The Issue Whether the Florida Department of Financial Services, Division of Workers’ Compensation (Respondent) should enter a final order dismissing the Petition for Resolution of Reimbursement (Petition for Resolution) filed by Martin Memorial Health Systems (Petitioner). If the Petition for Resolution should not be dismissed, whether Guarantee Insurance Company (the Carrier) improperly disallowed reimbursement owed to Petitioner for services Petitioner rendered to an injured employee/claimant and the amount thereof.
Findings Of Fact Paragraphs 1–38 of the Agreed Facts and Conclusions of Law set forth in the Joint Pre-Hearing Statement and Filing of Exhibits are hereby incorporated by reference. The Notice of Deficiency issued by Respondent should not have been issued because the Petition for Reimbursement was complete when filed. Respondent has no basis to dismiss the Petition for Reimbursement. Petitioner provided medical services to an employee that had workers' compensation insurance coverage from the Carrier. The usual and customary charges for the services at issue in this proceeding totaled $61,111.09. The Carrier paid Petitioner the sum of $9,135.52 based on the Carrier’s determination that the charges should be based on inpatient treatment on a per diem basis. The greater weight of the evidence establishes that the services to the injured employee should be billed under the category “outpatient surgery” pursuant to the pre-admission authorization provided to Petitioner. Respondent has duly adopted rules that govern billing limitations. The parties agree that outpatient surgery, such as the services at issue in this proceeding should be reimbursed at 60 percent of the usual and customary charges. Petitioner is entitled to reimbursement from the Carrier in the amount of $36,666.65, which is 60 percent of $61,111.09. The Carrier should be credited with having paid the sum of $9,135.52, so the additional amount of the reimbursement due to Petitioner from the Carrier is $27,531.13 ($36,666.65 less $9,135.52) plus any applicable interest.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Financial Services enter a final order ordering the Carrier to reimburse Petitioner, Martin Memorial Hospital, in the additional amount of $27,531.13 plus any applicable interest. DONE AND ENTERED this 20th day of May, 2010, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of May, 2010. COPIES FURNISHED: Karen Kennedy Martin Memorial Health Systems Post Office Box 9010 Stuart, Florida 34995 Mari H. McCully, Esquire Department of Financial Services Division of Workers` Compensation 200 East Gaines Street Tallahassee, Florida 32399-4229 Brian F. LaBovick, Esquire LaBovick & LaBovick, P.A. 5220 Hood Road, Second Floor Palm Beach Gardens, Florida 33418 Julie Jones, CP, FRP, Agency Clerk Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0390 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Benjamin Diamond, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
Findings Of Fact The petitioner participates in Florida's Medical Assistance Program (Medicaid) as a provider of skilled nursing home care and intermediate care facilities. The Petitioner had contracts with the Department to provide such services for Medicaid eligible persons during the years 1971 and 1972, including all times during the Petitioner's fiscal year which ended September 30, 1972. The contracts provided inter alia as follows: For each patient eligible for Medicaid, it is understood the payment agreed upon will include room, board, laundry and services as defined in the Division's [the Division of Health of the Department] information pamphlet regarding skilled nursing home care., Handling, administra tion and recording of drugs will be in accord with the requirements of the Division of Health [of the Department]. Each recipient will have a specified amount of personal income or an assistance grant to meet the cost of personal needs and clothing which will not be used to meet the cost of care. Skilled nursing care shall be based on medical orders, where required, standard nursing practices, and care which will assure the patient's privacy, independence, and mobility within their capabilities including the right to choose their own physician, pharmacy and/or other providers of medical care. The Petitioner agreed under the contracts to maintain adequate financial records, and to make them available to the Department upon request. For the fiscal year ending September 30, 1972, the Petitioner received $25,839.38 as a Medicaid reimbursement expense for certain drug and pharmaceutical items. During 1976 the Department performed an audit on the Petitioner's books, and based on the audit, is seeking to recover $24,196.00 of that amount. The Petitioner has actually recovered $7,660.66 of its drug expenses from sources other than Medicaid funds. The Petitioner has made some effort to recover the remaining $16,535.34 directly from patients or their relatives. While a precise audit has not been made to determine how much of that money was actually recovered, it appears from past experience, and from an examination of approximately fifteen percent of the total accounts that the Petitioner recovered ten percent of the funds, or $1,653.53. The remaining $14,881.81 was not recovered from any source other than Medicaid reimbursement funds. The Department sought to offer into evidence its rules Chapter 10C-9, Florida Administrative Code. These rules assertedly were in effect during the year in question. Nothing on the face of the rules reveals what their effective date might have been, and no other evidence was introduced to establish when these rules were in effect, or if they were in effect at the relevant time. It is apparent that the present rules of the Department set out at Chapter 10C-9, Florida Administrative Code were not in effect during the relevant fiscal year. The proffered rules have not been accepted as having been in effect during the relevant year.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED: That a final order be entered finding the Petitioner entitled to $14,881.81 of Medicaid reimbursement funds for expenses that it made for medically necessary drugs and pharmaceuticals for the fiscal year ending September 30, 1972. Since the Petitioner has received $24,196.00 in reimbursement funds, it should remit $9,314.19 to the Department in a mutually acceptable manner of payment. DONE and ORDERED this 30th day of October, 1979, in Tallahassee, Florida. G. STEVEN PFEIFFER Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: W. Kirk Brown, Esquire 313 Williams Street, Suite 10 Post Office Box 4075 Tallahassee, Florida 32303 Amelia M. Park, Esquire District VI Legal Counsel Department of Health and Rehabilitative Services 4000 West Buffalo Avenue Tampa, Florida 33614 Allan M. Dabrow, Esquire PECHNER, DORFMAN, WOLFE, ROUNICK & CABOT Suite 1300, 1845 Walnut St. Philadelphia, Pennsylvania 19103 APPENDIX
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (Respondent or AHCA), for medical expenses paid on behalf of Petitioner, Genesis Belinaso (Petitioner), from a medical malpractice settlement received by Petitioner from a third party.
Findings Of Fact Petitioner was born on August 29, 2011. At 11 months of age, Petitioner was diagnosed with Gaucher Disease, Type I. On September 21, 2012, when she was approximately 13 months of age, Petitioner was admitted to the hospital for the insertion of a central venous port (mediport) for treatment of her Gaucher Disease with Cerezyme infusions. The mediport insertion on the right side was unsuccessful, and it was inserted on the left side. Petitioner did not wake up from anesthesia and experienced seizure activity. Radiographic evaluation with CT and MRI of the brain revealed subarachnoid hemorrhage, cerebral edema, and herniation. Petitioner required an emergency craniotomy, duraplasty and partial right temporal lobectomy, with the operative note diagnosing a right internal carotid artery stroke and possible dissecting aneurysm of the internal carotid artery bifurcation. A post-operative CT revealed significant infarction of the right cerebral hemisphere. A subsequent intracranial hemorrhage resulted in recurrent/worsening of cerebral edema. Petitioner was transferred to Jackson Memorial Hospital where she underwent numerous neurological surgeries and procedures associated with catastrophic brain damage from the strokes suffered on September 21, 2012. As a result of the catastrophic brain damage, Petitioner suffers from left side hemiplegia and severe cognitive deficits. She is permanently disabled and unable to care for herself. She will need some form of care for the rest of her life. AHCA, through the Medicaid program, spent $301,085.18 on behalf of Petitioner, all of which represents expenditures paid for Petitioner’s past medical expenses. The $301,085.18 paid by Medicaid constituted Petitioner’s entire claim for past medical expenses. No portion of the $301,085.18 paid by AHCA through the Medicaid program on behalf of Petitioner represented expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. Petitioner’s parents and natural guardians, Cintia Aquino and Jonas Belinaso, brought a medical malpractice claim against Petitioner’s medical providers, including the physician and the hospital, to recover Petitioner’s damages, as well as their damages associated with their child’s injury. The physician responsible for the unsuccessful mediport insertion (“Settling Tortfeasor”), maintained only an insurance policy with a policy limit of $250,000.00. Petitioner’s medical malpractice claim against the Settling Tortfeasor was settled during the pre-suit period for the insurance policy limit of $250,000.00. The Release of All Claims with the Settling Tortfeasor (“Release”) stated, inter alia: Although it is acknowledged that this settlement does not fully compensate Genesis Belinaso and her parents for all of the damages that they have allegedly suffered, this settlement shall operate as a full and complete RELEASE as to RELEASEES without regard to this settlement only compensating Genesis Belinaso and her parents for a fraction of the total monetary value of their alleged damages. The parties agree that the alleged damages sustained by Genesis Belinaso and her parents, have a potential full value in excess of $25,000,000, of which $301,085.18 represents Genesis Belinaso’s claim for past medical expenses. Given the facts, circumstances, and nature of Genesis Belinaso’s injuries and this settlement, the parties have agreed to allocate $3,010.85 of this settlement to the claim for past medical expenses and allocate the remainder of the settlement towards the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the total monetary value of all of the damage claims sustained by Genesis Belinaso and her parents. Further, the parties acknowledge that Genesis Belinaso may need future medical care related to her injuries, and some portion of this settlement may represent compensation for future medical expenses Genesis Belinaso will incur in the future. However, the parties acknowledge that Genesis Belinaso, or others on her behalf, have not made payments in advance for Genesis Belinaso’s future medical care and Genesis Belinaso has not made a claim for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past for future medical care. Accordingly, no portion of this settlement represents reimbursement for future medical expenses. The Release did not further differentiate or allocate the $250,000.00 total recovery. Thus, this proceeding was brought by Petitioner pursuant to section 409.910(17)(b) to establish “that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses than the amount calculated by the agency pursuant to the formula set forth in paragraph [409.910](11)(f).” The acceptance of the Settling Tortfeasor’s policy limits was expressly conditioned on all claims against the hospital being preserved. Because Petitioner was a minor, Court approval of the settlement was required. Accordingly, on July 29, 2015, Circuit Court Judge Maria M. Korvick entered an Order Approving Settlement. There is no evidence that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement. There was no evidence of any manipulation or collusion by the parties to minimize the share of the settlement proceeds attributable to past medical expenses for Petitioner’s medical care. During the pendency of Petitioner’s medical malpractice claim, AHCA was notified of the claim. AHCA, through its collections contractor Xerox Recovery Services, asserted a Medicaid lien in the amount of $301,085.18 against any proceeds received from a third party as a result of Petitioner’s cause of action and settlement of that action. By letter of September 24, 2015, Petitioner’s medical malpractice attorney notified AHCA of the settlement and provided AHCA with a copy of the executed Release and itemization of Petitioner’s $85,095.49 in litigation costs. The letter explained that the damages suffered had a value in excess of $25,000,000, and that the $250,000.00 settlement represented only a one-percent recovery of Petitioner’s $301,085.18 claim for past medical expenses. The letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $301,085.18 Medicaid lien. AHCA responded to the September 24, 2015, letter on November 2, 2015. AHCA indicated that it had calculated the section 409.910(11)(f) formula amount owed from the $250,000.00 settlement and, under the formula, $74,735.15 was owed to AHCA in satisfaction of its Medicaid lien. AHCA requested a “check made payable to ‘Agency for Health Care Administration’ in the amount of $74,735.15.” AHCA correctly computed the lien amount pursuant to the statutory formula in section 409.910(11)(f). Deducting the 25 percent attorney’s fee of $62,500.00 from the $250,000.00 recovery left a sum of $187,500.00. AHCA then deducted $38,029.71 in approved taxable costs, which left a sum of $149,470.29, half of which is $74,735.15. That figure establishes the maximum amount that could be reimbursed from the third-party recovery in satisfaction of the Medicaid lien. Thus, application of the formula allows for sufficient funds from the settlement proceeds to satisfy the Medicaid lien amount of $74,735.15. AHCA has not filed an action to set aside, void, or otherwise dispute Petitioner’s settlement, nor has it commenced a civil action to enforce its rights under section 409.910. Petitioner deposited the section 409.910(11)(f) formula amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, pursuant to section 409.910(17). At the final hearing, Petitioner presented the expert testimony of Mr. Rossman. Mr. Rossman, who is board-certified in civil trial practice, demonstrated considerable experience handing personal injury and medical malpractice cases in the Miami area. Mr. Rossman testified that the standard of care in his field of practice requires a careful evaluation of a case from the time of intake through the trial. That evaluation, which includes an assessment of the value of the damages, includes a comparison of other jury verdicts in comparable cases as “the barometer of what is happening.” In assessing the value and worth of a case, it is common practice for counsel to retain a life care planner and an economist, and information provided by such persons is reasonably relied upon by persons in Mr. Rossman’s field of expertise. Mr. Rossman had extensive knowledge of the nature and extent of the injuries suffered by Petitioner, and was familiar with the information provided in Petitioner’s Habilitation Assessment and Present Value Analysis. Mr. Rossman testified that Petitioner’s total economic damages were $8,367,417.18, which included $301,085.18 in past medical expenses; $1,330,634.00 in lost earning capacity over Petitioner’s lifetime; and $6,735,698.00 for future life care needs. The future life care costs included those for future medical, surgical, diagnostic, and therapeutic needs, specialized equipment and supplies, attendant care, and related needs. The $6,735,698.00 amount estimated for future life care needs was the most conservative figure among the scenarios presented in the Present Value Analysis. Mr. Rossman also estimated the non-economic damages associated with Petitioner’s claim to be in the range of $12 million for Petitioner, and $3 million each for Petitioner’s parents, for a total of $18 million. His assessment of non- economic damages was based not only on his own knowledge and experience, but included an analysis of comparable jury verdicts, which is information reasonably relied upon by persons in Mr. Rossman’s field of expertise. As a result of his expert analysis, Mr. Rossman testified that, as a case of absolute liability with full damages awarded, Petitioner’s claim had a minimum value of $25 million dollars. Mr. Rossman’s testimony was credible, and is accepted. At the final hearing, Petitioner also presented the expert testimony of Mr. Barrett. Mr. Barrett has focused his practice for the past 30 years on personal injury cases, with the past 10 years devoted to medical malpractice and pharmaceutical products liability cases. Evaluation of personal injury cases and medical malpractice cases is a daily component of his practice. In preparation for his testimony, Mr. Barrett reviewed the reports of Petitioner’s life care planner and economist, Petitioner’s medical records, and other materials that are included in the record of this proceeding. Mr. Barrett routinely reviews jury verdict reports, and applied his knowledge and experience to Petitioner’s claim. Based on his review, Mr. Barrett concurred that the overall value of Petitioner’s claim was, conservatively, in the $25 million range, with the same general breakdown for economic and non- economic damages. Mr. Barrett’s testimony was credible, and is accepted. The evidence was clear and convincing that the total value of the damages related to Petitioner’s injury was, conservatively, $25 million, and that the settlement amount was one percent of the total value. The evidence was equally clear and convincing that the allocation for past medical expenses reflected in the court-approved Release was of the same ratio to the total past medical expenses as was the settlement amount to the reasonable value of the claim. There was no evidence that the allocation was subject to any form of manipulation to increase or decrease the accounting of past medical expenses.
The Issue The issue is what is the correct amount of workers’ compensation reimbursement to Aventura Medical Center for emergency services rendered to patient J.R. for a work-related injury?
Findings Of Fact Petitioner, Guarantee, is a carrier within the meaning of Subsections 440.02(4) and (38), Florida Statutes, and Florida Administrative Code Rule 69L-7.602(1)(w). Respondent, the Department, is charged with the review and resolution of disputes regarding the payment of providers by carriers for medical services rendered to injured workers. The Department has exclusive jurisdiction to decide reimbursement disputes. § 440.13(7) and (11)(c), Fla. Stat. Intervenor, Aventura, is a health care provider within the meaning of Subsections 440.13(1)(h), Florida Statutes. Aventura is an acute care hospital located in Aventura, Miami- Dade County, Florida. On May 27, 2009, Aventura provided emergency services to the patient J.R., a 41-year-old male, who was injured at his place of work. J.R. was examined by Aventura’s emergency department physician. He received two Computed Tomography (“CT”) scans, one of the abdomen and one of the pelvis. He also received a urinalysis, a complete blood count (CBC), and an X-ray of his left side and ribs. J.R. was discharged after these tests. Aventura’s total charges for J.R.’s outpatient emergency services were $9,877.47. Aventura submitted its claim for reimbursement using the standard “uniform billing” form, UB-04. The UB-04 sets out each service provided to J.R., the individual charge for each service, and the total charge. The individual services on the UB-04 submitted for patient J.R. are listed as follows: comprehensive metabolic; assay lipase; amylase syrum; automated hemocram; urinalysis; X-ray of the ribs and chest; X-ray of the abdomen; contrast CT scan of the pelvis; contrast CT scan of the abdomen; the emergency department visit itself, and low osmolar contrast media (LOCM). Aventura’s claim was received by MCMC, an organization described as a “third-party administrator,” and was referred in turn to Qmedtrix. Qmedtrix is a medical bill-review agent located in Portland, Oregon. Qmedtrix performs bill review by referral from carriers and third-party administrators, and performed a bill review for Guarantee of the bill submitted by Aventura. For its compensation, Qmedtrix is paid a percentage of the difference, if any, between the amount billed by the facility and the amount paid by the carrier. Following Qmedtrix’ review, Aventura received a check from Guarantee in the amount of $6,987.21, along with an “Explanation of Medical Benefits” review (EOBR), which is required to be sent along with the bill payment. The EOBR sets out the 11 individual components of Aventura’s claim, and indicates that the first nine were approved for reimbursement at 75 percent of the charge billed by Aventura. The tenth component is the charge for the emergency department visit itself. For that charge, Aventura billed $722.00, of which 75 per cent would be $541.50. The EOBR indicates the corresponding 25 percent discount from billed charges ($180.50) under a column entitled “MRA,” and indicates further that an additional reduction of $143.28 was applied, leaving an approved payment of $398.22 for the emergency room component of the claim. The additional reduction of $143.28 is under a column entitled “Ntwk Redc,” and the narrative explanation under the total payment states, ”The network discount shown above is based on your contract with the network.” Guarantee conceded at hearing that there was no contract applicable to the claim. The eleventh and last component is the charge for the LOCM, which was completely disallowed with the explanation, “Correction to a Prior Claim.” The EOBR also has references to “convalescent care” and “PIP days,” neither of which apply to Aventura’s claim. The EOBR indicates a “procedure code” of 99283. The UB-04 submitted by Aventura also used the code 99283. This code is among five codes that are used by hospitals to bill emergency department visits based on “level” of intensity rendered. These codes are taken from the American Medical Association’s Current Procedural Terminology (or CPT), a coding system developed for physician billing, not for hospitals. Over the years, these CPT codes were adopted by hospitals for billing emergency department visits. Emergency department services are billed with CPT codes 99281 through 99285. After receiving the payment and EOBR, Aventura timely filed a Petition for Resolution of Reimbursement Dispute, with attachments, to the Department. Aventura alleged in its Petition that the correct reimbursement amount owed was $7,408.10, leaving an underpayment of $420.89. Qmedtrix, acting as Guarantee’s representative, then filed Guarantee’s Response to Petition for Resolution of Reimbursement Dispute and attachments with the Department. Attached to the Response was a letter from Mr. von Sydow dated November 9, 2009. The letter asserted that the correct payment to the hospital (Aventura) should be determined on an average of usual and customary charges for all providers in a given geographic area, rather than the hospital’s usual and customary charges. As authority, Mr. von Sydow cites the case of One Beacon Insurance v. Agency for Health Care Administration, 958 So. 2d 1127 (Fla. 1st DCA 2007). The letter also requested that the Department “scrutinize the bill in question in order to determine, first, whether the hospital in fact charged its usual charge for the services provided and, second, whether the billed charges are in line with the customary charges of other facilities in the community.” The letter further alleges that the hospital “upcoded” the emergency room visit, billing using CPT code 99283, asserting that the proper billing code should have been 99282. The letter concludes that the amount paid, $398.22, for the emergency department visit is closer to the “usual and customary” charges that Qmedtrix asserts, on behalf of Guarantee, is applicable to the claim. On November 18, 2009, the Department issued its Determination. The Determination states in pertinent part: The 2006 HRM, Section 12.,A., vests specific authority in the carrier to review the hospital’s Charge Master to verify charges on the itemized statement and to disallow reimbursement for specifically itemized services that do not appear to be medically necessary. No documentation submitted indicates the carrier elected to exercise this option. Moreover, the carrier did not allege that any service was deemed not “medically necessary” or that the charges present on the DWC-90 failed to match the charges on the provider’s Charge Master. Therefore, the OMS finds the charges billed by the hospital are the hospital’s usual and customary charges. The 2006 HRM provides for reimbursement of emergency room services at seventy-five percent (75%) of the hospital’s usual and customary charges. Whereas, the carrier failed to substantiate is [sic] adjustments and disallowances of reimbursement on the EOBR and the hospital’s billed charges are accepted as the hospital’s billed charges are accepted as the hospital’s usual and customary charges, the OMS determines correct total reimbursement equals $7,408.10 ($9,877.47 x 0.75). The determination letter also informed Guarantee of its right to an administrative hearing. Guarantee timely filed a Request for Administrative Hearing, which gave rise to this proceeding. CODING FOR J.R.’S EMERGENCY SERVICES As mentioned above, Aventura reported the emergency department visit using CPT Code 99283. No one from the hospital testified but Aventura’s expert, Allan W. March, M.D., reviewed Aventura’s hospital record for J.R. Dr. March is a graduate of Dartmouth College and Johns Hopkins University Medical School. He has extensive experience in, among other things, hospital physician practice and utilization review. Dr. March describes utilization as the oversight of medical care to affirm that it is appropriate, cost-effective, and medically necessary. Dr. March has worked as an emergency department physician and has personally treated upwards of 5,000 workers’ compensation patients. Dr. March testified on behalf of Intervenor and Respondent. Dr. March described J.R. from the hospital record as follows: This is a 41-year-old male who was kicked in the flank one week prior to his presentation to the emergency department, while engaged in a fight, and was seen immediately prior to his appearance in the emergency department by a workers’ compensation physician, who referred the patient to the emergency department noting a stat referral, meaning that he wanted that patient evaluated within the hour. Dr. March reviewed Aventura’s hospital record for J.R. to analyze whether Aventura appropriately used CPT code 99283. Dr. March explained that Aventura’s selection of CPT code 99283 for the UB-04 was, in all likelihood, due to a particular reference in J.R.’s patient record. Specifically, in that section of the record indicating “Permanent Medical Record Copy” at the bottom of each page, page 6 reflects an entry made on May 29, 2009, which was two days after the services were rendered. The May 29, 2009, entry was made by the emergency physician to assign a level for emergency physician services, and indicates “ER LEVEL III.” Although the “level” reference is for physician services and not for facility services, it would have been used by Aventura’s hospital coder in the absence of an emergency department charge sheet adopting the widely used guidelines from the American College of Emergency Physicians (ACEP Guidelines).” Aventura used an alternate methodology of determining the severity level of the patient, in which the coder would have used the complexity of the medical evaluation by the physician. Under the ACEP guidelines, the CPT code level assigned is always the highest level at which a minimum of one “possible intervention” is found. In this case, Dr. March determined that two CT scans were ordered by the physician and performed by the hospital, which substantiates the use of a 99284 code under the ACEP Guidelines. Thus, Dr. March determined that Aventura could have justified the use of CPT code 99284, which is higher than the 99283 CPT code assigned by Aventura, had the ACEP guidelines been used. Dr. March further explained that the separate charge for the emergency visit is intended to compensate the hospital for “evaluation and Management” costs not captured in other line items. According to Mr. March, the separate charge does not duplicate charges for specific procedures rendered, such as a CT scan. The claim submitted by Aventura was sent to Qmedtrix for a bill review. Its data elements were first entered into Qmedtrix’ proprietary bill-review software known as “BillChek.” The software placed Aventura’s claim on hold for manual review. The claim was then manually reviewed by Mr. von Sydow, Director of National Dispute Resolution for Qmedtrix. Although his educational background is in law, Mr. von Sydow is a certified coder certified by the American Health Information Management Association (AHIMA). Mr. von Sydow determined in his bill review that Aventura should have used code 99282 instead of 99283. Mr. von Sydow supported his conclusion that CPT code 99282 is the appropriate code for the emergency department visit by comparing the procedure codes and diagnosis codes reported by the hospital with examples of appropriate billing for emergency department services in the CPT code handbook. Mr. von Sydow concluded that the hospital’s billing with CPT code 99283 was not appropriate and that the hospital should have billed with CPT code 99282. Mr. von Sydow also calculated that while the hospital billed $722 with CPT code 99283, its usual and customary charge for a visit billed with 99282 is $600. Moreover, Mr. von Sydow referenced a study by American Hospital Association (AHA) and AHIMA, which suggests that hospitals should count the number and kind of interventions to approximate the CPT factors, but that a hospital should not include in this count interventions or procedures, such as CTs or X-rays, which the hospital bills separately. He further acknowledged that the federal Centers for Medicare and Medicaid Services (CMS) allow hospitals to use their own methodology in applying the CPT codes. David Perlman, M.D., received his undergraduate degree from Brown University and his medical degree from the University of Oregon. He has considerable experience as an emergency room physician. For the past six years, he has worked for Qmedtrix initially doing utilization review and as its medical director since 2005. Dr. Perlman testified on behalf of Guarantee. Dr. Perlman is also familiar with the ACEP guidelines referenced by Dr. March and the AHA/AHIMA study relied upon by Mr. von Sydow. He is also familiar with the CPT code handbook. Dr. Perlman suggested that the use of the ACEP guidelines could result in reimbursement essentially already provided in a separate line-item. He agrees with the methodology recommended by the AMA/AHIMA study. That is, counting the number and kind of interventions or procedures to approximate the CPT book’s factors to consider in selecting the code billed for emergency department services, but not including in this count interventions or procedures, such as CTs or X-rays, which the hospital bills separately. In Dr. Perlman’s opinion, J.R.’s injuries supported the assignment of CPT code 99283 as designated by Aventura. Dr. Perlman agreed with Dr. March’s opinion that Aventura could have billed at a higher level (99284), but not based on the number and kind of interventions or procedures. Dr. Perlman instead referenced examples in the ACEP guidelines. Dr. Perlman acknowledged that hospitals are free to use the ACEP guidelines and that many hospitals do so. Both Drs. March and Perlman are of the opinion that Aventura’s use of CPT code 99283 was appropriate, and further agreed that Aventura could have assigned the higher code of 99284. Therefore, coding J.R.’s emergency department visit as 99283 by Aventura was appropriate.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Financial Services, Division of Workers' Compensation, enter a Final Order requiring Petitioner to remit payment to Aventura consistent with the Determination Letter dated November 18, 2009, and Section 440.13(7)(c), Florida Statutes. DONE AND ENTERED this 17th day of June, 2010, in Tallahassee, Leon County, Florida. S BARBARA J. STAROS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of June, 2010.
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (Respondent or AHCA), for medical expenses paid on behalf of Petitioner, Patrick Osmond (Petitioner), from settlement proceeds received by Petitioner from third parties.
Findings Of Fact Petitioner was injured in a single-vehicle collision after he and several underage friends were served alcoholic beverages at an Applebee’s restaurant, owned by Neighborhood Restaurant Partners, LLC (Applebee’s). As a result of his injuries, Petitioner brought suit against Applebee’s, for dram shop liability, and against Joseph Raub, the driver of the vehicle in which Petitioner was a passenger, for negligence. The Complaint also included a claim against the bartender from Applebee’s, however, she was eventually dropped from the lawsuit. After a two-week jury trial, the jury returned a verdict in favor of Petitioner, awarding a total of $41,956,473.73 in damages, allocated as follows: Past Medical Expenses: $436,473.73 Future Medical Expenses: $15,000,000.00 Past Lost Wages: $20,000.00 Future Loss of Earning Capacity: $1,500,000.00 Past Non-Economic Damages: $5,000,000.00 Future Non-Economic Damages: $20,000,000.00 The past medical expenses included $303,757.77 for payments made by Medicaid through AHCA, $13,985.96 for payments administered through the Rawlings Company, and $118,730.00 which represented an outstanding bill from Petitioner’s neurosurgeon. After the verdict, Petitioner reached a settlement agreement with Applebee’s, whereby Applebee’s agreed to pay the sum of $4,300,000.00 to Petitioner. As a condition of the settlement with Applebee’s, the parties executed a Release that included the following language: 1.6 The parties agree that Patrick Osmond’s damages have a total value of $41,956,473.73 (Forty-One Million, Nine Hundred Fifty-Six Thousand, Four Hundred Seventy-Three Dollars and Seventy-Three Cents), of which $317,743.73 (Three Hundred Seventeen Thousand, Seven Hundred Forty-Three Dollars and Seventy-Three Cents)[1/] represents the past medical expenses paid for by Medicaid. Given the facts, circumstances and nature of Patrick Osmond’s injuries and this settlement, $35,568.73 (Thirty-Five Thousand, Five Hundred Sixty-Eight Dollars and Seventy-Three Cents) of this settlement has been allocated to Patrick Osmond’s claim for past medical expenses paid by Medicaid and the remainder of the settlement has been allocated toward the satisfaction of claims other than past medical expenses paid by Medicaid. After the jury verdict was rendered, Petitioner recovered $25,000.00 in settlement from Joseph Raub and his insurers. As a condition of the settlement with Mr. Raub, the parties executed a Release that included the following language: The parties agree that Patrick Osmond’s damages have a total value of $41,956,473.73 (Forty-One million, Nine Hundred Fifty-Six Thousand, Four Hundred Seventy-Three Dollars and Seventy-Three Cents), of which $317,743.73 (Three Hundred Seventeen Thousand, Seven Hundred Forty-Three Dollars and Seventy-Three Cents) represents the past medical expenses paid for by Medicaid. Given the facts, circumstances and nature of Patrick Osmond’s injuries and this settlement, $190.43 (One Hundred ninety Dollars and Forty-Three Cents) of this settlement has been allocated to Patrick Osmond’s claim for past medical expenses paid by Medicaid and the remainder of the settlement has been allocated toward the satisfaction of claims other than past medical expenses paid by Medicaid. After the verdict, Petitioner’s insurer, Geico General Insurance Company (“Geico”), paid its policy limits of $10,000.00 to Petitioner under his Uninsured and/or Underinsured Motorist Coverage. The documentary evidence did not reflect that payment, but its existence was acknowledged by both parties during the argument, and is accepted as a stipulation. The purpose for the payment was not disclosed. The burden in this case is on Petitioner to prove “that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses.” There is no proof that the Geico settlement should be excluded from the amount available to satisfy the Medicaid lien. The $303,757.77 in Medicaid funds paid by AHCA is the maximum amount that may be recovered by AHCA. There was no evidence to suggest that statutory conditions precedent to AHCA asserting its claim or Petitioner bringing this action were not met. The Pre-hearing Stipulation, Respondent’s statement, the stipulation of facts, and the statement of issues of fact that remained to be litigated, indicate clearly that the issue of allocation of the settlement proceeds under sections 409.910(11)(f) and 409.910(17)(b) were the only issues in dispute remaining for disposition. There was no evidence that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement. There was no evidence of any manipulation or collusion by the parties to minimize the share of the settlement proceeds attributable to past medical expenses for Petitioner’s medical care. However, an issue remains as to the correct amount of “past medical expenses” to be used in establishing the proportional amount of those expenses vís-a-vís the total settlement. No portion of the $303,757.77 paid by AHCA through the Medicaid program on behalf of Petitioner represented expenditures for future medical expenses, with all amounts reflected in its Provider Processing System Report being for past medical expenses incurred.
Findings Of Fact Respondent, Herbert Goloff, D.C., is a chiropractor licensed to practice in the State of Florida. From March 10, 1988, through September 3, 1991, Dr. Goloff treated Ruth Waddle, a Workers' Compensation patient, for lumbar myofascitis. Lumbar myofascitis is an inflammation of the muscle and the fascia in the lumbar spine. Lumbar myofascitis is indicated by the following objective findings: recurrent spasms, limitation of motion, tender nodules, trigger point tenderness in the muscles, and taut or sensitive skin. On June 14, 1988, the Respondent placed Ruth Waddle at maximum medical improvement (MMI). The Respondent treated Ruth Waddle 14 times before placing her at MMI. The Respondent treated Ruth Waddle a total of 171 times after MMI. The Respondent is required to maintain documentation substantiating the treatment and services he rendered to Ruth Waddle in order to receive reimbursement for those services. The Respondent is required to perform an initial history, make a diagnosis, and develop a plan of care and document his subjective and objective findings in his records. The Respondent is also required to keep notes reflecting his subjective and objective findings, his appraisal or assessment and his plan of action (SOAP notes) for the patient Ruth Waddle, in order to substantiate and justify that the medical treatment and services he renders are medically necessary. If a health care provider cannot document that this treatment and services are medically necessary, he is not entitled to receive reimbursement for his services. The Respondent's records indicate that there was unscheduled ongoing care of the patient after June 14, 1988. Whenever the patient was in pain she would come in to the Respondent's Office and ask for a treatment. Respondent was not practicing full time in 1988. The patient seldom scheduled an appointment. She frequently came in on a Tuesday, a day she knew that Respondent had office hours. The patient would describe her symptoms to Respondent and he would perform various therapies, including mild adjustments. Respondent would make minimum entries in the patient's progress notes. Respondent's treatment of the patient Ruth Waddle, after reaching MMI, for the temporary relief of pain was palliative care. The Respondent's records indicate that there was inadequate testing of the patient Ruth Waddle to substantiate the medical necessity of treatment after June 14, 1988. The Respondent's records do not contain a plan of care or treatment for Ruth Waddle. The Respondents records do not contain an initial history for Ruth Waddle. The Respondents records do not contain an evaluation of Ruth Waddle's physical condition at the time of MMI relative to muscle spasms and range of motion, as well as other neurological and orthopedic tests. Respondent failed to maintain SOAP notes for the patient Ruth Waddle. The Respondent's records do not contain objective medical findings to substantiate the medical necessity of services rendered to Ruth Waddle after June 14, 1988. The Respondent's records do not substantiate the medical necessity of the frequency and duration of the treatment provided to Ruth Waddle after June 14, 1988.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: Respondent be determined to have failed to substantiate the treatment of Ruth Waddle after June 14, 1988. The Respondent be ordered to return the sum of $7,354.68 to the American States Insurance Company for the fees that the Respondent collected in treating Ruth Waddle after June 14, 1988, when the patient reached MMI. DONE and ENTERED this 30th day of March, 1994, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of March, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-4546 The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's proposed findings of fact. Accepted in substance: paragraphs 1-14. Respondent's proposed findings of fact. Accepted in substance: paragraphs 2, 5(a), 5(b) (in part). Rejected as against the greater weight of the evidence: paragraph 4, 5(b) (in part), 5(c). COPIES FURNISHED: Michael G. Moore, Esquire Department of Labor and Employment Security Suite 307 Hartman Building 2012 Capital Circle, S.E. Tallahassee, Florida 32399-2189 William J. McCabe, Esquire Shepherd, McCabe & Cooley 1450 West S.R. 434, Suite 200 Longwood, Florida 32750 Shirley Gooding, Secretary Department of Labor and Employment Security Suite 303 Hartman Building 2012 Capital Circle, S.E. Tallahassee, Florida 32399-2152 Cecilia Renn, Esquire Chief Legal Counsel Department of Labor and Employment Security Suite 307 Hartman Building 2012 Capital Circle, S.E. Tallahassee, Florida 32399-2152
The Issue The matter concerns the amount of the money to be reimbursed to the Agency for Health Care Administration for medical expenses paid on behalf of Mark Crain, a Medicaid recipient, following a settlement recovered from a third party.
Findings Of Fact This proceeding determines the amount the Agency should be paid to satisfy a Medicaid lien following Petitioner’s recovery of a $100,000 settlement from a third party. The Agency asserts that it is entitled to recover $35,700, which is the amount it calculated using the formula set forth in section 409.410(11)(f). The facts that gave rise to this matter are found pursuant to a stipulation of the parties.3/ On June 23, 2016, Petitioner was working for a tree pruning company. Petitioner’s employer assigned him to remove several branches from a tree. As directed, Petitioner climbed to the top of the tree and secured himself with one rope lanyard. Unfortunately, after he began pruning, Petitioner cut through the rope lanyard, lost his balance, and plummeted 30 feet to the ground. As a result of the fall, Petitioner suffered significant physical and neurological injuries. Petitioner underwent multiple surgeries. His medical procedures included an open reduction with internal fixation on his right wrist, lumbar fusion surgery, and a lumbar laminectomy. At the final hearing, Petitioner’s counsel represented that Petitioner’s medical prognosis is not fully known at this time. However, what is known is that Petitioner will continue to experience serious neurologic deficits. Petitioner’s injuries have left him with overall mobility issues and have affected his ability to walk normally. He suffers from a right foot drop and has limited feeling below his waist. The parties also stipulated that Petitioner has completed all medical treatment and therapy related to his accident. However, Petitioner is uncertain whether or not he will be able to return to normal activities in the future. Petitioner incurred sizable medical expenses due to his injuries. The charges for Petitioner’s medical procedures totaled approximately $375,000. However, only $62,067.28 has actually been paid for his medical care. Of this amount, the Florida Medicaid program paid $41,992.33. (In addition to the $41,992.22 paid by Medicaid, other health insurance covered $20,075.06.) Petitioner did not present evidence of monetary damages other than his past medical expenses. Petitioner subsequently initiated a civil cause of action for negligence against his (former) employer. Petitioner alleged that he was not properly trained how to safely secure himself to the tree. According to Petitioner’s counsel, Petitioner’s employer should have instructed him to use two lanyards instead of one. After two years of litigation, Petitioner settled his negligence action for $100,000. The settlement did not allocate Petitioner’s award between past medical expenses and other damage categories. The Agency, through the Florida Medicaid program, paid a total of $41,992.33 for Petitioner’s medical treatment resulting from the accident.4/ All of the expenditures that Florida Medicaid spent on Petitioner’s behalf are attributed to past medical expenses. Under section 409.910, the Agency is to be repaid for its Medicaid expenditures out of any recovery from liable third parties. Accordingly, when the Agency was notified of the settlement of Petitioner’s lawsuit, it asserted a Medicaid lien against the amount Petitioner recovered. The Agency claims that, pursuant to the formula set forth in section 409.910(11)(f), it should collect $37,500 to satisfy the medical costs it paid on Petitioner’s behalf. (As discussed in endnote 7, the “default” formula in section 409.910(11)(f) allows the Agency to collect $37,500 to satisfy its Medicaid lien.) The Agency maintains that it should receive the full amount of its lien regardless of whether Petitioner settled for less than what Petitioner believes is the full value of his damages. Petitioner, on the other hand, asserts that the Agency should be reimbursed a lesser portion of the settlement than the amount calculated using the section 409.910(11)(f) formula. Exercising its right to challenge the Medicaid lien pursuant to section 409.910(17)(b), Petitioner specifically argues that, taking into account the full value of Petitioner’s damages, the Agency’s Medicaid lien should be reduced proportionately. Otherwise, the application of the statutory formula would permit the Agency to collect more than that portion of the settlement that fairly represents Petitioner’s compensation for past medical expenses. Petitioner requests the Agency’s allocation from Petitioner’s third-party recovery be reduced to $4,199.23. To establish the value of his damages, Petitioner submitted the medical bills from his accident, as well as relied upon the stipulated facts. Petitioner’s medical bills show that he sustained the injuries identified above, as well as underwent surgery on his spine and wrist. To place a monetary value on Petitioner’s injuries, Petitioner’s counsel represented that his law firm appraised Petitioner’s injuries at no less than $1 to 2 million. However, Petitioner did not introduce any evidence or testimony corroborating this injury valuation or substantiating an amount Petitioner might have recovered at trial in his personal injury cause of action.5/ Neither did Petitioner offer evidence of additional damages Petitioner might be facing from his accident, such as future medical expenses, loss of quality of life, loss of employment or wages, or pain and suffering. Based on his estimate, Petitioner’s counsel asserted that the $100,000 settlement is far less than the actual value of Petitioner’s injuries and does not adequately compensate Petitioner for his damages. Therefore, a lesser portion of the settlement should be allocated to reimburse Medicaid, instead of the full amount of the lien. Petitioner proposes that a ratio should be applied based on the full value of Petitioner’s damages (conservatively estimated at $1,000,000) compared to the amount that Petitioner actually recovered ($100,000). Using these numbers, Petitioner’s settlement represents a 10 percent recovery of Petitioner’s damages. In like manner, the Medicaid lien should be reduced to 10 percent or $4,199.23 ($41,992.33 times .10). Therefore, Petitioner asserts that $4,199.23 is the portion of his third- party settlement that represents the equitable and fair amount the Florida Medicaid program should recoup for its payments for Petitioner’s medical care. The Agency was not a party to Petitioner’s negligence action or Petitioner’s $100,000 settlement. No portion of the $100,000 settlement represents reimbursement for future medical expenses. The undersigned finds that, based on the evidence in the record, Petitioner failed to prove, by a preponderance of the evidence, that a lesser portion of Petitioner’s settlement should be allocated as reimbursement for medical expenses than the amount the Agency calculated pursuant to the formula set forth in section 409.910(11)(f). Accordingly, the Agency is entitled to recover $37,500 from Petitioner’s recovery of $100,000 from a third party to satisfy its Medicaid lien.
The Issue The issues are whether proposed and existing Florida Administrative Code rules, both numbered 59G-6.030, are valid exercises of delegated legislative authority.
Findings Of Fact The Petitioners are 120 hospitals--some not-for-profit, some for-profit, and some governmental--that are licensed under chapter 395, Florida Statutes, provide both inpatient and outpatient services, and participate in the Medicaid program. AHCA is the state agency authorized to make payments for services rendered to Medicaid patients. Before 2013, all Medicaid outpatient services were provided and paid fee-for-service. Under the fee-for-service model, hospitals submit claims to AHCA, and AHCA reimburses the hospitals based on the established rate. For many years, AHCA has set prospective Medicaid fee- for-service reimbursement rates for outpatient hospital services, either semi-annually or annually, based on the most recent complete and accurate cost reports submitted by each hospital; has re-published the Florida Title XIX Hospital Outpatient Reimbursement Plan (Outpatient Plan) that explained how the rates were determined; and has adopted the current Outpatient Plan by reference in rule 59G-6.030. In 2005, the Florida Legislature’s General Appropriations Act (GAA) stated that the funds appropriated for Medicaid outpatient hospital services reflected a cost savings of $16,796,807 “as a result of modifying the reimbursement methodology for outpatient hospital rates.” It instructed AHCA to “implement a recurring methodology in the Title XIX Outpatient Hospital Reimbursement Plan that may include, but is not limited to, the inflation factor, variable cost target, county rate ceiling or county ceiling target rate to achieve the cost savings.” AHCA responded by amending the Outpatient Plan to provide: “Effective July 1, 2005, a recurring rate reduction shall be established until an aggregate total estimated savings of $16,796,807 is achieved each year. This reduction is the Medicaid Trend Adjustment.” The amended Outpatient Plan was then adopted by reference in rule 59G-6.030, effective July 1, 2005. AHCA collaborated with the hospitals to determine how to accomplish the legislatively mandated reduction in a manner that would be fair to all the hospitals. It was decided to take the hospitals’ unaudited cost reports from the most recent complete fiscal year and the number of Medicaid occasions of service from the monthly report of AHCA’s Medicaid fiscal agent that corresponded to the hospitals’ fiscal years, and use an Excel spreadsheet program with a function called Goal Seek to calculate proportionate rate adjustments for each hospital to achieve the legislatively mandated aggregate savings. The resulting rate adjustments were incorporated in the hospital reimbursement rates, effective July 1, 2005. In 2006, there was no further Medicaid Trend Adjustment (MTA) reduction. However, in accordance with the instructions in the 2005 GAA, the 2005 MTA reduction of $16,796,807 was treated as a recurring reduction and was applied again in the 2006 Outpatient Plan, which again stated: “Effective July 1, 2005, a recurring rate reduction shall be established until an aggregate total estimated savings of $16,796,807 is achieved each year. This reduction is the Medicaid Trend Adjustment.” The 2006 Outpatient Plan also stated: “This recurring reduction, called the Medicaid Trend Adjustment, shall be applied proportionally to all rates on an annual basis.” It also came to be known as the first cut or cut 1. It again was applied by taking the hospitals’ most current unaudited cost reports and the corresponding occasions of service from the appropriate monthly report of the fiscal agent, and using the Excel spreadsheets and the Goal Seek function to calculate rate adjustments for each hospital. The cut 1 rate adjustments were incorporated in the hospital reimbursement rates, effective July 1, 2006. In 2007, the GAA stated that the funds appropriated for Medicaid outpatient hospital services were reduced by $17,211,796 “as a result of modifying the reimbursement for outpatient hospital rates, effective July 1, 2008.” This has been referred to as the second cut or cut 2. It instructed AHCA to “implement a recurring methodology in the Title XIX Outpatient Hospital Reimbursement Plan to achieve this reduction.” The 2008 Outpatient Plan again applied the first cut as a recurring reduction and stated that it was to be “applied proportionally to all rates on an annual basis.” It then made the second cut, which was to be “applied to achieve a recurring annual reduction of $17,211,796.” These cuts were again applied by taking the hospitals’ most current unaudited cost reports and the corresponding occasions of service from the appropriate monthly report of the fiscal agent, and using the Excel spreadsheets and the Goal Seek function to calculate rate adjustments for each hospital. The resulting rate adjustments were incorporated in the hospital reimbursement rates, effective July 1, 2008. This process was repeated in subsequent years. The third cut (cut 3) was in 2008; it was a $36,403,451 reduction. The fourth cut (cut 4) was in 2009, during a special session; it was a $19,384,437 reduction; however, per the GAA that made the fourth cut, it was not applied to the rates of certain children’s specialty hospitals, which were excluded from the reduction. In addition, using language similar to what AHCA had been using in the Outpatient Plans, the 2009 GAA stated: “The agency shall reduce individual hospital rates proportionately until the required savings are achieved.” The Legislature enacted cut 5 and cut 6 in 2009 and 2010. However, the GAAs stated that AHCA should not take these cuts if the unit costs before the cuts were equal to or less than the unit costs used in establishing the budget. AHCA determined that cuts 5 and 6 should not be taken. However, cuts 1 through 4 continued to be applied as recurring reductions, and rates were adjusted for cuts 1 through 4 in 2009 and 2010 in the same manner as before. In 2011, the GAA enacted cut 7; it was for $99,045,233 and was added to the previous cuts for all but certain children’s specialty and rural hospitals, which were excluded from the additional reduction. In setting the individual hospitals’ reimbursement rates, AHCA first applied cut 7 in the same manner as cuts 1 through 4. The result was a 16.5 percent rate adjustment for cut 7, which was much higher than for previous cuts. Some of the hospitals pointed this out to AHCA and to the Legislature and its staff. There was lots of discussion, and it was determined that the rate adjustment from cut 7 would be more like what the Legislature was expecting (about 12 percent), if budgeted occasions of service were used, instead of the number from the fiscal agent’s monthly report that corresponded to the most recent cost reports. AHCA agreed to change to budgeted fee-for- service occasions of service for cut 7, with the concurrence of the hospitals and the Legislature and its staff. The year 2011 was also the year the Legislature instituted what became known as the “unit cost cap.” In that year, the Legislature amended section 409.908, Florida Statutes, to provide: “The agency shall establish rates at a level that ensures no increase in statewide expenditures resulting from a change in unit costs effective July 1, 2011. Reimbursement rates shall be as provided in the General Appropriations Act.” § 409.908(23)(a), Fla. Stat. (2011). This part of the statute has not changed. The GAA that year elaborated: In establishing rates through the normal process, prior to including this reduction [cut 7], if the unit cost is equal to or less than the unit cost used in establishing the budget, then no additional reduction in rates is necessary. In establishing rates through the normal process, if the unit cost is greater than the unit cost used in establishing the budget, then rates shall be reduced by an amount required to achieve this reduction, but shall not be reduced below the unit cost used in establishing the budget. “Unit cost” was not defined by statute or GAA. To calculate what it was in 2011, AHCA divided the total dollar amount of Medicaid payments made to hospitals by AHCA by the number of Medicaid occasions of service for all hospitals. The result was $141.51. Since 2011, AHCA has applied the unit cost cap with reference to the 2011 unit cost of $141.51. Since then, AHCA has compared the 2011 unit cost to the current cost, calculated by dividing the total dollar amount of Medicaid payments made to all hospitals by AHCA by the number of Medicaid occasions of service for all hospitals, except in children’s and rural hospitals, to determine whether the unit cost cap would require a further rate reduction, after applying the MTA cuts. Using this comparison, the unit cost cap never has been exceeded, and no further rate adjustments ever have been required. It is not clear why AHCA excluded Medicaid occasions of service for children’s and rural hospitals from the unit cost calculations made after 2011. It could have been because those hospitals were excluded from cut 7 and cut 8. Cut 8 was enacted in 2012; it was for $49,078,485 and was added to the previous cuts for all but certain children’s specialty and rural hospitals, which were excluded from the additional reduction. In 2012, the Legislature specified in the GAA that budgeted occasions of service should be used in calculating the MTA reduction for inpatient hospitals. AHCA always treated inpatient and outpatient MTAs the same, and it viewed the specific legislative direction for the inpatient MTA as guidance and indicative of legislative intent that it should continue to use budgeted occasions of service for the outpatient cut 7 and should also use them for the outpatient cut 8. Again, the hospitals did not object since the result was a higher reimbursement rate. In 2014, the Florida Medicaid program began to transition Medicaid recipients from a fee-for-service model to a managed care model. Under the managed care model, AHCA pays a managed care organization (MCO) a capitation rate per patient. The MCOs negotiate contracts with hospitals to provide outpatient care at an agreed reimbursement rate per occasion of service. Since August 2014, the majority of Medicaid recipients has been receiving services through MCOs, rather than through fee-for-service. Currently, about 75 to 80 percent of Medicaid outpatient hospital occasions of service are provided through managed care In recognition of the shift to MCOs, the Legislature began to divide the Medicaid outpatient hospital reimbursement appropriation in the GAA between what AHCA reimburses directly to hospitals under the fee-for-service model and what it pays MCOs to provide those services under the MCO delivery system. This allocation of the budgets between fee-for-service and managed care necessarily accomplished a corresponding division of the recurring MTA reductions between the two delivery systems. The Legislature did not enact any statutes or GAAs requiring AHCA to change how it applies MTA reductions to determine fee-for-service outpatient reimbursement rate adjustments, or make any other changes in response to the transition to MCOs. There were no additional MTA reductions in 2015. The 2015 Outpatient Plan, which is incorporated in existing rule 59G- 6.030, applied the previous cuts as recurring reductions. The evidence was confusing as to whether cuts 7 and 8 were applied using the occasions of service in the fiscal agent’s monthly report corresponding to the hospitals’ most current unaudited cost reports, or using budgeted occasions of service. If the former, the numbers did not yet reflect much of the shift to the managed care model because of a time lag in producing cost reports, and the evidence suggested that the numbers were approximately the same as the budgeted occasions of service used previously. Whichever numbers were used, the resulting rate adjustments were incorporated in the hospitals’ reimbursement rates, effective July 1, 2015. Leading up to the 2016 legislative session, there was a legislative proposal to determine prospective Medicaid outpatient reimbursement rates using a completely new method called Enhanced Ambulatory Patient Groups (EAPGs). EAPGs would eliminate the need to depend on hospital cost reports and complicated calculations to determine the effects of MTA reductions on prospective hospital outpatient reimbursement rates, effective July 1, following the end of the legislative session each year. Hospitals, including some if not all of the Petitioners, asked the Legislature not to proceed with the proposed EAPG legislation until they had an opportunity to study it and provide input, and EAPGs were not enacted in 2016. However, section 409.905(6)(b) was amended, effective July 1, 2017, to require the switch to EAPGs. See note to § 409.905, Fla. Stat.; and ch. 2016-65, § 9, Laws of Fla. (2016). When it became apparent that EAPGs would not be in use for prospective reimbursement rates for fiscal year 2016/2017, AHCA basically repeated the 2015/2016 process, but adjusted the occasions of service used for calculating the hospitals’ rate reductions for cuts 7 and 8 by adding 14,000 occasions of service. At the end of July, AHCA published new rates effective July 1, 2016. When the new rates were published, they were challenged by some of the Petitioners under section 120.57(1), Florida Statutes. Citing section 409.908(1)(f)1., AHCA took the position that there was no jurisdiction and dismissed the petitions. That decision is on appeal to the First District Court of Appeal. The Petitioners also challenged the methodology used to calculate the new prospective reimbursement rates as a rule that was not adopted as required, and challenged the validity of existing rule 59G-6.030, which incorporated the 2015 Outpatient Plan by reference. These challenges became DOAH cases 16-6398RX through 16-6414RX. In response to DOAH cases 16-6398RX through 16-6414RX, AHCA adopted the 2016 Outpatient Plan by reference in proposed rule 59G-6.030. The 2016 Outpatient Plan provides more detail than the 2015 version. AHCA’s position is that the additional detail was provided to clarify the 2015 version. However, it changed the occasions of service used for calculating the hospitals’ rate reductions for cuts 7 and 8, as indicated in Finding 22, as well as some other substantive changes. The 2015 Outpatient Plan addressed the unit cost cap by stating: “Effective July 1, 2011, AHCA shall establish rates at a level that ensures no increase in statewide expenditures resulting from a change in unit costs.” The 2016 Outpatient Plan elaborates and specifies the calculation AHCA has been using, as stated in Finding 14. The 2015 Outpatient Plan provided that an individual hospital’s prospective reimbursement rate may be adjusted under certain circumstances, such as when AHCA makes an error in the calculation of the hospital’s unaudited rate. It also stated: “Any rate adjustment or denial of a rate adjustment by AHCA may be appealed by the provider in accordance with Rule 28-106, F.A.C., and section 120.57(1), F.S.” The 2016 Outpatient Plan deleted the appeal rights language from the existing rule. The effect of the existing and proposed rules on the Petitioners through their effect on managed care contract rates is debatable. Those rates do not have to be the same as the fee- for-service outpatient reimbursement rates, although they are influenced by the fee-for-service rates, and it is not uncommon for them to be stated as a percentage of the fee-for-service rates. By law, managed care contract rates cannot exceed 120 percent of the fee-for-service rates unless the MCO gets permission from AHCA, as provided in section 409.975(6). Currently, rates paid by MCOs for Medicaid hospital outpatient services average about 105 percent of the fee-for-service reimbursement rates. AHCA has indicated that it would not expect or like to see the contract rates much higher than that. It is not clear whether that still is AHCA’s position. If higher rates were negotiated, the impact of fee-for-services rate adjustments on managed care rates could be reduced or even eliminated. The effect of the existing and proposed rules on the Petitioners through their effect on how fee-for-service reimbursement rates are calculated is not disputed. With the transition to managed care, the effect is greater and clearly substantial. The recurring MTA reductions enacted by the Legislature through 2014, which total $224,015,229 (after taking into account $10,656,238 that was reinstated, and $4,068,064 that was added in consideration of trauma centers), are being spread over fewer fee-for-service occasions of service, especially for cuts 7 and 8, which significantly lowers the fee-for-service outpatient reimbursement rates calculated under the proposed rule. The Petitioners’ objections to the validity of the proposed and existing rules can be summarized as follows: a lack of legislative authority for recurring (i.e., cumulative) MTA reductions; a failure to adopt a fixed methodology to calculate individual hospital outpatient reimbursement rate adjustments resulting from MTA reductions; specifically, a failure to derive the number of fee-for-service occasions of service used in calculating individual hospital outpatient reimbursement rate adjustments in the same manner every year; conversely, a failure to increase the occasions of service used to calculate individual hospital outpatient reimbursement rate adjustments resulting from cuts 1 through 4; a failure of the unit cost cap in the existing rule to specify how it is applied; a failure of the unit cost cap in the proposed rule to compare the 2011 unit cost to the current cost, calculated by dividing the total dollar amount of Medicaid payments made to all hospitals by AHCA by the number of Medicaid occasions of service for all hospitals, including in children’s and rural hospitals; and proposed rule’s deletion of the language in the existing rule stating that a rate adjustment or denial can be appealed in accordance with Florida Administrative Code Rule 28-106 and section 120.57.
Findings Of Fact Petitioner, Robert Frankl, is a chiropractor duly licensed to practice chiropractic medicine in the State of Florida. The Respondent, Department of Labor and Employment Security, Division of Workers' Compensation, is the administrative agency statutorily charged with administering the workers' compensation laws and administrative rules. In carrying out its statutory mission the Division promulgated the 1988 Workers' Compensation Reimbursement Manual as Rule 38F-7.020, Florida Administrative Code. The 1988 Workers' Compensation Reimbursement Manual establishes the maximum reimbursement allowances and reimbursement policies that are applicable to the workers' compensation system in the State of Florida. The Petitioner treated Ivan Rothstein for his work related injuries on 10/23/90, 11/30/90, 1/26/91, 2/23/91, 3/23/91, and 5/22/91. On each of these dates the Petitioner billed Liberty Mutual for the following codes: Procedure Description Code MRA 90040 Brief service $20 97260 Manipulation $20 97530 Kinetic activities $23 97531 additional time $10 97010 Physical medicine treatment; cold pack $15 90080 Comprehensive service $35 6. Procedure codes 97260, 97530, 97531, and 97010 represent physical medicine treatment. Petitioner was reimbursed for the physical medicine treatment procedure codes, but was not reimbursed for procedure code 90080 and contends that he is entitled to receive reimbursement for same in the amount of $210 (six dates times $35=$210). Providers receiving reimbursement for physical medicine services cannot be reimbursed for office visits (for reexaminations) billed for on the same day unless the provider can provide documentation complying with the criteria set forth in Part X, E., of the 1988 Workers' Compensation Reimbursement Manual. The cited provision appears at pages 57 and 58 of the manual and reads as follows: E. Follow-up Office Visits. A follow-up office visit for re-examination of established patient may be reimbursed in addition to physical medicine treatment only when: There is a definitive change in the patient's condition. The patient fails to respond to treatment. The patient reaches maximum medical improvement (MMI) or is ready for discharge. The physician submits substantiating documentation to the carrier. The 1988 Workers' Compensation Reimbursement Manual also includes the following at page 4 of the manual: III. Criteria for Documentation of Medical Necessity. When it is necessary to substantiate that any service is medically necessary, supporting documentation must be provided by the prescribing physician. Such documentation should include . . . Objective findings which substantiate the need for the medical care and treatment. The estimated period of time and the estimated number of services required for treatment. The anticipated benefits to the patient. The reasons for continuing treatment, if applicable. Part V., H., of the 1988 Workers' Compensation Reimbursement Manual also provides, at page 9: It is the responsibility of the physician to submit substantiating documentation to the carrier if it is medically necessary to exceed any of the limitations or exclusions of this manual. The carrier's approval should be based upon, but not be limited to, medical necessity, measurable improvement and potential achievement of expected goals. The documentation that the Petitioner provided did not meet the criteria set forth in the reimbursement manual to establish the Petitioner's entitlement to reimbursement for the reexaminations billed for. The Petitioner treated Angel Lugo for his work related injuries on February 25, 1991. The Petitioner billed FEISCO for the following codes for radiologic examinations taken on February 25, 1991: Procedure Code Description MRA 72114 Radiologic examination, spine, lumbosacral; anteroposterior and lateral. . . . complete, including bending views $70 92070 Radiologic examination, [72070] 92170 spine; thoracic, anteroposterior and lateral Radiologic examination $40 [72170] pelvis; anteroposterior only $35 Petitioner in error listed codes 92070 and 92170 which should have been 72070 and 72170 respectively. Petitioner was reimbursed $70 for code 72114, but was disallowed reimbursement for 72070 and 72170. Petitioner contends that he is entitled to receive $75 in additional reimbursement for codes 72070 and 72170. The 1988 Workers' Compensation Reimbursement Manual provides in pertinent part, at page 64: 3. Reimbursement. * * * c. Certain radiology studies have procedure codes which list complete body areas, as well as the individual sections of body areas, as separate entities. When x-rays of multiple sections of a body area are billed separately, the total reimbursement must not exceed the provider's charge or the MRA of the complete body area study, whichever is less.
Conclusions Upon review of the Recommended Order and after a review of the complete record in this case, and having ruled on all of the exceptions filed by the Petitioner, the Department hereby adopts and incorporates by reference the Findings of Fact and Conclusions of Law, except paragraphs 21 of the Conclusions of Law and 1 of the Recommendation as modified herein, set forth in the Recommended Order. Based upon the foregoing, it is accordingly ORDERED and ADJUDGED that: The Petitioner is not entitled to any additional reimbursement with regard to his treatment of patient Angel Lugo; and The Petitioner is not entitled to any additional reimbursement with regard to his treatment of patient Ivan Rothstein; and All other relief claimed by the Petitioner is denied. THIS ORDER CONSTITUTES FINAL AGENCY ACTION. PURSUANT TO 120.68(2), FLORIDA STATUTES, JUDICIAL REVIEW OF THIS PROCEEDING MAY BE INSTITUTED BY FILING A NOTICE OF APPEAL IN THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. SUCH NOTICE OF APPEAL MUST BE FILED WITH THE DISTRICT COURT OF APPEAL WITHIN THIRTY (30) CALENDAR DAYS OF THE DATE THIS ORDER IS FILED IN THE OFFICIAL RECORDS OF THE DEPARTMENT OF LABOR AND EMPLOYMENT SECURITY, AS INDICATED IN THE CERTIFICATE OF THE AGENCY CLERK BELOW, OR FURTHER REVIEW WILL BE BARRED. DONE AND ORDERED this 6th day of October, 1994, in Tallahassee, Florida. STATE OF FLORIDA DEPARTMENT OF LABOR AND EMPLOYMENT SECURITY ANN CLAYTON, DIRECTOR Division of Workers' Compensation 2728 Centerview Drive Suite 301, Forrest Building Tallahassee, Florida 32399 CERTIFICATE OF THE AGENCY CLERK I HEREBY CERTIFY that the above FINAL ORDER has been filed with the Agency Clerk of the Department of Labor and Employment Security this 6th day of October, 1994, and that a true copy has been furnished on this date by hand delivery or U.S. Mail to: Kenneth A. Wolis, Esquire 5th Floor 4601 Sheridan Street Hollywood, Florida 33021 Michael M. Parrish, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Edward A. Dion, General Counsel Department of Labor and Employment Security Suite 307, Hartman Building 2012 Capital Circle, S.E. Tallahassee, Florida 32399-2189 Michael G. Moore, Esquire Department of Labor and Employment Security Suite 307, Hartman Building 2012 Capital Circle, S.E. Tallahassee, Florida 32399-2189 NELDA J. ATKINSON, AGENCY CLERK Department of Labor and Employment Security
Recommendation On the basis of all of the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered in these two consolidated cases to the following effect: Concluding that the Petitioner is entitled to additional reimbursement in the amount of $75.00 for procedure codes 72070 and 72170 with regard to his treatment of patient Angel Lugo; Concluding that the Petitioner is not entitled to any additional reimbursement with regard to his treatment of patient Ivan Rothstein; and Concluding that all other relief claimed by the Petitioner should be denied. DONE AND ENTERED this 8th day of July 1994 in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of July 1994
