Findings Of Fact There is no genuine issue as to any of the following material facts: The Petitioner is 78 years old and, since at least 1995, has been eligible for Medicare based on her age. The Petitioner's monthly income is $594, and she has no assets or resources. Since at least 1995, she has been eligible for Medicaid based on her income and assets. F.A.C. Rule 59G-3.010(4) provides: (b) Medicare Supplemental Insurance (Part B) The monthly Medicare insurance premium is paid by the Agency directly to the Depart- ment of Health and Human Services for the Medicare and Medicaid eligible recipient. The deductible and co-insurance under Part B, Medicare, are paid for the Medicare and Medicaid eligible recipient by the Medi- caid fiscal agent. For physician services, Medicaid will cover the deductible and co- insurance only to the extent that the total payment received by the physician will not exceed the recognized Medicaid payment or, if there is no comparable Medicaid payment, 100 percent of the deductible and 75 percent of the co-insurance. In these situations, whether the physician did nor did not receive a payment from Medicaid, by billing Medicaid he is bound to the Medicaid payment schedule as payment in full. F.A.C. Rule 59G-3.230(6)(e) provides: Payment Methodology for Covered Services. * * * (e) Services provided to individuals who are covered by both Medicare and Medicaid must be billed to Medicare first. Medicaid will consider payment of the deductible and coinsurance, but in no case shall the combined Medicare and Medicaid payments exceed the maximum allowable Medicaid amount for the procedure. Pages 4-1, 4-2, 4-4, 4-5 and 4-6 and Appendix A-34-35 of The Florida Medicaid Provider Reimbursement Handbook, HCFA-1500, Nov. 1994, incorporated by reference in F.A.C. Rule 59G-3.230(8), contain language that essentially implements F.A.C. Rules 59G-3.010(4) and 59G-3.230(6)(e). When rules on this subject initially were adopted on January 1, 1977, they did not include the challenged provisions. The challenged provisions were added by amendment adopted January 6, 1978. The preamble to the adopting rule's description of the impact of the challenged rules states that the rule "could . . . decrease . . . the number of physicians [and] result in Medicaid eligible individuals paying their own deductible and co-insurance, . . . changing physicians, or maintaining the same physician with the physician accepting a loss in income." (Fla. Admin. Weekly, Vol. 4, No. 1, Jan. 6, 1978, at 224-25.) Some Florida physicians who accept other patients, including patients eligible for Medicare based on age but not eligible for Medicaid, do not accept "dual eligible" patients like the Petitioner (i.e., patients eligible for both Medicare and Medicaid) because the physician makes less money providing services for "dual eligible" patients under the terms of F.A.C. Rules 59G-3.010(4) and 59G-3.230(6)(e) and The Florida Medicaid Provider Reimbursement Handbook than the physician can make providing services for other patients, including patients eligible for Medicare based on age but not eligible for Medicaid. In 1995, the Petitioner's physician required her to pay him fees for service in addition to the reimbursement he received from the Respondent under the terms of F.A.C. Rules 59G-3.010(4) and 59G-3.230(6)(e) and The Florida Medicaid Provider Reimbursement Handbook although those provisions as well as his agreement with the Respondent prohibit him from doing so. The Intervenor asserts that other Florida physicians participating the Medicaid program, likewise in violation of F.A.C. Rules 59G-3.010(4) and 59G-3.230(6)(e) and The Florida Medicaid Provider Reimbursement Handbook as well as their agreements with the Respondent, also "attempt to collect Medicare coinsurance and deductibles from patients who are indigent."
The Issue The issue for determination in this case is whether certain provisions of the Florida Title XIX Long-Term Care Reimbursement Plan, as adopted in Rule 59G-6.010, Florida Administrative Code, which are relied upon by the AGENCY FOR HEALTH CARE ADMINISTRATION to apply a fair rental value system of property reimbursement to Petitioner are invalid under Section 120.56, Florida Statutes (1995). Petitioner also asserts a state and federal constitutional equal protection challenge to the existing rule provisions. (Petitioner’s constitutional issues are preserved, but are not determined in this proceeding.)
Findings Of Fact Petitioner, CONSULTING MANAGEMENT AND EDUCATION, INC., d/b/a GULF COAST NURSING AND REHABILITATION CENTER (CME), is the licensed operator of a 103-bed nursing home in Clearwater, Florida, which is presently known as GULF COAST NURSING AND REHABILITATION CENTER (GULF COAST). CME participates in the Florida Medicaid Program as an enrolled provider. Respondent, AGENCY FOR HEALTH CARE ADMINISTRATION (AHCA), is the agency of the State of Florida authorized to implement and administer the Florida Medicaid Program, and is the successor agency to the former Department of Health and Rehabilitative Services, pursuant to Chapter 93-129, Laws of Florida. Stipulated Facts Prior to 1993, the GULF COAST nursing home facility was known as COUNTRY PLACE OF CLEARWATER (COUNTRY PLACE), and was owned and operated by the Clearwater Limited Partnership, a limited partnership which is not related to CME. In 1993 CME agreed to purchase, and did in fact purchase, COUNTRY PLACE from the Clearwater Limited Partnership. Simultaneous with the purchase of COUNTRY PLACE, CME entered into a Sale/Leaseback Agreement with LTC Properties, Inc., a Maryland real estate investment trust which engages in the financing of nursing homes. The Purchase and Sale Agreement between Clearwater Limited Partnership and CME was contingent upon the Sale/Leaseback Agreement and the proposed Lease between CME and LTC Properties, Inc. On September 1, 1993, CME simultaneously as a part of the same transaction purchased COUNTRY PLACE, conveyed the facility to LTC Properties, Inc., and leased the facility back from LTC Properties, Inc. As required, CME had notified AHCA of the proposed transaction. AHCA determined that the transaction included a change of ownership and, by lease, a change of provider. CME complied with AHCA's requirements and became the licensed operator and Medicaid provider for COUNTRY PLACE. Thereafter, CME changed the name of the facility to GULF COAST. After CME acquired the facility and became the licensed operator and Medicaid provider, AHCA continued to reimburse CME the same per diem reimbursement which had been paid to the previous provider (plus certain inflation factors) until CME filed its initial cost report, as required for new rate setting. In the normal course of business, CME in 1995 filed its initial Medicaid cost report after an initial period of actual operation by CME. Upon review of the cost report, AHCA contended that the cost report was inaccurate and engaged in certain "cost settlement" adjustments. During this review, AHCA took the position that CME's property reimbursement should be based on FRVS methodologies rather than "cost" due to the lease. In November of 1995, CME received from AHCA various documents which recalculated all components of Petitioner's Medicaid reimbursement rates for all periods subsequent to CME's acquisition of the facility. In effect, AHCA placed CME on FRVS property reimbursement. The practical effect of AHCA's action was to reduce CME's property reimbursement both retroactively and prospectively. The retroactive application would result in a liability of CME to AHCA, due to a claimed overpayment by AHCA. The prospective application would (and has) resulted in a reduction of revenues. CME is substantially affected by AHCA's proposed action and by Sections I.B., III.G.2.d.(1), V.E.1.h., and V.E.4. of the Florida Medicaid Plan. Additional Findings of Fact The Florida Medicaid Plan establishes methodologies for reimbursement of a nursing home's operating costs and patient care costs, as well as property costs. The dispute in this matter relates only to reimbursement of property costs. CME as the operator of the GULF COAST nursing home facility is entitled to reimbursement of property costs in accordance with the Florida Medicaid Plan. CME as the operator of the GULF COAST facility entered into a Florida Medicaid Program Provider Agreement, agreeing to abide by the provisions of the Florida Medicaid Plan. The Sale/Leaseback Agreement entered into by CME and LTC Properties Inc. (LTC) specifically provides for a distinct sale of the nursing home facility to LTC. LTC holds record fee title to GULF COAST. LTC, a Maryland corporation, is not related to CME, a Colorado corporation. The Florida Medicaid Plan is intended to provide reimbursement for reasonable costs incurred by economically and efficiently operated facilities. The Florida Medicaid Plan pays a single per diem rate for all levels of nursing care. After a nursing home facility's first year of operation, a cost settling process is conducted with AHCA which results in a final cost report. The final cost report serves as a baseline for reimbursement over the following years. Subsequent to the first year of operation, a facility files its cost report annually. AHCA normally adjusts a facility's reimbursement rate twice a year based upon the factors provided for in the Florida Medicaid Plan. The rate-setting process takes a provider through Section II of the Plan relating to cost finding and audits resulting in cost adjustments. CME submitted the appropriate cost reports after its first year of operation of the GULF COAST facility. Section III of the Florida Medicaid Plan specifies the areas of allowable costs. Under the Allowable Costs Section III.G.2.d.(1) in the Florida Title XIX Plan, a facility with a lease executed on or after October 1, 1985, shall be reimbursed for lease costs and other property costs under the Fair Rental Value System (FRVS). AHCA has treated all leases the same under FRVS since that time. AHCA does not distinguish between types of leases under the FRVS method. The method for the FRVS calculation is provided in Section V.E.1.a-g of the Florida Medicaid Plan. A “hold harmless” exception to application of the FRVS method is provided for at Section V.E.1.h of the Florida Medicaid Plan, and Section V.E.4 of the Plan provides that new owners shall receive the prior owner’s cost-based method when the prior owner was not on FRVS under the hold harmless provision. As a lessee and not the holder of record fee title to the facility, neither of those provisions apply to CME. At the time CME acquired the facility, there was an indication that the Sale/Leaseback transaction with LTC was between related parties, so that until the 1995 cost settlement, CME was receiving the prior owner’s cost-based property method of reimbursement. When AHCA determined that the Sale/Leaseback transaction between CME and LTC was not between related parties, AHCA set CME’s property reimbursement component under FRVS as a lessee. Property reimbursement based on the FRVS methodology does not depend on actual period property costs. Under the FRVS methodology, all leases after October 1985 are treated the same. For purposes of reimbursement, AHCA does not recognize any distinction between various types of leases. For accounting reporting purposes, the Sale/Leaseback transaction between CME and LTD is treated as a capital lease, or “virtual purchase” of the facility. This accounting treatment, however, is limited to a reporting function, with the underlying theory being merely that of providing a financing mechanism. Record fee ownership remains with LTC. CME, as the lease holder, may not encumber title to the facility. The Florida Medicaid Plan does not distinguish between a sale/leaseback transaction and other types of lease arrangements. Sections IV.D., V.E.1.h., and V.E.4., the “hold harmless” and “change of ownership” provisions which allow a new owner to receive the prior owner’s method of reimbursement if FRVS would produce a loss for the new owner, are limited within the Plan’s organizational context, and within the context of the Plan, to owner/operators of facilities, and grandfathered lessee/operators. These provisions do not apply to leases executed after October 1, 1985. Capital leases are an accounting construct for reporting purposes, which is inapplicable when the Florida Medicaid Plan specifically addresses this issue. The Florida Medicaid Plan specifically addresses the treatment of leases entered into after October 1985 and provides that reimbursement will be made pursuant to the FRVS method. The Florida Medicaid Plan is the result of lengthy workshops and negotiations between the agency and the nursing home industry. The Florida Medicaid Plan complies with federal regulations.
The Issue The issue for determination is whether Petitioner was overpaid by the Medicaid program as indicated in Respondent's Final Agency Audit Report dated June 20, 2001.
Findings Of Fact Dr. Henson was an authorized Medicaid provider during the audit period of January 1, 1998 through September 30, 2000.1 During the audit period, Dr. Henson had been issued Medicaid provider number 0467243-00.2 No dispute exists that, during the audit period, Dr. Henson had a valid Medicaid Provider Agreement(s) with AHCA.3 During the audit period, Dr. Henson was employed by Latin Quarter Medical Center, located at 855 Southwest 8th Street, Miami, Florida, at which he treated Medicaid recipients. Dr. Henson had been a surgeon but had suffered a stroke in December 1997, which caused him to be incapable of continuing to practice as a surgeon. He agreed to become employed with Latin Quarter Medical Center to work at its new clinic and to receive compensation for his services every two weeks. Latin Quarter Medical Center's patients were suffering from AIDS. Dr. Henson agreed to several terms and conditions in executing a Medicaid Provider Agreement (Agreement) with AHCA. Those terms and conditions included the following: Quality of Service. The provider agrees to provide medically necessary services or goods . . . agrees that services and goods billed to the Medicaid program must be medically necessary . . . The services and goods must have been actually provided to eligible Medicaid recipients by the provider prior to submitting the claim. Compliance. The provider agrees to comply with all local, state and federal laws, rules, regulation, licensure laws, Medicaid bulletins, manuals, handbooks and Statements of Policy as they may be amended from time to time. Term and signatures This provider agreement . . . shall remain in effect until July 1, 1999, unless otherwise terminated. . . . Provider Responsibilities. The Medical provider shall: * * * (b) Keep and maintain . . . all medical and Medicaid related records as the Agency may require and as it determines necessary; make available for state and federal audits for five years, complete and accurate medical . . . records that fully justify and disclose the extent of the goods and services rendered and billings made under the Medicaid. . . . The Agreement was signed by Dr. Henson in 1996. In a Noninstitutional Professional and Technical Medicaid Provider Agreement, Dr. Henson agreed to terms and conditions including the following: The provider agrees to keep complete and accurate medical . . . records that fully justify and disclose the extent of the services rendered and billings made under the Medicaid program . . . . The provider agrees that services or goods billed to the Medicaid program must be medically necessary . . . and the services and goods must have been actually provided to eligible Medicaid recipients by the provider prior to submitting a claim. The provider agrees to submit Medicaid claims in accordance with program policies and that payment by the program for services rendered will be based on the payment methodology in the applicable Florida Administrative Rule. . . . * * * 8. The provider and the Department [Department of Health and Rehabilitative Services] agree to abide by the provisions of the Florida Administrative Code, Florida Statutes, policies, procedures, manuals of the Florida Medicaid Program and Federal laws and regulations. The Agreement was signed by Dr. Henson in 1988. AHCA audited certain of Dr. Henson's Medicaid claims pertaining to services rendered between January 1, 1998 and September 30, 2000. By Preliminary Agency Audit Report (PAAR) dated April 12, 2001, AHCA notified Dr. Henson that, after a physician consultant with a specialty in infectious disease reviewed the Medical claims and medical records provided by Dr. Henson, a preliminary determination was made that certain claims in the amount of $124,556.83 were not covered by Medicaid. After the issuance of the PAAR, no further documentation was submitted by Dr. Henson to AHCA. As a result, AHCA issued a FAAR dated June 20, 2001, upholding the overpayment of $124,556.83. The FAAR indicated, among other things, that the documentation provided by Dr. Henson supported a lower level of office visit than the one billed and for which payment was received and, therefore, the difference between the payment for the appropriate level of service and the amount actually paid was an overpayment; that some of Dr. Henson's medical records failed to contain documentation for services which were billed and for which payment was made and, therefore, the payments for the inappropriate documentation was an overpayment; that some of the services rendered were inappropriately coded and the difference between payment for the proper code and the inappropriate code was an overpayment; and that some of the services for which billing was made and payment received were not medically necessary and those services were disallowed and were, therefore, an overpayment. The FAAR further provided how the overpayment was calculated, indicating, among other things, that a sample of 30 recipients of the 2936 claims submitted by Dr. Henson were reviewed for the period from January 1, 1998 through September 30, 2000; that a statistical formula for cluster sampling, with the formula being presented, was used; that the statistical formula was generally accepted; and that the statistical formula showed an overpayment in the amount of $124,556.83, with a 95 percent probability of correctness. The majority of the overpayment was due to denied claims for intravenous infusions of multi-vitamins, epogen and nupogen to adult HIV/AIDS patients. AHCA's representative primarily responsible for handling the audit of Dr. Henson was Sharon Dewey, a registered nurse employed in the Medicaid Program Integrity (MPI) division of AHCA. Nurse Dewey conducted an audit of Medicaid payments only under Dr. Henson's Medicaid Provider number. An on-site visit of Dr. Henson's office was made by Nurse Dewey. During the on-site visit, she provided Dr. Henson with a questionnaire, which was completed by her and signed by Dr. Henson, and which indicated that Dr. Henson was the only Medicaid Provider at the office at which he was located, Latin Quarter Medical Center, 855 Southwest 8th Street, Miami, Florida. At the on-site visit, Dr. Henson provided all of the medical documentation and medical recipient records for the audit period involved. All the Medicaid claims for the medical recipients were paid Medicaid claims originating only from Dr. Henson's Medical Provider number. Dr. Henson made available and provided to AHCA or AHCA's representatives any and all required Medicaid-related records and information pertaining to the audit that he had in his possession.4 He never refused to allow access to the records or information. Having received the medical recipient records from Dr. Henson, Nurse Dewey organized the records by patient names and dates of service and provided them to Dr. Joseph W. Shands, Jr., along with a worksheet for the audited claims for each patient. Dr. Shands is an expert in infectious diseases and the treatment and management of AIDS and HIV. Dr. Shands retired in 2002, and his practice was basically the same as Dr. Henson. No objection was made at hearing that Dr. Shands met the statutory definition of "peer." § 409.9131(1)(c), Florida Statutes (1999).5 The undersigned finds Dr. Shands' testimony persuasive. Dr. Shands reviewed the medical documentation provided by Dr. Henson to AHCA. The medical documentation that he reviewed indicated that the patients were "all HIV AIDS patients." Dr. Shands reviewed the particular medications given the patients; reviewed the reasons why the medications were given; considered and made a determination as to whether a justification existed for the administration of the medication; and, based on his determination, either allowed or disallowed the claim. He made no determinations as to the actual dollar amount of services provided. After reviewing the medical records, Dr. Shands made notations on the worksheets, signed the worksheets, and returned the worksheets to Nurse Dewey. Specific instances of acute attention involved the administration of intravenous (IV) multi-vitamins, epogen, nupogen, and Intravenous Immunoglobulin (IVIG). As to the IV of multi-vitamins, Dr. Henson prescribed this administration for almost all of his patients. Dr. Shands found that the patients were coming into the facility two to three times a week for the treatment, but he found no documented medical information to justify the use of IV multi-vitamins and determined these services were not medically necessary. In Dr. Shands' opinion an oral multi-vitamin would have been more appropriate and achieved the same result. An oral multi-vitamin is not recommended, according to Dr. Shands, where the patient is unable to digest the oral multi-vitamin. Notably, for one patient a notation was made that the patient refused pills, but a further notation indicated that Dr. Henson had prescribed the same patient pill-based medications for treatment, which negated the basis for the intravenous use. Furthermore, IV administration to an HIV/AIDS patient places the patient at an unnecessary risk of infection, which is not present with oral multi-vitamins. Dr. Henson testified that he was continuing the treatment of another physician, but he failed to make an independent medical judgment based upon his own medical findings. Further, no justification was in the medical records for the former physician's administration of IV multi-vitamins. Additionally, IV multi-vitamins were more costly than oral administration. And, with patients returning to the facility two to three times a week, the cost increased even more. Regarding epogen, Dr. Shands opined that certain administration was not medically necessary for the HIV/AIDS' patients. As to nupogen, Dr. Shands opined that certain administration was not medically necessary for the HIV/AIDS' patients. Regarding the administration of IVIG, Dr. Shands opined that the administration was not medically necessary for the HIV/AIDS' patients. As to certain office visits for the administration of IV multi-vitamins, epogen, nupogen, and IVIG, Dr. Shands opined that the office visits were unnecessary. Using the worksheets, with Dr. Shands' notations on them, together with Dr. Shands denials or reductions, Nurse Dewey calculated the overpayment associated with each of Dr. Henson's patients. Subsequently, a statistical calculation was applied by AHCA to extend the audit sample's total overall payment to all of Dr. Henson's Medicaid claims during the audit period, which resulted in a determination of an overpayment in the amount of $124,556.83. Dr. Henson suggests that his signature may have been falsified or forged on the medical records and information that he submitted to AHCA for its audit. Prior to hearing, he had an opportunity to review the medical records and information but could not identify one instance that his signature was falsified or forged. Consequently, a finding of fact is made that Dr. Henson signed the medical records and documentation provided to AHCA by him for the audit. Dr. Henson presented no expert testimony or any testimony to support the medical necessity or cost-effectiveness of the procedures that he used. Further, Dr. Henson contends that Latin Quarter Medical Center, the facility that employed him, received the Medicaid payments, not he. However, as the Medicaid Provider, he was not relieved of his responsibility to make sure that the medical procedures were medically necessary and cost-effective.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order finding that Arthur Henson, D.O., received overpayments in the Medicaid program in the amount of $124,556.83, during the audit period January 1, 1998 through September 30, 2000, and requiring Arthur Henson, D.O., to repay the overpayment amount. DONE AND ENTERED this 29th day of June, 2006, in Tallahassee, Leon County, Florida. S ERROL H. POWELL 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 29th day of June, 2006.
The Issue The issue for determination in this case is whether Respondent’s application of a fair rental value system of property cost reimbursement to Petitioner under the Florida Title XIX Long-Term Care Medicaid Reimbursement Plan is appropriate.
Findings Of Fact Petitioner, CONSULTING MANAGEMENT AND EDUCATION, INC., d/b/a GULF COAST NURSING AND REHABILITATION CENTER (CME), is the licensed operator of a 103-bed nursing home in Clearwater, Florida, which is presently known as GULF COAST NURSING AND REHABILITATION CENTER (GULF COAST). CME participates in the Florida Medicaid Program as an enrolled provider. Respondent, AGENCY FOR HEALTH CARE ADMINISTRATION (AHCA), is the agency of the State of Florida authorized to implement and administer the Florida Medicaid Program, and is the successor agency to the former Department of Health and Rehabilitative Services, pursuant to Chapter 93-129, Laws of Florida. Stipulated Facts Prior to 1993, the GULF COAST nursing home facility was known as COUNTRY PLACE OF CLEARWATER (COUNTRY PLACE), and was owned and operated by the Clearwater Limited Partnership, a limited partnership which is not related to CME. In 1993 CME agreed to purchase, and did in fact purchase, COUNTRY PLACE from the Clearwater Limited Partnership. Simultaneous with the purchase of COUNTRY PLACE, CME entered into a Sale/Leaseback Agreement with LTC Properties, Inc., a Maryland real estate investment trust which engages in the financing of nursing homes. The Purchase and Sale Agreement between Clearwater Limited Partnership and CME was contingent upon the Sale/Leaseback Agreement and the proposed Lease between CME and LTC Properties, Inc. On September 1, 1993, CME simultaneously as a part of the same transaction purchased COUNTRY PLACE, conveyed the facility to LTC Properties, Inc., and leased the facility back from LTC Properties, Inc. As required, CME had notified AHCA of the proposed transaction. AHCA determined that the transaction included a change of ownership and, by lease, a change of provider. CME complied with AHCA's requirements and became the licensed operator and Medicaid provider for COUNTRY PLACE. Thereafter, CME changed the name of the facility to GULF COAST. After CME acquired the facility and became the licensed operator and Medicaid provider, AHCA continued to reimburse CME the same per diem reimbursement which had been paid to the previous provider (plus certain inflation factors) until CME filed its initial cost report, as required for new rate setting. In the normal course of business, CME in 1995 filed its initial Medicaid cost report after an initial period of actual operation by CME. Upon review of the cost report, AHCA contended that the cost report was inaccurate and engaged in certain "cost settlement" adjustments. During this review, AHCA took the position that CME's property reimbursement should be based on FRVS methodologies rather than "cost" due to the lease. In November of 1995, CME received from AHCA various documents which recalculated all components of Petitioner's Medicaid reimbursement rates for all periods subsequent to CME's acquisition of the facility. In effect, AHCA placed CME on FRVS property reimbursement. The practical effect of AHCA's action was to reduce CME's property reimbursement both retroactively and prospectively. The retroactive application would result in a liability of CME to AHCA, due to a claimed overpayment by AHCA. The prospective application would (and has) resulted in a reduction of revenues. CME is substantially affected by AHCA's proposed action and by Sections I.B., III.G.2.d.(1), V.E.1.h., and V.E.4. of the Florida Medicaid Plan. Additional Findings of Fact The Florida Medicaid Plan establishes methodologies for reimbursement of a nursing home's operating costs and patient care costs, as well as property costs. The dispute in this matter relates only to reimbursement of property costs. CME as the operator of the GULF COAST nursing home facility is entitled to reimbursement of property costs in accordance with the Florida Medicaid Plan. CME as the operator of the GULF COAST facility entered into a Florida Medicaid Program Provider Agreement, agreeing to abide by the provisions of the Florida Medicaid Plan. The Sale/Leaseback Agreement entered into by CME and LTC Properties Inc. (LTC) specifically provides for a distinct sale of the nursing home facility to LTC. LTC holds record fee title to GULF COAST. LTC, a Maryland corporation, is not related to CME, a Colorado corporation. The Florida Medicaid Plan is intended to provide reimbursement for reasonable costs incurred by economically and efficiently operated facilities. The Florida Medicaid Plan pays a single per diem rate for all levels of nursing care. After a nursing home facility's first year of operation, a cost settling process is conducted with AHCA which results in a final cost report. The final cost report serves as a baseline for reimbursement over the following years. Subsequent to the first year of operation, a facility files its cost report annually. AHCA normally adjusts a facility's reimbursement rate twice a year based upon the factors provided for in the Florida Medicaid Plan. The rate-setting process takes a provider through Section II of the Plan relating to cost finding and audits resulting in cost adjustments. CME submitted the appropriate cost reports after its first year of operation of the GULF COAST facility. Section III of the Florida Medicaid Plan specifies the areas of allowable costs. Under the Allowable Costs Section III.G.2.d.(1) in the Florida Title XIX Plan, a facility with a lease executed on or after October 1, 1985, shall be reimbursed for lease costs and other property costs under the Fair Rental Value System (FRVS). AHCA has treated all leases the same under FRVS since that time. AHCA does not distinguish between types of leases under the FRVS method. The method for the FRVS calculation is provided in Section V.E.1.a-g of the Florida Medicaid Plan. A “hold harmless” exception to application of the FRVS method is provided for at Section V.E.1.h of the Florida Medicaid Plan, and Section V.E.4 of the Plan provides that new owners shall receive the prior owner’s cost-based method when the prior owner was not on FRVS under the hold harmless provision. As a lessee and not the holder of record fee title to the facility, neither of those provisions apply to CME. At the time CME acquired the facility, there was an indication that the Sale/Leaseback transaction with LTC was between related parties, so that until the 1995 cost settlement, CME was receiving the prior owner’s cost-based property method of reimbursement. When AHCA determined that the Sale/Leaseback transaction between CME and LTC was not between related parties, AHCA set CME’s property reimbursement component under FRVS as a lessee. Property reimbursement based on the FRVS methodology does not depend on actual period property costs. Under the FRVS methodology, all leases after October 1985 are treated the same. For purposes of reimbursement, AHCA does not recognize any distinction between various types of leases. For accounting reporting purposes, the Sale/Leaseback transaction between CME and LTD is treated as a capital lease, or “virtual purchase” of the facility. This accounting treatment, however, is limited to a reporting function, with the underlying theory being merely that of providing a financing mechanism. Record fee ownership remains with LTC. CME, as the lease holder, may not encumber title. The Florida Medicaid Plan does not distinguish between a sale/leaseback transaction and other types of lease arrangements. Sections IV.D., V.E.1.h., and V.E.4., the “hold harmless” and “change of ownership” provisions which allow a new owner to receive the prior owner’s method of reimbursement if FRVS would produce a loss for the new owner, are limited within the Plan’s organizational context, and within the context of the Plan, to owner/operators of facilities, and grandfathered lessee/operators. These provisions do not apply to leases executed after October 1, 1985. Capital leases are an accounting construct for reporting purposes, which is inapplicable when the Florida Medicaid Plan specifically addresses this issue. The Florida Medicaid Plan specifically addresses the treatment of leases entered into after October 1985 and provides that reimbursement will be made pursuant to the FRVS method.
The Issue Whether the Department of Management Services ("DMS") or the ("Department") has an unpromulgated rule which states, in effect, that the Department will select the solicitation procurement method known as an Invitation to Negotiate when it is in the Department's best interests to do so even if rule requirements for the selection have not been met? Whether the statement contained in the Invitation to Negotiate (ITN Number-DSGI 00-001) issued in April 2000 by the Division of State Group Insurance ("DSGI") for the purchase of pharmacy benefits management services to the effect that "a late-submitted offer to negotiate will be returned unopened" is an unpromulgated rule? Whether, although not pled, the Petitioner proved at final hearing the existence of other unpromulgated rules?
Findings Of Fact The findings of fact in the Recommended Order in Case No. 00-3900BID are hereby incorporated into this Final Order. In the ITN there is the statement that "PROPOSALS RECEIVED AFTER THE SPECIFIED TIME AND DATE WILL BE RETURNED UNOPENED." It was not proven that Dr. Phillips on behalf of DSGI made the statement to the effect that "DMS will use the Invitation to Negotiate whenever it is in the agency's best interest to do so." Other statements made by DSGI in the context of selection of the ITN as the solicitation method in this case were statements that demonstrated DSGI was not in compliance with an existing DMS Rule, Rule 60A-1.001(2), Florida Administrative Code.
The Issue The issue for determination is whether Petitioner received Medicaid overpayments and, if so, the total amount of the overpayments. Petitioner agreed at the onset of the hearing not to contest the findings of the Agency that Petitioner received Medicaid monies to which he was not entitled. Therefore, the issue remaining for determination is: Whether Respondent calculated the overpayment amount of $52,850.82 using a valid statistical formula and a valid sample of recipients and claims during the audit period of March 1, 2000, through March 1, 2002.
Findings Of Fact Based upon observation of the witnesses while testifying, the documentary materials received in evidence, official recognition granted, evidentiary rulings made, and the entire record compiled herein, the following relevant and material facts are established. The Agency is charged with administration of the Medicaid program in Florida pursuant to Sections 409.907 and 409.913, Florida Statutes (2003). Among its administrative duties, the Agency operates a program to oversee the activities of Florida Medicaid providers to ensure that fraudulent and abusive behavior and neglect occur to the minimum extent possible and to recover overpayments and impose sanctions as appropriate. "Overpayment" is statutorily defined to mean "any amount that is not authorized to be paid by the Medicaid Program, whether paid as a result of inaccurate or improper cost reporting, improper claiming, unacceptable practices, fraud, abuse or mistake." § 409.913(1)(d), Fla. Stat. (2000). The FAAR, covering the audit period of March 1, 2000, through March 1, 2002, together with the Agency's work papers, set out a Medicaid overpayment amount of $52,850.82 that the Agency seeks to recoup from Petitioner. Petitioner is a physician enrolled in the Medicaid program under provider number 0580091-00, who operated under his provider number during the audit period of March 1, 2000, through March 1, 2002, under the auspices of a standard Medicaid provider agreement. As a part of the Medicaid provider agreement, the provider agrees to comply with all local, state and federal laws, rules, regulations, licensure laws, Medicaid bulletins, and statements of policy. Petitioner participated in the Medicaid program during the FAAR period of March 1, 2000, through March 1, 2002, and received payment for the services that the Agency now questions and are the subject of the audit. During the above audit period, the applicable statutes, rules, and Medicaid handbooks required Petitioner to retain all medical, fiscal, professional, and business records on all services provided to a Medicaid recipient. Petitioner had to retain these records for at least five years from the date of services. The Florida Medicaid program prepares and furnishes handbooks to all enrolled Medicaid providers, including Petitioner. These handbooks set forth the Medicaid policies with regard to services rendered and billed by providers. Petitioner had a duty to make sure that each claim submitted was true and accurate and was for goods and services that were provided, by an enrolled Medicaid provider, in accordance with the requirements of Medicaid rules, handbooks, and policies, and in accordance with federal and state law. Medicaid providers who do not comply with the Medicaid documentation and record retention policies hereinabove may be subject to administrative sanctions and/or recoupment of Medicaid payments. Medicaid payments for services that lack required documentation and/or appropriate signatures will be recouped. Mr. Hector Tapining (Mr. Tapining) and Phyllis Stiver (Nurse Stiver), registered nurse consultant for Medicaid Program Integrity, conducted an on-site visit to Petitioner's office and requested records. From the files of Petitioner, Mr. Tapining generated a random list of 30 Medicaid recipients (the cluster sample) who had received services by Petitioner during the two- year audit period of March 1, 2000, through March 1, 2002. The Agency thereafter generated worksheets reflecting: (1) the total number of Medicaid recipients during the audit period; (2) total number of claims made by Petitioner, with dates of medical services provided; (3) the total amount of money paid Petitioner during the audit period; and (4) the analyst's worksheets representing his review of each recipient's claim(s) for the audit period. Additional Agency-generated worksheets reflected: (1) the total number of Medicaid recipients during the audit period; (2) the total number of claims of Petitioner, with dates of service; (3) the total amount of money paid to Petitioner during the audit period; and (4) the analyst's worksheets representing his review of each recipient's claim(s) for the audit period. Mr. Tapining provided the worksheets to Nurse Stiver for her review of compliance with Medicaid enrollment and documentation. Mr. Tapining provided the worksheets to E. Rawson Griffin, III, M.D. (Dr. Griffin), the medical records consultant, for his review and evaluation of appropriate billing codes. The formula used by the Agency is a valid statistical formula, the random sample used by the Agency was statistically significant, the cluster sample was random, and the algebraic formula and the statistical formula used by the Agency are valid formulas. Dr. Griffin, after review of 30 patient records, concluded that Petitioner engaged in a general pattern of over coding at the highest level of code (99205) for services rendered that appeared to be rather straight-forward and simple for the medical services rendered at the time of each visit. Over coding is the term employed when supporting documentation for medical billing does not support the billing code chosen and assigned by the provider. In his review, Dr. Griffin saw no middle codes (99213s and/or 99214s) billed by Petitioner. Dr. Griffin opined that it was extraordinary that Petitioner would see and service 30 patients on their first visits, who at that time presented a complaint necessitating a medical necessity level code 99205, the highest level of Medicaid service. Continuing, Dr. Griffin explained that over coding is entering in the patient's billing statement a code higher than the patient's medical complaint and the Patient's recorded medical necessity warranted for the visit or visits (1st, 2nd, 3rd, etc.) on the date those services were provided by Petitioner. In Dr. Griffin's opinion, Medicaid billing codes are to be determined by consideration of the following medical factors: (1) the patient's particular medical complaint and the degree of complexity of that complaint at the time of the initial visit, (2) the type of and the complexity of medical examinations and the tests necessarily required to be administered based upon the type and complexity of the initial complaint, and (3) the resulting interpretations of the tests and the examinations administered for treatment of the complaint. It is only after completion of the above analysis and documentation in the patient's medical records, would a code 22915 billing be appropriate. Dr. Griffin's analysis of the cluster sample of 30 Medicaid records of patients serviced by Petitioner resulted in his down coding Petitioner’s billing as shown below.2 I.D. Number Service Date Code Billed Adjustment B.K. 1 03-29-2000 215 (5) 214 B.K. 1 07-19-2000 214 213 1 08-17-2000 214 213 1 12-11-2000 215 214 1 02-22-2001 215 214 1 05-23-2001 214 213 1 06-24-2001 214 212 J.A.C. 4 No date 215 214 J.R. 5 10-02-2000 215 213 B.F. 6 07-25-2000 215 213 F.H. 8 04-10-2000 215 213 F.H. 8 05-04-2000 214 213 (2 visits) D.C. 9 01-23-2000 215 213 T.M. 10 06-07-2000 215 213 T.M. 10 06-28-2000 214 213 D.W. 13 01-12-2000 215 213 P.L. 14 01-10-2000 214 213 I.H. 15 12-18-2000 215 213 M.V. 17 04-10-2000 215 213 R.R. 21 04-17-2001 214 213 S.K. 25 11-20-2000 212 211 A.H. 26 12-19-2000 215 212 T.P. 27 02-20-2000 215 213 M.R. 28 11-14-2002 215 214 E.C. 29 04-28-2000 214 213 E.C. 07-03-2000 214 213 12-28-2000 214 212 01-02-2000 214 212 01-23-2000 214 212 02-06-2000 214 212 04-03-2000 214 212 (6 visits) R.S. 30 04-16-2001 215 213 Nurse Stiver reviewed the cluster sample of 30 Medicaid records of patients serviced by Petitioner for compliance with Medicaid policy(s) to ensure that services billed are the services for which Medicaid pays and are services that meet all aspects of the Medicaid policy(s) as specified in the Medicaid Handbook. Medicaid policy, regarding provider enrollment, requires (all) providers who services Medicaid patients to be (individually) enrolled in the Medicaid program as providers before providing service and billing Medicaid for those services. The Agency verifies the education, credentials, and criminal background of each enrollee to ensure the safety of Medicaid recipients. The individual provider enrollment is required as a condition precedent for providers to bill Medicaid for services and to be paid by Medicaid for those services. The enrollment requirement includes PAs and ARNPs. Nurse Stiver's review of Petitioner's documents sought to ascertain whether each provider who actually rendered services had executed a voluntary enrollment contract agreement between the Agency and that provider. In these contract agreements, the provider agrees to comply with all laws and rules pertaining to the Medicaid program when furnishing a service or goods to a Medicaid recipient, and the Agency agrees to pay a sum, determined by a fee schedule, payment methodology, or other manner, for the service or goods provided to the Medicaid recipient. The Medicaid Handbook requires separate and/or individual enrollment of each and every entity that provides Medicaid service(s) to Medicaid recipients. The mandatory enrollment includes a provider(s) who makes written entries on and/or signs Medicaid documents. Should the medical service provider and the provider documenting the Medicaid recipient's medical files and the provider billing Medicaid for services rendered be different providers, each provider must be individually enrolled in the Medicaid program. Within a chain of provider entities, the failure of one provider entity to be enrolled entitles the Agency to full recoupment of all Medicaid payments made to the enrolled Provider. Nurse Stiver applied the above analysis to the cluster sample of 30 Medicaid recipients' records recovered from Petitioner's files and to the Agency's worksheets. Nurse Stiver's review and her investigation revealed specific instances in which the paid billing claims evidenced that Petitioner's non-enrolled PAs and/or Petitioner's non-enrolled ARNP either provided the medical services or documented the medical services provided to the Medicaid recipients as shown below: Patient Service Date(s) Services and/or documentation 1. B.K. Serviced 9 times Signature-not enrolled 2. E.J. 08-14-01 Records written and signed by PA not enrolled and (not countersigned by Petitioner) 3. E.T. Serviced 4 times Services provided not entitled to Medicaid payment (unauthorized) J.A. (stipulation) Stipulation3 B.F. 11 visits-serviced Provider not enrolled M.R. 7 visits-serviced Provider not enrolled F.H. 11 visits-serviced Provider not enrolled through 12. Stipulations 13. D.W. 2 visits-serviced Provider not enrolled 14. through 17. Stipulations 18. L.A. 5 visits-serviced Provider not enrolled 19. and 20. Stipulations 21. R.R. 3 visits-serviced Provider not enrolled 22. and 23. Stipulations 24. L.S. 1 visit-serviced Provider not enrolled 25. S.K. 3 visits-serviced Provider not enrolled 26. through 28. Stipulations 29. E.C. 12 visits-serviced Provider not enrolled 30. Stipulation After the review and examination of the claims submitted within the cluster sample, Nurse Stiver concluded the above services billed to the Agency were not performed by Petitioner. She opined that either or both of Petitioner's employees, Justo Lugo and Phillip Nguyen (PAs) and/or Andrea McDonald (ARNP) provided or assisted in providing services. As non-enrolled providers in the Medicaid program, the PAs and the ARNP’s participation in providing services to Medicaid recipients and/or participation in assisting Petitioner in providing medical services and/or participation in Petitioner's billing Medicaid for medical services to Medicaid recipients violated Medicaid policy. Respondent established that the Medicaid program payments for services provided by an individual not enrolled as a provider in the Medicaid program are overpayments of which the Agency is entitled to full recoupment. After the reviews and the analysis by Nurse Stiver and Dr. Griffin, using the Agency's formula for calculating the extrapolated overpayments, the Agency determined overpayment in the amount of $64,453.74 to have occurred. Based upon these findings, the Agency issued a Preliminary Agency Audit Report (PAAR) letter setting out the overpayment amount of $64,453.74 and inviting Petitioner to submit additional documentation. Petitioner's additional documentation submittals were reviewed by the Agency. The post-PAAR review resulted in a reduction of overpayment to $52,850.82 as the total overpayment for all claims considered, and sought to be recovered from Petitioner by the Agency. The Agency's worksheets resulting in the $52,850.82 overpayment included: (1) the medical record review summary; (2) a spreadsheet setting out the names of the recipients, the dates of service, the procedure billed, the amount paid by the Agency, the amount allowed by the Agency, and the resulting overpayment; (3) the overpayment calculation using cluster sampling; (4) the patient worksheets, or claims; and (5) the procedure code summary of the claims in the universe, as defined in Section 409.913, Florida Statutes (2000). The formula used by the Agency is a valid statistical formula, the random sample used by the Agency was statistically significant, the cluster sample was random, and the algebraic formula and the statistical formula used by the Agency are valid formulas. The Agency's data and calculations were reviewed by Ian McKeague, Ph.D. (Dr. McKeague). He reproduced the calculations and concluded that $52,850.82 is the correct overpayment amount made by Medicaid to Petitioner. Petitioner produced neither written authority nor expert testimony contesting the validity of the statistical formula and Dr. McKeague's resulting calculation of overpayment. Nurse Stiver, with over 14 years employment with the Agency, worked with the Medicaid policies and handbooks. She worked with Mr. Tapining on the audit of Petitioner documents. Specifically, she reviewed Petitioner's records for compliance with Medicaid policy, to ensure that the services billed are the services Medicaid paid for and that those services met all aspects of Medicaid policy. Nurse Stiver's investigation and review revealed specific instances in which the paid claims show that the PAs and/or the ARNP, not Petitioner himself, provided the services to Medicaid patients. In each case where the Agency determined Petitioner was not entitled to payment, Nurse Stiver reviewed the medical records and determined that the ARNP or one of the PAs, who were not enrolled in the Medicaid program, actually rendered services to Medicaid recipients. Her determination was based upon her many years of nursing experience that the person rendering the services is the person who documents the services rendered. From her review, it appeared that the ARNP or a PA (not enrolled), not Petitioner, documented the service billed to and paid by Medicaid. Services rendered by an ARNP or a PA who is not enrolled as a provider in the Medicaid program cannot be compensated by the Medicaid program. Petitioner argued that he provided all Medicaid services billed to Medicaid and, on those rare occasions reviewed by Nurse Stiver, his employees (either the ARNP or the PAs), who by happenstance would be present in the treatment room, aided him by merely documenting services he himself rendered to the Medicaid patients. Petitioner presented an alternative argument that on other of those rare occasions reviewed by Nurse Stiver, his employees would be in the room when Petitioner actually provided services to Medicaid patients, and, while he was providing those services, he would simultaneously dictate to his employee who would transcribe his dictations on the Medicaid forms. Petitioner elected not to compel attendance by subpoena of his employees, even though the final hearing was continued to provide Petitioner an opportunity to do so. Petitioner's argument, that the proposed testimony by his employees would have been sufficient to challenge the Agency determination that Petitioner's billing was for services performed by a provider who was not enrolled in the Medicaid program, is without a foundation in fact and rejected. The Medicaid Provider Reimbursement Handbook provides, in part, that "Records must be retained for a period of at least five years from the date of service." The handbook goes on to provide in pertinent part: PAs must meet the general Medicaid provider enrollment that are contained in Chapter 2 of the Medicaid Provider Reimbursement Handbook, HFCA-1500 and Child Health Check- Up 221. In addition, PAs must follow the specific enrollment requirements that are listed in this section. * * * PAs must meet the provider requirements and qualification and their practice must be fully operational before they can be enrolled as Medicaid providers. * * * If a PA is employed by or contracts with a physician who can enroll as a Medicaid provider, the physician must enroll as a group provider and the PA must enroll as a treating provider within the group. * * * Services provided by a PA under the direct supervision of a physician may be billed using the physician's provider number instead of the PA's provider number. Direct physician supervision means the physician: (*) Is on the premises when the services are rendered, and (**) reviews, signs, and dates the medical record. * * * Medical records must state the necessity for and the extent of services provided. The following minimum requirements may vary according to the services rendered: * * * Note: See the service-specific Coverage and Limitations Handbook for record keeping requirements that are specific to a particular service. Providers who are not in compliance with the Medicaid documentation and record retention policies described in this chapter may be subject to administrative sanctions and recoupment of Medicaid Payments. Medicaid payments for services that lack required documentation or appropriate signatures will be recouped. Note: See Chapter 5 in this handbook for information on administrative sanctions and Medicaid payment recoupment. Petitioner, by signing a Medicaid provider agreement, agreed that all submissions for payment of claims for services will constitute a certification that the services were provided in accordance with local, state, and federal laws, as well as rules and regulations applicable to the Medicaid program, including the Medical Provider Handbooks issued by the Agency.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent, Agency for Health Care Administration, enter a final order requiring Petitioner, Mazhar G. Nawaz, M.D., to repay Respondent the principal amount of $52,850.82 plus interest as provided in Section 409.913, Florida Statutes (2002). DONE AND ENTERED this 19th day of February, 2004, in Tallahassee, Leon County, Florida. S FRED L. BUCKINE 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 19th day of February, 2004.
The Issue Whether Medicaid overpayments were made to Respondent and, if so, what is the total amount of those overpayments. Whether, as a "sanction," Respondent should be directed to submit to a "comprehensive follow-up review in six months."
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following findings s of fact are made to supplement and clarify the factual stipulations set forth in the parties' Joint Prehearing Stipulation and their January 26, 2007, pleading:4 Respondent and his Practice Respondent is a pediatric physician whose office is located in a poor neighborhood in Hialeah, Florida. He has a very busy practice, seeing approximately 50 to 60 patients each day the office is open. Respondent documents patient visits by making handwritten notations on printed "progress note" forms. Because of the fast-paced nature of his practice, he does not always "have time to write everything as [he] would like, because [there] is too much" for him to do. Respondent's Participation in the Medicaid Program During the Audit Period, Respondent was authorized to provide physician services to eligible Medicaid patients. Respondent provided such services pursuant to a valid Provider Agreement (Provider Agreement) with AHCA, which contained the following provisions, among others: The Provider agrees to participate in the Florida Medicaid program under the following terms and conditions: * * * Quality of Services. The provider agrees to provide medically necessary services or goods of not less than the scope and quality it provides to the general public. The provider agrees that services or goods billed to the Medicaid program must be medically necessary, of a quality comparable to those furnished by the provider's peers, and within the parameters permitted by the provider's license or certification. The provider further agrees to bill only for the services performed within the specialty or specialties designated in the provider application on file with the Agency. The services or goods must have been actually provided to eligible Medicaid recipients by the provider prior to submitting the claim. Compliance. The provider agrees to comply with all local, state and federal laws, rules, regulations, licensure laws, Medicaid bulletins, manuals, handbooks and Statements of Policy as they may be amended from time to time. Term and signatures. The parties agree that this is a voluntary agreement between the Agency and the provider, in which the provider agrees to furnish services or goods to Medicaid recipients. . . . Provider Responsibilities. The Medicaid provider shall: * * * (b) Keep and maintain in a systematic and orderly manner all medical and Medicaid related records as the Agency may require and as it determines necessary; make available for state and federal audits for five years, complete and accurate medical, business, and fiscal records that fully justify and disclose the extent of the goods and services rendered and billings made under the Medicaid. The provider agrees that only records made at the time the goods and services were provided will be admissible in evidence in any proceeding relating to the Medicaid program. * * * (d) Except as otherwise provided by law, the provider agrees to provide immediate access to authorized persons (including but not limited to state and federal employees, auditors and investigators) to all Medicaid- related information, which may be in the form of records, logs, documents, or computer files, and all other information pertaining to services or goods billed to the Medicaid program. This shall include access to all patient records and other provider information if the provider cannot easily separate records for Medicaid patients from other records. * * * (f) Within 90 days of receipt, refund any moneys received in error or in excess of the amount to which the provider is entitled from the Medicaid program. * * * (i) . . . . The provider shall be liable for all overpayments for any reason and pay to the Agency any fine or overpayment imposed by the Agency or a court of competent jurisdiction. Provider agrees to pay interest at 12% per annum on any fine or repayment amount that remains unpaid 30 days from the date of any final order requiring payment to the Agency. * * * Respondent's Medicaid provider number (under which he billed the Medicaid program for providing these services) was (and remains) 370947700. Handbook Provisions The handbooks with which Petitioner was required to comply in order to receive Medicaid payment for services rendered during the Audit Period included the Medicaid Provider Reimbursement Handbook, HCFA-1500 (MPR Handbook); Physician Coverage and Limitations Handbook (PCL Handbook); the Early and Periodic Screening, Diagnosis and Treatment Coverage and Limitations Handbook (EPSDTCL Handbook); and the Child Health Check-up Coverage and Limitations Handbook (CHCUCL Handbook). Medical Necessity The PCL Handbook provided that the Medicaid program would reimburse physician providers for services "determined [to be] medically necessary" and not duplicative of another provider's service, and it went on to state as follows: In addition, the services must meet the following criteria: the services must be individualized, specific, consistent with symptoms or confirmed diagnosis of the illness or injury under treatment, and not in excess of the recipient's needs; the services cannot be experimental or investigational; the services must reflect the level of services that can be safely furnished and for which no equally effective and more conservative or less costly treatment is available statewide; and the services must be furnished in a manner not primarily intended for the convenience of the recipient, the recipient's caretaker, or the provider. The fact that a provider has prescribed, recommended, or approved medical or allied care, goods, or services does not, in itself, make such care, goods or services medically necessary or a covered services. Note See Appendix D, Glossary, in the Medicaid Provider Reimbursement Handbook, HCFA-1500 and EPSDT 224, for the definition of medically necessary.[5] The EPSDTCL and CHCUCL Handbooks had similar provisions. Documentation Requirements The MPR Handbook required the provider to keep "accessible, legible and comprehensible" medical records that "state[d] the necessity for and the extent of services" billed the Medicaid program and that were "signed and dated at the time of service." The handbook further required, among other things, that the provider retain such records for "at least five years from the date of service" and "send, at his or her expense, legible copies of all Medicaid-related information to the authorized state and federal agencies and their authorized representatives." The MPR Handbook warned that providers "not in compliance with the Medicaid documentation and record retention policies [described therein] may be subject to administrative sanctions and recoupment of Medicaid payments" and that "Medicaid payments for services that lack required documentation or appropriate signatures will be recouped." EPSDT Screening/Child Health Check-Up The EPSDTCL Handbook provided: To be reimbursed by Medicaid, the provider must address and document in the recipient's medical record all the required components of an EPSDT screening. The following required components are listed in the order that they appear on the optional EPSDT screening form: Health and developmental history Nutritional assessment Developmental assessment Physical examination Dental screening Vision screening Hearing screening Laboratory tests Immunization Health education Diagnosis and treatment The CHCUCL Handbook, which replaced the EPSDTCL Handbook in or around May 2000, similarly provided as follows: To be reimbursed by Medicaid, the provider must assess and document in the child's medical record all the required components of a Child Health Check-Up. The required components are as follows: Comprehensive Health and Developmental History, including assessment of past medical history, developmental history and behavioral health status; Nutritional assessment; Developmental assessment; Comprehensive Unclothed Physical Examination Dental screening including dental referral, where required; Vision screening including objective testing, where required; Hearing screening including objective testing, where required; Laboratory tests including blood lead testing, where required; Appropriate immunizations; Health education, anticipatory guidance; Diagnosis and treatment; and Referral and follow-up, as appropriate. Coding Chapter 3 of the PCL Handbook "describe[d] the procedure codes for the services reimbursable by Medicaid that [had to be] used by physicians providing services to eligible recipients." As explained on the first page of this chapter of the handbook: The procedure codes listed in this chapter [were] Health Care Financing Administration Common Procedure Coding System (HCPCS) Levels 1, 2 and 3. These [were] based on the Physician[]s['] Current Procedural Terminology (CPT) book. The Current Procedural Terminology (CPT) book referred to in Chapter 3 of the PCL Handbook was a publication of the American Medical Association. It contained a listing of procedures and services performed by physicians in different settings, each identified by a "procedure code" consisting of five digits or a letter followed by four digits. For instance, there were various "procedure codes" for office visits. These "procedure codes" included the following, among others: New Patient * * * 99204 Office or other outpatient visit for the evaluation and management of a new patient which requires these three key components: a comprehensive history; a comprehensive examination; and medical decision making of moderate complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of moderate to high severity. Physicians typically spend 45 minutes face-to-face with the patient and/or family. * * * Established Patient * * * 99213 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: an expanded problem focused history; an expanded problem focused examination; medical decision making of low complexity. Counseling and coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of low to moderate severity. Physicians typically spend 15 minutes face-to-face with the patient and/or family. 99214 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: a detailed history; a detailed examination; medical decision making of moderate complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of moderate to high severity. Physicians typically spend 25 minutes face-to-face with the patient and/or family. * * * Fee Schedules In Appendix J of the PCL Handbook, there was a "fee schedule," which established the amount physicians would be paid by the Medicaid program for each reimbursable procedure and service (identified by "procedure code"). For both "new patient" office visits (99201-99205 "procedure code" series) and "established patient" office visits (99211-99215 "procedure code" series), the higher numbered the "procedure code" in the series, the more a physician would be reimbursed under the "fee schedule." The Audit and Aftermath Commencing in or around August 2002, AHCA conducted an audit of Respondent's Medicaid claims for services rendered during the Audit Period (Audit Period Claims).6 Respondent had submitted 18,102 such Audit Period Claims, for which he had received payments totaling $596,623.15. These Audit Period Claims involved 1,372 different Medicaid patients. From this group, AHCA randomly selected a "cluster sample" of 40 patients. Of the 18,102 Audit Period Claims, 713 had been for services that, according to the claims, had been provided to the 40 patients in the "cluster sample" (Sample Claims). Respondent had received a total of $23,263.18 for these 713 Sample Claims. During an August 28, 2002, visit to Respondent's office, AHCA personnel "explain[ed] to [Respondent] what the audit was about [and] why [AHCA] was doing it" and requested Respondent to provide AHCA with copies of the medical records Respondent had on file for the 40 patients in the "cluster sample" documenting the services provided to them during the Audit Period. The originals of these records were not inspected by AHCA personnel or agents during, or any time after, this August 28, 2002, site visit. Sometime within approximately 30 to 45 days of the August 28, 2002, site visit, Respondent, through his office staff, made the requested copies (First Set of Copies) and provided them to AHCA. There is nothing on the face of these documents to suggest that they were not true, accurate, and complete copies of the originals in Respondent's possession, as they existed at the time of copying (Copied Originals). They do not appear, upon visual examination, to be the product of "bad photocopying." While the handwritten entries and writing are oftentimes difficult (at least for the undersigned) to decipher, this is because of the poor legibility of the handwriting, not because the copies are faint or otherwise of poor quality. Each of the Sample Claims was reviewed to determine whether it was supported by information contained in the First Set of Copies. An initial review was conducted by AHCA Program Analyst Theresa Mock and AHCA Registered Nurse Consultant Blanca Notman. AHCA then contracted with Larry Deeb, M.D., to conduct an independent "peer review" in accordance with the provisions of Section 409.9131, Florida Statutes. Since 1980, Dr. Deeb has been a Florida-licensed pediatric physician, certified by the American Board of Pediatrics, in active practice in Tallahassee. AHCA provided Dr. Deeb with the First Set of Copies, along with worksheets containing a "[l]isting of [a]ll claims in [the] sample" on which Ms. Notman had made handwritten notations indicating her preliminary determination as to each of the Sample Claims (Claims Worksheets). In conducting his "peer review," Dr. Deeb did not interview any of the 40 patients in the "cluster sample," nor did he take any other steps to supplement the information contained in the documents that he was provided. Dr. Deeb examined the First Set of Copies. He conveyed to AHCA his findings regarding the sufficiency of these documents to support the Sample Claims by making appropriate handwritten notations on the Claims Worksheets before returning them to AHCA. Based on Dr. Deeb's sufficiency findings, as well as Ms. Notman's "no documentation" determinations, AHCA "provisional[ly]" determined that Respondent had been overpaid a total $80,788.23 for the Audit Period Claims. By letter dated July 7, 2003 (Provisional Agency Audit Report), AHCA advised Petitioner of this "provisional" determination and invited Respondent to "submit further documentation in support of the claims identified as overpayment," adding that "[d]ocumentation that appear[ed] to be altered, or in any other way appear[ed] not to be authentic, [would] not serve to reduce the overpayment." Appended to the letter were "[t]he audit work papers [containing a] listing [of] the claims that [were] affected by this determination." In the Provisional Agency Audit Report, AHCA gave the following explanation as to how it arrived at its overpayment determination: REVIEW DETERMINATION(S) Medicaid policy defines the varying levels of care and expertise required for the evaluation and management procedure codes for office visits. The documentation you provided supports a lower level of office visit than the one for which you billed and received payment. The difference between the amount you were paid and the correct payment for the appropriate level of service is considered an overpayment. Medicaid policy specifies how medical records must be maintained. A review of your medical records revealed that some services for which you billed and received payment were not documented. Medicaid requires documentation of the services and considers payment made for services not appropriately documented an overpayment. Medicaid policy addresses specific billing requirements and procedures. You billed Medicaid for Child Health Check Up (CHCUP) services and office visits for the same child on the same day. Child Health Check- Up Providers may only bill for one visit, a Child Health Check-Up or a sick visit. The difference between the amount you were paid and the appropriate fee is considered an overpayment. The overpayment was calculated as follows: A random sample of 40 recipients respecting whom you submitted 713 claims was reviewed. For those claims in the sample which have dates of service from January 01, 2000 through December 31, 2001 an overpayment of $4,168.00 or $5.84667601 per claim was found, as indicated on the accompanying schedule. Since you were paid for a total (population) of 18,102 claims for that period, the point estimate of the total overpayment is 18,102 x $5.84667601= $105,836.33. There is a 50 percent probability that the overpayment to you is that amount or more. There was then an explanation of the "statistical formula for cluster sampling" that AHCA used and how it "calculated that the overpayment to [Respondent was] $80,788.23 with a ninety-five percent (95%) probability that it [was] that amount or more." After receiving the Provisional Agency Audit Report, Respondent requested to meet with Dr. Deeb to discuss Dr. Deeb's sufficiency findings. The meeting was held on September 25, 2003, approximately six months after Dr. Deeb had reviewed the First Set of Copies and a year after AHCA had received the First Set of Copies from Respondent. At the meeting, Respondent presented to Dr. Deeb what Respondent represented was a better set of copies of the Copied Originals than the First Set of Copies (on which Dr. Deeb had based the sufficiency findings AHCA relied on in making its "provisional" overpayment determination). According to Respondent, the First Set of Copies "had not been properly Xeroxed." He stated that his office staff "had not copied the back section of the documentation and that was one of the major factors in the documentation not supporting the [claimed] level of service." The copies that Respondent produced at this meeting (Second Set of Copies) had additional handwritten entries and writing (both on the backs and fronts of pages) not found in the First Set of Copies: the backs of "progress note" pages that were completely blank in the First Set of Copies contained handwritten narratives, and there were handwritten entries and writing in numerous places on the fronts of these pages where, on the fronts of the corresponding pages in the First Set of Copies, just blank, printed lines appeared (with no other discernible markings). The Second Set of Copies was not appreciably clearer than the First Set of Copies. In the two hours that he had set aside to meet with Respondent, Dr. Deeb only had time to conduct a "quick[]," partial review of the Second Set of Copies. Based on this review (which involved looking at documents concerning approximately half of the 40 patients in the "cluster sample"), Dr. Deeb preliminarily determined to "allow" many of the Sample Claims relating to these patients that he had previously determined (based on his review of the First Set of Copies) were not supported by sufficient documentation. Following this September 25, 2003, meeting, after comparing the Second Set of Copies with the First Set of Copies and noting the differences between the two, AHCA "made the decision that [it] would not accept the [S]econd [S]et [of Copies]" because these documents contained entries and writing that appeared to have been made, not contemporaneously with the provision of the goods or services they purported to document (as required), but rather after the post-Audit Period preparation of the First Set of Copies. Instead, AHCA, reasonably, based its finalized overpayment determination on the First Set of Copies. Thereafter, AHCA prepared and sent to Respondent a Final Agency Audit Report, which was in the form of a letter dated June 29, 2004, advising Respondent that AHCA had finalized the "provisional" determination announced in the Provisional Agency Audit that he had been overpaid $80,788.23 for the Audit Period Claims (a determination that the preponderance of the record evidence in this case establishes is a correct one).
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that AHCA enter a final order finding that Respondent received $80,788.23 in Medicaid overpayments for the Audit Period Claims, and requiring Respondent to repay this amount to AHCA. DONE AND ENTERED this 30th day of April, 2007, in Tallahassee, Leon County, Florida. S 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 30th day of April, 2007.
The Issue Is proposed rule 59G-3.010(4)(b)2.c. an invalid exercise of delegated legislative authority, for reasons described in the respective petitions that formed the basis of this dispute? See Section 120.56(2), Florida Statutes.
Findings Of Fact The party Florida Medical Association, Inc., a not for profit corporation is organized and maintained for the benefit of approximately 17,000 licensed physicians who are its members. It represents the common interests of those members. Some of its members provide services under the terms contemplated by proposed rule 59G-3.010(4)(b)2.c. Likewise, Robert Anthony Savona, D.O.; John F. Hull, D.O.; and Robert Kagan, M.D., as licensed physicians, provide services contemplated by a proposed rule 59G- 3.010(4)(b)2.c. Respondent is the agency responsible for administering the state Medicaid Program under Title XIX of the Social Security Act, 42 U.S.C. Section 1396 et seq. and Section 409.901, et seq. Florida Statutes. This responsibility includes reimbursement of Medicaid providers. Respondent offered the proposed rule for adoption. The services contemplated by proposed rule 59G- 3.010(4)(b)2.c., in which the rule describes a payment mechanism, are in association with patients who are Medicare and Medicaid eligible. The arrangement contemplated by the proposed rule is in relation to Medicaid reimbursable services which complement Medicare. Under the proposed rule, Medicare Supplemental Insurance (Part B) is paid for the deductible and coinsurance for the Medicare and Medicaid eligible recipients by the Medicaid fiscal agent, in accordance with a rate identified in the proposed rule. The recipients of the services from physicians under the proposed rule, eligible for both Medicare and Medicaid benefits, are also referred to as Qualified Medicare Beneficiaries (QMBs). QMBs are described as poor, elderly and disabled persons. In pertinent part the proposed rule states: 59G-3.010 Medicaid Services Complementing Medicare. * * * (4) Medicaid Reimbursable Services which Complement Medicare. * * * (b) Medicare Supplemental Insurance (Part B). * * * 2. The Medicare Part B deductible and coinsurance is paid for the Medicare and Medicaid eligible recipient by the Medicaid fiscal agent at the following rates: * * * c. Physician services, including doctors of medicine, doctors of osteopathy, and providers of chiropractic and podiatric services are reimbursed 100 percent of the deductible and 100 percent of the coinsurance only to the extent that the total payment received does not exceed the Medicaid fee for the service provided. If there is no comparable Medicaid fee for the service, the Medicaid fee is calculated to be 50 percent of the Medicare approved charge for the service provided. In these situations, whether the physician did or did not receive a payment from Medicaid, by billing Medicaid he is bound to the Medicaid payment schedule as payment in full. Other parts of proposed rule 59G-3.010(4)(b)2. at a., b., d., and e. address Medicare Part B deductibles and coinsurance for other providers as follows: Part B patient hospital services are reimbursed 100 percent of the deductible and coinsurance. Rural health centers, federally qualified health centers and county health departments are reimbursed their encounter rate minus the amount of Medicare's payment. * * * Pharmacy providers are reimbursed 100 percent of the deductible and 100 percent of the coinsurance only to the extent that the total payment does not exceed the Medicaid fee for the service provided. Other Part B suppliers are reimbursed 100 percent of the coinsurance and 100 percent of deductible. Under Medicare Part B, 80 percent of reasonable costs or charges for the delivery of health care to Medicare eligible patient is paid through the Medicare program as a premium. That program is administered by the federal government under Title XVIII of the Social Security Act, 42 U.S.C., Section 1395 et seq. That payment is a form of insurance. The remaining 20 percent is anticipated to be paid by the patient as copayments or coinsurance, in addition to an annual deductible. The proposed rule in relation to physician services addresses the manner in which some portion of the 20 percent is "crossed-over" to be paid for potential payment through the Medicaid program administered by Respondent using federal and state funding, pursuant to Title XIX of the Social Security Act, 42 U.S.C., Section 1396 et seq. and Section 409.901 et seq., Florida Statutes. Payment to the physicians for their services in relation to the deductible and coinsurance depends upon the application of the formula in the proposed rule. The formula contemplates reimbursement to the physicians at less than 100 percent of the deductible and 100 percent of the coinsurance because the Medicaid fee schedule is generally lower than the federal Medicare fee schedule for the same services. In fact, in most cases the physicians will receive no payment for the deductible or coinsurance above the 80 percent payment under the Medicare fee structure in relation to the basic Medicare premium. By comparison to other health care and service providers discussed in the proposed rule, some other individuals and entities are reimbursed at 100 percent of the deductible and coinsurance and others are not guaranteed reimbursement at 100 percent. The formulas for reimbursement for services provided under the proposed rule related to Medicare Part B deductible and coinsurance are influenced by the results of quarterly estimating conferences held between legislative and executive branch staff. Those estimators, within respective categories of services, examine the performance of the various categories of services concerning fiscal impact through a comparison of available revenues against expenditures. This assists in the preparation of future budgets upon the recommendation of the governor to be passed by the legislature. Respondent assists in preparation of budget requests, to include recommendation for policy changes related to the amount of expenditures for the various services performed for the benefit of Medicare and Medicaid eligible recipients, QMBs, who are entitled to the payment of their deductible and coinsurance under Medicare Part B. However, the impetus for the reimbursement formula for physician services described in the proposed rule has a more precise origin, for reasons now explained. A prior version of Rule 59G-3.010(4), Florida Administrative Code in effect on April 8, 1996, was challenged in an administrative proceeding before the Division of Administrative Hearings. That version limited the amount of reimbursement for physician services associated with Medicare Part B deductible and coinsurance in a different manner than the proposed rule. In the decision of Reynolds v. Agency for Health Care Administration, 18 F.A.L.R. 3474 (Fla. DOAH 1996) the rule was held invalid. Among the cases cited for this decision was Pennsylvania Medical Society v. Snider, 29 F.3d 886 (3d Cir. 1994) and Haynes Ambulance Service, Inc. v. State of Alabama, 36 F.3d 1974 (11th Cir. 1994). The federal court cases refer to the recipients of cost reimbursement for deductibles and coinsurance as QMBs. Essentially, they are the same persons who are described in the proposed rule as Medicare and Medicaid eligible. Although the rule had been declared invalid, Respondent continued to exercise the policy of denying payment of Medicare deductibles and coinsurance on physician crossover claims at 100 percent of the deductible and 100 percent of the coinsurance as contemplated by the federal court cases. Following Respondent's return to the policy of not paying the deductible and coinsurance at 100 percent for physician services, Petitioner's Savona, Hull, and Kagan brought a lawsuit in federal count to compel payment for physician services to QMBs at the Medicare rate. On March 3, 1997, the United States District Court for the Northern District of Florida granted a final injunction that required Respondents to pay the physician class in the lawsuit at the Medicare rate for services provided to QMBs. See Savona v. Cook, Case No. 4:96CV14-WS (N.D. Fla. 1997). After the decision in Savona, Respondent pursued a policy of paying the deductible and coinsurance at 100 percent of the Medicare rate. This policy lasted from March 3, 1997 until October 1, 1997. To facilitate the payment for physician services at 100 percent of the Medicare rate for the crossover claims related to the deductible and coinsurance, Respondent amended its state Medicaid plan, with the federal Health Care Financing Administration (HCFA). In addition, Respondent sought an appropriation through the legislature to fund the increase in copayments to assure that physician services were reimbursed at 100 percent of the Medicare rate for the deductible and coinsurance. This led to the passage of Chapter 97-152, Laws of Florida, Item 248, the 1997-98 General Appropriations Act, which set aside monies from the General Revenue Fund and from the Medical Care Trust Fund, totaling $87 million for Medicare Part B copayment for reimbursement of physician services for the dually eligible recipients. This refers to recipients eligible for services under Medicare and Medicaid. The 1997-98 fiscal year for that appropriation began July 1, 1997, and continues until June 30, 1998. The amount appropriated has proven more than adequate to meet the copayment for physician services at the 100 percent Medicare rate. Another document, prepared by persons unknown, was associated with the appropriations process for 1997-98. That document is referred to as Respondent's Ex No. 1 and is entitled 1997-98 General Appropriations and Summary Statement of Intent. It sets out the exact language in Chapter 97-152, Laws of Florida, Item 248, related to the $87 million for full Medicare Part B copayment for physician services. It also sets out a summary statement of intent that is not found within the General Appropriations Act. The language in that summary statement of intent is as follows: It is the intent of the Legislature that the funds in Specific Appropriation 248 which are provided to pay the full Medicare part B co- payment for physician services to clients who are dually eligible for Medicare and Medicaid, be expended only to the extent currently required by federal law. In the event that changes in federal law relating to reimbursement for these services occurs, the Agency for Health Care Administration shall directly submit to the federal Health Care Financing Administration any amendments to the state Medicaid Plan which are necessary to realize cost savings options permitted by and in compliance with federal law. As anticipated by the summary statement of intent, federal law relating to reimbursement for physician services did change in August of 1997 when Congress enacted the Congressional Balanced Budget Act of 1997, Section 4714. In pertinent part it stated: * * * (2) In carrying out paragraph (1), a State is not required to provide any payment for any expenses incurred relating to payment for deductibles, coinsurance or copayments for medicare cost-sharing to extent that payment under title XVIII for the service would exceed the payment amount that otherwise would be made under the State plan under this title for such service if provided to an eligible recipient other than a medicare beneficiary. That law became effective October 1, 1997. By its terms it created the option for states to reduce payments on crossover claims to the state Medicaid rate, although it did not mandate that outcome. The payment option created by the congressional enactment had application to all categories of providers. In view of the Congressional Balanced Budget Act of 1997, Respondent decided to change its payment policy to disallow payment for physician services at the 100 percent Medicare rate in all instances for physician services related to the deductible and coinsurance for dually eligible recipients. The effective date of the change in policy was October 1, 1997, coinciding with the effective date of the Congressional Budget Act. Respondent implemented its policy change without the benefit of rule adoption. The failure to implement the payment policy by rule adoption was challenged in the case of Savona v. Agency for Health Care Administration, DOAH Case No. 97-5909RU (Fla. DOAH 1998). On January 16, 1998, Respondent gave notice of rule development, to include the preliminary text of the rule. For this reason, the February 12, 1998, order entered in DOAH Case No. 97-5909RU denied the petition for determination of invalidity of the non-rule policy brought in accordance with Section 120.56(4), Florida Statutes. Consistent with its notice of rule development, Respondent published notice of proposed rulemaking pertaining to the rule under challenge here. That publication was made on February 13, 1998, through the Florida Administrative Weekly, Volume 24, No. 7. The specific authority for rule promulgation was Section 409.919, Florida Statutes, and the law to be implemented was Section 409.908, Florida Statutes. No mention was made of the summary statement of intent associated with the 1997-98 General Appropriations Act in Florida and the Congressional Balanced Budget Act of 1997. The testimony of Richard T. Lutz, Director of the Division of State Health Purchasing, Agency for Health Care Administration, at hearing established his reliance upon those latter two items as authority for promulgating the proposed rule in relation to the copayment for physician services under Medicare Part B, for the deductible and coinsurance. Mr. Lutz was principally responsible for the promulgation of the rule as policymaker for the Respondent. In addressing the difference in the reimbursement policies for physician services, contrasted with other services detailed in the proposed rule, Mr. Lutz indicated that changes in relation to reimbursement policies, other than for physicians, would be the product of an estimating conference showing the financial impact of the changes, followed by a budget item to effect the changes. In the absence of that impetus, Mr. Lutz described that he had been instructed that the methodologies that were in place for various services under Medicare Part B utilizing established methodologies for the reimbursement practices would remain in effect. Unlike the circumstances existing in the proposed rule, for classes of providers other than physicians, Mr. Lutz in behalf of Respondent took the initiative in dealing with reimbursement for physicians care under Medicare Part B when promulgating the proposed rule. He concluded that the terms of the federal court order in Savona were subject to the language in the summary statement of intent, and with the advent of the Congressional Balanced Budget Act of 1997 Respondent was at liberty to change its reimbursement scheme for physician services effective October 1, 1997. In making the policy choice to promulgate the proposed rule, Mr. Lutz recognized the option which Florida had to either limit copayments or continue copayments at the Medicare rate for physician services under Medicare Part B. In promulgating the proposed rule Mr. Lutz identified that the Agency did not consider language in Section 409.908(13), Florida Statutes. He did indicate in his testimony the belief that the preamble to Section 409.908, Florida Statutes, creates authority for promulgation of the proposed rule in its comment about the Respondent's ability to make payments in accordance with methodologies that are set forth in its rules, manuals, and handbooks, consistent with limitations placed in the General Appropriations Act and any statement of legislative intent. Mr. Lutz in promulgating the proposed rule recognized that the physician services under Medicare Part B copayment for deductible and coinsurance would eventuate in no payment beyond the 80 percent premium in many instances. Although Mr. Lutz expresses the opinion that the proposed rule for payment of physician services under Medicare Part B has retroactive application to October 1, 1997, he acknowledges that the language in the proposed rule makes no reference to its retroactivity to that date.
