Findings Of Fact At all times material hereto, Dr. Esteban Valdes-Castillo, a Board- certified psychiatrist, was the Medical Director of Progressive Health Center, Inc. Blanche Lear, a psychiatric social worker, was an employee of the Center. Between 1978 and August, 1981, Petitioner paid Respondent $45,627.16 in Medicaid payments for counseling ser- vices rendered by Blanche Lear. A two-way mirror was located in the common wall between Lear's and Valdes-Castillo's offices. Of the Medicaid recipients counseled by Lear, Valdes-Castillo did not meet, interview, counsel or even observe all of the patients for whom payments were made to the Center by Petitioner. Further, Valdes-Castillo only observed Lear's coun- seling sessions approximately once a month over the time period involved and then only upon the specific request of Lear to observe a specific patient for a specific reason.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered by Petitioner directing Respondent Progressive Health Center, Inc., to reimburse to Petitioner the amount of $45,627.16. DONE and RECOMMENDED this 14th day of March, 1983, in Tallahassee, Leon County, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of March, 1983. COPIES FURNISHED: Robert A. Weiss, Esquire Medicaid Program Office Department of Health and Rehabilitative Services 1317 Winewood Boulevard, Suite 233 Tallahassee, Florida 32301 J. Michael Sara, Esquire 2153 Coral Way, Suite 400 Miami, Florida 33145 David H. Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301
The Issue The issue in this case is whether the Respondent, Agency for Health Care Administration, is liable to Petitioner, Miriam Lara, M.D., for attorney's fees and costs pursuant to Section 57.111, Florida Statutes, and, if so, the amount of attorney's fees and costs Petitioner should be awarded.
Findings Of Fact Respondent, the Agency for Health Care Administration (hereinafter referred to as the "Agency"), is the agency of the State of Florida responsible for the administration of the Federal government's Medicaid program in Florida. Section 409.907, Florida Statutes. One of the duties imposed upon states in order to participate in the Medicaid program is the duty to terminate any approved Medicaid provider where the provider has been "convicted" of certain types of crimes. See Social Security Act, Section 1128(a)(1), 42 U.S.C. Section 1230a-7. In particular, 42 U.S.C. Section 1230a-7(a)(1) requires the mandatory exclusion from the Medicaid program of any individual or entity that has been "convicted" of a program- related crime: Any individual or entity that has been convicted of a criminal offense related to the delivery of any item or service under subchapter XVII of this chapter or under any State health care program. For this purpose, the term "convicted" is defined to include "participation in a . . . deferred adjudication, or other agreement or program where judgement of conviction has been withheld." 42 U.S.C. Section 1230a-7(i)(4). Petitioner, Dr. Miriam Lara, is a licensed medical doctor and an approved Medicaid provider in the State of Florida. On January 20, 1998, Dr. Lara was indicted for "Organized Fraud and Medicaid Fraud." A copy of the Arrest Warrant, Respondent's Exhibit 9, was provided to the Agency shortly after Dr. Lara's arrest putting the Agency on notice of the charges against her. On or about November 30, 1998,1 Dr. Lara entered into a "Deferred Prosecution Agreement and Speedy Trial Waiver" (hereinafter referred to as the "DPA") which was filed in the Circuit Court of the Eleventh Judicial Circuit of Florida, in and for Dade County. Dr. Lara agreed, in part, to the following in the DPA: I, [sic] understand that I have been tentatively accepted as a participant in the Pretrial Diversion Program, and that the charges against me will not be prosecuted so as [sic] long as I am a program participant in good standing and that my case will not come to trail during that time. While it is clear from the DPA that the charges against Dr. Lara were not to be prosecuted so long as she participated in the program, the DPA does not specifically state that the charges would be dropped if she completed the program. Although the DPA is not specific, the Office of the Statewide Prosecution and Dr. Lara intended, when they entered into the DPA that the charges would be completely dropped if Dr. Lara completed the Pretrial Diversion Program. On April 20, 1999, after Dr. Lara successfully completed the pretrial program,2 the Office of Statewide Prosecution nolle prossed all charges pending against her. In early 1999 the Agency became aware that Dr. Lara had entered into and completed some type of "pretrial program." Ellen Williams, a Medicaid/Healthcare Program Analyst for the Agency, was notified that Dr. Lara had completed what Ms. Williams understood to be a "pretrial intervention program." The Agency, through Ms. Williams, also became aware of the disposition of Dr. Lara's case some time during 1999. Ms. Williams was provided with a copy of a disposition record for Dr. Lara's case from the Clerk of the Circuit and County Court of the Eleventh Judicial Circuit of Florida. That disposition record, Respondent's Exhibit 11, states that the charges against Dr. Lara had been "NOLLE PROS . . ." on April 20, 1999. The Agency, through Ms. Williams, believed that all pretrial programs involved a program through which an individual charged with a crime could, by participating in the program, avoid being adjudicated "guilty" of the charged offense. Because the information contained on the disposition record provided to Ms. Williams indicated that the charges had been nolle prossed and, this appeared to be inconsistent with the Agency's belief that all pretrial programs result in adjudication being withheld, Ms. Williams attempted to find out precisely what had happened to the criminal charges against Dr. Lara. Ms. Williams first telephoned and spoke with Assistant Attorney General Hugo Acebo, whom she understood to be an attorney, about the matter. Ms. Williams was told by Mr. Acebo that Dr. Lara had entered into some type of pretrial program and that she had successfully completed the program. Ms. Williams did not recall being told by Mr. Acebo that the charges against Dr. Lara had been dropped. Nor did she recall being told that any plea had been entered by Dr. Lara or adjudication on the charges had been withheld. Consistent with the Agency's belief about the nature of pretrial programs, Ms. Williams assumed that Dr. Lara, by successfully completing the pretrial program, had merely avoided being adjudicated guilty of the offenses for which she had been charged. Ms. Williams did not understand that the charges against Dr. Lara had been dropped. On October 12, 1999, a Case Closing Report on Miriam Lara, M.D. (hereinafter referred to as the "Closing Report"), Case No. 04-96-03-0016, was issued by the Office of the Attorney General, Medicaid Fraud Control Unit, Fort Lauderdale Bureau. In pertinent part, the Closing Report states the following: According to Assistant Attorney General Hugo Acebo, Dr. Lara entered into a pretrial intervention (PTI) program, which she successfully completed in April 1998. The charges against her were then dropped. . . . (Emphasis added). Ms. Williams received a copy of the Closing Report. The Agency, therefore, had actual notice that the charges against Dr. Lara had been dropped, but Ms. Williams continued to incorrectly believe that, because the Closing Report indicated that Dr. Lara had entered into a "pretrial intervention (PTI) program, which she successfully completed . . . " she had been "convicted" of a criminal offense that is Medicaid program- related, consistent with the Agency's incorrect understanding of pretrial programs. Marie del Carmen Calzone, Esquire, who represented Dr. Lara at the time, spoke to Ms. Williams at least three times after the charges against Dr. Lara had been dropped. Ms. Calzone explained to Ms. Williams that the charges had been nolle prossed or dropped, that Dr. Lara had not entered any adverse plea to the charges, that "adjudication had not been withheld," and that Dr. Lara had not, therefore, been "convicted." Ms. Williams, however, incorrectly insisted that, because Dr. Lara had engaged in a pretrial program and successfully completed it, she had been "convicted" as that term is defined for Medicaid purposes. Based upon Ms Williams' understanding of the Agency's interpretation of the pertinent law, Ms. Williams drafted a letter notifying Dr. Lara that her participation in the Florida Medicaid program was being terminated (hereinafter referred to as the "Termination Letter"). The Termination Letter indicates that the decision to terminate Dr. Lara's participation in the Medicaid program was based upon the following: The Agency for Health Care Administration has received information from the Attorney General, Office of Statewide Prosecution that indicates the following: You were indicted on January 20, 1998, for Organized Fraud and Medicaid Fraud. On November 20, 1998, you entered into a pretrial intervention program, which resulted in a nolle prosequi of the charges. The Social Security Act at section 1128(a)(1) provides for the mandatory exclusion from participation in the Medicaid program of any individual or entity convicted of a criminal offense that is program-related. Section 1128(I)(4) defines convicted to include "when the individual or entity has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld." Section 1902(p)(1) of the Social Security Act provides for state authority to take action to exclude providers from the Medicaid program for the reasons cited in section 1128. The Termination Letter was signed on or about April 13, 2001, almost two years after the charges against Dr. Lara had been nolle prossed. The Termination Letter was provided to Dr. Lara. Dr. Lara disputed the Agency's proposed action to terminate her participation in the Medicaid program and filed a Petition for Formal Hearing Pursuant to Section 120.569, Fla. Stat. (2001) and Petition for Other Relief Under Fla. Stat. and F.A.C. (hereinafter referred to as the "Petition for Formal Hearing"). The Petition for Formal Hearing was filed with the Division of Administrative Hearing on July 13, 2001. The matter was styled Miriam Lara, M.D. vs. Agency for Health Care Administration, and designated DOAH Case No. 01-2789. On September 18, 2001, realizing that Dr. Lara had not been "convicted" of any charges, the Agency filed a Notice of Withdrawal of Final Agency Action in the Underlying Case. Consequently, an Order Closing File was entered the same day, canceling the scheduled final hearing of the Underlying Case and closing the file of the Division of Administrative Hearings. As stipulated to by the parties, the Agency is an "agency" as defined in Section 57.111, Florida Statutes; the Agency initiated an administrative proceeding against Dr. Lara; the Agency was not a nominal party; and Dr. Lara, a "small business party" as defined in Section 57.111, Florida Statutes, was the "prevailing party" in the Underlying Case by virtue of the filing of the Notice of Withdrawal of Final Agency Action. The amount of reasonable attorney's fees incurred by Dr. Lara in the Underlying Case exceed $15,000.00. On November 26, 2001, Dr. Lara filed a Renewed Petition to Determine Amount of Attorney Fees and Costs Pursuant to Section 57.111, Fla. Stat. (2001) and Other Relief Under Fla. Stat. and F.A.C. (hereinafter referred to as the "Renewed Petition"). An Attorney Fee Affidavit has been attached to the Renewed Petition in which it is represented that attorney's fees in the amount of $18,279.50 were reasonably incurred in the Underlying Case, but also recognizing that fees and costs are capped at $15,000.00 under Section 59.111(4)(d)2., Florida Statutes. The Renewed Petition was designated Case No. 01-4669F. The pertinent information available to the Agency at the time it sent the Termination Letter to Dr. Lara included the following: Dr. Lara had been charged with criminal offenses that are program related in January 1998; Dr. Lara entered into a "Deferred Prosecution Agreement" in November 1998; Dr. Lara successfully completed the pretrial diversion program. At no time did she enter any plea to the charges and, therefore, there was no adjudication on the charges; and As a consequence of having completed the pretrial diversion program, all charges against her were dropped in 1999. All information necessary to determine that Dr. Lara had not been "convicted" of charges related to the Medicaid program was available to the Agency before action was taken to terminate her participation in the Medicaid program.
Findings Of Fact On February 4, 1980, the Office of Medicaid Quality Control advised Respondent that a review of his Medicaid claims revealed that he billed the Medicaid Program for psychiatric services and further advised him that only Board-certified or Board-eligible psychiatrists were entitled to bill the Program for such services. The letter further requested that Respondent provide Petitioner with a copy of his Board certification. (Although the letter admitted in evidence bears the date of February 4, 1979, it is obvious that the date contains a typographical error, since the letter pertains to services previously rendered in April of 1979, and refers to a rule which became effective January 1, 1980.) By letter dated February 8, 1980, Respondent replied, by advising Petitioner that he was neither Board-certified nor Board-eligible. Respondent included in his letter a recitation of his extensive experience and qualifications as a psychiatrist. In spite of Petitioner's failure to reply to his letter or to authorize him to do so, Respondent continued to bill Petitioner for psychiatric services rendered to Medicaid recipients, and Petitioner continued to pay Respondent's claims. During the summer of 1981, Petitioner determined that ineligible psychiatrists were billing the Medicaid Program for psychiatric services rendered to Medicaid recipients. In order to ascertain those qualified to bill the Program, form letters were sent to all providers of psychiatric services requesting documentation of Board eligibility or Board certification and further advising that only Board-certified or Board-eligible psychiatrists were entitled to bill the Program. On August 5, 1981, that form letter was sent to Respondent. On August 11, 1981, Respondent replied to the August 5 form letter by again advising Petitioner that he was not Board-certified or Board-eligible and his extensive background and qualifications as a psychiatrist. Although no reply was made to his August 1981 letter to Petitioner, Respondent continued to bill the Medicaid Program for psychiatric services, and Petitioner continued to pay Respondent's claims. Respondent is not presently, and has never been, a Board-certified psychiatrist or a candidate for Board certification. During the period from January 1, 1980, through February, 1982, Respondent billed for and was paid $38,252.75 by the Medicaid Program for providing psychiatric services to Medicaid recipients. Petitioner never advised Respondent that he was entitled to bill the Medicaid Program for providing psychiatric services to Medicaid recipients notwithstanding the fact that he was not a Board-certified psychiatrist or a candidate for Board certification.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered directing Respondent to reimburse to Petitioner the sum of $38,252.75 for payments received by him for psychiatric services rendered from January 1, 1980, through February, 1982. DONE and RECOMMENDED this 15th day of March, 1983, in Tallahassee, Leon County, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of March, 1983. COPIES FURNISHED: Robert A. Weiss, Esquire Medicaid Program Office Department of Health and Rehabilitative Services 1317 Winewood Boulevard, Suite 233 Tallahassee, Florida 32301 Bruce M. Boiko, Esquire 1000 Ponce de Leon Boulevard, Suite 212 Coral Gables, Florida 33134 David H. Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301
The Issue Whether the Petitioner must reimburse the Respondent for Medicaid overpayments as set out in the Amended Final Agency Audit Report dated November 13, 2000, and, if so, the amount to be repaid.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Agency is the state agency responsible for the administration of the Medicaid program in Florida, and, as one of its duties, the Agency is charged with recovering overpayments made to Medicaid providers. Section 409.913, Florida Statutes (2000). At all times material to this proceeding, Peripheral Medical Services provided durable medical equipment and home health services to Medicaid recipients in Florida pursuant to a contract with the Agency, and it was assigned Medicaid provider number 950348000.2 The Medicaid Provider Agreement entered into by Peripheral Medical Services provides in pertinent part: The Provider agrees to participate in the Florida Medicaid program under the following terms and conditions: * * * (5) The Medicaid provider shall: * * * (b) Keep and maintain in a systematic and orderly manner all medical and Medicaid related records as the Agency may require and as it determines necessary; make available for state and federal audits for five years, complete and accurate medical, business, and fiscal records that fully justify and disclose the extent of the goods and services rendered and billings made under the Medicaid program. The provider agrees that only contemporaneously made records of goods and services provided will be admissible in evidence in any proceeding relating to payment for or provision of services for the purpose of supporting any claim submitted to or paid by the Medicaid program. After the Agency received a routine report from its Medicaid Program Office located in Miami, Florida, the Agency conducted an audit of the claims submitted by Peripheral Medical Services for the 27 Medicaid recipients to whom it provided oxygen durable medical equipment and services during the audit period extending from August 5, 1996, to July 6, 1998. Pursuant to certificates of medical necessity, Peripheral Medical Services provided each of the 27 Medicaid recipients with an oxygen concentrator during the audit period, and it submitted Medicaid claims for monthly visits to each of these patients. During the period of time covered by the audit, Peripheral Medical Services received payments for services provided to the 27 Medicaid recipients in an amount totaling $76,926.74. Peripheral Medical Services maintained patient records for these 27 Medicaid recipients, and, during the audit, it provided the Agency with the patient records as documentation to support the claims. At the times material to this proceeding, the DME/Medical Supply Services Coverage and Limitations Handbook governing "Oxygen and Oxygen Related Equipment" provided in pertinent part: "Monthly Home Visit Requirements: When the CRTT, RRT or RN conducts a home visit, the following information about the recipient's condition and the condition of the equipment must be documented in the recipient's record: . . . the monthly checks of the operation and safety of the equipment." The Agency's inspector compared the patient records to the list of claims submitted by Peripheral Medical Services for which it received payment from Medicaid, and he reached the following conclusions, which were memorialized in the audit work papers and the summary report he prepared: Peripheral Medical Services made 21 claims for payment for monthly visits to patient M.C., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at 14 of the visits; $3,639.90 of the $6,106.80 paid by Medicaid was not supported by documentation. Peripheral Medical Services made 12 claims for payment for monthly visits to patient C.M., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at eight of the visits; $2,498.20 of the $3,747.30 paid by Medicaid was not supported by documentation. Peripheral Medical Services made 14 claims for payment for monthly visits to patient J.P-O., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at eight of the visits; $2,498.20 of the $4,340.55 paid by Medicaid was not supported by documentation. Peripheral Medical Services made 13 claims for payment for monthly visits to patient F.A., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at eight of the visits; $2,361.63 of the $3,915.18 paid by Medicaid was not supported by documentation. Peripheral Medical Services made 20 claims for payment for monthly visits to patient N.V., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at 12 of the visits; $3,595.18 of the $6,061.98 paid by Medicaid was not supported by documentation. Peripheral Medical Services made ten claims for payment for monthly visits to patient M.P., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at six of the visits; $1,325.22 of the $2,270.36 paid by Medicaid was not supported by documentation. Peripheral Medical Services made one claim for payment for a monthly visit to patient M.A., and it provided documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at this visit; the payment made by Medicaid was supported by documentation. Peripheral Medical Services made one claim for payment for a monthly visit to patient M.B., and it provided documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at this visit; the payment made by Medicaid was supported by documentation. Peripheral Medical Services made 21 claims for payment for monthly visits to patient R.Q., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at 15 of the visits; $4,172.69 of the $6,015.04 paid by Medicaid was not supported by documentation. Peripheral Medical Services made 19 claims for payment for monthly visits to patient M.P., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at 12 of the visits; $3,975.64 of the $5,833.64 paid by Medicaid was not supported by documentation. Peripheral Medical Services made 11 claims for payment for monthly visits to patient E.D., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at six of the visits; $1,813.19 of the $3,366.74 paid by Medicaid was not supported by documentation. Peripheral Medical Services made 15 claims for payment for monthly visits to patient I.S., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at ten of the visits; $2,679.60 of the $4,233.15 paid by Medicaid was not supported by documentation. Peripheral Medical Services made five claims for payment for monthly visits to patient R.G., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at any of the visits; the entire $1,522.25 paid by Medicaid was not supported by documentation. Peripheral Medical Services made one claim for payment for a monthly visit to patient R.B., and it provided documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at this visit; the payment made by Medicaid was supported by documentation. Peripheral Medical Services made two claims for payment for monthly visits to patient A.A., but it failed to provide documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at one of the visits; $320.10 of the $640.20 paid by Medicaid was not supported by documentation. Peripheral Medical Services made one claim for payment for a monthly visit to patient L.B., and it provided documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at this visit; the payment made by Medicaid was supported by documentation. Peripheral Medical Services made 20 claims for payment for monthly visits to patient D.C., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at 14 of the visits; $3,868.24 of the $5,726.24 paid by Medicaid was not supported by documentation. Peripheral Medical Services made one claim for payment for a monthly visit to patient D.M., and it provided documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at this visit; the payment made by Medicaid was supported by documentation. Peripheral Medical Services made one claim for payment for a monthly visit to patient K.R., and it provided documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at this visit; the payment made by Medicaid was supported by documentation. Peripheral Medical Services made 16 claims for payment for monthly visits to patient D.G., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at ten of the visits; $2,954.88 of the $4,812.88 paid by Medicaid was not supported by documentation. Peripheral Medical Services made 23 claims for payment for monthly visits to patient M.V., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at 15 of the visits; $4,172.69 of the $6,639.59 paid by Medicaid was not supported by documentation. Peripheral Medical Services made one claim for payment for a monthly visit to patient L.F., and it provided documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at this visit; the payment made by Medicaid was supported by documentation. Peripheral Medical Services made six claims for payment for monthly visits to patient R.N., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at any of the visits; the entire $1,920.60 paid by Medicaid was not supported by documentation. Peripheral Medical Services made 22 claims for payment for monthly visits to patient T.P., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at 15 of the visits; $4,172.69 of the $6,335.14 paid by Medicaid was not supported by documentation. Peripheral Medical Services made nine claims for payment for monthly visits to patient A.V., but it failed to provide documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at eight of the visits; $1,889.30 of the $2,102.70 paid by Medicaid was not supported by documentation. Peripheral Medical Services made two claims for payment for monthly visits to patient R.P., and it provided documentation establishing that checks of the operation and safety of the oxygen concentrators were performed at these visits; the payments made by Medicaid were supported by documentation. aa. Peripheral Medical Services made one claim for payment for a monthly visit to patient E.R., and it provided documentation establishing that a check of the operation and safety of the oxygen concentrators was performed at this visit; the payment made by Medicaid was supported by documentation. The patient records provided by Peripheral Medical Services do not contain documentation that the required operation and safety checks were performed in the months identified by the Agency in its audit work papers, and the Agency's calculations of the amounts paid by Medicaid that are subject to recoupment are supported by the summary report prepared by the Agency's inspector, as well as by the Agency's summary report. Peripheral Medical Services received payments totalling $49,380.20 from Medicaid on claims not supported by documentation.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order finding that Peripheral Medical Services, Inc., was overpaid for services provided to Medicaid recipients for the audit period extending from August 5, 1996, to July 6, 1998, and requiring Peripheral Medical Services, Inc., to repay the Agency for Health Care Administration the principal amount of $49,380.20. DONE AND ENTERED this 8th day of November, 2001, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO 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 November, 2001.
The Issue The issue for determination is whether Petitioner must reimburse Respondent for payments totaling $1,140,763.88 that Petitioner received from the Medicaid Program in compensation for the provision of prescription drugs between late-August and November of 1998. Respondent contends that Petitioner is not entitled to retain the payments in question because Petitioner allegedly has failed to demonstrate that it had available during the pertinent period a sufficient quantity of the prescription drugs in question.
Findings Of Fact The parties' Joint Stipulation of Facts and the evidence presented at final hearing established the facts that follow. The Parties The Agency for Health Care Administration (the “Agency”) is responsible for administering the Florida Medicaid Program. As one of its duties, the Agency must recover "overpayments . . . as appropriate," the term "overpayment" being statutorily defined to mean "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 practices, fraud, abuse, or mistake." See Section 409.913(1)(d), Florida Statutes. Palm Beach Pharmacy, Inc. (“PBPI”), d/b/a Eddie’s Drug (“Eddie’s”) was, at all times material hereto, a duly contracted Medicaid provider, having entered into a Medicaid Provider Agreement with the Agency and been assigned a Medicaid Provider Number: 106343000. Eddie’s is a Florida licensed pharmacy.1 As an enrolled Medicaid provider, Eddie’s is authorized to dispense drugs and supplies to Medicaid recipients. In return, Eddie’s has agreed to comply with all governing statutes, rules, and policies, including those policies set forth in the Florida Medicaid Prescribed Drug Services Coverage, Limitations and Reimbursement Handbook (the “Handbook”). The Agency, which prepared the Handbook and furnishes it to Medicaid providers, has incorporated the Handbook by reference into Rule 59G-4.250(2), Florida Administrative Code. PBPI, which owned and operated a number of pharmacies (including Eddie’s), maintained its corporate headquarters in West Palm Beach, Florida. Eddie’s was located in Miami, Florida. On July 1, 1998, PBPI acquired a drug store known as Jay’s Drugs (“Jay’s”). Jay’s was located in Miami, Florida, across the street from Eddie’s. Thus, before both stores came under common ownership, they had been competitors. This case arises out of the Agency's attempt to recover alleged overpayments on Medicaid claims for which Eddie’s was paid several years ago. The "audit period" that is the subject of the Agency's recoupment effort is April 1, 1998 to July 31, 1999, although the actual period in controversy is much shorter. From July 1, 1998, until the end of the audit period, PBPI owned and operated both Eddie’s and Jay’s. The Underlying Facts The transactions at the heart of this case occurred between late-August and November of 1998, during which period (the “Focal Period”) Medicaid reimbursed Eddie’s more than $1 million for prescription drugs including Neupogen and Epogen/Procrit (collectively, the “Drugs”). The Drugs are used to treat AIDS patients and persons infected with HIV. Prior to the Focal Period, Eddie’s had not dispensed $1 million worth of the Drugs——or any figure approaching that amount——in three or four months’ time. The reason for the dramatic spike in Eddie’s business is that Eddie’s was dispensing the Drugs to customers of Jay’s pursuant to an arrangement designed to manipulate PBPI’s contractual obligations to the former owner of Jay’s under the purchase and sale agreement by which PBPI had acquired Jay’s. Essentially, the arrangement was this. Jay’s was dispensing the Drugs to a large number (approximately 150) of Medicaid beneficiaries who were receiving treatment at a nearby clinic. Because the Drugs were administered to the patients via intravenous infusion, the clinic typically obtained the Drugs from Jay’s in bulk. To fill these prescriptions, Jay’s ordered the Drugs from a wholesale supplier, which usually delivered the Drugs to Jay’s the next day. At some point before the Focal Period, arrangements were made to have the clinic present its prescriptions for the Drugs to Eddie’s rather than Jay’s.2 The evidence does not show, exactly, how this was accomplished, but whatever the means, the clinic abruptly began bringing prescriptions for the Drugs to Eddie’s.3 This diversion of Jay’s’ business to Eddie’s was intended to deprive Jay’s of Medicaid reimbursements to which Jay’s’ former owner had access as a source of funds for paying down a note that PBPI had given for the purchase of Jay’s. By having Eddie’s dispense the Drugs and submit the Medicaid claims, Medicaid money flowed into Eddie’s’ bank account (rather than Jay’s’ bank account) and hence was not immediately available to the former owner of Jay’s to reduce PBPI’s debt. During the Focal Period, Eddie’s did not purchase the Drugs from a wholesaler but instead acquired them from Jay’s. The process by which this was accomplished involved a pharmacy technician named Wright, who was employed at Eddie’s, and a pharmacist named Shafor, who worked at Jay’s. Wright (at Eddie’s) accepted the prescriptions for the Drugs as the clinic brought them in Then, she called Shafor (at Jay’s) and told him the quantities needed to fill the prescriptions. Shafor ordered the Drugs from a wholesaler, which delivered them in bulk to Jay’s, usually the next day. Upon receiving the Drugs, Shafor personally delivered them to Wright, who, recall, was across the street at Eddie’s. Wright labeled and dispensed the Drugs. Eddie’s submitted a claim for the Drugs to Medicaid, and Medicaid paid Eddie’s. PBPI maintained separate accounting ledgers for Eddie’s and Jay’s, respectively. The company’s accountants recorded the subject transactions in these ledgers so that Jay’s——not Eddie’s——would “recognize” the sales of the Drugs. In a nutshell, this was done through “inter-company” transfers whereby all of the money that Eddie’s received from Medicaid for the Drugs was moved, on the books, into an account of Jay’s. In this way, any profit from the sales of the Drugs (the difference between the wholesale cost of the Drugs and the Medicaid reimbursement therefor, less overhead) was realized on Jay’s’ books.4 The Medicaid payments to Eddie’s that the Agency seeks to recoup were included in four remittance vouchers dated September 2, 1998; September 30, 1998; October 28, 1998; and November 25, 1998, respectively. The September 2 payment to Eddie’s totaled $287,205.52. Of this amount, $276,033.23 reimbursed Eddie’s for dispensing the Drugs. Eddie’s’ accounting ledger reflects that, as of September 30, 1998, the sum of $276,033.23 had been transferred from an account of Eddie’s to an account of Jay’s. The September 30 payment to Eddie’s totaled $439,175.77, of which $432,700.36 was paid in consideration of the Drugs. The October 28 Medicaid payment was $431,753.82, of which total the Drugs accounted for $424,202.76. Eddie’s’ accounting ledger reflects that, as of October 31, 1998, the sum of $870,929.59 (439,175.77 + 431,753.82) had been transferred from an account of Eddie’s to an account of Jay’s. The November 25 payment to Eddie’s totaled $407,088.00. Of this amount, $393,063.00 reimbursed Eddie’s for dispensing the Drugs. Eddie’s’ accounting ledger reflects that, as of November 30, 1998, the sum of $407,088.00 had been transferred from an account of Eddie’s to an account of Jay’s. The Agency’s Allegations On October 31, 2000, the Agency issued its Final Agency Audit Report (“Audit”) in which Eddie’s was alleged to have received $1,143,612.68 in overpayments relating to the Drugs. In the Audit, the Agency spelled out its theory of the case; indeed, the Audit is the only document in the record that does so. The Agency cited several statutory provisions. First, Section 409.913(7)(e), Florida Statutes, was referenced. This section states: When presenting a claim for payment under the Medicaid program, a provider has an affirmative duty to supervise the provision of, and be responsible for, goods and services claimed to have been provided, to supervise and be responsible for preparation and submission of the claim, and to present a claim that is true and accurate and that is for goods and services that: * * * (e) Are provided in accord with applicable provisions of all Medicaid rules, regulations, handbooks, and policies and in accordance with federal, state, and local law. Section 409.913(7)(e), Florida Statutes. The Agency did not allege (or prove), however, that Eddie’s had violated Section 409.913(7)(e), Florida Statutes.5 Put another way, the Agency did not plead or prove lack of supervision, submission of a false claim, or that the Drugs were not provided in accordance with applicable law. Next, the Agency cited Section 409.913(8), Florida Statutes, which provides: A Medicaid provider shall retain medical, professional, financial, and business records pertaining to services and goods furnished to a Medicaid recipient and billed to Medicaid for a period of 5 years after the date of furnishing such services or goods. The agency may investigate, review, or analyze such records, which must be made available during normal business hours. However, 24-hour notice must be provided if patient treatment would be disrupted. The provider is responsible for furnishing to the agency, and keeping the agency informed of the location of, the provider's Medicaid- related records. The authority of the agency to obtain Medicaid-related records from a provider is neither curtailed nor limited during a period of litigation between the agency and the provider. The Agency further alleged, as fact, that Eddie’s had failed, upon request, “to submit invoices from [its] suppliers to substantiate the availability of drugs that [were] billed to Medicaid” and thus had not “fully substantiated such availability.” The Agency, however, did not invoke any of the available remedial provisions as authority to impose a sanction for this alleged failure to turn over Medicaid-related records. See, e.g., Sections 409.913(14)(b), (c), and (d), Florida Statutes. The Agency cited Section 409.913(10), Florida Statutes, which authorizes the Agency to “require repayment for inappropriate, medically unnecessary, or excessive goods or services from the person furnishing them, the person under whose supervision they were furnished, or the person causing them to be furnished.” There was no allegation (or proof), however, that the Drugs which Eddie’s had purported to dispense (i.e. the Drugs for which it had submitted Medicaid claims) were “inappropriate, medically unnecessary, or excessive.” Thus, Eddie’s was not alleged (or shown) to have violated Section 409.913(10), Florida Statutes. Finally, the Agency relied upon Section 409.913(14)(n), Florida Statutes, which is the basis of the Agency’s legal theory. This section provides: The agency may seek any remedy provided by law, including, but not limited to, the remedies provided in subsections (12) and (15) and s. 812.035, if: * * * (n) The provider fails to demonstrate that it had available during a specific audit or review period sufficient quantities of goods, or sufficient time in the case of services, to support the provider's billings to the Medicaid program[.] The Agency contended, additionally, that “[b]illing Medicaid for drugs that have not been demonstrated as available for dispensing is a violation of the Medicaid laws and regulations and has resulted in the finding that [Eddie’s] ha[s] been overpaid by the Medicaid program.” (Emphasis added). The Agency explained, “Medicaid payments that have been substantiated by documented inventory are assumed to be valid; and payments in excess of that amount are regarded to be invalid.” Thus, the Agency’s theory of recovery is that Eddie’s must forfeit “overpayments” arising from its failure to demonstrate the availability, in inventory, of a sufficient quantity of the Drugs for which claims were submitted, as required by Section 409.913(14)(n), Florida Statutes. After the Audit was issued, the Agency accepted a handwritten note regarding the transfer of a small quantity of Drugs from Jay’s to Eddie’s as sufficient to demonstrate the availability of such amount. This resulted in a slight reduction of the amount of the alleged overpayment, to $1,140,763.88. The Separate Audit of Jay’s The Agency conducted a separate audit of Jay’s, concerning which some evidence was introduced at hearing. Without getting into unnecessary detail, the audit of Jay’s revealed that Jay’s had purchased, during and around the Focal Period, a quantity of the Drugs that exceeded the number of units that Jay’s had billed to Medicaid. It was Eddie’s theory that this “excess inventory” of Jay’s matched, more or less, the alleged inventory shortfall at Eddie’s, thereby corroborating the testimony concerning the transfer of these Drugs from Jay’s to Eddie’s for dispensation. At hearing, the parties sharply disputed whether, in fact, Jay’s had transferred the Drugs to Eddie’s. The Agency, of course, maintained that such transfers were not properly documented; Eddie’s argued that the documents and other evidence, including testimony about the transactions in question, adequately demonstrated that the transfers had, in fact, occurred. There was no dispute, however, that if it were found that such transfers had occurred, and if, further, the documents (and other evidence) pertaining to the inventory of Jay’s were accepted as proof of the quantities of Drugs so transferred, then all but $176,078.30 worth of the Drugs could be accounted for. Thus, as counsel for Eddie’s conceded at hearing, the Agency is entitled to recoup some sum of money. The question is whether that sum is $1,140,763.88 or $176,078.30. Ultimate Factual Determination Based on all of the evidence in the record, including the deposition testimony received through the parties’ joint stipulation, it is determined that, more likely than not, Eddie’s had available during the Focal Period a sufficient quantity of the Drugs to support all but $176,078.30 worth of the claims in dispute.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency enter a final order requiring Eddie’s to repay the Agency the principal amount of $176,078.30. DONE AND ENTERED this 12th day of March, 2002, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of March, 2002.
The Issue Whether Respondent failed to comply with several requirements set forth in the Florida Medicaid Assistive Care Services Coverage and Limitations Handbook, thereby incurring a $15,000 fine according to Florida Administrative Code Rule 59G- 9.070(7)(e).
Findings Of Fact Embassy is an assisted living facility that provides assistive care services, and was enrolled as a provider in the Florida Medicaid program at all times pertinent to the instant case. AHCA is the state agency charged with the administration of the Medicaid program in Florida. Within AHCA is the Bureau of Medicaid Program Integrity (MPI), whose duty is to ensure the integrity of the Medicaid program by conducting audits of claims and by investigating providers to ensure compliance with all requirements of the Medicaid program. At all relevant times, Embassy has been subject to a Medicaid Provider Agreement. Pursuant to the agreement, Embassy agreed to comply with all federal, state, and local laws, including rules, regulations, and statements of policy applicable to the Medicaid program. Embassy also agreed to comply with AHCA's Medicaid handbooks. The Medicaid Provider Agreement includes the requirement that providers keep, maintain, and make available in a systemic and orderly manner all medical and Medicaid-related records as AHCA requires. On December 6, 2011, AHCA conducted a site visit at Embassy's facility. In a letter dated February 8, 2012, Embassy was notified that a fine of $15,000 was being assessed. The letter read as follows: In accordance with Section 409.913, Florida Statutes (F.S.), and Rule 59G-9.070, Florida Administrative Code (F.A.C.), the Agency for Health Care Administration (Agency), shall apply sanctions for violations of federal and state laws, including the failure to maintain a Resident Service Plan for Assistive Care Services within fifteen (15) days of a Resident Health Assessment for Assisted Living Facilities for Medicaid consumers P.A., D.B., D.D., R.E., M.G., F.G., P.N., K.T., E.V., and G.W., the failure to maintain a complete Resident Health Assessment for Assisted Living Facilities for Medicaid consumers D.B., M.G., and F.G., the failure to maintain a physician statement indicating that employee M.J.D. is free of communicable diseases, the failure to maintain current tuberculosis skin test results for employees M.J.D., E.J., and B.R., and failure to maintain current Level II background screening results for employees E.D., M.J.D., J.R., and B.R. A review of the recipient files revealed that service plans were missing in ten files. Service plans are required for each recipient, and they must be signed or provided within 15 days of the annual health assessment, or within 15 days of an assessment that causes a significant change in the recipient's condition. Embassy admitted at the final hearing that ten recipient files did not contain service plans. The documentation provided also did not contain a Level II Background Screening for four Embassy employees; these screenings must be conducted every five years. Embassy admitted that the required background screenings were conducted on December 16, 2011-- after the site visit, and after they had expired. Lastly, the documentation provided during the site visit did not contain tuberculosis screening results for three employees. Two of those employee files also did not contain the Level II Background Screenings as noted above; one employee file was only missing the tuberculosis screening. The Agency properly imposed sanctions for each of the fifteen violations of Medicaid policy; that is: ten recipient files that did not contain service plans, four employee files that did not contain a Level II background screening and therefore were not maintained properly for inspection, and one employee file that did not contain a tuberculosis screening. There is no evidence establishing that Embassy has been previously charged with, or been determined to have committed, any violation of Medicaid law.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that pursuant to Florida Administrative Code Rule 59G-9.070(7)(e), Respondent should be fined a total of $15,000 for 15 violations of Florida's Medicaid laws. DONE AND ENTERED this 31st day of January, 2013, in Tallahassee, Leon County, Florida. S JESSICA E. VARN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 31st day of January, 2013.
The Issue The issue is whether the Agency’s Lowest Charge Rule as identified in the petition filed in this matter is an invalid exercise of delegated legislative authority because it contravenes the specific provisions of law implemented as prohibited by section 120.52(8)(c), Florida Statutes (2013).
Findings Of Fact Respondent, AHCA, is the Florida agency responsible for the administration of the Medicaid program in Florida and is the agency responsible for the adoption, implementation and enforcement of the Lowest Charge Rule at issue in this proceeding. Petitioner, LabCorp, provides medical testing and clinical diagnostic services used by hospitals, physicians, and other medical providers to diagnose and treat patients in Florida and nationwide. LabCorp is a Florida Medicaid provider. Quest operates commercial reference laboratories in Florida and nationwide, providing a range of clinical laboratory services to assist health care providers in diagnosing and treating disease and other health conditions. Quest is a Florida Medicaid provider. As Florida Medicaid providers, LabCorp and Quest are subject to the rules adopted by AHCA to administer the Medicaid program in Florida, including the Lowest Charge Rule. The Lowest Charge Rule substantially affects the amounts LabCorp and Quest are entitled to charge and are paid for Medicaid services under chapter 409, Florida Statutes, and the applicable Florida regulations and handbooks. LabCorp and Quest are substantially affected by the Lowest Charge Rule and therefore have standing to seek an administrative determination of its invalidity. This action challenges the validity of the Lowest Charge Rule, which is included in both the first sentence of rule 59G- 5.110(2), and in the Provider General Handbook at page 1-4. 10. Rule 59G-5.110(2), states: Charges for services or goods billed to the Medicaid program shall not exceed the provider’s lowest charge to any other third party payment source for the same or equivalent medical and allied care, goods, or services provided to person [sic] who are not Medicaid recipients. Any services or goods customarily provided free of charge to patients may not be billed to Medicaid when provided to Medicaid recipients. Any payment made by Medicaid for services or goods not furnished in accordance with these provisions is subject to recoupment and the agency may, in such instances, initiate other appropriate administrative or legal action. The Provider General Handbook, adopted pursuant to rule 59G-5.020, repeats the Lowest Charge Rule at page 1-4: What the Provider May Charge for Services The provider’s charges for services billed to Medicaid must not exceed the provider’s lowest charge to any other third party source for the same or equivalent medical and allied care, goods, or services provided to individuals who are not Medicaid recipients.
The Issue The issue for determination is whether Respondent committed the offense set forth in Petitioner's letter of agency action dated March 9, 2012, and, if so, what action should be taken.
Findings Of Fact At all times material hereto, New Life was issued individual Medicaid provider number 140680900. At all times material hereto, New Life was enrolled as an assisted living facility. At all times material hereto, New Life had a valid Medicaid Provider Agreement with AHCA (Agreement). Under the Agreement, New Life was authorized to provide assistive living services to Medicaid recipients. The Florida Medicaid Assistive Care Services Coverage and Limitations Handbook, effective July 2009, hereinafter Handbook, provides, among other things, requirements of Medicaid home health services providers and sets forth pertinent Medicaid policies and service requirements. The Handbook is provided to each Medicaid provider upon enrollment into the Medicaid program and is available online. Each provider is expected and presumed to be familiar with the Handbook. The Handbook was incorporated by reference into rule 59G-4.025, Assistive Care Services. No dispute exists that, at all times material hereto, New Life was an assistive care services provider as defined by the Handbook. The Handbook provides in pertinent part: Recipients receiving Assistive Care Services must have a complete assessment at least annually . . . or sooner if a significant change in the recipient's condition occurs . . . . An annual assessment must be completed no more than one year plus fifteen days after the last assessment. An assessment triggered by a significant change must be completed no more than fifteen days after the significant change. The assessment for a resident of a ALF . . . must be completed by a physician or other licensed practitioner of the healing arts (Physician Assistant, Advanced Registered Nurse Practitioner, Registered Nurse) acting within the scope of practice under state law, physician assistant or advanced registered practitioner. * * * The assessment for ALF [assisted living facility] residents must be recorded on the Resident Health Assessment for Assisted Living Facilities, AHCA Form 1823. * * * Along with the annual assessment requirement, all recipients receiving ACS [Assistive Care Services] must have an updated Certification of Medical Necessity for Medicaid Assistive Care Services, AHCA- Med Serv Form 035, July 2009, signed by a physician or other licensed practitioner of the healing arts (Physician Assistant, Advanced Registered Nurse Practitioner, Registered Nurse) and the Resident Service Plan for Assistive Care Services, AHCA-Med Serv Form 036, July 2009, completed and available in the recipient's case file at the facility. * * * Every ACS recipient must have a service plan completed by the ACS service provider. The Resident Service Plan for Assistive Care Services, AHCA-Med Serv Form 036, July 2009, shall be used for each recipient receiving ACS. The form must be included in the recipient's case file at the facility. The ALF, RTF [residential medical facility] and AFCH [adult family care home] are responsible for ensuring the service plan is developed and implemented. * * * The Resident Service Plan for Assistive Care Services (AHCA-Med Serv Form 036) must be completed within 15 days after the initial health assessment or annual assessment, be in writing and based on information contained in the health assessment. . . . * * * A new service plan is required on an annual basis or sooner if a significant change in the recipient's condition occurs. The new service plan must be completed no more than 15 days after the annual assessment or an assessment because of a significant change in the recipient's condition. * * * In addition to records required by the applicable licensure standards, ACS records that must be kept include: Copies of all eligibility documents; Health Assessment Forms, AHCA Form 1823 . . .; Certification of Medical Necessity for Medicaid Assistive Care Services, AHCA-Med Serv Form 035; The Resident Service Plan for Assistive Care Services, AHCA-Med Serv Form 036; and The Resident Service Log, AHCA-Med Serv Form 037. This documentation must be maintained at the facility, kept for at least five years, and be made available to the Agency for Health Care Administration monitoring or surveyor staff or its designated representative, upon request. . . . * * * ACS documentation may be in electronic format. The original, signed . . . documents must be kept in the recipient's case file in the facility . . . for audit, monitoring and quality assurance purposes. . . . Handbook at P 2-7 through 2-11. AHCA's investigator performed a site visit at New Life on December 8, 2011. The investigator reviewed case files of residents for the service-period covering January 1, 2011, through November 30, 2011 (service-period). AHCA's investigator found deficiencies in the case files of seven residents at New Life: M.B.; R.F.; E.H.; R.J.; I.M.; K.L.; and J.S. Additional documents, not contained in the case files during the site visit, were provided subsequent to the site visit. Regarding Resident M.B., the Health Assessment and the Resident Service Plan were dated August 17, 2010, which was after the service-period; and the Certification of Medical Necessity was dated March 28, 2012, which was not within the service-period and after the site visit. The evidence demonstrates that the case file of Resident M.B. lacked the Health Assessment, Resident Service Plan, and Certification of Medical Necessity for the service- period. As to Resident R.F., the Health Assessment was dated January 1, 2011, which was within the service-period but not up- to-date; the Resident Service Plan was up-to-date; and the Certification of Medical Necessity was dated March 1, 2012, which was not within the service-period and after the site visit. The evidence demonstrates that the case file of Resident R.F. lacked the Health Assessment and Certification of Medical Necessity for the service-period. Regarding Resident E.H., the Health Assessment was dated January 24, 2011, and was up-to-date; the Resident Service Plan was not provided; and the Certification of Medical Necessity was dated September 27, 2002, with no more recent Certification of Medical Necessity. The evidence demonstrates that the case file of Resident E.H. lacked the Resident Service Plan and Certification of Medical Necessity for the service-period. As to Resident R.J., the parties stipulated that the Health Assessment was up-to-date; the Resident Service Plan was not provided; and the Certification of Medical Necessity was dated February 29, 2012, which was not within the service-period and after the site visit. The evidence demonstrates that the case file of Resident R.J. lacked the Resident Service Plan and Certification of Medical Necessity for the service-period. Regarding Resident I.M., the Health Assessment and the Resident Service Plan were up-to-date; and the Certification of Medical Necessity was dated March 1, 2012, which was not within the service-plan and after the site visit. The evidence demonstrates that the case file of Resident I.M. lacked the Certification of Medical Necessity for the service-period. As to Resident K.L., the Health Assessment was dated March 1, 2012, which was not within the service-period and after the site visit; the Resident Service Plan was not provided; and the Certification of Medical Necessity was provided, but the date as to the year was unintelligible even though the month and day were intelligible, i.e., March 1. The evidence demonstrates that the case file of Resident K.L. lacked the Health Assessment, Resident Service Plan, and Certification of Medical Necessity for the service- period. Regarding Resident J.S., the Health Assessment was dated August 22, 2009, which was not within the service-period; the Resident Service Plan was not provided; and the Certification of Medical Necessity was dated February 29, 2012, which was not within the service-period and was after the site visit. The evidence demonstrates that the case file of Resident J.S. lacked the Health Assessment, Resident Service Plan, and Certification of Medical Necessity for the service period. The Director and owner of New Life is Ethel Newton. Ms. Newton has been the Director and owner for the past 13 years. She was not familiar with the Health Assessment form, the Resident Service Plan form, or the Certification of Medical Necessity form. Ms. Newton advised AHCA's investigator that she was not familiar with the forms and admitted same at the hearing. Ms. Newton historically depended upon the assistance of the Department of Children and Family Services (DCF) to complete any required forms. She depended upon DCF until 2005 when DCF closed its local office which had been assisting her. After DCF closed its local office, Ms. Newton depended upon the residents' case managers at New Horizons, an agency where the residents' physicians are located, to complete any required forms. Five of the seven residents had case managers at New Horizons; J.S. and E.H. did not have case managers at New Horizons. E.H. is no longer a resident at New Life. Ms. Newton is willing to cooperate with AHCA and do whatever it takes to have the required forms completed timely and correctly. The evidence does not demonstrate that Ms. Newton intentionally failed to complete the required forms. None of the seven residents were harmed as a result of the deficiencies in the documentation. No evidence was presented demonstrating that New Life has any prior administrative sanction or penalty. No evidence was presented demonstrating that New Life has any prior violations.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order: Finding that New Life Assisted Living, Inc., d/b/a New Life Assisted Living Facility, violated Florida Administrative Code Rule 59G-9.070(7)(e) by failing to have in the case files of Resident M.B., Resident K.L., and Resident J.S. a Health Assessment, Resident Service Plan, and Certification of Medical Necessity for the service-period covering January 1, 2011, through November 30, 2011; by failing to have in the case file of Resident R.F. a Health Assessment and Certification of Medical Necessity for the service-period covering January 1, 2011, through November 30, 2011; by failing to have in the case file of Resident E.H. and Resident R.J. a Resident Service Plan and Certification of Medical Necessity for the service-period covering January 1, 2011, through November 30, 2011; and by failing to have in Resident I.M.'s case file a Certification of Medical Necessity for the service-period covering January 1, 2011, through November 30, 2011; Requiring New Life Assisted Living, Inc., d/b/a New Life Assisted Living Facility to enter into a corrective action plan; and Imposing a fine against New Life Assisted Living, Inc., d/b/a New Life Assisted Living Facility in the amount of $1,750.00. S DONE AND ENTERED this 14th day of November, 2012, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 14th day of November, 2012.
The Issue The issue for determination in this case is whether certain provisions of the Florida Title XIX Long-Term Care Reimbursement Plan, as adopted in Rule 59G-6.010, Florida Administrative Code, which are relied upon by the AGENCY FOR HEALTH CARE ADMINISTRATION to apply a fair rental value system of property reimbursement to Petitioner are invalid under Section 120.56, Florida Statutes (1995). Petitioner also asserts a state and federal constitutional equal protection challenge to the existing rule provisions. (Petitioner’s constitutional issues are preserved, but are not determined in this proceeding.)
Findings Of Fact Petitioner, CONSULTING MANAGEMENT AND EDUCATION, INC., d/b/a GULF COAST NURSING AND REHABILITATION CENTER (CME), is the licensed operator of a 103-bed nursing home in Clearwater, Florida, which is presently known as GULF COAST NURSING AND REHABILITATION CENTER (GULF COAST). CME participates in the Florida Medicaid Program as an enrolled provider. Respondent, AGENCY FOR HEALTH CARE ADMINISTRATION (AHCA), is the agency of the State of Florida authorized to implement and administer the Florida Medicaid Program, and is the successor agency to the former Department of Health and Rehabilitative Services, pursuant to Chapter 93-129, Laws of Florida. Stipulated Facts Prior to 1993, the GULF COAST nursing home facility was known as COUNTRY PLACE OF CLEARWATER (COUNTRY PLACE), and was owned and operated by the Clearwater Limited Partnership, a limited partnership which is not related to CME. In 1993 CME agreed to purchase, and did in fact purchase, COUNTRY PLACE from the Clearwater Limited Partnership. Simultaneous with the purchase of COUNTRY PLACE, CME entered into a Sale/Leaseback Agreement with LTC Properties, Inc., a Maryland real estate investment trust which engages in the financing of nursing homes. The Purchase and Sale Agreement between Clearwater Limited Partnership and CME was contingent upon the Sale/Leaseback Agreement and the proposed Lease between CME and LTC Properties, Inc. On September 1, 1993, CME simultaneously as a part of the same transaction purchased COUNTRY PLACE, conveyed the facility to LTC Properties, Inc., and leased the facility back from LTC Properties, Inc. As required, CME had notified AHCA of the proposed transaction. AHCA determined that the transaction included a change of ownership and, by lease, a change of provider. CME complied with AHCA's requirements and became the licensed operator and Medicaid provider for COUNTRY PLACE. Thereafter, CME changed the name of the facility to GULF COAST. After CME acquired the facility and became the licensed operator and Medicaid provider, AHCA continued to reimburse CME the same per diem reimbursement which had been paid to the previous provider (plus certain inflation factors) until CME filed its initial cost report, as required for new rate setting. In the normal course of business, CME in 1995 filed its initial Medicaid cost report after an initial period of actual operation by CME. Upon review of the cost report, AHCA contended that the cost report was inaccurate and engaged in certain "cost settlement" adjustments. During this review, AHCA took the position that CME's property reimbursement should be based on FRVS methodologies rather than "cost" due to the lease. In November of 1995, CME received from AHCA various documents which recalculated all components of Petitioner's Medicaid reimbursement rates for all periods subsequent to CME's acquisition of the facility. In effect, AHCA placed CME on FRVS property reimbursement. The practical effect of AHCA's action was to reduce CME's property reimbursement both retroactively and prospectively. The retroactive application would result in a liability of CME to AHCA, due to a claimed overpayment by AHCA. The prospective application would (and has) resulted in a reduction of revenues. CME is substantially affected by AHCA's proposed action and by Sections I.B., III.G.2.d.(1), V.E.1.h., and V.E.4. of the Florida Medicaid Plan. Additional Findings of Fact The Florida Medicaid Plan establishes methodologies for reimbursement of a nursing home's operating costs and patient care costs, as well as property costs. The dispute in this matter relates only to reimbursement of property costs. CME as the operator of the GULF COAST nursing home facility is entitled to reimbursement of property costs in accordance with the Florida Medicaid Plan. CME as the operator of the GULF COAST facility entered into a Florida Medicaid Program Provider Agreement, agreeing to abide by the provisions of the Florida Medicaid Plan. The Sale/Leaseback Agreement entered into by CME and LTC Properties Inc. (LTC) specifically provides for a distinct sale of the nursing home facility to LTC. LTC holds record fee title to GULF COAST. LTC, a Maryland corporation, is not related to CME, a Colorado corporation. The Florida Medicaid Plan is intended to provide reimbursement for reasonable costs incurred by economically and efficiently operated facilities. The Florida Medicaid Plan pays a single per diem rate for all levels of nursing care. After a nursing home facility's first year of operation, a cost settling process is conducted with AHCA which results in a final cost report. The final cost report serves as a baseline for reimbursement over the following years. Subsequent to the first year of operation, a facility files its cost report annually. AHCA normally adjusts a facility's reimbursement rate twice a year based upon the factors provided for in the Florida Medicaid Plan. The rate-setting process takes a provider through Section II of the Plan relating to cost finding and audits resulting in cost adjustments. CME submitted the appropriate cost reports after its first year of operation of the GULF COAST facility. Section III of the Florida Medicaid Plan specifies the areas of allowable costs. Under the Allowable Costs Section III.G.2.d.(1) in the Florida Title XIX Plan, a facility with a lease executed on or after October 1, 1985, shall be reimbursed for lease costs and other property costs under the Fair Rental Value System (FRVS). AHCA has treated all leases the same under FRVS since that time. AHCA does not distinguish between types of leases under the FRVS method. The method for the FRVS calculation is provided in Section V.E.1.a-g of the Florida Medicaid Plan. A “hold harmless” exception to application of the FRVS method is provided for at Section V.E.1.h of the Florida Medicaid Plan, and Section V.E.4 of the Plan provides that new owners shall receive the prior owner’s cost-based method when the prior owner was not on FRVS under the hold harmless provision. As a lessee and not the holder of record fee title to the facility, neither of those provisions apply to CME. At the time CME acquired the facility, there was an indication that the Sale/Leaseback transaction with LTC was between related parties, so that until the 1995 cost settlement, CME was receiving the prior owner’s cost-based property method of reimbursement. When AHCA determined that the Sale/Leaseback transaction between CME and LTC was not between related parties, AHCA set CME’s property reimbursement component under FRVS as a lessee. Property reimbursement based on the FRVS methodology does not depend on actual period property costs. Under the FRVS methodology, all leases after October 1985 are treated the same. For purposes of reimbursement, AHCA does not recognize any distinction between various types of leases. For accounting reporting purposes, the Sale/Leaseback transaction between CME and LTD is treated as a capital lease, or “virtual purchase” of the facility. This accounting treatment, however, is limited to a reporting function, with the underlying theory being merely that of providing a financing mechanism. Record fee ownership remains with LTC. CME, as the lease holder, may not encumber title to the facility. The Florida Medicaid Plan does not distinguish between a sale/leaseback transaction and other types of lease arrangements. Sections IV.D., V.E.1.h., and V.E.4., the “hold harmless” and “change of ownership” provisions which allow a new owner to receive the prior owner’s method of reimbursement if FRVS would produce a loss for the new owner, are limited within the Plan’s organizational context, and within the context of the Plan, to owner/operators of facilities, and grandfathered lessee/operators. These provisions do not apply to leases executed after October 1, 1985. Capital leases are an accounting construct for reporting purposes, which is inapplicable when the Florida Medicaid Plan specifically addresses this issue. The Florida Medicaid Plan specifically addresses the treatment of leases entered into after October 1985 and provides that reimbursement will be made pursuant to the FRVS method. The Florida Medicaid Plan is the result of lengthy workshops and negotiations between the agency and the nursing home industry. The Florida Medicaid Plan complies with federal regulations.
