Findings Of Fact Hillhaven Convalescent Center is a 120-bed skilled nursing care facility, and it participates in Florida's medical assistance program (Medicaid) as a provider of skilled nursing home care. The Department reimburses the Petitioner for the Petitioner's cost in providing such services to eligible patients. As a part of the reimbursement system, Petitioner is required to calculate a per diem reimbursement rate for its Medicaid patients. The Petitioner computed this rate by dividing its total of appropriate expenses ($828,628) by its total patient days (39,399). The resulting per diem rate is $21.03. The total expense and total patient day figures were based upon all categories of patients served by the Petitioner, including Medicare, Medicaid, private and Veterans Administration patients. The Department retained a private accounting firm, Coopers & Lybrand, to audit the Petitioner's 1977 fiscal cost report. The accounting firm concluded that the per diem rate calculated by the Petitioner was erroneous. The firm subtracted total expenses and total patient days attributable to Medicare patients from the figure utilized by the Petitioner. The result of this adjustment was to substantially reduce the Center's per diem rate, and the amount of compensation that the Petitioner is entitled to receive for its participation in the Medicaid Program. Medicare patients generally require a more profound degree of care than do Medicaid patients. Including Medicare patients in a determination of per diem rates at nursing homes will almost universally result in an increase in the rate. The Department has not adopted its policy to exclude Medicare expenses and Medicare days in determining Medicaid per diem rates as a rule in accordance with the Administrative Procedure Act. The Department has uniformly enforced the policy with respect to nursing home facilities participating in the Medicaid Program that it has audited. The parties have stipulated and agreed that the decision in this matter will be applicable to a companion case involving a different nursing home owned by the same corporation. The Petitioner has submitted proposed findings of fact and conclusions of law. To the extent that the proposals have not been substantively adopted herein, they have been rejected either as not supported by the evidence, or as not relevant.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, hereby RECOMMENDED: That a final order be entered affirming the audit exceptions respecting the Petitioner's Medicaid reimbursement for the fiscal year ending March 31, 1977, and requiring that the per diem rate of compensation for Medicaid patients be recomputed by deleting expenses and patient days relating to Medicare patients. DONE and ENTERED this 7th day of December, 1979, in Tallahassee, Florida. G. STEVEN PFEIFFER Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of December, 1979.
Conclusions THE PARTIES resolved all disputed issues and executed a Stipulation. The parties are directed to comply with the terms of the attached Stipulation. Based on the foregoing, this file is CLOSED. DONE AND ORDERED anise 7Aay of Llu , 2014, in Tallahassee, Leon County, Florida. eS ZA K, les: Agency for Health{Care Administration Page 1 of 3 Filed March 27, 2014 4:47 PM Division of Administrative Hearings 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 BY LAW, 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: Advocates For Opportunity 5975 W. Sunrise Blvd., Suite 217 Plantation, Florida 33313-6813 Agency for Health Care Administration Douglas J. Lomonico, Assistant General Counsel, MS #3 Agency for Health Care Administration Bureau of Finance and Accounting, MS #14 Agency for Health Care Administration Bureau of Medicaid Program Integrity, MS#6 ATTN: Rick Zenuch, Bureau Chief Health Quality Assurance (E-mail) Page 2 of 3 CERTIFICATE OF SERVICE 1 HEREBY CERTIFY that a true and correct copy of the foregoing Final Order was furnished by United States Mail, interoffice mail, or email transmission to the above-referenced _——— addressees this%& Clay ot _Yre L200. . SHOOP, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, MS #3 Tallahassee, Florida 32308 Telephone No. (850)-412-3630 Fax No. (850)-921-0158 Page 3 of 3 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, vs. Case No. 13-3378MPI Provider No. 6711324-98 ADVOCATES FOR OPPORTUNITY, C.I. No. 13-1717-000 Respondent. JOINT STIPULATION OF DISMISSAL The AGENCY FOR HEALTH CARE ADMINISTRATION (hereinafter *AHCA™ or “Agency”), and ADVOCATES FOR OPPORTUNITY (hereinafter “PROVIDER”), by and through the undersigned, hereby stipulate and agree to the following: 1. The parties enter into this agreement for the purpose of memorializing the resolution to this matter. 2. PROVIDER is a Medicaid provider in the State of Florida, operating under Provider Number 6711324-98. 3. In its Final Audit Report, C.1. Number 13-1717-000, (the “Audit Letter" or “FAR”), dated July 30, 2013, AHCA notified PROVIDER that AHCA was seeking to recoup an alleged overpayment in the amount of $2,053.94 and audit costs estimated at the time to amount to $54.22. The FAR also sought to impose an administrative fine in the amount of $410.78 for an alleged violation of Fla, Admin. Code Rule 59G-9.070(7)(e). The total amount sought by the Agency in the FAR was $2,518.94. 4, In response, on or about August 29, 2013, PROVIDER filed with AHCA a Page | of 5 C.1. No. 13-1717-000 AHCA v. Advocates for Opportunity Joint Stipulation of Dismissal petition for a formal administrative hearing, which was forwarded to the Division of Administrative Hearings (DOAH), and therein challenged the findings contained within the FAR. 5. On or about September 18, 2013, PROVIDER and AHCA jointly filed a Motion to Relinquish Jurisdiction with DOAH in order to pursue resolution of this case short of a formal administrative proceeding. 6. On or about September 19, 2013, the Administrative Law Judge entered an order granting the parties’ Motion to Relinquish Jurisdiction and the case was referred back to AHCA. 7. Both parties stipulate and agree that as a resolution of all disputed issues in this cause, each party shall dismiss and rescind its cause of action. AHCA has agreed to dismiss its Final Audit Report, C.J. No. 13-1717-000. PROVIDER has agreed to dismiss its Petition for a Formal Administrative Hearing. 8. Both PROVIDER and AHCA agree that this joint stipulation of dismissal resolves and settles this case completely and releases both parties from any administrative or civil liabilities arising from the findings relating to the claims as referenced in audit C.1, No.13-1717- 000. 9. The parties agree to bear their own attorney’s fees and costs, if any. 10. The signatories to this Agreement, acting in a representative capacity, represent that they are duly authorized to enter into this Agreement on behalf of the respective parties. 11. All parties agree that a facsimile signature suffices for an original signature. Page 2 of 4 C.L No. 13-1717-000 AHCA v. Advocates for Opportunity Joint Stipulation of Dismissal 12. This Agreement shall be construed in accordance with the provisions of the laws of Florida. Venue for any action arising from this Agreement shall be in Leon County, Florida. 13. Both AHCA and PROVIDER expressly waive in this matter their rights to any hearing pursuant to §§120.569 or 120.57, Fla. Stat., the making of findings of fact and conclusions of law by DOATI and the Agency, and all further and other proceedings to which it may be entitled by law or rules of the Agency regarding C.I. No. 13-1717-000 and any and all issues raised herein. PROVIDER further agrees that the Agency should issue a Final Order which is consistent with the terms of this Joint Stipulation of Dismissal, and which adopts this agreement and closes this matter as to AHCA C.1. No. 13-1717-000. 14. PROVIDER 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 AHCA CI. No. 13-1717-000; and AHCA’s actions herein, including, but not limited to, any claims that were or may be asserted in any federal or state court or administrative forum, by or on behalf of PROVIDER. 15. This Stipulation and Agreement shall inure to the benefit of and be binding on each party’s successors, assigns, heirs, administrators, representatives and trustees. 16. All times stated herein are of the essence in this Stipulation and Agreement. 17. This Stipulation and Agreement shall be in full force and effect upon cxecution by the respective parties in counterpart. Page 3 of 4 C.I. No. 13-1717-000 AHCA v. Advocates for Opportunity Joint Stipulation of Dismissal ADVOCATES FOR OPPORTUNITY BY: NAME (Print): Deborah Wicks Kahn TITLE: Director Date:_October 24 __, 2013 AGENCY FOR HEALTH CARE ADMINISTRATION 2 727 Mahan Drive Mail Stop #3 Tallahassee, FL 32308 Page 4 of 4 oA ERIC W. MIZLER ral Inspector Ger General Counsel vate. 3/14 uf By: _| . —— Zooupiia ~LOMONICO Assistant General Counsel a _ Date: Peboy lo oo (Page 1 of °8) FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION: RICK SCOTT ELIZABETH DUDEK GOVERNOR Better Health Care for all Fioridians SECRETARY GOVERNOR Tree sere me mer ere SECRETARY FEDERAL EXPRESS MAIL No.: 8029 1875 9208 July 30, 2013 Provider No: 6711324 98 NPI No: N/A License No.: N/A ADVOCATES FOR OPPORTUNITY 5975 W. SUNRISE BLVD. STE. 217 PLANTATION, FL 33313-6813 In Reply Refer to FINAL AUDIT REPORT CI. No. 13-1717-000 Dear Provider: The Agency for Health Care Administration (Agency), Office of Inspector General, Bureau of Medicaid Program Integrity, has completed a review of claims for Medicaid reimbursement for dates of service during the period January 1, 2008 through December 31, 2011. A preliminary audit report dated April 10, 2013 was sent to you indicating that we had determined you were overpaid $2,053.94. Based upon a review of all documentation submitted, we have determined that you were overpaid $2,053.94 for services. Since no documentation was produced to refute these billings, all the claims are considered overpayments. We have determined that you were overpaid $2,053.94 for services that in whole or in part are not covered by Medicaid. A fine of $410.78 has been applied. The cost assessed for this audit is $54.22, The total amount due is $2,518.94. Be advised of the following: (1) In accordance with Sections 409.913(15), (16), and (17), Florida Statutes (F.S.), and Rule 59G-9.070, Florida Administrative Code (F.A.C.), the Agency shall apply sanctions for violations of federal and state laws, including Medicaid policy. This letter shall serve as notice of the following sanction(s): e A fine of $410.78for violation(s) of Rule Section 59G-9.070(7) (e), F.A.C. (2) Pursuant to Section 409.913(23) (a), F.S., the Agency is entitled to recover all investigative, legal, and expert witness costs. Visit AHCA online at http://ahea.myflorida.com 2727 Mahan Drive, MS# 6 Tallahassee, Florida 32308 (Page 2 of 8) Nursing Home Diversion Waiver — Fee for Service Match Page 2 The Medicaid program is authorized by Title XIX of the Social Security Act and Title 42 of the Code of Federal Regulations. The Florida Medicaid Program is authorized by Chapter 409, F.S., and Chapter Federal Regulations. The Florida Medicaid Program is authorized by Chapter 409, F.S., and Chapter 59G, F.A.C. This review and the determination of overpayment were made in accordance with the provisions of Section 409.913, F.S, In determining the appropriateness of Medicaid payment pursuant to Medicaid policy, the Medicaid program utilizes procedure codes, descriptions, policies, limitations and requirements found in the Medicaid provider handbooks and Section 409.913, F.S. In applying for Medicaid reimbursement, providers are required to follow the guidelines set forth in the applicable rules and Medicaid fee schedules, as promulgated in the Medicaid policy handbooks (in accordance with Chapter 59G, F.A.C.), billing bulletins, and the Medicaid provider agreement. Medicaid cannot pay for services that do not meet these guidelines. Below is a discussion of the particular guidelines related to the review of your claims, and an explanation of why these claims do not meet Medicaid requirements. The audit work papers are attached, listing the claims that are affected by this determination. REVIEW DETERMINATION(S) A Medicaid Provider is required to comply with Medicaid policy requirements (e.g. laws, rules, regulations, handbooks, policy), These requirements include, but are not limited to, providing goods and services in accordance with provisions of Medicaid policy and retaining medical, financial, and business records pertaining to the goods and services furnished. This review included a review of your claims reimbursed to you by Medicaid for goods and services to determine compliance with Medicaid policy. Payments for goods or services that are not documented and/or not billed in accordance to Medicaid policy are deemed to be overpayments. Our review has determined that you have failed to comply with Medicaid policy as outlined below. * Medicaid fee-for-service payments have been identified for recipients while they were enrolled in the Medicaid Nursing Home Diversion Waiver Program. Medicaid providers are required to verify Medicaid recipient eligibility prior to rendering Medicaid services. The fee-for-service payments, shown on the attached work papers, were for services that were to be covered by the recipient’s Nursing Home Diversion Waiver Provider. The total amount reimbursed to you for these fee-for-service payments has been identified as an overpayment. If you are currently involved in a bankruptcy, you should notify your attorney immediately and provide a copy of this letter for them. Please advise your attorney that we need the following information immediately: (1) the date of filing of the bankruptcy petition; (2) the case number; (3) the court name and the division in which the petition was filed (e.g., Northern District of Florida, Tallahassee Division); and, (4) the name, address, and telephone number of your attorney. If you are not in bankruptcy and you concur with our findings, remit by certified check the total amount reflected on page one, paragraph one, of this letter which includes the overpayment amount as well as any fines imposed and assessed costs. The check must be payable to the Florida Agency for Health Care Administration. Questions regarding procedures for submitting payment should be directed to Medicaid Accounts Receivable, (850) 412-3901. To ensure proper credit, be certain you legibly record on your check your Medicaid provider number and the C.I. number listed on the first page of this audit Teport. Please mail payment to: (Page 3 of 8) Nursing Home Diversion Waiver — Fee for Service Match Page 3 Medicaid Accounts Receivable - MS # 14 Agency for Health Care Administration Agency for Health Care Administration 2727 Mahan Drive Bldg. 2, Ste. 200 Tallahassee, FL 32308 Pursuant to section 409.913(25)(d), F.S., the Agency may collect money owed by all means allowable by law, including, but not limited to, exercising the option to collect money from Medicare that is payable to the provider. Pursuant to section 409.913(27), F.S., if within 30 days following this notice you have not either repaid the alleged overpayment amount or entered into a satisfactory repayment agreement with the Agency, your Medicaid reimbursements will be withheld; they will continue to be withheld, even during the pendency of an administrative hearing, until such time as the overpayment amount is satisfied. Pursuant to section 409.913(30), F.S., the Agency shall terminate your participation in the Medicaid program if you fail to repay an overpayment or enter into a satisfactory repayment agreement with the Agency, within 35 days after the date of a final order which is no longer subject to further appeal. Pursuant to sections 409.913(15)(q) and 409.913(25)(c), F.S., a provider that does not adhere to the terms of a repayment agreement is subject to termination from the Medicaid program. Finally, failure to comply with all sanctions applied or due dates may result in additional sanctions being imposed. You have the right to request a formal or informal hearing pursuant to Section 120.569, F.S. Ifa request for a formal hearing is made, the petition must be made in compliance with Section 28-106.201, F.A.C. and mediation may be available. If a request for an informal hearing is made, the petition must be made in compliance with rule Section 28-106.301, F.A.C. Additionally, you are hereby informed that if a request for a hearing is made, the petition must be received by the Agency within twenty-one (21) days of receipt of this letter. For more information regarding your hearing and mediation rights, please see the attached Notice of Administrative Hearing and Mediation Rights. Any questions you may have about this matter should be directed to: Miranda Hunt, Investigator, Agency for Health Care Administration, Medicaid Program Integrity, 2727 Mahan Drive, Mail Stop #6, Tallahassee, Florida 32308-5403, telephone (850) 412-4600, facsimile (850) 410-1972. Sincerely, has Fante Program Administrator Office of Inspector General Medicaid Program Integrity PF/MH/SG Enclosure(s) Copies furnished to: Finance & Accounting Health Quality Assurance (Interoffice mail) (E-mail) (Page 4 of 8) Nursing Home Diversion Waiver — Fee for Service Match Page 4 NOTICE OF ADMINISTRATIVE HEARING AND MEDIATION RIGHTS You have the right to request an administrative hearing pursuant to Sections 120.569 and 120.57, Florida Statutes. If you disagree with the facts stated in the foregoing Final Audit Report (hereinafter FAR), you may request a formal administrative hearing pursuant to Section 120.57(1), Florida Statutes. If you do not dispute the facts stated in the FAR, but believe there are additional reasons to grant the relief you seek, you may request an informal administrative hearing pursuant to Section 120.57(2), Florida Statutes, Additionally, pursuant to Section 120.573, Florida Statutes, mediation may be available if you have chosen a formal administrative hearing, as discussed more fully below. The written request for an administrative hearing must conform to the requirements of either Rule 28- 106.201(2) or Rule 28-106.301(2), Florida Administrative Code, and must be received by the Agency for Health Care Administration, by 5:00 P.M. no later than 21 days after you received the FAR. The address for filing the written request for an administrative hearing is: Richard J. Shoop, Esquire Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop #3 TaHahassee, Florida 32308 Fax: (850) 921-0158 Phone: (850) 412-3630 The reauest must be legible, on 8 % by 11-inch white paper, and contain: Your name, address, telephone number, any Agency identifying number on the FAR, if known, and name, address, and telephone number of your representative, if any; 2. An explanation of how your substantial interests will be affected by the action described in the FAR; 3. A statement of when and how you received the FAR; 4. For a request for formal hearing, a statement of all disputed issues of material fact; 5. Fora request for formal hearing, a concise statement of the ultimate facts alleged, as well as the rules and statutes which entitle you to relief; 6. For a request for formal hearing, whether you request mediation, if it is available; 7. For a request for informal hearing, what bases support an adjustment to the amount owed to the Agency; and 8. A demand for relief. A formal] hearing will be held if there are disputed issues of material fact. Additionally, mediation may be available in conjunction with a formal hearing. Mediation is a way to use a neutral third party to assist the parties in a legal or administrative proceeding to reach a settlement of their case. If you and the Agency agree to mediation, it does not mean that you give up the right to a hearing. Rather, you and the Agency will try to settle your case first with mediation. If you request mediation, and the Agency agrees to it, you will be contacted by the Agency to set up a time for the mediation and to enter into a mediation agreement. If a mediation agreement is not reached within 10 days following the request for mediation, the matter will proceed without mediation. The mediation must be concluded within 60 days of having entered into the agreement, unless you and the Agency agree to a different time period. The mediation agreement between you and the Agency will include provisions for selecting the mediator, the allocation of costs and fees associated with the mediation, and the confidentiality of discussions and documents involved in the mediation. Mediators charge hourly fees that must be shared equally by you and the Agency. If a written request for an administrative hearing is not timely received you will have waived your right to have the intended action reviewed pursuant to Chapter 120, Florida Statutes, and the action set forth in the FAR shall be conclusive and final. (Page 5 of:8) Nursing Home Diversion Waiver — Fee for Service Match Page 5 If you are in agreement with this audit and wish to make payment, please return If you are in agreement with this audit and wish to make payment, please return this form along with your check. Complete this form and send along with your check to: Agency for Health Care Administration Medicaid Accounts Receivable 2727 Mahan Drive, Mail Stop #14 Tallahassee, Florida 32308 CHECK MUST BE MADE PAYABLE TO: FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION Provider Name ADVOCATES FOR OPPORTUNITY Provider ID 6711324 98 MPI Case Number 13-1717-000 Overpayment Amount | $2,053.94 Fine Amount $410.78 Costs Assessed $54.22 Total Amount Due $2,518.94 Check Number Payment for Medicaid Program Integrity Audit (Page 6 of 8) @1OZ/SZ/TL —:a1eG Woday ELESONSEZOTZZ © S6OETS TYNOISS33OHd - EO6TSVES GH Z1069 aiaz/zz/at O10@/zZ2/0T €b 6Er" TS OFOZ/OT ONT NV WOIGIN YVAN SOGLEOSO OTOZ/tE/OT oroz/sTft ot ALEOSYSEE ‘ [ mnouydes, | eam paien de [owen sapmctadey wade | wpa welder | _prvemmesuen | S6OETS , SvNonsaiGua We | £06 Tare H ; TT ote} ‘TeEsoossz0izz Ey 6eR'tS OTOZ/60 ONE NVId TYIOGYN UNYIANH nonetaeee OTOL/OENG DOC 7 O&LISTERE ‘_Bnoury dey. | WRU palanon dey” | SUNN FPO CED [ rspvasa de | pu bukg de dl wifag wih dey | ‘Plucgpesuel | ——_——i " $6QETS TWNOISS330ud - EETISOHS 6a 21065 otoz/ters atoe/tehe “S@s9tOLzaTIzz 09°005'TS OT.02/80 _ONINVTA WOH SVAN 906T20STO. 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The Issue Whether Petitioner, the Agency for Health Care Administration (AHCA or Agency), proved that Respondents, Life Care Centers of America, Inc., d/b/a Life Care Center of Port St. Lucie, and other Life Care facilities in Winter Haven, Ocala, Orlando, and Citrus County, were not in compliance with the Medicaid-patient-days condition stated on the face of the Certificates of Need (CON) for each facility for calendar year 2006, and, if not in compliance, whether the Agency may impose administrative fines in the amount sought in the first amended administrative complaints.
Findings Of Fact The Parties The Agency for Health Care Administration is the state agency responsible for licensing and regulating nursing home facilities such as Respondents under Chapter 400, Part II, Florida Statutes, and issuing CONs under Chapter 408, Florida Statutes. Respondents are community/skilled nursing home facilities that have CONs issued pursuant to Chapter 408, Florida Statutes. Each facility is located in the geographical area indicated by its name, e.g., Life Care Center of Port St. Lucie is located in Port St. Lucie, Florida, and in an AHCA health service planning district (District) and subdistrict. Life Care Center of Port St. Lucie, a 123-bed facility, is located in District 9, Subdistrict 5; Life Care Centers of America, Inc., d/b/a Life Care Center of Winter Haven, a 177-bed facility, is located in District 6, Subdistrict 5; Life Care Centers of America, Inc., d/b/a Life Care Center of Ocala, a 120-bed facility, is located in District 3, Subdistrict 4; Life Care Centers of America, Inc., d/b/a Life Care Center of Orlando, a 120-bed facility, is located in District 7, Subdistrict 2; and Life Care Centers of America, Inc., d/b/a Life Care Center of Citrus County, a 120-bed facility, is located in District 3, Subdistrict 5. § 408.032(5), Fla. Stat.; Fla. Admin. Code R. 59C-2.200. The CONs; Medicaid Conditions; Dual Eligibility The starting point of this story begins with the CONs that are effective for calendar year 2006 for each Respondent and the Medicaid-patient-days condition stated on each CON.2 The Agency conditioned the issuance of the CONs based upon statements of intent expressed by Respondents in the CON applications. § 408.040(1)(a), Fla. Stat. The primary purpose of requiring the CON Medicaid- patient-days condition is to ensure access for Medicaid-eligible or funded residents. T 499-500.3 When the CONs were issued, either through a transfer or as an initial CON, Respondents committed to provide a certain level of Medicaid patient days. The required Medicaid percentage of patient days for each Respondent is set forth in the table under Finding of Fact 36. Agency Exhibits 1 through 11 and 13 show how Life Care Centers of America, Inc., characterized the agreed to number/percentage of Medicaid patient days in various CON application documents; verbalization of same; and the manner in which its facilities would account on Schedule 7 or 10, e.g., of the CON application, for projected revenue by payor source, including, but not limited to, Medicaid. See Fla. Admin. Code R. 59C-1.008(1)(f) (adoption of Agency forms); T 161. (Payor and payer are used throughout this record and in context have the same meaning.) Agency Exhibit 4 contains excerpts from a 120-bed new freestanding nursing home in Marion County, Florida, submitted in 1995 on behalf of Life Care Centers of America, Inc. T 49. The conditions page states that the applicant agreed to provide "66% of patient days to Medicaid clients." The following page states in part: "Condition C2: A minimum percentage of proposed project for Medicaid eligible patients at stabilized occupancy." Under "Measurement and Conformance," it is stated: "Actual payor mix experience following project licensure and fill-up; annual reporting requirements." Id. at 3; T 49-50. (Another excerpt states: "Condition C2: Percentage of patient days for Medicaid beneficiaries." PE 13 at 4.) Schedule 10 provides projected operating revenue for year two ending December 31, 1996. Medicaid patient days are stated (26,981) as well as a percentage (66.0%) of patient days. Id. at 5. (In other excerpts, similar material appears in Schedule 7.) The Schedule 10 Notes and Assumptions pages devote a paragraph to Medicaid. Id. at 7. See T 165-67. None of the excerpts from Agency Exhibits 1 through 11 and 13 expressly refer to providing services to "dual eligible" patients. The schedules do not have a specific line item for entry of this information, although Schedule 7 has a category "Other Revenue," PE 1 at 4, which the Agency suggests could have been used to identify that revenue source. T 163. The Agency considers Agency Exhibits 1 through 11 and 13 as proof that Respondents understood and agreed to provide a minimum percentage of patient days to residents whose care was paid for by Medicaid, a payor source. Thus, according to the Agency, only patient days that are provided to patients when Medicaid is the sole source of reimbursement are counted when determining compliance with the Medicaid condition. (According to the Agency, the statement "'Medicaid patient days' is defined, for purposes of CON condition compliance, as the 'patient days reimbursed by Medicaid,'" see PE 41 at paragraph 15.b., and is derived from Respondents' Schedule 7 indicating what the Respondents "expect their payers to be, and that is in rule." T 931.) Agency Exhibits 21, 22, and 24 through 26 are the CONs at issue in this proceeding and, with some minor variations, state: A minimum of [ ] percent of the [ ] bed facility's total annual patient days shall be provided to Medicaid patients. Medicare is a program of health insurance and benefits authorized and administered under Title XX of the Social Security Act. Medicaid is a program of health insurance and benefits authorized and administered under Title XIX of the Social Security Act. "Nursing facilities may obtain reimbursement for services provided to recipients privately or through long term care insurance. There are also specific situations when Medicare will be the payer. Medicaid is always the payer of last resort." RE 46 at 2-2. A person who is eligible for care under Medicare is not necessarily Medicaid-eligible. The person must meet eligibility factors to qualify. However, a person may be qualified as Medicare and Medicaid-eligible. A Medicaid-eligible patient may stay at a nursing home one day or more. Not infrequently, such a patient is more or less permanent resident. Generally, if a nursing home patient achieves the status of a Medicaid patient on day one of the stay, the patient's status as a Medicaid patient continues throughout the stay at the nursing home, unless the patient loses that status either through an ineligibility determination or for some other reason. See T 393.4 Stated otherwise, Medicaid-eligible nursing home patients do not lose their status as Medicaid-eligible patients when the nursing home is reimbursed in whole or in part by Medicare. According to the Florida Medicaid Nursing Facility Services Coverage and Limitations Handbook (Handbook), published by the Agency, a "recipient" "is used to describe an individual who is eligible for Medicaid." RE 46 at ii. "If Medicare Part A covers the recipient, Medicare will reimburse the facility for the entire cost of the care provided for the first twenty (20) days the resident is in the facility following an acute care hospitalization. During the period of time between the twenty-first and one-hundredth days, the resident will incur a charge for coinsurance." RE 46 at 2-2. "Medicaid will cover the amount of the coinsurance if the recipient is eligible for Medicaid" under certain circumstances. Id. "When a recipient is Medicare and Medicaid-eligible and is in the Medicare coinsurance period (21 through 100 days of Medicare coverage), Medicaid pays the Medicare coinsurance amount for the recipient. The amount paid by Medicaid is the lesser of the Medicare rate or the Medicaid per diem rate minus the patient responsibility. Medicaid does not pay for a Medicare HMO recipient during the coinsurance period." RE 46 at 3-2. See also id. at "Qualified Medicare Beneficiary." If the Medicaid patient either enters the nursing home after a three-day or longer hospitalization stay or is a resident of the nursing home and then is hospitalized for this length of time, the resident's care will be reimbursed by Medicare (assuming he or she is enrolled in the program) for up to 20 days upon returning to the nursing home. Medicare may continue to reimburse, typically 80%, (subject to Medicaid's payment of any coinsurance, typically 20%) the nursing home for the patient's care thereafter up to a maximum of 80 additional days, depending on the patient's continuing qualification to receive services paid by Medicare. See generally T 549-54, 663-65, 835-36. In 2006, Medicare was the primary payer and Medicaid covered co-pays and deductibles only. Medicaid could have potentially paid for co-insurance or cross-over. Cross-over means if the patient has Medicare, then Medicaid would be potentially the secondary payer of the cross-over or co-insurance. Generally days 21 through 100 are the cross-over days. See generally T 387-93, 551, 663-65. Subsection 408.040(1)(b), Florida Statutes, states: (b) The agency may consider, in addition to the other criteria specified in s. 408.035, a statement of intent by the applicant that a specified percentage of the annual patient days at the facility will be utilized by patients eligible for care under Title XIX of the Social Security Act. Any certificate of need issued to a nursing home in reliance upon an applicant's statements that a specified percentage of annual patient days will be utilized by residents eligible for care under Title XIX of the Social Security Act must include a statement that such certification is a condition of issuance of the certificate of need. The certificate- of-need program shall notify the Medicaid program office and the Department of Elderly Affairs when it imposes conditions as authorized in this paragraph in an area in which a community diversion pilot project is implemented. (emphasis added). Subsection 408.040(1)(d), Florida Statutes, states: (d) If a nursing home is located in a county in which a long-term care community diversion pilot project has been implemented under s. 403.705 or in a county in which an integrated, fixed-payment delivery system [program] for Medicaid recipients who are 60 years of age or older [or dually eligible for Medicare and Medicaid] has been implemented under s. 409.912(5), the nursing home may request a reduction in the percentage of annual patient days used by residents who are eligible for care under Title XIX of the Social Security Act, which is a condition of the nursing home's certificate of need. The agency shall automatically grant the nursing home's request if the reduction is not more than 15 percent of the nursing home's annual Medicaid-patient-days condition. A nursing home may submit only one request every 2 years for an automatic reduction. A requesting nursing home must notify the agency in writing at least 60 days in advance of its intent to reduce its annual Medicaid-patient-days condition by not more than 15 percent. The agency must acknowledge the request in writing and must change its records to reflect the revised certificate-of-need condition. This paragraph expires June 30, 2011. (emphasis added). The language in brackets was inserted in 2007. "[P]rogram" was inserted for "system" and the remaining language in brackets was new. Ch. 2007-82, § 2 at 1051, Laws of Fla. The amendments to Subsection 408.040(1)(d) were made at the same time that amendments were made to Section 408.912, adding, in part, "program" and deleting "system," and adding "or dually eligible for Medicare and Medicaid" to Subsection 408.912(5). Id., § 1 at 1048. The Agency interprets "utilized by patients eligible for care under Title XIX of the Social Security Act" to mean residents whose care is paid for solely by Medicaid. If the nursing home is reimbursed in whole or in part by Medicare for services to a resident Medicaid patient, e.g., during the one to 100-day period referred to above, the Agency does not count any days of treatment as a Medicaid patient day for the purpose of satisfying the Medicaid-patient-days condition. Conversely, Respondents count all residents who are eligible for Medicaid, regardless of who pays for the resident's care.5 The Agency conditions the approval of a CON based on the applicant's commitment to provide services to the medically indigent, here Medicaid patients. There is no indication that the patients referred to as "dual eligible" by Respondents were not, in fact, Medicaid patients during calendar year 2006, notwithstanding the nature of the facilities reimbursement. Respondents supplied the Agency with data counting traditional Medicaid days, hospice Medicaid days, and the days for "dual eligible" residents, separately stated. The Agency does not take issue with Respondents' reported number of "dual eligible," Medicaid-eligible patient days, only that they should not be counted toward meeting the CON condition. Based upon the persuasive evidence, it is determined that the Agency's interpretation to exclude the reported "dual eligible" Medicaid patient days from consideration for meeting the CON condition is not reasonable. The Annual Compliance Reports; Reporting of Patient Data to the Agency Respondents are required to provide annual compliance reports to the Agency that contain required information, including but not limited to "[i]f applicable, the reason or reasons, with supporting data, why the [CON] holder was unable to meet the conditions set forth on the face of the [CON]." Fla. Admin. Code R. 59C-1.013(4)(a)7. All nursing homes report occupancy data to the local health councils (LHC), with some data reported to the Agency. See PE 14. The LHCs supply the Agency with data concerning the total occupancy of each facility in patient days as well as the number of days reimbursed by Medicaid. Id. This data is compiled into the Florida Nursing Home Utilization by District and Subdistrict Guide (NH Guide). PE 14 (calendar year 2006). If data received from the LHC indicates that a facility is not in compliance with the CON Medicaid-patient-days condition, the Agency will send a letter to the facility requesting additional information. The Agency sent each Respondent a letter requesting additional information for calendar year 2006. See, e.g., RE 1. Consistent with this reporting requirement, on February 25, 2008, counsel filed a formal report for each Respondent. Four of the Respondents, except Life Care Center of Ocala, submitted a detailed booklet setting forth the reason why it was unable to meet the CON Medicaid-patient-days condition. In each formal report except one (Ocala), Respondents' counsel concluded that each facility appeared to strictly not meet the CON Medicaid-patient-days condition, but additional documentation and discussion was provided to the Agency to support a finding by the Agency that the facility was in substantial compliance with these conditions. (With respect to Life Care Center of Ocala, it was suggested that this facility was in full compliance with the Medicaid-patient-days condition.) Except as otherwise stated herein,6 the parties agree (see, e.g., T 155, PHS at 20) with the following data: A B B A C B + C A Life Care Total Patient Days Medicaid Patient Days % "Dual Eligible" % CON Minimum Cond. Port St. Lucie 42,162 16,978 40.27% 1,429 43.66% 47.00% Winter Haven 60,817 29,580 48.64% 5,914 58.36% 60.60% Ocala 40,888 10,725 26.23% 5,387 39.41% 33.00% Orlando 40,468 9,093 22.47% 2,781 29.34% 31.19% Citrus Cty 40,846 14,559 35.64% 3,064 43.14% 45.64% Without consideration of "dual eligible" patient days, five facilities are allegedly non-compliant as follows: Port St. Lucie -- 6.73 %; Winter Haven -- 11.96%; Ocala -- 6.77%; Orlando -- 8.72%; and Citrus County -- 10.00%. RE 41; JPHS at 5-6; Agency's Pre-Hearing Statement at 7. If "dual eligible" patient days are considered, four out of five facilities remain allegedly non-compliant, but to a lesser degree: Port St. Lucie -- 3.34%; Winter Haven -- 2.24%; Orlando -- 1.85%; and Citrus County -- 2.50%. Ocala is compliant by 6.41%. See RE 3, 41; T 817; Agency's Pre-Hearing Statement at 8. The Administrative Complaints This proceeding initially involved consideration of six (now five) separate administrative complaints alleging that each Respondent did not comply with the Medicaid-patient-days condition set forth in each CON for calendar year 2006. Each administrative complaint is based on the information contained in and the Agency's analysis of the formal reports submitted on behalf of each Respondent.7 The Agency does not dispute the facts and figures set forth in the formal reports, although it disagrees with Respondents' contention of compliance with the Medicaid-patient- days condition and whether "dual-eligible" patients may be considered for compliance purposes. Each administrative complaint states, in part, that "[t]his is an action to impose administrative fines in the amount of . . . against Respondent, pursuant to Section 408.040, Florida Statutes, and Florida Administrative Code Rules 59C- 1.013 and 59C-1.021." The Agency has the statutory authority to impose fines up to $1,000 per day for noncompliance, taking into account as mitigation the degree of noncompliance.8 Prior to filing its first amended administrative complaints on October 28, 2009, when a CON holder was determined to be in noncompliance, the Agency made an individualized determination as to whether and how much to fine the CON holder. RE 44 at 3; T 115-16. The Agency created a chart that is completed as an analytical tool. Next, the Agency considered the individual situation of the CON holder, "including but not limited to" a number of factors, such as the "degree of noncompliance, absolutely and in comparison to others within the sub-district"; whether the "[f]acility is not at 85% occupancy"; whether the "[f]acility has not been operational for at least 18 months or first reached 85% occupancy during the reporting year"; whether the "[f]acility can demonstrate operational losses through financial statements and or audit"; whether the "[f]acility has a sister facility (facility owned by the same entity) in the same sub-district that either has no Medicaid condition or has met its Medicaid condition and has additional Medicaid Total Annual Patient-Days to donate to its sister facility"; "[p]rovision of patient care to Hospice Medicaid patients"; "[p]rovision of care to Charity/Indigent patients (days or cash)"; whether the "[f]acility is within 1% or less of its condition"; whether "[p]rovision of Medicaid for facility exceeds that of the sub-district"; and "[a]ny other factors that a CON holder may present that could impact against fines are considered." RE 44. These are a common list of factors that have been considered (not in isolation) by Agency management, if brought to their attention by the facility in assessing whether a fine should be imposed. RE 44; T 206-213, 215-216, 221, 279-80, 352- 56, 373, 483, 927-30, 947-49. See also Fla. Admin. Code R. 59C- 1.013(4)(a)7; Findings of Fact 73 through 83. "All things [were] considered prior to determining the fine, including [the Agency] gave [nursing homes] the 75 percent [for diversion programs] off." T 365. On a rare occasion, the Agency did not fine a noncompliant nursing home because the nursing home was closed during a portion of the year. T 267-68.9 With the filing of the third amended administrative complaints, none of these factors is considered in determining the fine. T 931, 949. The Agency proposed to fine each Respondent as follows: Port St. Lucie -- $13,085; Winter Haven -- $18,022; Ocala -- $18,724; Orlando -- $25,540; and Citrus County -- $19,992. The Agency explained how these fines were calculated, including the mitigation factors considered regarding the degree of noncompliance. RE 26; T 225-30. Respondents' Exhibit 26 consists of the forms (Excel spreadsheets) used by the Agency to determine noncompliance matters in calendar year 2006. The Agency started applying the Excel spreadsheets in approximately 2004 or 2005 in condition compliance cases. T 223, 250-51. For example, for Port St. Lucie, the maximum fine under the statutory framework is $365,000 ($1,000 per day times 365 days). The "applicable fine" was calculated to be $52,341, which is the maximum fine times the percent difference or $365,000 times 14.34%. Then the applicable fine was reduced by 75% to $13,085 ($52,341 times 25%), which is the fine sought in the administrative complaint. RE 26 at 5; see also T 252, 292-97. The 25% factor was applied in each case to reflect consideration of pilot diversion programs in each county where the Respondents are located. T 268, 295. Each Respondent was treated the same. See RE 26.10 Since approximately 2006 and 2007 and prior to the filing of the Agency's third amended administrative complaints in October of 2009, the Agency routinely applied the 25% diversion factor (a 75% deduction). T 294, 338-39. With the filing of the third amended administrative complaints, prior to calculating the fine, the Agency still considers the circumstances of each nursing home and the reasons why they were unable to meet the Medicaid-patient-days condition. "But in terms of the degree [the nursing home is] out of compliance, [the Agency is] using the statute based on the days that [the nursing home is] out of compliance and" the penalty is based on that calculation. T 366-68, 374. See also T 349-50, 357, 363-65. The Third Amended Petitions for Formal Administrative Hearing and the First Amended Administrative Complaints On October 2, 2009, Respondents filed a motion and revised motion to amend their second amended petitions and also filed their third amended petitions challenging the administrative complaints filed by the Agency. (The revised motion was granted over the Agency's objection.) Respondents dispute that they failed to meet the respective Medicaid-patient-days conditions; dispute that the Agency appropriately considered the degree of alleged noncompliance; dispute how the Agency determined the number of residents eligible pursuant to Title XIX of the Social Security Act and Section 408.040, Florida Statutes, claiming that "dual eligible" residents should be counted for purposes of compliance; and further claim that the Agency is improperly relying on six alleged statements as unadopted rules. See PE 41. On October 14, 2009, the Agency filed a motion requesting leave to amend its administrative complaints. (The motion was granted over Respondents' objection.) In its motion, the Agency voiced its disagreement with Respondents' challenge to the alleged statements as unadopted rules and stated: "While the Agency disagrees that the alleged statements are rules, the Agency has determined that in the present proceeding, it will explicitly not rely on the alleged statements, but will explicitly only rely on the Agency's statutory authority conferred by" Subsection 408.040(1)(e), Florida Statutes, and that "the Agency has amended the administrative complaints as to each respondent based on the admissions by each respondent and based upon the authority and language of" Subsection 408.040(1)(e). The Agency incorporated by reference the exhibits (including, but not limited to, the formal reports submitted by Respondents) attached to the original administrative complaints.11 On October 28, 2009, the Agency filed first amended administrative complaints against each Respondent. Most notably, the Agency deleted reference to Florida Administrative Code Rules 59C-1.013 and 59C-1.021, cited in the administrative complaints, and proceeded, consistent with the Agency motion requesting leave to amend, to rely solely on Subsection 408.040(1)(e), as authority to impose the fines requested. The proposed fines are based solely on the Agency's determination that each Respondent is not in compliance with the applicable Medicaid-patient-days condition and based on its view that the degree of noncompliance means the result of the mathematical calculation of the difference between the conditioned level of compliance and the reported level of compliance. No consideration was given to any other factors such as the prior proposed reduction in fines (in the original administrative complaints) in light of the pilot diversion programs (the 25% factor). Stated otherwise, the Agency applied the new proposed rule, see Finding of Fact 63, as the sole criterion for determining as mitigation the degree of noncompliance. T 219, 492. The Agency will no longer consider the mitigating factors considered by the Agency in the past. This led the Agency to proceed to rule development. T 494-95. The Agency explained how it calculated the amended fines. Agency Exhibits 27 and 28 and 30 through 32 are the calculation sheets used by the Agency to determine the fines for the first amended administrative complaints. T 151, 274-79. Based on each Respondents' formal report of compliance (without regard to "dual eligible" Medicaid patient days), except for "dual eligible" Medicaid patient days reported by a Respondent, the Agency considered all traditional Medicaid patient days, including Medicaid hospice days12 and charity days. T 152, 201-03. The Agency imposed a fine of $1,000 per day for each day in which Respondents were not in compliance. T 150-57, 272-79. The degree of noncompliance per month in calendar year 2006 was taken into consideration by calculating the percentage of noncompliance. For January 2006, Port St. Lucie was required to provide 1,688 Medicaid patient days (47% times 3,592) and actually provided 1,506 traditional Medicaid patient days, which was then divided by the required number of Medicaid patient days (1,506/1,688) to equal 89.22% of the 31 days in January that were met or 27.66 days or 3.34 unmet days. The resulting fine for January was $3,342 or $1,000 per day times 3.34. These calculations were performed for each month with the actual fine requested in the first amended administrative complaint at $52,024, T 152-153, PE 27, which is the fine for the number of days out of compliance. T 279, 494. (Mr. McLemore thought the Agency would not fine a nursing home out of compliance for two days. T 278.) The new formula is based on statutory-based days out of compliance, resulting in higher fines rather than taking 75% off the top reflected in the administrative complaints. T 274, 297. The Agency performed the same calculations for each Respondent. PE 27-28 and 30-32. T 156-57. The Agency has attempted to codify its decision to change the manner in which the fines are calculated in the first amended administrative complaints by publishing a Notice of Development of Rulemaking and proposing to amend Rule 56C- 1.021(3)(a), Certificate of Need Penalties, as follows: "Facilities failing to comply with any conditions . . . will be assessed a fine, not to exceed $1,000 per failure day. In assessing the penalty the agency shall take into account the degree of noncompliance. The degree of noncompliance means the result of the mathematical calculation of the difference between the conditioned level of compliance and the reported level of compliance." (emphasis in original). Aside from this notice, there is no evidence that the Agency has proceeded further to adopt the proposed rule. According to the Agency, it would be "completely impractical" to promulgate a rule listing all the conditions that would mitigate noncompliance. T 924-26, 940. The proposed fines were increased above the fines requested in the administrative complaints as follows: Port St. Lucie -- $13,085 to $52,024; Winter Haven -- $18,022 to $71,642; Ocala -- $18,724 to $74,830; Orlando -- $25,540 to $103,132; and Citrus County -- $19,992 to $79,409. The Amount of the Fine Using the Agency's Methodology It is determined that the fines should be calculated for each Respondent by including the stipulated number of "dual eligible" Medicaid patient days, arriving at a dollar figure and then subtracting 75%.13 The Agency used a methodology to calculate the fines in the original administrative complaints. That methodology is applied herein. See RE 26. Port St. Lucie The difference between the minimum CON condition percentage (47%) and the actual Medicaid percentage (43.66%) is 3.34%, which is then divided by 47% and yields 0.0710638 times $365,000, which yields $25,938. Twenty-five percent of $25,938 yields a total fine of $6,485 (25% fine for pilot diversion program or 75% fine reduction), without consideration of any other factors discussed below. Compare with RE 26 at 5. Winter Haven The difference between the minimum CON condition percentage (60.60%) and the actual Medicaid percentage (58.36%) is 2.24%, which is then divided by 60.60% and yields 0.0369636 times $365,000, which yields $13,492. Twenty-five percent of $13,492 yields a total fine of $3,373 (25% fine for pilot diversion program or 75% fine reduction), without consideration of any other factors discussed below. Compare with RE 26 at 11. Orlando The difference between the minimum CON condition percentage (31.19%) and the actual Medicaid percentage (29.34%) is 1.85%, which is then divided by 31.19% and yields 0.0593 times $365,000, which yields $21,645. Twenty-five percent of $21,645 yields a total fine of $5,411 (25% fine for pilot diversion program or 75% fine reduction), without consideration of any other factors discussed below. Compare with RE 26 at 9. Citrus County The difference between the minimum CON condition percentage (45.64%) and the actual Medicaid percentage (43.14%) is 2.50%, which is then divided by 45.64% and yields 0.0547765 times $365,000, which yields $19,993. Twenty-five percent of $19,993 yields a total fine of $4,998 (25% fine for pilot diversion program or 75% fine reduction), without consideration of any other factors discussed below. Compare with RE 26 at 3. Ocala No fines should be imposed on the Ocala facility as it exceeded the Medicaid condition for calendar year 2006. Consideration of Reasons Why Respondent Nursing Homes Were Unable to Meet CON Medicaid-Patient-Days Conditions and the Amount of the Fine Considering Other Factors Prior to filing its first amended administrative complaints and its Notice of Development of Rulemaking, the Agency considered several factors when deciding whether a nursing home complied or was unable to comply with a Medicaid condition, and whether a fine was appropriate under the circumstances for noncompliance. See generally Finding of Fact 44 for some of the compliance factors. Respondents offered testimony that they used their best efforts to meet the Medicaid-patient-days conditions, including the relative demand levels for Medicaid services in the areas served of Respondents, income levels of seniors, and other reasons. See generally T 547-48, 557, 826, 829, 852, and 876; RE 4-7. Respondents suggested that the existence of various State diversion and transition programs in the counties where they are located should also be considered in mitigation. See generally T 694-95. The nursing home diversion program operated in 26 counties in Florida in 2006, and Respondents are located in five of those counties. (Potential nursing home patients are diverted to other health care settings under this and other similar programs.) Generally, these diversion programs have been successful in diverting Medicaid-eligible residents from nursing homes. To some extent, these diversion programs have impacted Respondent nursing homes. T 534. Respondents also provided other factors in support of noncompliance with the Medicaid-patient-days conditions such as Medicaid utilization, which may be affected by the moratorium (with some exceptions) on new CONs for nursing homes, the existence of other community-based facilities, the effects of various diversion programs, the income level of various population centers where some of the Respondents are located, high Medicare admissions, declining Medicaid demand, and the relative age of Respondent facilities. Respondents also provided evidence of their marketing efforts. See PE 15-16, 18- 20; RE 4-7; T 535-36, 540-44, 556-57, 560-61, 570-71, 627-30, 638, 671-72, 711-23, 728-32, 846-47, 849, 858-60, 875-77. See also PE 39 at 3-4, regarding reported impacts of the moratorium. But see endnote 7. The Agency considered a nursing home's occupancy when it considered mitigation. T 266-67, 484-85.14 Respondents also suggest that the Agency has applied other factors either to forgo action against a nursing home facility by waiving a fine or by reducing a fine contrary to the Agency's treatment of Respondents. See, e g., Respondents' Proposed Recommended Order at 36-44. For example, in the past, the Agency has reduced or eliminated a calculated fine for a nursing home if it was less than one percent out of compliance. See RE 44 and 45; T 206. There have been instances when the Agency has not taken action against a nursing home that had missed the Medicaid condition by five percent or less. RE 24 at 19-28; RE 45 at 61-66. (Here, after calculating the fines using the Agency's pre-first amended administrative complaint methodology and including consideration of "dual eligible" patients, see Findings of Fact 68 through 72, none of the Respondents missed their Medicaid-patient-days conditions by more than four percent.) Conversely, the Agency provided evidence that each Respondent provided Medicaid patient days on a percentage basis below the average for other nursing homes in their respective subdistricts. However, the Agency has not used the comparison to impose a fine on a nursing home. T 259-65; see also RE 26 at 2, middle calculations. None of the Respondents is located in the same subdistrict with another Life Care facility which exceeds its Medicaid-patient-days condition. None of the Respondents (except Ocala that exceeded its Medicaid-patient- days condition) was within one percent of the Medicaid-patient- days conditions, even considering the "dual eligible" patient days. None of the Respondents reported experiencing an operational loss. (According to the Agency, these factors were not always applied in every noncompliance case. T 927-39.) The Agency also offered evidence that nursing home facilities within a five-mile radius of, e.g., the Respondent Ocala facility in Marion County, had a higher percentage of their days provided to Medicaid patients than the Ocala facility, T 910-11. See also T 908-15. The Agency also offered evidence that the percentage of Medicaid patient days/census provided by Respondents has reduced between 2000 and 2006. T 891-908. Based in part on the foregoing, Respondents suggest that no fines should be imposed, whereas the Agency suggests that fines should be imposed. No party has cited to any Medicaid condition fine case that was resolved after an evidentiary hearing and the entry of a recommended order and a final order. Rather, the examples of alleged inconsistent Agency action appear to have been resolved by settlements. It is difficult to apply the factors considered in this subsection of the Recommended Order in an objective fashion so as to determine, with any reliability and predictability, whether and to what extent Respondents should be further relieved of meeting the Medicaid-patient-days conditions.15 On a final note, the Agency abruptly (toward the end of the discovery portion of this proceeding) changed its policy regarding, in part, the method of determining the fines for noncompliance. The Agency did not adopt a rule codifying the change in policy despite opportunities to do so in the past and did not persuasively explain the reasons for departing from its policy, which pre-dated the filing of the first amended administrative complaints.
Recommendation Based upon the foregoing, it is recommended that the Agency enter a final order imposing the following fines: Port St. Lucie -- $6,485; Winter Haven -- $3,373; Orlando -- $5,411; and Citrus County -- $4,998. No fines should be imposed on the Ocala facility as it exceeded the Medicaid-patient-days condition. DONE AND ENTERED this 15th day of March, 2010, in Tallahassee, Leon County, Florida. S CHARLES A. STAMPELOS 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 15th day of March, 2010.
The Issue Whether the Agency for Health Care Administration (AHCA) should take the final agency action it announced, in its July 18, 2001, letter to Petitioner, it intended to take with respect to certain Medicaid claims Petitioner had filed.
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: The Medicaid program is a cooperative federal-state venture designed to provide health care to the needy. States participating in the program receive federal financial assistance for compensating enrolled providers for the goods and/or services they provide Medicaid recipients in accordance with the program's requirements. Florida is a participant in the Medicaid program. AHCA is the state agency responsible for making payments to enrolled Medicaid providers in Florida. In discharging this responsibility, it is assisted by a fiscal intermediary with whom it contracts. Florida has applied for, and been granted by the federal government, "waivers" in order to use Medicaid funds to pay for certain "home and community-based services" (HCBS), including, among others, adult day health care, to individuals who, if not provided these services, would require institutionalization. Among Florida's HCBS "waiver" programs is the Aged/Disabled Adult (ADA) "waiver" program, which targets needy individuals 65 years of age or older, as well as needy disabled adults aged 18 to 64, who qualify for nursing home placement. The Florida Department of Elder Affairs (DOEA), with the help of the 11 Area Agencies on Aging throughout the state and their contractors, coordinates the provision of services to these targeted individuals (which services AHCA pays for). At all times material to the instant case, the Alliance for Aging, Inc., has been the Area Agency on Aging serving Miami-Dade County. Before an individual may receive ADA "waiver" services, (s)he must undergo an assessment by DOEA or its designee to determine whether (s)he needs the required level of care to be eligible for such services. This assessment is referred to by the acronym "CARES," which stands for "Comprehensive Assessment and Review for Long Term Care Services." Individuals determined to be eligible to receive ADA "waiver" services must have a plan of care established for them by an authorized case management agency. Having such a plan of care is a prerequisite to their receiving any services (other than case management services from an authorized case management agency). They may receive only those services identified in the plan of care. At all times material to the instant case, the only two agencies authorized to provide case management services to ADA "waiver" recipients residing in Miami-Dade County were United Home Care Services, Inc. (United) and Miami-Dade County's Elderly Services unit (Miami-Dade Elderly Services). To be entitled to paid by AHCA for rendering ADA "waiver" services to eligible individuals with an authorized case management agency-developed plan of care, a provider must not only have a Medicaid provider number and be a party to a Medicaid provider agreement with AHCA enabling it to bill Medicaid for the type of services rendered, the provider must also have a referral agreement with the authorized case management agency that developed the recipient's plan of care and, in addition, the recipient must have been referred to the provider by the case management agency for purposes of receiving the services rendered (pursuant to the request of the recipient, who has the right to choose among enrolled providers qualified to provide the services). At all times material to the instant case, AHCA had in effect a rule describing Florida's HCBS "waiver" programs, including the ADA "waiver" program. The rule, Florida Administrative Code Rule 59G-8.200, provided as follows: Purpose. Under authority of Section 2176 of Public Law 97-35, Florida obtained waivers of federal Medicaid requirements to enable the provision of specified home and community-based (HCB) services to persons at risk of institutionalization. Through the administration of several different federal waivers, Medicaid reimburses enrolled providers for services that eligible recipients may need to avoid institutionalization. Waiver program participants must meet institutional level of care requirements. The HCB waiver services are designed to allow the recipients to remain at home or in a home- like setting. To meet federal requirements, Medicaid must demonstrate each waiver's cost-effectiveness. Definitions. General Medicaid definitions applicable to this program are located in Rule 59G-1.010, F.A.C. Additional descriptions of services available under this program are provided in subsection (3) of this rule. The following definitions apply: "Agency" means the Agency for Health Care Administration, the Florida state agency responsible for the administration of Medicaid waivers for home and community- based (HCB) services. "Department" means the Florida Department of Elderly Affairs (DOEA). Home and Community-Based (HCB) Waiver Services are those Medicaid services approved by the Health Care Financing Administration under the authority of Section 1915(c) of the Social Security Act. The definitions of the following services are provided in the respective HCB services waiver, as are specific provider qualifications. Since several similar services with different names may be provided in more than one waiver, this section lists them as a cluster. A general description of each service cluster is provided. Individuals eligible for the respective HCB services waiver programs may need and receive the following services: * * * (b) Adult Day Health Care and Day Health Care are services provided in an ambulatory care setting. They are directed toward meeting the supervisory, social, and health restoration and maintenance needs of adult recipients who, due to their functional impairments, are not capable of living independently. * * * (e) Case Management, Waiver Case Management, and Support Coordination are services that assist Medicaid eligible individuals in gaining access to needed medical, social, educational and other services, regardless of funding source. * * * (i) Counseling, Mental Health Services, Education and Support, and Behavioral Analysis are services provided for the diagnosis or treatment of mental, psychoneurotic, or personality disorders, or providing assistance to recipients in identifying feasible goals, providing emotional support and guidance, providing advice about community resources, or exploring possible alternative behavior patterns. * * * Respite Care is the provision of supervisory, supportive, and short-term emergency care necessary to maintain the health and safety of a recipient when the primary caregiver is not available to provide such care or requires relief from the stress and demands associated with daily care. Risk Reduction services provide care and guidance to caregivers, based on a plan of specific exercises for the recipient to increase physical capacity, strength, dexterity, and endurance to perform activities of daily living. This service also includes assessment and guidance for the recipient and caregiver to learn to prepare and eat nutritious meals and promote better health through improved nutrition. This service may include instructions on shopping for appropriate food, preparation, and monitoring of same. This service also provides guidance for budgeting and paying bills, which may include establishing checking accounts and direct deposits to lessen the risk of financial exploitation and abuse of the recipient. * * * Covered Services -- General. Services provided under the HCB services waivers include those described in paragraphs (3)(a) through (ff). The availability of these services to waiver program participants is subject to approval by the Medicaid office and is subject to the availability of the services under the specific waiver program for which a recipient has been determined eligible. Service Limitations -- General. The following general limitations and restrictions apply to all home and community-based services waiver programs: Covered services are available to eligible waiver program participants only if the services are part of a waiver plan of care ("care plan", "individual support plan", or "family support plan"). Care plan requirements are outlined in subsections (6) and (8) of this rule. The agency or its designee shall approve plans of care based on budgetary restrictions, the recipient's necessity for the services, and appropriateness of the service in relation to the recipient, prior to their implementation for any waiver recipient. Additional service limitations applicable to specific waiver programs are specified in subsections (10) through (14) of this rule. Program Requirements -- General. All HCB services waiver providers and their billing agents must comply with the provisions of the Florida Medicaid Provider Reimbursement Handbook, Non-Institutional 081, November 1996, which is incorporated by reference and available from the Medicaid fiscal agent. The following requirements are applicable to all HCB services waiver programs: The Medicaid program will deny an applicant's request if the proposed enrollment could cause the program to exceed the maximum enrollment level authorized by the Health Care Financing Administration in the applicable HCB services waiver. To be eligible to receive HCB waiver services, each applicant must receive case management services, plus at least one other HCB waiver service. * * * The Department or its designee will perform an evaluation of the level of care needed by an applicant for services when there is a reasonable indication that the applicant might need institutionalization in the near future, if the covered HCB services were not available. The Department or its designee will perform reevaluations of level of care at least annually, or as changes in the recipient's condition or community care setting may warrant. The plan of care will identify the type of services to be provided, the amount, frequency, and duration of each service, and the type provider to furnish each service. Reimbursement claims for the provision of Medicaid services not listed in the plan of care of HCB services waiver program participants are subject to denial or recoupment. In providing applicants or participants freedom of choice, the Agency or its designee must: Inform all prospective waiver program participants of the feasible alternatives available under the respective waiver program and afford recipients a freedom of choice to participate in the community program in lieu of institutional placement; Afford recipients the opportunity to choose from those enrolled providers capable of providing the covered services identified in the recipient's plan of care; and Afford all enrolled recipients the right to disenroll at any time. * * * Provider Qualifications and Provider Enrollment. To enroll and participate in the waiver programs, providers must comply with the provisions of Chapter 59G-5, F.A.C. Additional provider requirements are specified in subsections (10) through (14) of this rule. Case Management Requirements. Case managers advocate for recipients during the eligibility determination process and assist applicants in complying with requests for information, interviews, or activities required for a determination of Medicaid eligibility. Case managers will conduct a comprehensive needs assessment and identify areas in the person's life that require supports or services to reduce the risk of having to be placed in an institution. In addition, each case manager will: Begin the initial needs assessment before services are provided and complete it within 30 days of enrollment in the waiver program; Make a home visit as part of the needs assessment process; Prepare a written plan of care for each program participant and maintain the plan in the participant's case record; Reassess the plan of care at least every six months to review service goals, outcomes, and functional changes that may warrant the modification of the plan and reassessment of the recipient's level of care; After the needs assessment has been completed, maintain in each client's record case progress notes that document the provision of services; Make legible entries in the case progress notes in sufficient detail to document the case management service rendered and to allow an audit of the appropriateness of charges; Date and sign all written case record entries; Notify the Agency of all disenrollments by waiver program participants within 30 days after the effective date; and Maintain records in an accessible location for review by authorized federal and state representatives for monitoring and auditing purposes; ensure that recipient specific information is maintained as "confidential"; ensure that program, administrative, and financial information is maintained for a period of at least five years after termination of participation as a waiver service provider. If an audit has been initiated and audit findings have not been resolved at the end of five years, the records will be retained until resolution of the audit findings. Home and Community-Based Services Waiver Programs. The following are authorized HCB services waivers: (a) Aged and Disabled Waiver; * * * (c) Developmental Services Waiver; * * * Aged/Disabled Waiver. Program Summary. The aged/disabled waiver is a long-term care initiative providing HCB services to the aged and disabled as an alternative to institutional care. Services are available statewide to recipients who meet the eligibility requirements as specified in paragraph (10)(c) of this rule. Covered Services and Provider Qualifications. Providers must meet the criteria specified in Chapter 59G-5, F.A.C. In addition, providers must be under contract with the Department for the provision of HCB services available under this waiver. Provider qualifications for services are: 1. Adult Day Health Care providers must be licensed adult day health care centers in accordance with Rule 59A-16.003, F.A.C. * * * 4. Case Management providers must be CCE contractors, or community care for the disabled adults contractors, or staff of the Department who serve the community care for the disabled adults program, pursuant to Ch. 10A-10, F.A.C. * * * 7. Counseling providers must be licensed psychologists or mental health counselors pursuant to s. 490.001-490.015, F.S., licensed social workers pursuant to pursuant to s. 491.002-491.015, F.A.C., or licensed mental health centers, pursuant to s. 394.65-394.907, F.S. * * * Respite Care providers must be licensed Medicaid participating home health agencies, CCE agencies, or residential providers, pursuant to s. 400.011-400.332, F.S., s 400.401-400.454, and s. 400.616-400.629, F.S. Risk Reduction Services providers must be community care agencies, Medicaid participating home health agencies, or independent contractors, pursuant to Section 61F11-4, F.A.C. * * * Recipient Eligibility. Individuals must meet Medicaid eligibility requirements as defined by Chapter 409, F.S., and Florida's Title XIX State Plan; or be physically disabled or aged as defined by Chapter 10C-8, F.A.C., and 42 C.F.R. 435.217 and 435.726, as of October 1, 1994, the latter two hereby incorporated by reference. Recipients must be assessed as meeting level of care criteria for skilled or intermediate nursing home care as defined in Sections 59G-4.290 and 59G-4.180, F.A.C., and must be at risk for nursing facility placement without the provision of HCB services. Recipients must receive waiver case management and at least one other HCB service to be Medicaid eligible at the institutional care placement (I.C.P.) level. Program Operations. The HCB services program under this waiver shall comply with the provisions of Chapters 10A-4, 10A-5, 59A-16, 10A-8, 10A-10, 10A-11, and 10A-14, F.A.C. * * * (12) Developmental Services Waiver Program Summary. This program provides HCB waiver services to recipients with developmental disabilities who are clients of the Department of Health and Rehabilitative Serves (HRS) developmental services (DS) program, and who are eligible for admission to an intermediate care facility for the mentally retarded- developmentally disabled (ICF/MR-DD). The recipients have elected services in the community rather than in an ICF/MR-DD. Covered Services and Provider Qualifications. Providers of DS waiver services must be certified by the HRS DS program in each district where it applies to provide services. . . . * * * The Florida Medicaid Provider Reimbursement Handbook, Non-Institutional 081, November 1996, which was incorporated by reference in Florida Administrative Code Rule 59G-8.200, stated the following, among other things, in its first chapter, about Florida's HCBS "waiver" programs: Description: The Social Security Act allows states to obtain waivers to provide home and community-based services (HCBS) to target groups of recipients. These services are designed to help the recipient avoid placement in expensive and restrictive institutional settings. To receive waiver services, a recipient must be enrolled in the specific waiver program. HCBS Waiver Provider Enrollment: In order for a provider to be reimbursed for rendering a home and community-based service to an eligible recipient, the provider must be enrolled as a waiver-specific HCBS provider. All home and community-based services must be prior approved by a waiver case manager. Note: See the waiver specific Coverage and Limitations Handbook for additional information about HCBS provider enrollment. Florida HCBS Programs: Florida has seven HCBS waiver programs. They are: Aged/Disabled Adult Waiver * * * Developmental Services Waiver * * * Aged/Disabled Adult Waiver: The Aged/Disabled waiver serves frail elderly and adults with disabilities who are at risk of placement in a nursing facility. * * * Developmental Services Waiver: The Developmental Services waiver serves people who are at risk of placement in an intermediate care facility for the developmentally disabled (ICF/DD). * * * Chapter 2 of the Florida Medicaid Provider Reimbursement Handbook, Non-Institutional 081, November 1996, included the following information about "[p]rovider [e]nrollment": Introduction: Every facility, individual and group practice must submit an application and sign an agreement in order to provide Medicaid services. HCBS and Targeted Case Management: Home and community-based services (HCBS) and targeted case management providers must enroll through the state agency or state-contracted entity that administers the waiver or targeted case management service. Note: See the waiver-specific or Targeted Case Management Coverage and Limitations Handbook for the specific enrollment requirements. Chapter 3 of the Florida Medicaid Provider Reimbursement Handbook, Non-Institutional 081, November 1996, included the following information about "Medicaid [r]ecipient [e]ligibility": Eligibility Determination Eligibility Requirements: To qualify for Medicaid an individual must meet specific eligibility requirements such as age, citizenship or resident alien status, Florida residency, and either having a Social Security Number of proof of having applied for one Who Determines Eligibility: Eligibility for Medicaid is determined by the Florida Department of Health and Rehabilitative Services (HRS), or by the federal Social Security Administration (SSA) for certain categories of elderly and disabled individuals. In January 1997, HRS will be divided into two departments: The Department of Health and the Department of Children and Families. The Department of Children and Families will be responsible for HRS' recipient eligibility functions. * * * Eligibility for HCBS and Targeted Case Management: In addition to being eligible for Medicaid, recipients must meet specific eligibility criteria to enroll in a HCBS waiver or to receive targeted case management. Note: See the program-specific Coverage and Limitations Handbook for the additional eligibility criteria. Eligibility Periods: . . . . A provider must verify a recipient's eligibility prior to rendering a service. The Medicaid Computer System Introduction: The Florida Medicaid Management Information System (FMMIS) is the system that processes claims, makes payments to Medicaid providers, and issues Medicaid identification cards. Medicaid will not reimburse a claim unless FMMIS shows that a recipient is eligible on the date of service. * * * Program Codes: The Medicaid program for which a recipient is eligible is identified on the FMMIS by a unique alpha identifier called a program code. The provider needs to know a recipient's program code before providing services . . . . * * * Verifying Eligibility, HMO and MediPass Introduction: Information about the recipient's eligibility and Medicaid coverage is maintained on the Florida Medicaid Management Information System (FMMIS). The system is maintained by the state Medicaid fiscal agent. The provider verifies eligibility and obtains benefit information by accessing the system. This section discusses how a provider can access the system to obtain this information. Ways to Access Recipient Information: Eligibility and benefit information are available to providers via the following: Medicaid eligibility verification terminals (MEVS) Computer software that can be added to an office computer Automated fax response Automated voice response Human operator Information Available: The following recipient eligibility information is available for all the above sources: Denture limitations Drug caps and other service limitations HMO or MediPass membership Third party insurance coverage and policy number Medicare number Medicare part A & B coverage * * * Automated Fax Response -- FaxBack: This verification method requires a fax machine and a touch tone telephone. To obtain eligibility information, the provider enters the 9-digit provider number and one of the following: 10-digit recipient Medicaid ID number; 8-digit plastic card control number; or the recipient's social security number and date of birth. A voice response message will be received giving basic eligibility status, followed immediately by a hard copy report to the provider's fax location. The hard copy fax page serves as the provider's verification of eligibility. This method is available 24 hours a day, seven days a week. If a provider needs additional information on the recipient's eligibility for the service, he can call Unisys Provider Services at 1-800-289-7799. English and Spanish-speaking operators are available. * * * Human Operator Verification: A provider can verify eligibility and determine limitation by calling Unisys Provider Services at 1- 800-289-7799, Monday through Friday, 7:00 a.m. to 6:00 p.m., eastern standard time. This phone number is on the back of the Medicaid ID card. English and Spanish- speaking operators are available. The provider gives the Unisys operator the control number on the front of the recipient's Medicaid ID card or the recipient's ten-digit Medicaid ID number and requests information as needed. Providers are limited to two inquiries per phone call. The operator will tell the provider if the recipient is Medicaid eligible on the date of service, what the recipient's ten-digit Medicaid ID number is, and if the recipient has exceeded the Medicaid coverage limitations. The operator will not give the provider an audit number; therefore the provider will not have proof of the recipient's eligibility if a discrepancy arises. Chapter 6 of the Florida Medicaid Provider Reimbursement Handbook, Non-Institutional 081, November 1996, "describe[d] the Non-Institutional 081 claim form, the time limits for submission, and how to complete and submit the form for payment." It read, in pertinent part, as follows: Purpose and Description Purpose: This handbook is intended for use by providers who serve Medicaid recipients. It explains the procedures for obtaining reimbursement for services that are billed on the Non-Institutional 081 claim form. Coverage and Limitations Handbook: This handbook must be used in conjunction with the provider's program specific Coverage and Limitations Handbook, which contains policy information about the specific procedures that Medicaid will reimburse. Providers Who Bill on the Non Institutional 081: Targeted case management providers and the home and community based services providers must complete and submit Non- Institutional 081 claim forms to receive reimbursement from Medicaid. . . . Chapter 7 of the Florida Medicaid Provider Reimbursement Handbook, Non-Institutional 081, November 1996, described "[a]dditional filing requirements," including the following: Service Authorization Requirements Home and Community-Based Services: All home and community-based services (HCBS) must be service authorized by the recipient's case manager and be included in the recipient's plan of care. Medicaid may recoup reimbursement for services that were not service authorized or authorized in the recipient's plan of care. Note: See the waiver-specific Coverage and Limitations Handbook for additional information on the plan of care. * * * Appendix D of the Florida Medicaid Provider Reimbursement Handbook, Non-Institutional 081, November 1996, contained a glossary of terms used in the handbook, which read, in pertinent part, as follows: * * * Case Manager: A case manager for Home and Community-Based Waiver services is the person who writes a recipient's plan of care and authorizes, in advance, the services that will be provided to a recipient. * * * Home and Community-Based Services Waiver: A specific program and set of services authorized under Section 1915(c) of the Social Security Act that are designed to assist recipients to avoid institutionalization. * * * Recipient: A person who is eligible to receive services under Medicaid. Appendix E of the Florida Medicaid Provider Reimbursement Handbook, Non-Institutional 081, November 1996, listed "eligibility program codes." Of the codes listed, only two, MW A and MW C, were for "home and community based services." The Florida Medicaid Aged and Disabled Waiver Provider Handbook (first published in 1993) was the "waiver specific Coverage and Limitations Handbook" referred to in the Florida Medicaid Provider Reimbursement Handbook, Non-Institutional 081, November 1996, that provided additional information about Florida's ADA "waiver" program. Chapter 10 of the Florida Medicaid Aged and Disabled Waiver Provider Handbook discussed "[p]rovider [p]articipation" in the ADA "waiver" program. It read, in pertinent part, as follows: Becoming Enrolled as a Medicaid Provider: 10.4 To become a provider of Home and Community Based Aged/Disabled Waiver services in the Medicaid program you must: not be currently suspended from Medicare or Medicaid in any state; meet requirements described in Section 10C-7.0527, F.A.C.; maintain a contract with the Area Agency on Aging (AAA) or Lead Agency with standards for participation in the Community Care for the Elderly and/or the Community Care for the Adult Disabled Programs; and Maintain full compliance with Title VI of the Civil Rights Act of 1964 and the Rehabilitation Act of 1973. To request a provider enrollment package contact the Medicaid Waiver Specialist at the Area Agency on Aging located in your area. Refer to Chapter 13, Section 13-4 for the address and telephone number of the Area Agency on Aging offices. The enrollment package includes an application and a noninstitutional professional technical agreement. Complete and forward the completed application package to the Medicaid Waiver Specialist located at your local Area Agency on Aging. The Medicaid Waiver Specialist will sign the application and forward it to Consultec.[2] The specialist's signature verifies that the provider application information is complete and the criteria for enrollment have been met. Consultec will not accept any application that has not been signed by the Medicaid Waiver Specialist. After your application is approved, Consultec will send you a Medicaid provider number and a provider handbook for the Medicaid Aged/Disabled Waiver program. If you have a Medicaid provider number and request participation in this program, your 7-digit base number will remain the same; the 2-digit suffix will be different for each program. Use your provider number to bill Medicaid. Medicaid then pays you for covered services that you furnish to Medicaid eligible waiver recipients. Chapter 11 of the Florida Medicaid Aged and Disabled Waiver Provider Handbook described the "[c]overed [s]ervices and [l]imitations" of the ADA "waiver" program. It read, in pertinent part, as follows: * * * Program Purpose: 11.3 The purpose of the Aged/Disabled Home and Community Based Services Waiver program is to promote, maintain, and restore health, or minimize the effects of illness and disability in order to delay or prevent institutionalization. These services allow persons to remain at home or in a home-like setting Covered Services: 11.4 Individuals determined eligible for this program may be entitled to the following services: Adult Day Health Care Case Management Respite Care * * * Counseling * * * General Description of Covered Services: 11.5 There are specific problems experienced by the physically disabled or elderly who are at risk of nursing home placement. Supportive services which strengthen and foster their independence allow the elderly and disabled to remain at home or in a community setting. Waiver services are defined as follows: Adult Day Health Care: Adult Day Health Care (ADHC) is an organized day program of therapeutic, social, and health activities and services designed to restore or maintain the recipient's optimal capacity for self-care. These services are provided to persons who are at least 18 years of age and who have physical or mental functional impairments. Covered services under Adult Day Health Care include: Rehabilitation Services including: physical therapy occupational therapy speech therapy. Medical screening services, emphasizing prevention and continuity of care, which include routine blood pressure checks, diabetic maintenance checks, or rehabilitation therapies not covered under the regular Medicaid program and which are provided at the site. Nursing services which include periodic evaluation, medication supervision, and supervision of self-care services directed toward activities of daily living and personal hygiene. Nutritional services which include dietary and nutritional education. Social services to help with personal and family problems. Planned group therapeutic activities which are in accordance with the goals of the recipient's individual treatment plan. Transportation to and from Adult Day Health Care services. Meal services which provide at least one meal per day of suitable quality and quantity. Case Management Services: Case management is a way to identify an individual recipient's needs, develop intermediate and long term goals, and monitor the services provided to the individual. Case management provides specialized assistance to each individual who wants and needs help to choose and obtain resources and services. Case managers coordinate the delivery of the services in the best way to meet each individual's needs. The amount of assistance is adjusted for each individual recipient. The principle is to develop each individual's capability to negotiate and obtain needed and appropriate services on his/her own behalf. Essential components of effective case management services are: screening of services needs; referring to available resources; conducting a comprehensive needs assessment; developing an individual service plan development; developing a plan of implementation; accessing resources to meet needs identified in service plan; monitoring and following up to assure continued appropriateness of the services; assessing progress toward the original goals; and reassessing recipient need and determining of ongoing service needs. Respite Care: Respite care is a demand-response service to provide supervision and companionship to physically disabled persons or infirm elderly persons for a specified period of time. Respite care may include personal care. The purpose of respite care is to relieve the primary caregiver from the stress and demand associated with providing daily care. Providing the caregiver with relief helps to maintain a healthy living environment. * * * Counseling Services: Counseling involves exploring a recipient's interests and skills, problem solving, emotional support and guidance and encouragement for adopting new behaviors, and setting of realistic goals. It also may include diagnosis and structured treatment of psychological and psychosocial problems. This service is provided by a licensed psychologist, a licensed clinical social worker, or a licensed mental health counselor. * * * Recipient Eligibility: 11.6 To become eligible for this Medicaid program an individual must meet the following eligibility criteria: be aged (65 or older); or be a disabled adult (18 to 64); be Supplemental Security Income (SSI) eligible; or meet the income and assets limits for the Institutional Care Program (ICP); meet level of care requirements as described in Section 11.7; have a plan of care executed by the case manager as described in Section 11.8 below; and have a waiver identification number assigned by the Medicaid Waiver Specialist. Level of Care Determination: 11.7 To determine if an individual is at risk of needing the care provided in an institution, a client assessment must be completed. The assessment is used to identify the individual's social resources and supports and his physical and mental ability to carry out the activities of daily living. This helps to determine the individual's functional impairment and risk of institutionalization. The case manager uses this information to develop a client- centered plan of care. The assessment procedures are: SSI eligibles must have a completed HRS Form 1055 signed by a registered nurse or medical doctor which verifies that the applicant is at risk of institutionalization. ICP eligibles must have a level of care determination provided by the Aging and Adult CARES team using the Nursing Home Level of care for Pre-Admission Screening, HRS Form 3049. For more information regarding the assessment process, please refer to the Client Assessment Manual. Plan of Care: 11.8 A plan of care is a written document which describes the service needs of a recipient and specifies the services to be provided (type), how often the service is to be provided (frequency), and how long the services will continue to be provided (duration). The purpose of the care plan is to enable the case manager and the recipient to summarize the findings of the recipient's evaluation; to identify realistic goals for the recipient; to recognize the barriers to attaining the goals; and then, to work toward removing these barriers and achieving the stated goals. It is an extension of the client assessment and identifies services required to maintain the recipient in the community, reduce the functional limitations noted in the assessment and meet other identified needs. The case manager and recipient work together to develop a plan of care. The recipient's family may help in the development of the plan of care. To assure appropriate case planning, the case manager will consult with the physician, physician's assistant, nurse, other health care providers working with the recipient, and other specialized consultants as needed. The case manager must establish a plan of care before services are rendered and Medicaid is billed. It must be signed and dated by the case manager and the recipient. The plan of care must: specify the level of care, and the needs or problems to be resolved to avoid institutionalization; specify improved or resolved problems by recording the date that services were no longer necessary and were stopped; specify the effective date for the start of in-home service; specify the type of services to be provided and who will provide them; specify the probable duration and desired frequency of service provision; be signed (certified) and dated by the case manager and recipient and, if the plan of care is still appropriate, recertified every 90 days; be updated any time the recipient's condition changes or every six months at a minimum; and be kept on file by the agency and available for review for a period of five years after the termination of services. * * * Service Limitation and Exclusions: 11.12 The plan of care must describe the services to be provided (type), how often the service is to be provided (frequency), and how long it will continue to be provided (duration). Services provided beyond the frequency and duration indicated on the care plan are not allowable. If the type, duration or frequency need to be changed, the case manager must approve the new schedule and update to the plan of care. Medicaid reimbursement is limited to necessary services. Service Authorization: 11.13 Case managers authorize only services which are on the written plan of care. Chapter 12 of the Florida Medicaid Aged and Disabled Waiver Provider Handbook contained the following discussion on "[r]estrictions on [b]illing": You are required to bill your usual and customary fee. Medicaid will pay the maximum fee, or your usual and customary fee, whichever is lower. All services must be authorized by an enrolled Medicaid aged/disabled waiver case manager and must be on the recipient's written plan of care. Petitioner is now, and has been at all times material to the instant case, licensed by AHCA to operate an adult day care center (North Pointe) in Miami-Dade County. Nadine Proctor is now, and has been at all times material to the instant case, the owner and administrator of North Pointe. Ms. Proctor is college educated. She has taken at least one graduate-level course (in public administration at Florida International University). In or around 1997, Ms. Proctor contacted the Alliance for Aging, Inc. (Alliance), by telephone and spoke with Lynn Pollack, one of the Alliance's Medicaid Waiver Specialists, about Petitioner becoming enrolled as a Medicaid provider. Ms. Proctor indicated to Ms. Pollack that she wanted Petitioner enrolled as a provider of adult day health care services to recipients in the state's ADA "waiver" program. Petitioner was "qualified" to provide these services by virtue of its being licensed to operate North Pointe as an adult day care center. Ms. Pollack explained, accurately, to Ms. Proctor "how the [ADA] 'waiver' [program] worked," including its assessment, plan of care development, and referral features (that are described above).3 She emphasized to Ms. Proctor that, to participate in the program as an adult day health care service provider, Petitioner needed, not only to enroll as a Medicaid provider and obtain (from AHCA, through its fiscal intermediary) a Medicaid provider number, but also to enter into a referral agreement with United or Miami-Dade Elderly Services. Following her telephone conversation with Ms. Proctor, Ms. Pollack mailed Ms. Proctor a Florida Medicaid Provider Enrollment Application, along with written "instructions on how to complete the application." There were directions on the application that, upon completion, it be returned to the Alliance for approval (before the completed application was sent to AHCA's fiscal intermediary). Ms. Proctor completed the application and mailed it back to the Alliance. "[T]here were errors on the application," however. Ms. Pollack informed Ms. Proctor of these errors. Ms. Proctor made several unsuccessful attempts to submit an error-free application. Finally, in June of 1997, she paid a visit to the Alliance's offices and met with Ms. Pollack in person. Ms. Pollack "explained [to Ms. Proctor] step-by-step exactly how to do the application." Ms. Pollack also "went over . . . again" with Ms. Proctor the requirements of the state's ADA "waiver" program. In so doing, she reminded Ms. Proctor that having a referral agreement with United or Miami-Dade Elderly Services was an absolute condition precedent to Petitioner's participation in the program as an adult day health care service provider. With Ms. Pollack's help, Ms. Proctor correctly filled out the Florida Medicaid Provider Enrollment Application. Ms. Proctor indicated on the application that Petitioner was seeking to become an adult day health care service provider as part of the state's ADA "waiver" program. Ms. Pollack approved the completed application on June 13, 1997. She then sent it to AHCA's fiscal intermediary, Unisys Corporation (Unisys). Unisys sent Petitioner the following letter dated August 16, 1997: Welcome to the Florida Medicaid Program. Your Florida Medicaid provider number is 6754961 00. Please use you number whenever you bill Medicaid for the following services and invoice type beginning 06/11/97. Service: HOME AND COMM BASED SVCS Invoice Type: FMMIS Non-Institutional Claim Form. The enclosed handbooks explain how to bill Medicaid and how to order additional invoices (billing) forms. We supply invoices that are unique to Medicaid at a nominal charge. An initial supply is enclosed for your convenience. If you have any questions or problems about billing matters or claims, please telephone: Unisys Corporation Fiscal Agent Contractor Toll Free 1-800-289-7799 If Unisys cannot resolve your problems, call your AHCA area Medicaid office. A list of area offices and their telephone numbers is included in your reimbursement handbook. Thank you for participating in Medicaid. AHCA also sent Petitioner a letter dated August 16, 1997. It read as follows: We are pleased that you have chosen to join the Florida Medicaid program and serve the needs of our Medicaid eligible recipients. We are dedicated to making your participation in the program straightforward and productive. Enclosed are handbooks that explain how the Medicaid program operates and how to bill for services that you have agreed to provide. We feel that your enrollment in the Florida Medicaid program is a statement that you want to make a difference in the availability and quality of health care for every Florida citizen who qualifies for Medicaid and we will always try to meet your commitment with a willingness to serve your needs. Enclosed is a sheet that contains you unique Medicaid number. Please remember to always use your number when billing Medicaid. If you encounter a problem or have a question, call Unisys Provider services at 1-800-289- 7799 or if out-of-state 1-800-955-7799. For provider enrollment questions, call 1-800- 377-8216. The Unisys phone lines are staffed especially to assist you, but after contacting them if you still have a problem, call your Medicaid area office. The telephone numbers for area Medicaid offices are listed in Appendix C of your Medicaid Provider Reimbursement Handbook. The area offices are primary sources of information concerning Medicaid policy and covered services. The success of the Florida Medicaid program is dependent primarily on providers like you who furnish services directly to recipients. Thank you for your participation and your efforts to maintain and improve the health of Florida Medicaid recipients. Ms. Proctor "never received" the handbooks referenced in Unisys' and AHCA's August 16, 1997, letters to Petitioner. A few months after her June 1997 meeting with Ms. Pollack, Ms. Proctor telephoned Ms. Pollack and angrily complained that "nobody [was] giving her any referrals" and that she was being "discriminat[ed] against."4 Ms. Pollack asked Ms. Proctor if she had, on behalf of Petitioner, executed a referral agreement. Ms. Proctor responded that she had not because "the process took too long and [United and Miami-Dade Elderly Services] were giving her the runaround." Ms. Pollack told Ms. Proctor, as she had done previously, that Petitioner was "not going to get any referrals" unless it had a referral agreement with United or Miami-Dade Elderly Services. John Saxon, who was "working for" a Florida state senator, subsequently telephoned Ms. Pollack and indicated that the senator "wanted to find out what was going on" with Ms. Proctor. Ms. Pollack "explained the situation to [Mr. Saxon]" and "how the [ADA} 'waiver' program worked," pointing out, among other things, that Petitioner "need[ed] to have [referral] agreements [with United and Miami-Dade Elderly Services] in order to get referrals" from them. Mr. Saxon advised Ms. Pollack that "he would make sure that [Ms. Proctor] underst[ood] [this]." Thereafter, Mr. Saxon telephoned Ms. Pollack again and "assured [her] that [Ms. Proctor] understood." On or about December 17, 1997, Ms. Proctor sent Unisys a check in the amount of $30.00 to obtain the handbooks referenced in Unisys' and AHCA's August 16, 1997, letters to Petitioner. The check was received and cashed. In or around April of 1998, Ms. Proctor asked for and was granted a meeting with the Alliance's executive director, John Stokesberry. Ms. Proctor's pastor and Mr. Saxon accompanied Ms. Proctor to the meeting. Linda Levin, one of Mr. Stokesberry's subordinates, was also in attendance at the meeting. As she had done during her last telephone conversation with Ms. Pollack, Ms. Proctor complained to Mr. Stokesberry at the meeting that "no one was referring clients to her" and therefore "she wasn't receiving any [Medicaid] money." She wanted to know why there had been no referrals made. Mr. Stokesberry told Ms. Proctor, in response to her inquiry, that the Alliance was not involved in the referral process and that any questions she had regarding lack of referrals should be addressed to United and Miami-Dade Elderly Services. Mr. Stokesberry, during the meeting, "made it very clear" that Ms. Proctor "could not bill [Medicaid] if she did not have referrals" from United or Miami-Dade Elderly Services, an advisement Ms. Levin echoed. Ms. Levin added that Ms. Proctor could not receive any referrals if she did not have a referral agreement with one of these case management agencies. What Ms. Proctor had told Mr. Stokesberry at the meeting about her situation was only partially true. Petitioner indeed had not received any referrals from United or Miami-Dade Elderly Services; however, notwithstanding the absence of such referrals, Petitioner had been submitting Medicaid claims and receiving "[Medicaid] money." Petitioner continued to bill Medicaid and be reimbursed following the meeting. Petitioner received payments totaling $673,754.50 for Medicaid claims it had submitted for ADA "waiver" services assertedly rendered from June 12, 1997, to August 28, 1998 (Paid Claims). These Paid Claims were processed by Unisys. At the request of DOEA, an Alliance staff member reviewed one of these Paid Claims (that was randomly selected) and determined that it was not "an appropriate billing." A more extensive post-payment review of the Paid Claims was then conducted. By letter dated September 11, 1998, DOEA's Inspector General, Lisa Milton, advised the Chief of AHCA's Bureau of Medicaid Program Integrity, Edward Turner, of the results of this post-payment review. By memorandum dated September 16, 1998, Mr. Turner requested the Chief of AHCA's Bureau of Medicaid Contract Management to "have Unisys pend [Petitioner's] claims for prepayment review." By letter dated September 17, 1998, AHCA's Bureau of Medicaid Contract Management asked Unisys, until further notice, to "pend for prepayment review any claim" Petitioner submitted, a request with which Unisys complied. On September 22, 1998, Costas Miskis, Esquire, an attorney with AHCA, sent the following letter to Ms. Proctor: The Florida Department of Elder Affairs has advised the Office of Medicaid Program Integrity ("MPI") that certain claims totaling $673,754.50 were improperly submitted under your Medicaid Provider number 6754961-00 for the time period beginning January 1, 1998, though and including September 16, 1998. The information received indicates that the services were not provided pursuant to a written plan of care developed by a case management agency which meets certain standards, and the recipients were not pre- screened as meeting disability criteria as required by the Social Security Act, Federal Regulations, and Aged/Disabled Medicaid Waiver Program. Given this information, the agency is compelled to seek a resolution of this matter. In an effort to expedite and simplify this process, we will extend to you the opportunity to settle this matter. Any settlement at this juncture will save both you and this office the burden and expense of litigation, as well as minimize the public airing with regard to any improper claims. The final terms of any settlement will be incorporated into a written agreement, and will effectively bring this matter to a close. Please be advised however, that in resolving situations involving false Medicaid claims, this agency may seek interest, investigative costs, or penalties as part of any negotiated settlement. Finally, please be advised that should we be unable to settle this matter, this office will consider proceeding under the False Claims Act (section 68.081, Florida Statutes, et seq.). Successful prosecution of such a case for any false claims submitted on or after July 1, 1994, would result in full restitution of the moneys in question plus the award of treble damages (triple the amount paid) together with a mandatory minimum $5,000 penalty per false claim- the maximum penalty per false claim is $10,000. If an agreement is reached between the appropriate parties, however, this agency would forego filing an action. Should you wish to discuss settlement of this matter, please call me at . . . by October 4, 1998. If I do not hear from you, I will assume that you are not interested in discussing this matter and will pursue any and all remedies available. A settlement was not reached. Petitioner continued to bill Medicaid, but was not reimbursed. Petitioner submitted Medicaid claims totaling $1,135,932.96 for ADA "waiver" services assertedly rendered from June 12, 1998, to February 29, 2000, which have not been paid (Pended Claims). The record evidence is insufficient to establish that any AHCA employee or agent, including Mr. Miskis, ever guaranteed Ms. Proctor that these Pended Claims would be paid. None of the Paid or Pended Claims was for any service for which Petitioner was entitled to be reimbursed by Medicaid, as Ms. Proctor knew or should have known. At all times material to the instant case, each of the individuals identified as recipients in the Paid and Pended Claims was Medicaid-eligible, but none of them had undergone a CARES assessment and been deemed eligible for ADA "waiver" services5; none of them had a plan of care; and none of them had been referred to Petitioner by United or Miami-Dade Elderly Services to receive the services billed for. Indeed, Petitioner did not even have a referral agreement with either of these case management agencies. Furthermore, a substantial number of the Paid and Pending Claims were for ADA "waiver" services other than adult day health care (including case management, counseling, respite care, and risk reduction) that Petitioner, as an adult day health care provider, was not authorized to bill for. Ms. Proctor used the FaxBack service offered by Unisys before billing Medicaid. The record evidence is insufficient to establish that Unisys, in responding to Ms. Proctor's inquiries via the FaxBack service, ever advised her that any of the individuals she inquired about were eligible to receive ADA "waiver" services from Petitioner.6 In any event, even if Unisys had provided Ms. Proctor with such an advisement, given what she had been told during her dealings with Alliance staff concerning the requirements of the ADA "waiver" program, it would have been unreasonable for her to have blindly relied on this information without making any further inquiry. On July 18, 2001, AHCA issued its Final Agency Audit Report,7 finding that the monies totaling $673,754.50 Petitioner received for the Paid Claims constituted overpayments Petitioner had to return to AHCA and that the Pended Claims were for services "not covered by Medicaid" and thus should not be paid.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that AHCA enter a final order finding that the monies, totaling $673,754.50, Petitioner received for the Paid Claims constituted overpayments that Petitioner must return to AHCA and that the Pended Claims were for services "not covered by Medicaid" and should therefore be denied. DONE AND ENTERED this 22nd day of July, 2004, in Tallahassee, Leon County, Florida. STUART M. LERNER 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 22nd day of July, 2004.
