The Issue Whether, as set forth in the Respondent's letters dated April 28, 1997, and May 19, 1997, health care services provided by the Petitioner to specified Medicaid recipients, for which services the Petitioner was reimbursed under the Medicaid Program, were not medically necessary and, therefore, resulted in overpayments to the Petitioner; and, if so, the amount which the Respondent is entitled to recoup from the Petitioner.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of these proceedings, the following findings of fact are made: The Respondent, the Agency for Health Care Administration, is the state agency responsible for administering Florida's Medicaid Program, which includes recovery of payments made for services which are retrospectively determined to be medically unnecessary. Section 409.913, Florida Statutes. The Petitioner, Indian River Memorial Hospital, Inc., is an acute care facility that has contracted with the Agency to provide health care goods and services to Medicaid recipients. Indian River Memorial meets all statutory requirements for a Medicaid provider. At the times material to these proceedings, the Keystone Peer Review Organization was under contract with the Agency to conduct retrospective reviews of the medical records and other information related to health care goods and services provided to Medicaid recipients and to determine whether the goods and services qualified for reimbursement under the Medicaid Program. The amount of money the Agency seeks to recoup from Indian River Memorial is based on the results of KePRO's retrospective review of the medical necessity for acute inpatient care for Medicaid recipients admitted for psychiatric treatment to Indian River Memorial in 1992, 1993, and 1994. The process used for retrospective reviews by KePRO consisted of four steps.3 The review process was initiated when the Agency submitted a list of Medicaid cases to KePRO for review. At the times material to these proceedings, the Agency submitted all of the Medicaid cases involving inpatient psychiatric services for peer review, and KePRO was the only peer-review organization authorized to review psychiatric services. The medical records were also sent to KePRO, which employed registered nurses to review the records to determine whether the admission and the number of days of hospitalization for each recipient were justified by the relevant criteria set forth in the Florida Medicaid Criteria Handbook. In the Medicaid cases at issue herein, the relevant criteria were those adult and pediatric psychiatric criteria for intensity of service, severity of illness, and discharge. If the KePRO nurse found that the medical records established that the applicable criteria were met, KePRO approved the payment which had been made for the services. If the KePRO nurse found that the medical records did not support the applicable criteria, the nurse referred the case for further review to a physician licensed in Florida and acting in the capacity of an independent contractor to KePRO. The identities of these physicians were confidential and were not disclosed even to the Agency. The physician who first reviewed a Medicaid case was not required to be a specialist in the type of medicine presented in the case even though the physician was expected to evaluate the medical necessity of the services in light of the requirements of the applicable Medicaid criteria, his or her own clinical judgment, and any other factors deemed relevant. The fact that one of the applicable Medicaid criteria was not satisfied was not dispositive of the question of medical necessity for the services provided. If the physician questioned the medical necessity for some or all of the services provided to a Medicaid recipient, a letter was sent to the provider identifying the case as a pending denial and giving the provider twenty days in which to provide additional information to support the medical necessity for the services. If additional information was submitted, the case was sent to a second physician, who reviewed the additional information and determined whether the preliminary decision of the first physician should be upheld, modified, or reversed. If the second physician upheld the decision, an initial denial letter was sent by KePRO to the provider advising that it was not entitled to reimbursement under the Medicaid Program for the specified services provided to the Medicaid recipient. The initial denial letters were form letters which were modified as needed and included, among other things, a brief description of the basis for the denial, the services for which reimbursement was denied, and notification of the provider's right to request that KePRO reconsider its decision. If the provider requested reconsideration, KePRO scheduled a "reconsideration" and notified the provider that it could submit additional information in the form of testimony and/or documentation. The physician reviewing the case on reconsideration could not be one of the physicians who had previously reviewed the case and had to be board-certified in the relevant medical specialty. During reconsideration, the physician was expected to review the medical records and any additional information that had been submitted; he or she then determined whether the initial decision should be upheld, modified, or reversed. KePRO prepared a letter that notified the provider of the decision on reconsideration and included a brief explanation of the basis for the decision. The reconsideration letter was a form letter that was modified to include information specific to the case under review. The explanation for the decision on reconsideration was prepared by a nurse, who interpreted and summarized the notes of the reconsideration review which had been prepared by the reviewing physician. KePRO initial denial letters and reconsideration letters were signed by William L. Moore, M.D., KePRO's medical director from 1993 through 1996. Dr. Moore is board-certified in family practice and quality assurance and holds a Florida license to practice medicine. Dr. Moore was not involved in the preparation of the letters, and he did not read the medical records of any of the Medicaid recipients except when necessary for purposes of quality control.4 The initial and reconsideration letters were sent to the provider, and copies of the letters were also sent to the Agency. If the provider did not submit repayment to the Agency based on the KePRO letters, the Agency prepared and sent a letter advising the provider that it must repay the Agency for reimbursements it had received under the Medicaid Program for services which KePRO had denied. The letter also advised the provider of its right to request an administrative hearing to be conducted pursuant to Chapter 120, Florida Statutes. Following a retrospective review, KePRO sent initial denial letters to Indian River Memorial and the attending physicians advising them that Indian River Memorial was not entitled to reimbursement for a specified number of days of inpatient care provided to the Medicaid recipients identified in the denial letters because KePRO had determined either that the admission was not medically necessary or that it was not medically necessary for the recipient to receive acute inpatient care for the number of days he or she remained hospitalized.5 After it received the initial denial letters, Indian River Memorial requested that KePRO reconsider a number of its decisions denying reimbursement. KePRO completed the reconsiderations, and sent letters to Indian River Memorial advising it of the decisions to uphold or modify the initial denials. Based on the KePRO decisions on reconsideration, the Agency prepared and sent the April 28, 1997, and May 19, 1997, letters to Indian River Memorial seeking to recoup reimbursements for services provided to seventy-two patients admitted to Indian River Memorial and treated for psychiatric problems in 1992, 1993, and 1994; thirty-two patients were identified in the letter at issue in DOAH Case No. 97-2469, and forty patients were identified in the letter at issue in DOAH Case No. 97-2692. The Agency's decision to seek to recoup reimbursements made on behalf of most of these Medicaid recipients was based on KePRO’s determinations that there was no medical necessity for the hospital admission or that there was no medical necessity for a specified number of days of inpatient care.6 John Sullenberger, M.D., is Chief Medical Advisor for Florida's Medicaid Program, and he makes the final decision for the Agency regarding the medical necessity for health care goods and services provided to Medicaid recipients in Florida. Dr. Sullenberger is board-certified in surgery and in thoracic surgery, and he holds a license to practice medicine in Florida. Dr. Sullenberger reviewed both the initial and the reconsideration letters sent to Indian River Memorial by KePRO for fifty-four of the seventy-two Medicaid recipients identified in the attachments to the April 28, 1997, and May 19, 1997, letters.7 Because Dr. Sullenberger is not a psychiatrist, he did not offer an expert opinion as to the medical necessity for the days of acute inpatient care provided to these Medicaid recipients. Instead, he agreed with the decisions of KePRO with respect to fifty-three of the recipients and believed that the explanations in each of the KePRO letters provided a reasonable basis on which to deny reimbursement under the statutory definition of medical necessity applicable in Florida Medicaid cases; Dr. Sullenberger did not approve of the KePRO decision to deny reimbursement with respect to one recipient.8 Dr. Sullenberger did not review the medical records of any of the fifty-four Medicaid recipients, and he did not review the notes written by the physician advisors reviewing the cases for KePRO.9 Rather, Dr. Sullenberger based his agreement with the KePRO decisions exclusively on the cursory explanations contained in the initial and reconsideration letters. Indian River Memorial presented the testimony of three attending physicians for the Medicaid recipients at issue. Each of these physicians commented on the information contained in the medical records for their patients, explained their reasons for admitting and retaining each patient in an acute care setting, and offered their opinions that acute inpatient care was medically necessary for each of their patients at admission and throughout their hospitalization at Indian River Memorial. Indian River Memorial also presented the testimony of Bernard L. Frankel, M.D. Dr. Frankel is board-certified in psychiatry, is licensed to practice medicine in Florida and Georgia, and is currently a professor of psychiatry at Emory University in Atlanta, Georgia. Dr. Frankel reviewed the medical records for fifty-two of the fifty-three Medicaid recipients whose hospitalization in Indian River Memorial was ultimately placed at issue by Dr. Sullenberger's testimony, and Dr. Frankel offered his opinion as an expert in psychiatry as to the medical justification for the admission and length of stay for each of the fifty-two patients. Dr. Frankel expressed his opinion that, based on the information contained in the medical records and on his clinical judgment, the admission to and length of stay in an acute care facility such as Indian River Memorial was medically justified for each of the fifty-two patients. Dr. Frankel supported his opinions with a summary of the pertinent points documented in the medical records and with his assessment of the medical necessity of the hospitalization for each of the fifty- two patients. Neither Mercedes S. Borromeo, M.D., the attending physician, nor Dr. Frankel testified regarding the medical necessity for the admission and thirty-two-day hospitalization of patient J. P. J. P. was admitted to Indian River Memorial on November 10, 1993, and, in the opinion of the KePRO physicians both initially and on reconsideration, he should have been discharged on December 3, 1993, because he was stable and no longer needed acute inpatient care. Dr. Sullenberger testified that he agreed with the opinion of KePRO that ten days of the thirty-two days of hospitalization were not medically necessary. The Medicaid reimbursement per diem rate of $452.53 was effective from July 1, 1993, through December 31, 1993. The evidence presented by Indian River Memorial is sufficient to establish that, in DOAH Case No. 97-2469, the admission and length of stay was medically necessary for patients P. A.; T. A.; E. A.; D. A.; T. B.; B. B.; E. B.; M. B.; S. B.; J. C.; J. C., Jr.; B. C.; H. C.; B. D.; W. E.; J. F.; A. F.; E. J.; G. J.; M. L.; B. L.; S. L.; V. L.; C. L.; M. M.; R. M.; A. N.; Y. R.; J. S.; and K. B. (C.). The evidence presented by the Agency through Dr. Sullenberger's testimony and the KePRO letters is not sufficient to support the Agency's contention that the services provided these patients were not medically necessary.10 The evidence presented by Indian River Memorial is sufficient to establish that, in DOAH Case No. 97-2692, the admission and length of stay was medically necessary for patients J. B., Jr.; J. P. B.; K. C.; R. C.; M. D.; A. D.; R. D.; L. E.; C. F.; K. H.; M. H.; T. K.; J. L.; H. L.; J. M.; M. M.; R. P.; C. R. S.; J. S.; K. S.; M. S.; and R. W. The evidence presented by the Agency through Dr. Sullenberger's testimony and the KePRO letters is not sufficient to support the Agency's contention that the services provided these patients were not medically necessary.11 Indian River Memorial presented no evidence except the medical records to support the medical necessity for the acute inpatient care provided to patient J. P. from December 4, 1993, through December 13, 1993. In the absence of any expert testimony to establish the medical necessity for these ten days of hospitalization, Indian River Memorial must repay the Agency for the Medicaid reimbursement Indian River Memorial received for ten days of inpatient care for patient J. P., at the applicable per diem rate of $452.53. Finally, the Agency's claim in its Proposed Recommended Order that the Agency is entitled to recoup from Indian River Memorial payments made for a patient identified as R. D. is rejected. The Agency asserts that Indian River Memorial is not entitled to reimbursement under the Medicaid Program for inpatient services provided to R. D. on the basis of a "technical denial," that is, Indian River Memorial's failure to provide medical records for this patient. This assertion is not supported by any evidence of record, either through a KePRO letter or testimony of Dr. Sullenberger.
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: Requiring Indian River Memorial Hospital, Inc., to repay the Agency $4,525.30 for ten days of acute inpatient care provided to Medicaid recipient J. P.; and, Finding that the Agency is not entitled to recoup from Indian River Memorial reimbursements made under the Medicaid Program for services provided to any other Medicaid recipients identified in the April 28, 1997, Agency letter, DOAH Case No. 97-2469, or in the May 19, 1997, Agency letter, DOAH Case No. 97- 2692. DONE AND ENTERED this 28th day of June, 1999, 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 28th day of June, 1999.
Conclusions THE PARTIES resolved all disputed issues and executed a Settlement Agreement. The parties are directed to comply with the terms of the attached settlement agreement. Based on the foregoing, this file is CLOSED. DONE and ORDERED on this the 2{, U, day of - J lJ_h (2 ---' 2014, m Tallahassee, Florida. ELIZ RETARY Agency for Health Care Administration A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A 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 BYLAW. WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW 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. Copies furnished to: Shena Grantham, Esquire Agency for Health Care Administration 2727 Mahan Drive, MS#3 Tallahassee, Florida 32308 Peter A. Lewis, Esquire Law Offices of Peter A. Lewis, P.L. 3023 North Shannon Lakes Drive, #101 Tallahassee, Florida 32303 (U.S. Mail) CERTIFICATE OF SERVICE == ' I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished to ------==-- the above named addressees by U.S. Mail on this th f 2014. Richard Shoop, Esquire Agency Clerk State of Florida Agency for Health Care Administration 2727 Mahan Drive, Building #3 Tallahassee, Florida 32308-5403
