveals that on April 29, 2003, the unauthorized activity of "shopping" was performed. As such, Respondent was overpaid in the amount of $3.70. Further, Respondent's service log indicates that on January 7, 2004, homemaker activities were provided from 9:00 a.m. through 11:00 a.m., which included shopping and meal preparation. As noted above, shopping is an unauthorized activity. In addition, the support plan indicates that the recipient's mother was responsible for preparing meals. Accordingly, an overpayment of $3.70 occurred with respect to this date of service. For these reasons, AHCA has demonstrated a total overpayment of $7.40 in connection with this recipient. Recipient No. 10 Recipient No. 10 was authorized to receive Companion Services, which, pursuant to the support plan, were intended to help the recipient "continue to be exposed to different options in the community." AHCA contends that two of the five claims examined during the audit are problematic. First, with respect to the July 29, 2003, claim, Respondent provided no documentation to support the $49.44 billed for the four hours of service. As such, AHCA correctly determined that Respondent was overpaid in that amount. In addition, AHCA properly found that Respondent was overpaid $3.70 in connection with the September 26, 2003, services. Specifically, the service log indicates that a meal was prepared, which is an activity unrelated to the specific goals identified in the support plan. Based on the above findings, Respondent was overpaid a total of $53.14 with respect to this recipient. Recipient No. 12 Recipient No. 12 was authorized to receive eight hours of Companion Services per week. Pursuant to the support plan and service authorization, the services were intended to help the recipient be "socially active in the community." The support plan further indicated that the recipient was able to "clean her room, clean the bathroom . . . wash dishes and help her mother with chores." AHCA correctly alleges that of the five claims examined, three involved overpayments. First, for the 32 units of service provided on December 28, 2003, Respondent was overpaid $3.70 because the service log indicates that dishwashing was provided. This was obviously inappropriate because, as noted above, the support plan expressly provided that the recipient was capable of washing dishes. Next, Respondent's service log indicates that dishwashing was performed for the recipient on April 24, 2004. As such, Respondent was overpaid $3.70. An overpayment of $3.70 was also proven in connection with the July 3, 2004, services, as the service log demonstrates that the unauthorized activities of dishwashing and "organizing the bathroom" were performed. For these reasons, AHCA appropriately determined that Respondent was overpaid in the total amount of $11.10 for the services provided to this recipient during the audit period. Recipient No. 17 This recipient was authorized to receive Personal Care Assistance and Homemaker Services. Of the twelve claims reviewed concerning this recipient, AHCA alleges that only the November 11, 2004, services are problematic. In particular, a review of the service logs demonstrates that seven activities billed as homemaker services for November 11, 2004, were also provided and billed as personal care assistance for the same date. Based upon this unauthorized duplication of services, AHCA has proven that an overpayment of $14.80 occurred. Recipient No. 18 This recipient was authorized to receive forty hours of Personal Care Assistance per week. According to the support plan, the recipient lived alone with her father (who worked full time) and had little contact with her mother, who lived "far away" and visited only occasionally on weekends. The support plan further provided that the personal care assistance was intended to provide assistance with "bathing, dressing, grooming, food preparation, feeding, and transportation to . . . therapy." AHCA determined, following a review of the service logs and other documentation, that Respondent was overpaid in connection with two of the seven claims reviewed during the audit. First, AHCA alleges that Respondent was overpaid $7.72 by performing unauthorized homemaker tasks on September 19, 2003, which included shopping, washing dishes (although no meal was prepared), and assisting with household activities that would not typically be completed by an eight-year-old child. The undersigned agrees that the activities identified by AHCA in connection with the services rendered on September 19, 2003, were unauthorized, and that Respondent was overpaid in the amount of $7.72. AHCA also contends that Respondent was overpaid $7.72 in connection with the services provided on February 27, 2004. Specifically, AHCA asserts that three of the activities (shopping, laundry, and washing dishes) were unauthorized homemaker tasks. It is critical to note that in contrast to the services provided on September 19, 2003, the provider prepared a meal (as authorized by the support plan) for the recipient on February 27, 2004. As such, and for the reasons expressed previously in this Recommended Order, dishwashing should not be deemed an unauthorized activity. However, the undersigned concludes that shopping and laundry, the other two questionable activities performed on February 27, 2004, were indeed unauthorized. In light of the undersigned's finding that meal preparation was not an unauthorized activity, AHCA should make an appropriate adjustment to the February 27, 2004, overpayment. Recipient No. 19 Of the eight claims examined for Recipient No. 19, who was authorized to receive Companion Services, AHCA found fault with only one. In particular, AHCA determined that of the $59.20 billed on November 26, 2004, Respondent was overpaid $3.70 by performing the unauthorized homemaker activity of "organizing bathroom." The undersigned agrees with AHCA's finding, as organizing the recipient's bathroom is a homemaker activity that does not fall within the ambit of companion services. As such, an overpayment of $3.70 occurred. Recipient No. 20 This recipient was authorized to receive twenty hours of Companion Services per week, which were typically provided in four hour blocks from 1:00 p.m. to 5:00 p.m. Companion Services are defined in the Florida Medicaid Developmental Services Waiver Services Coverage and Limitations Handbook as follows: Companion services consist of non-medical care, supervision, and socialization activities provided to an adult on a one-on- one basis. This service must be provided in direct relation to the achievement of the beneficiary's goals per his or her support plan. A companion provider may also assist the beneficiary with such tasks as meal preparation, laundry and shopping . . . . Providers may also perform light housekeeping tasks, incidental to the care and supervision of the beneficiary. (Emphasis added). Significantly, the support plan expressly provided that the recipient "receive[d] assistance from her companion in some house chores, like cleaning the kitchen and meal preparation to avoid risky situations in the kitchen." (Emphasis added). AHCA contends that overpayments occurred with respect to four of the five claims audited. First, AHCA alleges that with regard to the November 11, 2003, services, Respondent was overpaid $3.70 by performing the unauthorized activity of "light housekeeping." The undersigned cannot agree, as the support plan plainly allowed the provider to assist the recipient with "some house chores," which is indistinguishable from "light housekeeping." Further, and as noted above, companion services may include "light housekeeping tasks, incidental to the care and supervision of the beneficiary." The service log for November 11, 2003, demonstrates that supervision was provided to the recipient. Accordingly, Respondent did not overbill in the amount of $3.70 for this date of service. Next, AHCA contends that with respect to the services provided on December 10, 2003 (which included non-medical care, supervision, shopping, and "goals and support plan assistant"), one activity was unauthorized: meal preparation. As such, AHCA alleges that an overpayment of $3.70 occurred. The undersigned concludes, based on the unambiguous language of the support plan, that meal preparation was authorized. As detailed above, the recipient "receive[d] assistance from her companion in some house chores, like cleaning the kitchen and meal preparation to avoid risky situations in the kitchen." (Emphasis added). Accordingly, an overpayment of $3.70 did not occur with respect to the December 10, 2003, services. Turning to the services provided on May 6, 2004, AHCA contends that the unauthorized activity of washing laundry resulted in an overbilling of $3.70. As referenced in the definition of companion services previously quoted, laundry may only be performed "in direct relation to the achievement of the beneficiary's goals per his or her support plan." In this instance, the documentation submitted by Respondent fails to make such a showing. As a result, AHCA correctly found that $3.70 was overbilled for this date. Finally, with respect to the May 12, 2004, services, AHCA alleges that Respondent was overpaid $3.70 for the unauthorized activity of "dishwashing." The undersigned does not agree that dishwashing was unauthorized, since the support plan contemplated that the recipient would receive assistance from a "companion in some house chores, like cleaning the kitchen." As washing dishes is integral to the process of cleaning a kitchen, Respondent was not overpaid in connection with this date of service. Based on the above findings, the total overbilling for this recipient was $3.70, which related to the May 6, 2004, services. Respondent was not overpaid in connection with the services provided on November 11 and December 10, 2003, and May 12, 2004. Recipient No. 21 This recipient was authorized to receive 20 hours of Personal Care Assistance per week, which was typically provided from 2:00 p.m. through 6:00 p.m. The support plan for this recipient, who is incontinent, reads in relevant part as follows: Food requires modification. Food needs to be blend [sic] or puree [sic] at all times to avoid choking . . . . [Recipient] arrives home around 2:00 p.m. Personal Care service changes her diaper. Then she prepares her a snack. She is [sic] assists with eating. AHCA contends that Respondent was overpaid in connection with three of the four dates of service examined during the audit. First, with respect to the services provided on April 14, 2004, AHCA asserts that two unauthorized activities were performed (organizing clothes and performing a massage), which resulted in overbilling of $3.86. Having reviewed the support plan carefully, the undersigned agrees that these activities were unauthorized and that an overpayment occurred in the amount alleged. Turning to the services provided on October 14, 2004, AHCA alleges that five unauthorized activities (providing a massage, washing dishes, changing sheets, organizing the bathroom, and cleaning a table) resulted in overbilling of $11.58. The undersigned concurs with AHCA's assertion that the activities of "massage," change sheets, organize bathroom, and clean table were unauthorized. However, overbilling did not occur for washing dishes, as the service log reveals that a meal was prepared for the recipient on October 14, 2004, an activity that was expressly authorized by the support plan. As meal preparation was permitted, washing the dishes constituted a permissible activity. In light of the above findings, AHCA should make an appropriate adjustment to the overpayment associated with the October 14, 2004, services. Finally, AHCA contends that with regard to the December 24, 2004, services, Respondent was overpaid $7.72 by providing four unauthorized activities: performing a massage, making the bed, changing towels, and cleaning the living room. The undersigned agrees that these activities were not approved and that an overpayment occurred in the amount alleged. Recipient No. 23 Recipient No. 23 was authorized to receive Personal Care Assistance, which was typically provided multiple times each week for eight hours. AHCA contends that Respondent was overpaid in connection with eight of the nine claims examined during the audit. Six of the claims involve identical issues. In particular, with respect to the services provided on August 29, 2003, and February 2, February 17, April 5, May 28, and September 13, 2004, AHCA asserts that the unauthorized activities of "make bed, meal prep, [and] clean table" resulted in overbilling totaling $60.48 (i.e., $10.08 for each of the six dates). As it appears from a review of the support plan that the recipient's mother was able to complete these activities, the undersigned agrees that overbilling occurred in the amount alleged. AHCA also alleges, and has demonstrated by a preponderance of the evidence, that $10.08 was overbilled in connection with the services provided on August 8, 2003. In particular, the activities of "played outside, played with castle set, and lunch" are beyond the scope of the services contemplated by the support plan. Finally, AHCA has met its burden with respect to the alleged $5.04 in overbilling associated with the September 10, 2003, services, as "went to pool" and "watered deck flowers before dinner" plainly constitute unauthorized activities. Recipient No. 24 As noted previously, Respondent concedes that an overpayment of $0.96 occurred with respect to this recipient. Recipient No. 25 Recipient No. 25 was authorized to receive 16 hours of Companion Services each week to assist with socialization and supervision. Of the six claims examined during the audit, AHCA contends that two are problematic. First, with regard to the services provided on January 29, 2003, AHCA contends that the entire billing for that date ($24.72) should be denied due to inadequate documentation. In particular, AHCA notes that the service log provided during the preliminary audit and final audit was different than a log submitted by Respondent in April of 2009. Further, the earlier log is vague (it merely indicates "assist household, escort activities, other") and fails to address any specific support plan activities. AHCA also points out that the later log was incomplete and failed to indicate the date of the activities. AHCA has demonstrated by a preponderance of the evidence that the services provided on January 29, 2003, were not adequately documented, and therefore Respondent was overpaid in the amount of $24.72. Next, AHCA alleges that the services provided on March 25, 2004, were not adequately documented, and therefore the entire billing of $44.40 should be denied for that date. Specifically, AHCA points out that the service log only reads "supervision" and "escort activities" and failed to address any of the activities enumerated in the support plan. Although a later service log was submitted, it was incomplete, vague, and failed to delineate which activities were performed on March 25, 2004, as opposed to the other nine dates of service during that month. For the reasons detailed above, AHCA demonstrated by a preponderance of the evidence that the March 25, 2004, services were not properly documented, and therefore the $44.40 payment should be denied. Recipient No. 26 AHCA contends that of the nine claims examined during the audit concerning this recipient, one should be fully denied due to the lack of proper documentation. Specifically, AHCA alleges that the $74.00 payment for the services rendered on May 31, 2004, should be denied outright, as the service log for May of 2004 was created by photocopying the service log for the previous month and changing the date. The undersigned has examined the documents11 and concludes that the May 2004 service log was not contemporaneously prepared. As a result, AHCA has demonstrated by a preponderance of the evidence that the $74.00 payment associated with the May 31, 2004, services should be denied. Recipient No. 28 This recipient was authorized to receive Personal Care Assistance to address daily needs such as grooming and dressing. Significantly, the support plan also indicates that meal preparation was authorized. AHCA contends that with respect to the services provided on May 15, 2003, four unauthorized homemaker activities were performed: cleaning the bathroom, washing laundry, cleaning the kitchen, and washing dishes. As a result, AHCA alleges an overpayment of $12.00, which represents four units of service. AHCA has demonstrated by a preponderance of the evidence that cleaning the bathroom and washing laundry were unauthorized. However, AHCA has failed to prove that dishwashing and cleaning the kitchen were unauthorized, as the provider prepared a meal (as indicated by the service log) for the recipient on May 15, 2003, an activity that was authorized by the support plan. As explained previously in this Recommended Order, if a provider is authorized to prepare a meal, then it is entirely reasonable for the provider to wash the dishes and clean the kitchen afterward. This is particularly true with respect to this recipient, who lived alone with her stepfather (who, according to the support plan, worked "intensive hours"), and was incapable of performing basic tasks (e.g., grooming and dressing) without assistance. Accordingly, AHCA should make an appropriate adjustment to the alleged $12.00 overpayment based on the above findings that cleaning the kitchen and washing dishes were not unauthorized. Recipient No. 29 Recipient No. 29 was authorized to receive Personal Care Assistance in the amount of two hours each weekday and five hours on weekends. Pursuant to the support plan, the recipient required assistance with basic activities such as dressing, bathing, brushing teeth, and preparing meals. AHCA contends that overbilling occurred with respect to four of the eight dates of service examined during the audit. First, AHCA alleges, and has demonstrated by a preponderance of the evidence that $10.08 was overbilled for the October 6, 2004, services, as the following unauthorized homemaker activities were performed: cleaning the recipient's room, cleaning the bathroom, organizing the room, organizing the bathroom, and changing towels. In addition, AHCA has proven an overpayment of $10.08 in connection with the November 24, 2004, services, where the service log demonstrates that unauthorized homemaker activities (identical to the services identified in the previous paragraph) were performed on that date. With regard to the services rendered on December 14, 2004, AHCA has demonstrated overbilling of $10.08 for the unauthorized homemaker services of cleaning the room and changing towels. Finally, AHCA alleges, and has demonstrated by a preponderance of the evidence, a $5.04 overpayment in connection with the December 29, 2004, services. In particular, the service logs demonstrate that the unauthorized homemaker activities of vacuuming, organizing the bathroom, and taking out garbage were performed. Recipient No. 31 This recipient was authorized to receive Personal Care Assistance, which was provided eight hours per day, Monday through Friday, and ten hours on both Saturday and Sunday. As the recipient is a quadriplegic, personal care assistance was obviously necessary for feeding and maintaining personal hygiene. Of the nine claims examined during the audit concerning this recipient, AHCA alleges that overbilling occurred with respect to two. First, with regard to the October 27, 2003, services, AHCA contends that insufficient documentation was provided by Respondent to support ten hours of billing. In particular, AHCA asserts that "ate well" is the only activity described in the contemporaneous service log.12 As a result, AHCA argues that one hour of billing should be permitted for meal prep, and that the remaining billing in the amount of $181.44 should be disallowed. Contrary to AHCA's contention, "ate well" is not the only event described in the contemporaneous service log. Significantly, the log also reads, "Incontinent B & B." Given the recipient's physical condition, this notation obviously means that the service provider was required to address at least one episode of bladder and bowel incontinence during the ten hours of service. As such, billing should be permitted for toileting. Based on the above finding that services were documented for toileting, AHCA should make an appropriate adjustment to the October 27, 2003, overpayment. Next, AHCA contends that that due to inadequate documentation, overbilling of $161.28 occurred with regard to the ten hours of services provided on February 16, 2004. In particular, AHCA contends that the documentation submitted by Respondent supports only two hours of billing, as bathing was the only activity described in the contemporaneous service log. Once again, however, the contemporaneous service log also indicates that the service provider was required to address the recipient's bladder and bowel incontinence. Accordingly, additional billing should be permitted for toileting, and AHCA should make an appropriate adjustment to the February 16, 2004, overpayment. Recipient No. 32 Recipient No. 32 was authorized to receive Personal Care Assistance and Companion Services. AHCA contends that Respondent was overpaid in connection with eight of the fifteen claims examined pursuant to the audit. With respect to the services provided on March 21 and 23, 2003, AHCA has demonstrated by a preponderance of the evidence that Respondent was overpaid $61.80 in connection with each of the two dates (totaling $123.60) where the documentation does not support the units of service billed. Next, AHCA contends, and the undersigned agrees, that Respondent inappropriately billed for recreational activities in connection with the personal care assistance services provided on August 13, 2003, and December 1, 2003. As a result, $3.86 was overbilled for each date, for a total of $7.72. AHCA also alleges, and has demonstrated by a preponderance of the evidence, that unauthorized homemaker activities were billed in connection with the companion services rendered on October 7 and 11, 2003, and December 2, 2003, which resulted in overbilling of $11.10, $11.10, and $7.40, respectively. In particular, the service logs indicate that meal prep, laundry, and housekeeping were performed on October 7 and 11, 2003, and that laundry and housekeeping were provided on December 2, 2003. Finally, AHCA has proven an overpayment of $15.44 with respect to the personal care assistance services provided on March 25, 2004. Specifically, the service log indicates that the service provider "walked the dog" and "checked live bait," tasks which do not fall within the scope of personal care assistance. Based on the above findings, AHCA demonstrated a total overpayment of $176.36 with respect to this recipient. Recipient No. 33 This recipient was authorized to receive three hours per week of Companion Services, which were intended to "increase awareness of community resources and increase community integration skills." AHCA alleges that Respondent was overpaid in connection with one of the two claims examined during the audit. Specifically, with respect to the services provided on July 15, 2003, the only activities described in the service log are "shopping" and "exercise." AHCA contends, and the undersigned agrees, that neither shopping nor exercise constitute goal oriented activities in under the circumstances of this recipient. Accordingly, AHCA has demonstrated an overpayment of $15.44, which represents one hour of billing. Recipient No. 34 This recipient was authorized to receive Personal Care Assistance. Pursuant to the support plan, the recipient lived with her able-bodied mother and older brother. Of the five claims examined during the audit, AHCA contends that Respondent was overpaid with respect to two. First, AHCA alleges that $5.29 was overpaid in connection with the August 4, 2004, services, where the service log suggested that the provider took the recipient to the park. The undersigned has examined the monthly summary, and agrees with AHCA's assessment of the documentation. Accordingly, AHCA has demonstrated an overpayment in the amount alleged. Turning to the services provided on December 9, 2004, AHCA has demonstrated an overpayment of $5.29 by a preponderance of the evidence, as "cleaning the living room" is an activity that could have been performed by the recipient's mother.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is Recommended that AHCA: Make appropriate adjustments to the empirical overpayment; Recalculate the probable total overpayment using the adjusted empirical overpayment and the statistical formula previously employed, and enter a final order requiring Respondent to repay AHCA the amount determined through such recalculation; The final order should further require Respondent to pay interest at the rate of 10 percent per annum on the recalculated total overpayment. DONE AND ENTERED this 23rd day of November, 2010, in Tallahassee, Leon County, Florida. S Edward T. Bauer 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 23rd day of November, 2010.
The Issue Whether the Agency for Health Care Administration (Agency or Petitioner) is entitled to recover alleged Medicaid overpayments, administrative fines, and investigative, legal, and expert witness costs from Kenneth O. Harden, d/b/a Ken Care, Inc. (Respondent).1/
Findings Of Fact The Agency is the state agency responsible for administering the Florida Medicaid Program (Medicaid). Medicaid is a federally-funded state-administered program that provides health care services to certain qualified individuals. Respondent, Kenneth O. Harden, is an individual who was enrolled as a provider in both the Florida Medicaid Developmental Disabilities Waiver Program (DD Program) and the Florida Medicaid Family Supported Living Waiver Program (FSL Program) at all material times. By enrolling in the Medicaid programs, Respondent agreed to fully comply with all state and federal laws, policies, procedures, and handbooks pertaining to the Medicaid program. Respondent submitted bills to Medicaid while he was enrolled and these bills were processed and paid to Respondent through the Florida Medicaid automated payment system. Claimed services for which Respondent submitted bills and was paid by Medicaid include in-home support, personal care assistance, self-care/home management training, companion support, supported living coaching, and respite care. The Agency is authorized to recover Medicaid overpayments, as appropriate. § 409.913(1)(e), Fla. Stat.4/ One method the agency uses to discover Medicaid overpayments is by auditing billing and payment records of Medicaid providers. Such audits are performed by staff in the Agency's Bureau of Medicaid Program Integrity (MPI). Providers are identified as potential candidates for auditing by a combination of referrals from field offices, data processing offices, and the Agency?s fraud and abuse hotline, and a random audit process.5/ In 2011, Agency Administrator Robi Olmstead identified Respondent as a potential audit candidate through a field office referral. She opened two cases on Respondent, one for each provider number, and assigned the cases to Kristen Koelle, then Program Analyst, for full audits. Ms. Koelle completed the first steps of the audit process according to established protocols. She reviewed Respondent?s provider information and billing to determine what types of services he provided, what types of claims he had submitted, and how much had been paid by Medicaid. In consultation with Ms. Olmstead, Ms. Koelle selected January 1, 2008, through June 30, 2010, as the audit period. During that audit period, Respondent submitted 10,578 claims for 47 recipients alleged to have received services from Respondent through the DD Program, and 2,485 claims for 22 recipients alleged to have received services from Respondent through the FSL Program. When the Agency audits a Medicaid provider for possible overpayments it "must use accepted and valid auditing, accounting, analytical, statistical, or peer-review methods, or combinations thereof. Appropriate statistical methods may include, but are not limited to, sampling and extension to the population . . . and other generally accepted statistical methods." § 409.913(20), Fla. Stat. The audit method used by the Agency depends on the characteristics of the provider and of the claims. For example, where a provider serves thousands of Medicaid recipients during the audit period, but the number of claims for each recipient is small, then the Agency may use a single-stage cluster sampling methodology. Under this approach, a random sample of recipients is selected, and then all claims are examined for the recipient sample group. Alternatively, where there are so many claims per recipient that it would be impractical to review all claims for each recipient or all claims for a sample group of recipients, a two-stage cluster sample methodology may be used. Under this approach, a random sample of recipients is selected, followed by a random selection of sample claims for the recipients in the sample. As a general target, the Agency considers samples of between 5 and 15 claims per recipient to be reasonable sample sizes for the second stage of two-stage cluster sampling. However, if a given recipient has fewer than 15 claims, a smaller number of claims for that recipient will be selected. Because of the high volume of claims generated by Respondent during the audit period in this case, Ms. Koelle determined with her supervisor that a two-stage cluster sampling methodology would be used. In other words, it was not feasible to review all 13,063 claims generated by the recipients Respondent claimed to have served during the audit period. Using a computer program to carry out the random sampling, the Agency's two-stage cluster sampling software selected a random sample of Respondent?s recipients under both the DD Program and the FSL Program during the audit period. The software generated a list of 30 recipients in the DD Program and 21 recipients in the FSL Program. It then selected a random sample of between 5 and 15 claims for each recipient from Respondent?s paid-claims data in the Agency?s data warehouse for the audit period. For the DD Program, 344 sample claims for the 30 sample recipients were randomly selected from among the 10,578 claims submitted by Respondent during the audit period. For the FSL Program, 256 sample claims for the 21 sample recipients were randomly selected from among the 2,485 claims submitted by Respondent during the audit period. Thereafter, Ms. Koelle prepared a “demand letter” for each of the two programs, informing Respondent that audits had been initiated and requesting that Respondent provide Medicaid- related records to substantiate billing records of the identified recipients, as well as the employment/personnel records or files for any of Respondent?s staff who provided services to Medicaid recipients during the audit period. The letters gave Respondent the standard 21-day period to submit the requested records. Ms. Olmstead reviewed and signed the letters and they were mailed, along with a Provider Questionnaire and Certification of Completeness of Records, to Respondent on July 26, 2011. After requesting and receiving a series of extensions, Respondent complied with the demand letters on September 13, 2011. Respondent delivered to the Agency Medicaid-related records and employee documents, along with the Provider Questionnaires and signed Certificates of Completeness, which certified the accuracy, truthfulness, and completeness of the records submitted. Persons who provide Medicaid services must meet certain minimum qualifications and obtain certain trainings, otherwise the person is deemed “ineligible” or “disqualified” and Medicaid cannot reimburse for services provided by such persons. All persons who provide services directly to Medicaid recipients must also pass a Level 2 background screening. Training and screening requirements for staff of Medicaid providers during the audit period are set forth in the Medicaid Handbook and the DD Handbook. Upon receiving records sent by Respondent in response to the Agency's July 26, 2011, letters, Ms. Koelle first reviewed Respondent's staff files to determine whether each staff member met the necessary requirements to provide Medicaid or Medicaid waiver services. Respondent produced staff files for 30 of the 39 staff members who provided services to randomly-selected recipients during the audit period. Of those 30 files, 16 contained no documentation of core competency training, eight had incomplete or no background screening documentation, one had a disqualifying background screening, and 22 lacked documentation of required training in HIV/AIDS, Infection Control, Zero Tolerance, or CPR during the audit period. In addition, 13 staff files revealed the staff member did not meet the experience or educational requirements for the position held. Next, Ms. Koelle reviewed the documentation Respondent submitted for each recipient against the 344 DD Program claims and 256 FLS program claims in the random sample and recorded her findings on worksheets along with her descriptions of any deficiencies or noted violations of Medicaid law. Ms. Koelle noted numerous violations of Medicaid laws, including, but not limited to, the following: of the 344 DD Program sample claims, 127 were submitted without any supporting documentation, 67 were submitted without a service log to document services provided to the recipient, 36 were submitted for companion services provided to recipients who were ineligible because they either lived in a licensed residential setting or were receiving in-home support services, and 28 were submitted for unauthorized activities provided to recipients. The most common violation, services provided by unauthorized staff, appeared in 243 claims submitted by Respondent. Of the 256 FSL Program sample claims, 50 were submitted without supporting documentation, and 208 were submitted for services provided by unauthorized staff. Ms. Koelle also documented a handful of cases in which the unauthorized staff provided services outside the scope of the recipient?s service plan or overbilled for the services provided. Ms. Koelle found no claims that were allowed under the Medicaid law and, therefore, no claims that merited adjustment. Ms. Koelle completed her review and entered all amounts that she found to be disallowed into the computer program. The program added the figures to find the overpayment amount for the samples, and then extrapolated the overpayment to the entire universe of recipients, according to an established statistical methodology, which yielded the total overpayment amount. The computer program generated a printout showing the exact overpayment amount for each of the claims in the samples, and the total overpayment extended to the population. The figures on the printouts correspond to the figures on the worksheets. Utilizing this methodology, Ms. Koelle determined that Respondent had been overpaid by an amount of $568,250.01 for services in the DD Program, and $162,700.08 for services in the FSL Waiver program. Thereafter, she prepared the Preliminary Audit Reports (Preliminary Audits), describing the methodology applied to determine overpayment and the deficiencies that led to that determination. She attached to the Preliminary Audits the printouts, copies of her worksheets, and a copy of the spreadsheets with staff findings. A provision in the Preliminary Audits explains that Respondent may submit additional documentation to support the sample claims, although such submission may be deemed evidence of previous non- compliance. Ms. Olmstead reviewed, approved, and signed the Preliminary Audits, which were mailed with attachments to Respondent on October 18, 2011. After receiving the Preliminary Audits, Respondent again submitted records and a written response in an effort to further support the sample claims. However, Ms. Koelle determined that the records submitted were duplicates of records previously submitted by Respondent and did not support any change in her findings from the Preliminary Audits. In preparation of the Final Audit Reports, Ms. Koelle, in consultation with Ms. Olmstead, reviewed Respondent's documentation and found that there was insufficient documentation to support any of the sample claims in either the DD Program or the FSL Program. The deficiencies included incomplete or missing staff files, lack of documentation of services, no service authorization, no service logs or service logs that did not meet Medicaid handbook requirements, no monthly summary, and indications that ineligible staff members were providing services. In some instances, the service provided was ineligible as it did not further the recipient?s goals or was an unauthorized activity (e.g., watching a movie). Ms. Koelle recorded her findings in a separate spreadsheet for each audit. The spreadsheets, organized by recipient number, contain the following information for each of the claims in the samples: date of service (DOS), procedure code, procedure description, unit of service (UOS), cost per unit of service, amount paid to Respondent, claim determination (Allow, Adjust, or Deny), review determination, whether there was a document deficiency (Doc. Def.) or a billing amount issue, and the amount of the overpayment for the claim (O/P). Next, Ms. Koelle entered the disallowed amounts into the computer program, which added the amounts together, found the overpayment amount for the sample, and extended the overpayment to the entire population of 10,578 claims in the DD Program and 2,485 claims in the FSL Program. Ultimately, Ms. Koelle prepared the Final Audit Reports (Final Audits), which Ms. Olmstead signed and sent to Respondent on November 21, 2011. Because the records submitted by Respondent in response to the Preliminary Audits did not change the findings, the Final Audits reported the same overpayment amounts as the Preliminary Audits: $568,250.01 in the DD Program and $162,700.08 in the FSL Program. The Final Audits notified Respondent of the total overpayment calculations, described the types of non-compliance found in the sample claims, and explained the methodology employed to select the claims for review and extend the sample overpayment to arrive at the total overpayment amount. The Final Audits also advised Respondent that the Agency intended to recover fines in the amount of $113,650.00 for violations of requirements in the DD Program and $32,540.02 for violations of requirements of the FSL Program. Additionally, the Agency sought a total of $1,437.38 for costs of the two audits. Copies of the worksheets, as well as the two spreadsheets detailing the staff review findings, were attached. Respondent disputed the Final Audits and the Agency referred the matter to the Division. In preparation for the final hearing, the Agency consulted with Dr. Fred W. Huffer, a professor in the Department of Statistics at Florida State University with a B.S. in mathematics from the Massachusetts Institute of Technology and a Ph.D. in statistics from Stanford University. He has taught and researched statistics for more than 30 years at various institutions of higher learning. Dr. Huffer reviewed the Agency?s Preliminary and Final Audit findings and found one error in the analysis. In each audit, one randomly-selected recipient had submitted only one claim during the audit period. According to the Agency?s overpayment calculation methodology, the second-stage random sample may only be taken from those recipients with two or more claims during the audit period. Therefore, the Agency?s overpayment calculation included one incorrect variable. Dr. Huffer adjusted the formula and recalculated the overpayment with the correct variables for each audit. The result was a modest change to the final overpayment amounts -- a reduction of $8,368.36 for the DD Program and $818.44 for the FSL Program. The final adjusted total overpayments were $559,881.65 for the DD Program and $161,881.64 for the FSL Program. Respondent offered no witnesses and introduced no evidence at the final hearing. Instead of presenting contradictory expert testimony, Respondent attempted to undermine Dr. Huffer's opinions through cross-examination and argument. On cross-examination, Respondent attempted to challenge the reliability of the Agency?s sampling methodology and Dr. Huffer?s calculations. Respondent inquired as to the “authentication” of Dr. Huffer?s results and the requirements for determining when Dr. Huffer?s calculations were final, and insinuated that Dr. Huffer may have been biased because he has consulted with the Agency since 2004. Respondent was not effective in this regard. The methodology and description of two-stage cluster sampling were explained and confirmed at the final hearing by Dr. Huffer, who was accepted as an expert in statistical analysis and methodologies. In addition, the methodology comports with established law. See § 409.913, et seq., Fla. Stat.; Ag. for Health Care Admin v. Custom Mobility, Inc., 995 So. 2d 984 (Fla. 1st DCA 2008), cert. denied, 3 So. 3d 1246 (Fla. 2009). Dr. Huffer was familiar with the case at hand and with the science of random sampling of populations and the analysis of samples, including extension of results to the total population. Dr. Huffer analyzed the sampling method utilized by the Agency in this case with a program he personally developed for that purpose. Dr. Huffer repeated random simulation that recreated the audit circumstances many thousands of times, and found them to be accurate in this case. The software utilized by the Agency determined the amount of overpayments at a 95 percent confidence level. As explained by Dr. Huffer, if the entire procedure is repeated “many times, 95 percent of the time this value that they get to at the end would be less than the true amount” of the overpayment. In other words, the amount the Agency has asked Respondent to repay is most likely lower than the actual overpayment. In sum, Dr. Huffer credibly explained that the Agency?s cluster sampling method is appropriate and that it comports with the technical meaning of random sample and generally accepted statistical methods. Moreover, Dr. Huffer verified the adjusted overpayment amount through professionally accepted methodology. Dr. Huffer's opinions that the audits in this case utilized a correct and reasonable application of two-stage cluster sampling and that the sampling method used in this case was reasonable and comported with generally accepted statistical methods are accepted as credible and accurate.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner, Agency for Health Care Administration, enter a final order requiring Respondent, Kenneth O. Harden, d/b/a Ken Care, Inc., to: Repay the sum of $559,881.65 for claims in the Medicaid Development Disability Waiver Program that did not comply with the requirements of Medicaid laws, rules, and provider handbooks; Repay the sum of $161,881.64 as recoupment of claims in the Medicaid Family and Supported Living Waiver Program which did not comply with the requirements of Medicaid laws, rules, and provider handbooks; Pay interest on the sums of $559,881.65 and $161,881.64 at the rate of 10 percent (10%) per annum from the date of the overpayment determination; Pay a fine of $6,000 per agency action (for a total of $12,000) for violations of the requirements of Medicaid laws, rules, and provider handbooks; and Pay allowable costs of $3,405.71, pursuant to section 509.913(23), Florida Statutes. DONE AND ENTERED this 20th day of March, 2013, in Tallahassee, Leon County, Florida. S SUZANNE VAN WYK 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 20th day of March, 2013.
The Issue Whether the Department of Children and Family Services (Department) failed to immediately provide Destiny Smith with the developmental services to which she is entitled.
Findings Of Fact For the period July 1, 1998 through June 30, 2003, the Health Care Financing Administration (HCFA), Region IV, of the U.S. Department of Health and Human Services, by agreement with the State of Florida, has agreed to permit the Department to provide services in a home and community-based setting to persons diagnosed with mental retardation or developmental disabilities. This was allowed as an alternative to receiving services in an institutional setting. It is referred to as the Home and Community-Based Services Waiver Program, or less formally, the "waiver" or "waiver program." The waiver provided that in "year three" of the program, 25,945 persons would be served, should the Florida Legislature appropriate sufficient funds to serve that number. If the appropriation is insufficient, then fewer persons will be served. Fiscal year 2000-2001 is "year three." Florida has elected to serve the number of individuals funded by the Florida Legislature, up to the number listed in the waiver agreement with HCFA, in fiscal year 2000-2001. Historically, all individuals eligible for developmental services have not received them because of insufficient funding. The Florida Legislature, when providing funding for this program in 1999, established priorities in the 1999-2000 General Appropriations Act, through the use of proviso language. Priorities for this funding, in order, are as follows: 1) Transitions for those requesting transfers from Intermediate Care Facilities for the Developmentally Disabled (ICF/DD) institutional placements; and 2) Meeting the needs of identified under-served participants in the Home and Community Based Waiver Services after accurately assessing the actual costs of each person's support plan. The Department implemented the 1999 appropriation for fiscal year 1999-2000 by promulgating a spending plan that directed the Department's districts to provide services to 15,984 persons pursuant to the priorities set by the Florida Legislature. The 2000 Florida Legislature appropriated funds to serve an additional 7,377 persons for a total of 23,360. This appropriation contained proviso language which was identical to that found in the 1999 General Appropriations Act. An addition to the proviso, however, stated that, "The Medicaid waiver services mix must be fully met for all eligible participants before funds are transferred to non-Medicaid covered services, with the exception of room and board payments." The Department implemented the 2000 appropriation by promulgating a spending plan that continued the previous year's spending plan. This plan stated that individuals who are new to the system after July 1, 1999, would only be served after those on the original waiting list are served, unless they have been determined to be in crisis pursuant to a crisis assessment tool. Petitioner applied for the general revenue individual and family support program. This program is in the category of "non-Medicaid covered services." The Department determined that Petitioner was eligible for developmental services on July 11, 2000. However, the Department further determined that Petitioner did not presently qualify for funds appropriated for fiscal year 2000-2001 because she became eligible after July 1, 1999, and because the program she sought was one which the Florida Legislature determined should be funded at the previous year's level. The crisis assessment tool is used to identify individuals who are in crisis situations. A crisis situation occurs when there is a court order mandating care; when there has been a determination that an individual is dangerous to himself, herself, or others; where there is abuse or neglect; where the person is homeless; when the person's caregiver can no longer provide for the person; or in other situations where there is a need to ensure the individual's safety and security. Petitioner does not meet any of the criteria on the crisis identification tool. As a result, she is not eligible for immediate service. At the time of the hearing there were individuals who were on the waiting list who were determined to be eligible prior to July 1, 1999 who have not yet been served. Only after those individuals are served can the persons eligible after July 1, 1999, be served. Petitioner may ultimately be provided developmental services, but this cannot occur until funds are available to the Department for that purpose.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Department enter a final order finding that the Petitioner is not entitled to receive developmental services until the Department determines that funds are available for that purpose. DONE AND ENTERED this 8th day of January, 2001, in Tallahassee, Leon County, Florida. HARRY L. HOOPER 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 8th day of January, 2001. COPIES FURNISHED: Lucy Goddard, Esquire Department of Children and Family Services Post Office Box 390, Mail Stop 3 Gainesville, Florida 32602 Destiny Smith 27619 25th Place Branford, Florida 32008 Virginia A. Daire, Agency Clerk Department of Children and Family Services Building 2, Room 204B 1317 Winewood Boulevard Tallahassee, Florida 32399-0700 Josie Tomayo, General Counsel Department of Children and Family Services 1317 Winewood Boulevard Building 2, Room 204 Tallahassee, Florida 32399-0700
The Issue Whether or not Petitioner's application for certification as an Independent Waiver Support Coordinator should be approved.
Findings Of Fact Respondent is the state agency that implements programs and services for persons who are developmentally disabled. In this capacity, Respondent certifies and enrolls qualified individuals, private businesses, not-for-profit organizations, and units of local government to provide services to developmentally disabled persons under the Developmental Disabilities Program Developmental Services Home and Community- based Services waiver program. In so doing, Respondent must ensure that all federal requirements are met and that the health and welfare of developmentally disabled persons are protected. Respondent has established reasonable academic, training and experience criteria for individuals seeking to be enrolled and certified as Independent Waiver Support Coordinators as a part of the Developmental Disabilities Program Developmental Services Home and Community-based Services waiver program. For example, these minimum qualifications include a bachelor's degree and three years of professional experience in developmental disabilities, special education, or related fields. In addition to the academic, training and experience criteria, Respondent conducts background screening in an attempt to assess the suitability of individuals seeking to be enrolled and certified as Independent Waiver Support Coordinators. Part of the background screening involves a review of the work product, performance appraisals, and achieved outcomes of any applicant who has rendered services to individuals receiving developmental disabilities services. Respondent may deny certification to an applicant if it receives evidence of an adverse history with Respondent or the Agency for Health Care Administration as a result of background screening. Prior to Petitioner's application to be certified as an Independent Waiver Support Coordinator, she was employed by an institutional services provider which provided services to individuals with developmental disabilities; her job with the institutional services provider had essentially the same responsibilities as she would have if she became an Independent Waiver Support Coordinator. Respondent solicited and received an evaluation of Petitioner's work performance with the independent services provider. Petitioner's supervisor indicated that Petitioner's work was not satisfactory and that she would not rehire her. Respondent determined this negative evaluation as evidence of an adverse history sufficient to disqualify Petitioner and deny her certification.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order denying Petitioner's application for certification as an Independent Waiver Support Coordinator. DONE AND ENTERED this 12th day of September, 2002, in Tallahassee, Leon County, Florida. JEFF B. CLARK 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 12th day of September, 2002. COPIES FURNISHED: Joseph K. Birch 34 East Pine Street Orlando, Florida 32802 Chelsea Predue-Washington Post Office Box 1117 Clarcona, Florida 32710-1117 Beryl Thompson-McClary, Esquire Department of Children and Family Services 400 West Robinson Street, Suite S-1106 Orlando, Florida 32801 Paul F. Flounlacker, Jr., Agency Clerk Department of Children and Family Services 1317 Winewood Boulevard Building 2, Room 204B Tallahassee, Florida 32399-0700 Josie Tomayo, General Counsel Department of Children and Family Services 1317 Winewood Boulevard Building 2, Room 204 Tallahassee, Florida 32399-0700
Conclusions Having reviewed the Amended Notice of Intent to Deny and Settlement Agreement, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1, The Agency has jurisdiction over the above-named Petitioner pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Amended Notice of Intent to Deny and Election of Rights form to the Petitioner. (Ex. 1) The Election of Rights form advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 4. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 5. The Petitioner’s license renewal application for assisted living facility licensure is withdrawn. 6. The Agency’s Amended Notice of Intent to Deny is moot and thus is withdrawn. 7. The Petitioner is responsible for any refunds that may be due to any clients. 8. The Petitioner shall remain responsible for retaining and appropriately distributing client records as prescribed by Florida law. The Petitioner is advised of Section 408.810, Florida Statutes. The Petitioner should also consult the applicable authorizing statutes and administrative code provisions as well as any other statute that may apply to health care practitioners regarding client records. Filed December 6, 2012 3:03 PM Division of Administrative Hearings 9. The Petitioner is given notice of Florida law regarding unlicensed activity. The Petitioner is advised of Section 408.804 and Section 408.812, Florida Statutes. The Petitioner should also consult the applicable authorizing statutes and administrative code provisions. The Petitioner is notified that the cancellation of an Agency license may have ramifications potentially affecting accrediting, third party billing including but not limited to the Florida Medicaid program, and private contracts. ORDERED at Tallahassee, Florida, on this @ day of ; 2012. Elizabeth Didek, Secretary Agency for Hgalth Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct_cgpy of this Final Order was served on the below-named persons by the method designated on this £ tay of , 2012. Richard Shoop, Agency Cte Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Shaddrick Haston, Unit Manager Facilities Intake Unit Assisted Living Unit (Electronic Mail) Agency for Health Care Administration (Electronic Mail) Finance & Accounting Revenue Management Unit (Electronic Mail) Katrina Derico-Harris Medicaid Accounts Receivable Agency for Health Care Administration (Electronic Mail) Patricia Caufman, Field Office Manager Areas 5 and 6 Agency for Health Care Administration (Electronic Mail) David Selby, Esq. Assistant General Counsel Office of the General Counsel Agency for Health Care Administration (Electronic Mail) Shawn McCauley Medicaid Contract Management Agency for Health Care Administration (Electronic Mail) R. Bruce McKibben Administrative Law Judge Division of Administrative Hearings (Electronic Mail) Amelia Cowles, Co-owner 80" Place 5551 80" Place Pinellas Park, FL 33781 (U.S. Mail) Christina Mesa, Esq. Mesa Law, PA PO Box 10207 Tampa, FL 33679 (U.S. Mail) NOTICE OF FLORIDA LAW 408.804 License required; display.-- (1) It is unlawful to provide services that require licensure, or operate or maintain a provider that offers or provides services that require licensure, without first obtaining from the agency a license authorizing the provision of such services or the operation or maintenance of such provider. (2) A license must be displayed in a conspicuous place readily visible to clients who enter at the address that appears on the license and is valid only in the hands of the licensee to whom it is issued and may not be sold, assigned, or otherwise transferred, voluntarily or involuntarily. The license is valid only for the licensee, provider, and location for which the license is issued. 408.812 Unlicensed activity.-- (1) A person or entity may not offer or advertise services that require licensure as defined by this part, authorizing statutes, or applicable rules to the public without obtaining a valid license from the agency. A licenseholder may not advertise or hold out to the public that he or she holds a license for other than that for which he or she actually holds the license. (2) The operation or maintenance of an unlicensed provider or the performance of any services that require licensure without proper licensure is a violation of this part and authorizing statutes. Unlicensed activity constitutes harm that materially affects the health, safety, and welfare of clients. The agency or any state attorney may, in addition to other remedies provided in this part, bring an action for an injunction to restrain such violation, or to enjoin the future operation or maintenance of the unlicensed provider or the performance of any services in violation of this part and authorizing statutes, until compliance with this part, authorizing statutes, and agency rules has been demonstrated to the satisfaction of the agency. 3 (3) It is unlawful for any person or entity to own, operate, or maintain an unlicensed provider. If after receiving notification from the agency, such person or entity fails to cease operation and apply for a license under this part and authorizing statutes, the person or entity shall be subject to penalties as prescribed by authorizing statutes and applicable rules. Each day of continued operation is a separate offense. (4) Any person or entity that fails to cease operation after agency notification may be fined $1,000 for each day of noncompliance. (5) When a controlling interest or licensee has an interest in more than one provider and fails to license a provider rendering services that require licensure, the agency may revoke all licenses and impose actions under s. 408.814 and a fine of $1,000 per day, unless otherwise specified by authorizing statutes, against each licensee until such time as the appropriate license is obtained for the unlicensed operation. (6) In addition to granting injunctive relief pursuant to subsection (2), if the agency determines that a person or entity is operating or maintaining a provider without obtaining a license and determines that a condition exists that poses a threat to the health, safety, or welfare of a client of the provider, the person or entity is subject to the same actions and fines imposed against a licensee as specified in this part, authorizing statutes, and agency rules. (7) Any person aware of the operation of an unlicensed provider must report that provider to the agency. ae re RICK SCOTT RORDR ASENG! FORFEAIT CARE ADMINS HATS ELIZABETH DUDEK GOVERNOR Better Health Care for all Floridians INTERIM SECRETARY August 29, 2012 Administrator Gene Cowles so" Place P.O, Box 1778 Safety Harbor, FL 34689 RE: DOAH Case # 121-2641 AHCA Case # 2012007214 AMENDED “NOTICE OF INTENT TO DENY” Dear Administrator: It is the decision of the Agency for Health Care Administration (the “Agency”) that your renewal application for an Assisted Living Facility and initial Limited Mental Health specialty license to operate 80° Place be DENIED. This denial is based on the following: Your Standard license was due to expire on 20 May, 2012, and you had applied to renew it plus add a Limited Mental Health specialty license. On 14 February, 2012, the Agency, as required by law, attempted to conduct a biennial survey pursuant to re- licensure. No administrators, staff nor residents were present on that date when the surveyor arrived. , The Agency is required by law to inspect ALFs biennially for licensure renewal. Furthermore, these inspections are required by law to be unannounced. Finally, the Agency is required by law if unable to conduct the inspection to deny the renewal application. : Therefore, the following listed laws, but not limited thereto, require denial of your renewal application: F.S. 408, Part II, to include 408.806 (7) (a), (c)&(d) (re license application process) 408.811 (1) (a)&(b) (re right of inspection) 408.815 (1) (b)& (c) (re denial) * — Headquarters Area Office 2727 Mahan Drive 525 Mirror Lake Or. No., Tallahassee, FL 32308 Suite 330D AHCA.MyFlorida.com St. Petersburg, FL 33701 EXHIBIT 1 F.S. 429, to include 429.14 (1) (h)&(k) (re administrative penalties) 429.17(2) ;429.28(3) (a) (re renewal) , 429.28(3) (a)&(b) (re residents’ rights) 429.34 (re right of entry & inspection) Rule 58A-5.015,F.A.C. (re renewal) * The 3 July, 2012, Notice of Intent to Deny, mistakenly cited F.S. 408.15 (1) (b)&(c); the correct cite (408.815(1) (b)&(c))is listed above. EXPLANATION OF RIGHTS Pursuant to Section 120.569, Florida Statutes (F.S.), you have the right to request an administrative hearing. In order to obtain a formal proceeding before the Division of Administrative Hearing under Section 120.57(1), F.S., your request for an administrative Hearing must conform to the requirement in Section 28-106.201, Florida Administrative Code (F.A.C.), and must state the material facts you dispute. SEE ATTACHED ELECTION OF RIGHTS FORM Sincerely, Shaddrick A. ton, Manager Assisted Living Unit Bureau of Long Term Care Services Copies to: : Jan Mills, General Counsel Office, Tallahassee ‘Christina Mesa, Esq.,P.0.Box 10207, Tampa, FL 33679-0207 Assisted Living Unit, Tallahassee Paul Brown, AHCA, Supervisor, Area 5, St. Petersburg David Selby, AHCA, Assistant General Counsel, St. Petersburg STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION 80" PLACE, Petitioner, : vs. DOAH CASE NO. 12-2641 AHCA NO. 2012007214 STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Respondent. / SETTLEMENT AGREEMENT Petitioner, 80" Place, and Respondent, State of Florida, Agency for Health Care Administration (hereinafter the “Agency”), through its duly authorized representatives, pursuant to Section 120.57(4), Florida Statutes, each individually, a “party,” collectively as “parties,” hereby enter into this Settlement Agreement (“Agreement”) and agree as follows: WHEREAS, Petitioner is an assisted living facility (“ALF”) licensed pursuant to Chapters 408, Part IT and 429, Part I, Florida Statutes, and Chapter 58A-5, Florida _ Administrative Code; and WHEREAS, the Agency has jurisdiction by virtue of being the regulatory and licensing authority over Petitioner, pursuant to Chapters 408, Part i and 429, Part I, Florida Statutes; and WHEREAS, the Agency served Petitioner with a “Notice of Intent to Deny” (“NOI”) received on or about 9 July, 2012, and an “Amended Notice of Intent to Deny” on 6 September, 2012, both notifying Petitioner of the Agency’s intent to deny Petitioner’s license renewal application, and WHEREAS, the parties have negotiated and agreed that the best interest of all the parties will be served by a settlement of this proceeding; and . NOW THEREFORE, in consideration of the mutual promises and recitals herein, the parties intending to be legally bound, agree as follows: EXHIBIT 2 1. All recitals herein are true and correct and are expressly incorporated herein. 2. Both parties agree that the “whereas” clauses incorporated herein are binding findings of the parties. 3. Upon full execution of this Agreement, Petitioner agrees to waive any and all appeals and proceedings to which it may be entitled including, but not limited to, an informal proceeding under Subsection 120.57(2), Florida Statutes, a formal proceeding under Subsection 120.57(1), Florida Statutes, appeals under Section 120.68, Florida Statutes; and declaratory and all writs of relief in any court or quasi-court of competent jurisdiction; and agrees to waive _ compliance with the form of the Final Order (findings of fact and conclusions of law) to which it may be entitled, provided, however, that no agreement herein shall be deemed a waiver by either party of its right to judicial enforcement of this Agreement. 4 Upon full execution of this Agreement, the parties stipulate: a. Petitioner’s request for a hearing in this cause is deemed withdrawn; b. Petitioner’s application for licensure renewal is also deemed withdrawn, and c. This cause shall be deemed dismissed as moot. 5. Venue for any action brought to enforce the terms of this Agreement or the Final Order entered pursuant hereto shall lie in Circuit Court in Leon County, Florida. 6. By executing this Agreement, neither party admits or denies the allegations set forth in the Amended NOI, and the Agency asserts the validity of the allegations raised in the Amended NOI referenced herein. 7. The Agency is not precluded from using the subject events identified in the Amended NOI for any purpose within the jurisdiction of the Agency. Further, Petitioner acknowledges and agrees that this Agreement shall not preclude or estop any other federal, state, or local agency or office from pursuing any cause of action or taking any action, even if based on or arising from, in whole or in part, the facts raised in the Amended NOI. This Agreement does 2 not prohibit the Agency from taking action regarding Petitioner’s Medicaid provider status, ° conditions, requirements or contract. 8. Upon full execution of this Agreement, the Agency shall enter a Final Order adopting and incorporating the terms of this Agreement and closing the above-styled case. 9. Each party shall bear its own costs and attorney’s fees. 10. This Agreement shall become effective on the date upon which it is fully executed by all the parties. 11. Petitioner for itself and for its related or resulting organizations, its successors or transferees, attorneys, heirs, and executors or administrators, does hereby discharge the State of Florida, Agency for Health Care Administration, and its agents, representatives, and attorneys of and from all claims, demands, actions, causes of action, suits, damages, losses, and expenses, of any and every nature whatsoever, arising out of or in any way related to this matter and the Agency’s actions, including, but not limited to, any claims that were or may be asserted in any federal or state court or administrative forum, including any claims arising out of this . Agreement, by or on behalf of Petitioner or related facilities. 12 This Agreement is binding upon all parties herein and those identified in paragraph 1 of this Agreement. 13. In the event that Petitioner was a Medicaid provider at the subject time of the occurrence alleged in the Amended NOI, this Agreement does not prevent the Agency from seeking Medicaid overpayments related to the subject issues or from imposing any sanctions pursuant to Rule 59G-9.070, Florida Administrative Code. 14. The undersigned have read and understand this Agreement and have the authority to bind their respective principals to it. Petitioner has the capacity to execute this Agreement. 15. This Agreement contains and incorporates the entire understandings and agreements of the parties. ar eee a SF ee 16. This Agreement supersedes any prior oral or written agreements between the © parties. , 17, This Agreement may not be amended except in writing. Any attempted assignment of this Agreement shall be void. . 18. —_ All parties agree that faxed and scanned signatures suffice for original signatures, The following representatives hereby acknowledge that they are duly authorized to enter - into this Agreement, consisting of the preceding 18 para, , stina. Mesa, Esq. Florida Bar No, 932388 MESA LAW, PA 2727 Mahan Drive . - PO Box 10207 Tallahassee, Florida 32308 Tampa, FL 33679-0207 Florida Bar no.; 932388 . For Petitioner . DATED: }2 [of L DATED: /0-(2-/2—- tuart F. Williams el Gene Cowles, Co-owner -or- General Counsel Amelia Cowles, Co-owner Agency for Health Cay9 Administration a ; bi ‘2727 Mahan Drive Ayilding #3 55 Place Tallahassee, Flog Pinellas Park, FL 33781 patep: / paren: 0-2-2 Wy A Edwin D. Selby, Assistant Florida Bar No. 262587 Agency for Health Care Administration $25 Mizror Lake Drive, Suite 330H St. Petersburg, FL 3870 DATED: _ /2L7 LO 02, eneral Counsel
The Issue The issue is whether Respondent properly denied Petitioner's request for immediate developmental disability services, placing him instead on a waiting list for those services due to the unavailability of funds.
Findings Of Fact There are three primary funding sources for persons with developmental disabilities: Individual and Family Supports (IFS program); Home and Community Based Waiver for Persons with Developmental Disabilities (HCBW or Medicaid Waiver program); and Intermediate Care Facility for Developmentally Disabled Clients (ICF/DD program). The IFS program is funded from the state's general revenue. Based upon available funds, this program can pay for summer camps and other services that are not available under the other two programs. The HCBW program provides a variety of services to individuals with developmental disabilities under Section 19.15 (c) of the Social Security Act. It is a federal matching dollar program with approximately 50 percent of the funds furnished by the state and 50 percent of the funds furnished by the federal Medicaid program. Unlike the IFS and ICF/DD programs, the HCBW program can pay for residential habilitation in a home or community setting. The ICF/DD program serves clients in an institutional setting under a Medicaid entitlement program. Unlike the IFS and HCBW programs, which are not entitlement programs, the funds for the ICF/DD program are not limited and do not have to be prioritized. The federal government's Health Care Finance Administration (HCFA) has to approve the state's HCBW program. HCFA's approval serves as a waiver of certain federal Medicaid requirements. The waiver allows the state to serve individuals in community-based settings instead of institutions. The approval process includes identification of the number of individuals to be served, as well as defining the services to be provided and setting forth provider qualifications. In 1998, HCFA approved Respondent's five-year plan for an HCBW program. Under the plan as amended each fiscal year, Respondent makes a commitment to serve the lesser of a target number of individuals or the number of persons authorized by the state legislature. The target number of persons was 15,302, 22,433, and 25,945 for the 1998-1999, 1999-2000, and 2000-2001 fiscal years, respectively. Any difference between the target number of individuals to be served and the actual number of individuals served is based on the funds appropriated by the state legislature. Historically, the state has not been able to serve all individuals identified as developmentally disabled. The persons who are not served are placed on a statewide waiting list. Traditionally, individuals are removed from the waiting list and begin receiving services as funds become available. Prior to the 1999 legislative session and after federal litigation, Respondent identified the number of developmentally disabled individuals who were under-served or receiving no services. Respondent made this effort in anticipation of receiving additional funding to begin eliminating the existing waiting list. At that time, Respondent identified 23,361 persons who were on the waiting list. In 1999, Respondent developed and submitted to the Legislature a two-year spending plan. The purpose of the plan was to eliminate the existing waiting list by addressing the needs of the 23,361 people over a two-year period. Respondent based the plan on data then available and the existing case load. The plan assumed that Respondent would prioritize populations and provide services in an organized manner. The two-year spending plan called for new funding in the amount of $98,167,008 for the 1999-2000 fiscal year. The plan provided for the delivery of additional services to 15,984 people in the first year (July 1, 1999 through June 30, 2000), with the remaining 7,377 people receiving services in the second year (July 1, 2000 through June 30, 2001). The two-year spending plan estimated that additional funding in the amount of $118,215,693 would be required for the 2000-2001 fiscal year to serve the 23,361 people on the waiting list. The two-year spending plan contained the following priorities: Identify those persons in crisis, both in need of residential or community-based care, and serve them in the first six months. [This goal assumed that Respondent would serve 1,590 persons identified as in crisis in the first six months of the 1999-2000 fiscal year.] Identify those persons who are eligible for ICF/DD [Intermediate Care Facilities/Developmental Disabled] (LON [Levels of Need] 3, 4, & 5) and are in need of additional services and provide services (DOE vs. Bush). [This goal assumed that Respondent would continue to serve 1,298 persons already participating in the Medicaid waiver program and begin serving 5,237 additional persons in that program by the end of the 1999-2000 fiscal year.] Provide home and community-based services to persons who wish to move from the private institutions to the community (Cramer vs. Bush). [This goal assumed that certain numbers of people would elect to move from a private ICF/DD or a nursing home to the community program in the 1999-2000 and 2000-2001 fiscal years.] Determine the unmet needs of persons living in residential care, or needing residential care (not crisis) and who are ICF/DD eligible and provide services. [This goal assumed that Respondent would provide enhanced residential care to some persons and new residential care for others.] Determine the unmet need of persons not eligible for ICF/DD (LON 1&2) and begin meeting their needs. [This goal assumed that Respondent would meet the needs of all people then on the Medicaid waiver program in the first year. It also assumed that Respondent would provide services to 25 percent of the population who were not on the Medicaid program in the 1999-2000 fiscal year with the remainder receiving services in the 2000-2001 fiscal year.] In the 1999 legislative season, the Legislature renewed funding for services provided to the existing clients of the HCBW, ICF/DD, and IFS programs. The Legislature also provided additional funding for developmentally disabled persons in the amount of $98,167,008, to meet the priorities, in order, as follows: (a) transitions for those requesting transfers from ICF/DD institutional placements into HCBW residential placements; and (b) meeting the needs of identified under-served participants in the HCBW program. The 1999 Legislature did not provide any additional funding for the IFS program that would allow Respondent to increase the number of persons served in the IFS program without decreasing services provided to existing clients. In a memorandum dated June 22, 1999, Respondent advised its district administrators that the 1999-2000 spending plan was approved. The memorandum described certain tasks that had to be completed, together with relevant time frames, before Respondent could spend the appropriated funds. These tasks included the following: (a) Serve persons in crisis; (b) Serve persons wishing to move from ICF/DD to community placements; (c) Serve persons on the waiver with unmet needs or who are under-served; (d) Serve persons eligible for ICF/DD or HCBS waiver with unmet needs; and (e) Serve persons with limited and minimal levels of need who are not enrolled in the waiver (not enrolled in HCBW and not eligible for ICF/DD or waiver.) The two-year spending plan developed by Respondent in 1999 did not take into consideration the needs of developmentally disabled persons who were not in crisis and who applied for and became entitled to services after July 1, 1999. Therefore, as non-crisis applicants qualified for services after July 1, 1999, Respondent placed their names on a second waiting list. The new waiting list grew at an unprecedented rate due to the redesigned system and the influx of additional funds. During the 2000 legislative session, Respondent requested and the Legislature appropriated sufficient funds to continue the services provided to persons in the 1999 General Appropriations Act and for an additional 7,377 persons to be served in the 2000-2001 fiscal year. Once again the new funds were earmarked as follows: (a) for clients requesting transfers from a ICF/DD program to a HCBW program; and (b) for under- served clients in the HCBW program. The Legislature earmarked all of the new funding for the HCBW program. The Conference Report on House Bill 2145, General Appropriation Act FY 2000- 2001, Section 3, Specific Appropriation No. 344, specifically stated: The Medicaid waiver services mix must be fully met for all eligible participants before funds are transferred to non-Medicaid covered services, with the exception of room and board payments. In accordance with the Legislature's appropriations and proviso language for the 1999-2000 and 2000-2001 fiscal years, Respondent implemented a policy to eliminate the existing waiting list for persons seeking developmental disability services. Respondent properly determined that persons with unmet needs, who were on the waiting list as of July 1, 1999, would be served before any one who applied for services after that date. According to Respondent's policy, the only exceptions would be individuals who were determined to be in crisis. Respondent's proposed budget for the 2001-2002 fiscal year calls for additional funding for clients who applied for services after July 1, 1999. Respondent projects that 6,774 additional persons would become clients or be waiting for services by the end of the 2001-2002 fiscal year--a net increase in the caseload of 2,258 people annually. Until funding becomes available, these additional people will remain on a waiting list. Under the spending plan in effect at the time of the hearing, some individuals who were on the wait list as of July 1, 1999, still are not receiving services for which they are eligible. These persons are in the process of obtaining services and must be served before persons who became or will become eligible after July 1, 1999. Petitioner became eligible for developmental services in November 1999. He does not presently qualify for services funded by the Legislature in fiscal year 2000-2001 for three reasons: (a) he became eligible after July 1, 1999; (b) he applied for IFS services, a funding category for which the Legislature did not appropriate any new funds for new clients; and (c) he is not in crisis. Additionally, Petitioner is currently having his residential training needs met through the Conklin Center, Division of Blind Services.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Respondent enter a final order affirming its decision that Petitioner remain on the list of clients waiting to receive developmental disability services. DONE AND ENTERED this 2nd day of February, 2001, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of February, 2001. COPIES FURNISHED: Michael Raymond 5268 Isabelle Avenue Port Orange, Florida 32127 Cathy McAllister, Esquire Department of Children and Family Services 210 North Palmetto Avenue, Suite 412 Daytona Beach, Florida 32114 Virginia A. Daire, Agency Clerk Department of Children and Family Services Building 2, Room 204B 1317 Winewood Boulevard Tallahassee, Florida 32399-0700 Josie Tomayo, General Counsel Department of Children and Family Services 1317 Winewood Boulevard Building 2, Room 204 Tallahassee, Florida 32399-0700
Findings Of Fact UniPsych is a Florida corporation that provides managed mental health and substance abuse services to Florida residents. The company was founded by Dr. Leo Bradman, a recognized authority in managed mental health care. UniPsych currently provides mental health and substance abuse services and has been providing mental health services, on a managed care basis to the Lake County School District and its employees for the last five (5) years. In July 1995, the Board issued Request For Proposals No. 883 (RFP). The RFP sought proposals for a managed behavioral health program that includes an employee assistance program and a mental health/substance abuse program for the School District employees, their spouses, and their children. The RFP at a minimum requires that each member would be entitled to three visits a year with a counselor. The first visit would be at no charge to the member and a $10.00 charge to the member for visits two and three. The RFP also states in pertinent part: Rights are reserved by the School Board of Lake County to reject any and all proposals and to waive all technicalities. * * * THE SCHOOL BOARD RESERVES THE RIGHT TO ACCEPT OR REJECT PROPOSALS IN WHOLE OR IN PART; AND TO AWARD A CONTRACT IN THE MANNER IN WHICH THE BOARD DETERMINES TO ITS BEST INTEREST. Award of this proposal is intended to be made by the School Board at its regular meeting on August 8, 1995. Conformity to specifications, price, quality of network, quality of program, response to worksheet and financial stability will be determining factors in the awarding of the proposal. All proposals must include the following: Completed Managed Behavioral Health Program Worksheet signed by an authorized representative. Completed Statement on Public Entity Crimes. A copy of your company's Florida Private Review Act Certification. Sample EAP and Managed MH/SA communi- cations to employees. A sample contract stating the provisions that would apply if your company is selected. Any additional information which your company deems pertinent to the proposal. The RFP does not define the term financial stability. The RFP does state a preferred method of calculating price. The preferred method of calculating price is the per employee contracts per month model. Total employee contracts is 2855 employees. Six (6) vendors submitted proposals prior to the submission deadline for RFP 883, including the prior contract holder UniPsych. The Board's plan for evaluating the six proposals was to submit them to the Board's insurance committee and the Board's expert consultant, John D. Robinson. The Board elected to have Mr. Robinson screen the submitted proposals for responsiveness to the RFP. Of the six (6) proposals submitted to the School Board, only the proposals of UniPsych, FPM, and Mathar Behavioral Health Systems, Inc. were deemed to satisfy the criteria of the RFP. These three proposals were sent to the Board's insurance committee so that the committee members could review and interview the three remaining proposers. The committee members as well as the Board had each proposers' proposal as well as a spreadsheet prepared by Mr. Robinson during his screening process. However, the evidence was clear that the committee relied on the price representations and guarantees contained in the spreadsheet. The Committee voted 9-0-1 to recommend the award to FPM. The Petitioner received no votes. The third finalist received one vote. Around August 10, 1995, UniPsych received written notice that the School District's ten-member district-wide health insurance committee decided to recommend that the School Board award its contract to FPM. As indicated earlier in screening the proposals, Mr. Robinson prepared a spreadsheet containing comparative data. The spreadsheet was not meant to be a complete listing of all the items in a company's proposal. He obtained the information contained in the spreadsheet mostly from the proposers' proposals. However, in at least two instances relevant to this case. Mr. Robinson contacted certain proposers over its proposal. Mr. Robinson felt he could seek corrections or clarifications from FPM, and other proposers because "[t]his is a proposal, not a bid. Proposals have the ability to be questioned and clarified " One such call was made to FPM. The call to FPM was made regarding at least two portions of FPM's proposal. FPM stated in Part 3 of its proposal that 14 average employee assistance program (EAP) visits per 1000 members were handled by FPM; and stated in Part 7 of its proposal that it would offer the benefit design outlined in the Board's specifications at $5.00 per employee contract per month. The $5.00 rate would be guaranteed for "two years without significant Consumer Price Index (CPI) increases." FPM was permitted to change the information contained in Part 3 of its proposal to 80-85 average employee assistance program visits per 1000 members because the original number was an error. The evidence did not demonstrate that this change was significant or material. More importantly however, FPM was allowed to change it price guarantee to three years without the CPI provision. These changes contradicted the plain language of FPM's proposal. Mr. Robinson inserted the newly-provided information in his spreadsheet and reported these changes to FPM's proposal to the committee. The change made to FPM's price guarantee was not a mere clarification but a significant change in a material bid term. The evidence was clear that the information in the spreadsheet was utilized and relied on by the Board and its insurance committee. The spreadsheet also contained information on each proposer's price. However, the spreadsheet was unduly detrimental to UniPsych because it overstated UniPsych's price. Health benefit contracts are typically priced under one of two methods: per employee per month (PEPM) or per member per month (PMPM or additive method). Members include the employee as well as any non-employee persons such as children of the employee covered under a health plan. The RFP stated a preference for pricing on a PEPM basis. UniPsych proposed to charge $4.01 on a PEPM basis. In determining UniPsych's PEPM average, the individual employee price was not added onto the price charged per employee and child(ren), per employee and spouse, or per employee and family. However, the spreadsheet erroneously stated all prices in the spreadsheet on a PMPM basis and reflected that UniPsych proposed to charge $4.80 PMPM instead of $4.01 PEPM. Moreover, the price was incorrectly based on an interpretation of documents relating to UniPsych's pricing scheme under its prior contract with the School Board. The erroneous interpretation served to inflate the spreadsheets price calculation for UniPsych. FPM proposed to charge $5.00 PEPM. Mr. Robinson recognized that if UniPsych's price was $4.01 PEPM, it would be substantially different from FPM's price, and could be sufficient to justify an award of the contract to UniPsych over FPM. Given the price guarantee change to FPM's proposal and this error in calculating UniPsych's price, these two factors warrant the rejection of all the bids in this case. As indicated earlier, the financial stability of a proposer was one of the criteria for review of this RFP. Neither the committee nor the RFP members required that any proposer submit financial information with its proposal or in its presentation to the committee. The only information supplied was general company information showing business activity, clients served and providers under contract. The committee members generally only asked the proposers if such information was available and if the proposer was financially stable. At the hearing, the evidence showed that FPM is the wholly-owned subsidiary of Ramsay Managed Care, Inc. (Ramsay). Ramsay essentially has two operating divisions: a health maintenance organization (HMO) division and a mental health and substance abuse division. FPM is Ramsay's mental health and substance abuse operating division. Ramsay's 10Q filing for the quarter ending March 31, 1995, reported that Ramsay had $17,508,893 in assets, $13,236,246 in liabilities, shareholder's net worth of $4,272,647, and $87,802 in losses that quarter. Ramsay has current assets of $2,957,912 and current liabilities of $4,362,714. These two figures give Ramsay a current ratio of 1:1.47. Generally a 1:1 or better ratio is deserved for financially stable companies. However, the ratio by itself does not show financial instability. It is simply a red flag worthy of more scrutiny. Ramsay's largest asset is "goodwill" totaling $9,959,745. Ramsay's 10Q explains that it booked most of this goodwill to account for its acquisition of FPM and two other mental health companies at prices exceeding the book values of those companies. Again the amount of goodwill does not demonstrate financial instability of a company. The 10Q also reflects that FPM proposes to obtain working capital via a line of credit that is collateralized by security interests in FPM's accounts receivable and its stock. The significance of these security interests is magnified by Ramsay's debt service obligations, which (as of March 31, 1995) would require it to pay out $2,211,100 by June 30, 1997, and $2,407,600 by June 30, 1998. Again these figures do not demonstrate financial instability of a company. To confirm its financial stability, UniPsych offered the Committee audited financial statements that were being prepared on a statutory accounting basis. The statements were never requested by the Committee and the Committee never considered financial statements for any of the proposals. However in this instance, the committee did consider the financial stability of all the proposers to its satisfaction. The evidence did not show that the committee's consideration was unreasonable or unfair to any proposer. In fact, the proposers were treated equally in the quality and quantity of financial information sought by the committee. The fact that more information or better information could have been sought is irrelevant since the committee and Board under the RFP specifications were free to determine the level of inquiry they deemed appropriate. If the specification as used by the Board was unclear or undefined to UniPsych, it should have challenged the specifications within the 72 hour period for such challenges under 120.53, Florida Statutes. Finally, the evidence was clear that UniPsych's proposal was a superior program to FPM's. In short UniPsych offered more benefits for less money. Indeed UniPsych's experiences during those five (5) years gave it first-hand knowledge of several ways it could improve and enhance the managed care program specified by the Board's RFP. FPM's proposal fails to offer any enhanced benefits. To enhance and improve the RFP's managed care program, UniPsych offered to provide two (2) additional benefits to the Board: (a) an out-of-network benefit; and (b) a chronic condition benefit. The out-of-network benefit gives potential patients complete choice of out-patient providers and increased choice of in-patient (hospital) providers, by allowing those potential patients to select a provider who is outside a designated network of providers. The chronic condition benefit addresses another restriction that is prevalent in most managed mental health care programs. As is the case with the RFP in issue, most managed mental health care programs routinely fail to require the plan provider to contract for coverage of chronic, recurrent or long-term mental health conditions (chronic conditions). This omission forces chronic condition patients to look to publicly funded community agencies for mental health care. Publicly funded facilities in Lake County have not produced patient satisfaction, partly because they are too few in number or they offer too few services. In addition to these two (2) major benefits, UniPsych's proposal also offered several other valuable benefit enhancements that improved upon the RFP's minimum requirements: 10 additional out-patient visits (above the 20 required by the RFP); and 5 free visits (i.e., no co-payment for members) under UniPsych's Employee Assistance Program, instead of the RFP's requirement of three visits, only the first of which is not subject to co-payment. The evidence did not demonstrate any reason with a basis in fact which would have caused the School Board to reject UniPsych's proposal in favor of FPM. The evidence only hinted at a general dissatisfaction with UniPsych. No basis for this dissatisfaction was shown. Since no basis was given for the Board's decision to reject a proposal which offers more benefits for less money the only conclusion is that the Board acted arbitrarily in awarding the contract to FPM. Therefore, all the proposals should be rejected and the process begun anew.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Board enter a Final Order rejecting all proposals. DONE and ENTERED this 29th day of January, 1996, at Tallahassee, Leon County, Florida. Officer Hearings 1550 Hearings DIANNE CLEAVINGER, Hearing Division of Administrative The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399- (904) 488-9675 Filed with the Clerk of the Division of Administrative this 29th day of January, 1996. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 95-4827BID The facts contained in paragraphs 2, 3, 4, 5, 7, 8, 13, 14, 15, 17, 19, 20, 21 and 22, of Petitioner's Proposed Findings of Fact are adopted in substance, in so far as material. The facts contained in paragraphs 1, 6, 10, 11, 16, 18, 24, 25 and 26 of the Petitioner's Proposed Findings of Fact are subordinate. The facts contained in paragraphs 12 and 23 of Petitioner's Proposed Findings of Fact were not shown by the evidence. The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 7, 8(a) and (b) and 15 of Respondent's Proposed Findings of Fact* are adopted in substance is so far as material. The facts contained in paragraphs 11, 12, 13 and 14 of Respondent's Proposed Findings of Fact are subordinate. The facts contained in paragraphs 9 and 10 of Respondent's Proposed Findings of Fact were not shown by the evidence. Paragraph 8(c) of Respondent's Proposed Findings of Fact contained only legal argument. *Paragraphs 7 through 15 of Respondent's Proposed Findings of Fact were unnumbered. Therefore, the Hearing Officer supplied sequential numbers for these paragraphs for reference purposes. COPIES FURNISHED: Timothy G. Schoenwalder, Esquire Blank, Rigsby and Meenan, P.A. 204 South Monroe Street Tallahassee, Florida 32301 Richard Langley, Esquire Post Office Box 120188 Clermont, Florida 34712-0188 Dr. Thomas E. Sanders, Superintendent Lake County School Board 201 West Burleigh Boulevard Tavares, Florida 32778-2496 Frank T. Brogan, Commissioner of Education Department of Education The Capitol Tallahassee, Florida 32399-0400
