The Issue The central issue in this case is whether B&L is the lowest responsive bidder to HRS Medicaid transportation services RFP for fiscal year 1988-89.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact: On March 18, 1988, HRS issued a request for proposal (RFP) for contractual services, the Medicaid transportation services for fiscal year 1988- The proposals were to be opened April 15, 1988. The contract manager for the Medicaid Program Office was identified as Vera Sharitt. All questions pertaining to the provisions of the RFP were to be in writing addressed to Ms. Sharitt. The RFP identified seven categories of transportation which required response. In the instant case, NEMT, AAA, and B&L all submitted proposals for each of the categories. All proposals were first reviewed to determine whether or not they met the requirements set forth in the fatal items checklist. This review was performed by Vera Sharitt. All bid responses were deemed in compliance with the fatal items and were, therefore, submitted to the five member evaluation committee for further review. Committee members then used a ating sheet to determine which proposal was the most advantageous to the state. The evaluation committee weighed each proposal on the basis of five criteria: proposal requirements; response to statement of purpose/need project understanding; method of service provision; references; and rate analysis. The proposal receiving the highest total of points was deemed the most advantageous to the state. In each of the seven transportation categories, B&L received the highest total of points from the evaluation committee members. The evaluation committee met on May 16, 1988. Present at this meeting were: Kent Rice, Connie Klein, Magna Salas, Susan Pippitt, Urban Myers, Vera Sharitt, and Cathy N. D'Heron. In response to a suggestion made by Vera Sharitt, the committee members agreed to assign set points to the rate analysis portion of the rating sheet. Accordingly, the lowest rate was given 10 of the possible 10 points, the second lowest was given 5 of the possible 10 points, and the third lowest was given 1 of the possible 10 points. In the event of a tie, both proposals received the same points. The RFP had included a sample rating sheet which had specified that the rating analysis would be computed on a 0-10 scale. The committee determined that the proposed assignment of 10-5-1 was within the published range but that it would be unfair to give the highest rate 0 points. At no time during the evaluation committee meeting did Vera Sharitt improperly influence or attempt to influence the members' scoring of points. Ms. Sharitt did not interfere with the evaluation process nor did she attempt to favor one proposal over another. Further, there is no evidence which suggests that Ms. Sharitt improperly influenced or attempted to influence evaluation committee members outside of the meeting conducted on May 18, 1988. The fatal items checklist for the RFP asked six cuestions which related to information required to complete a proposal. The absence of any one of the required items would have resulted in the disqualification of the proposal. At issue in this case are the following provisions of the fatal items: Was the fatal items envelope received by the time and date specified in the RFP? Ambulatory Services: Did the proposer submit a copy(ies) of taxi and/or limousine permits? Did the proposer submit proof of registration from the Florida Division of Motor Vehicles? Wheelchair/Stretcher Van Services: Did the proposer submit a copy of county licensure? Did the proposer submit proof of vehicle liability insurance which included insurer name, address and phone number, policy number, vehicles covered as identified by vehicle identification number, liability limits and policy effective/expiration dates? Did the proposer submit a statement that the proposer agrees to all contract terms and conditions? Did the proposer submit the statement regarding no involvement? In reviewing the information submitted under the fatal items checklist, Vera Sharitt determined that if the information sought could be found in any of submitted materials, the proposer would be deemed qualified. Thus, in the case of B&L, Ms. Sharitt found that the insurance coverage for the vehicles, which named B&L as the insured, corresponded to the vehicles identified on the vehicle registrations submitted. Having made the connection to relate proposer to insurance and vehicles, the actual ownership of the vehicles (in this case in the name of a third or fourth entity) Ms. Sharitt deemed to be unimportant. The same approach was applied to the submittals made by AAA and NEMT. The RFP did not require that vehicles identified in a proposal be titled in the name of the proposer. No proposer challenged the terms of the RFP or the fatal items checklist. All three proposers, NEMT, AAA and B&L, complied with the fatal items requirements as consistently reviewed by Ms. Sharitt. Based upon the terms of the RFP and the fatal items checklist, Ms. Sharitt's review and finding that all proposers were qualified was reasonable.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Department of Health and Rehabilitative Services enter a final order awarding the contract for Medicaid transportation services, fiscal year 1988-89, to B & L Services, Inc. DONE and RECOMMENDED this 16th day of September, 1988, in Tallahassee, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of September, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NOS. 88-3157BID, 88-3158BID Rulings on Proposed Findings of Fact submitted by Petitioner, NEMT: Paragraph 1 is rejected as contrary to the weight of the evidence submitted, argumentative and a conclusion of law erroneous to the facts of this case. Paragraph 2 is rejected as contrary to the weight of the evidence submitted. Paragraph 3 is rejected as contrary to the weight of the evidence submitted. Paragraph 4 is rejected as irrelevant, immaterial or contrary to the relevant evidence submitted. Paragraph 5 is rejected as irrelevant, immaterial or contrary to the relevant evidence submitted. Paragraphs 6,7,8 and 9 (including all subportions therein) are rejected as irrelevant or contrary to the weight of the credible evidence submitted. Paragraph 10 is rejected as argument or conclusion of law erroneous to the facts of this case. Paragraph 11 is rejected. There is no evidence which would suggest B&L acted as a "front" for another entity or entities. Paragraph 12 is rejected as argument unsupported by the record in this cause. Paragraph 13 is rejected All parties waived any contest of the rating criteria by not timely challenging the terms of the RFP. Further, the terms as applied in this instance have not been arbitrarily or capriciously used to prejudice any proposer. Paragraph 14 is rejected as contrary to the weight of the evidence presented. Paragraph 15 is rejected as argument or a conclusion of law which, although correctly stated, is not applicable to the facts of this case. Paragraphs 16 and 17 are rejected as argument. Paragraph 18 is accepted to the extent it states Robert J. Siedlecki/NEMT Corp. was a qualified bidder; however, to the extent such paragraph concludes the bidder qualified was NEMT, the paragraph is rejected as contrary to the weight of the evidence presented. Rulings on NEMT's findings as to AAA: 1. Paragraphs 1-5 are rejected as contrary to the weight of the relevant and material evidence submitted. It should be further noted that NEMT does not have standing to contest the award to B&L given the finding that AAA did, in fact, comply with the fatal items checklist. Being a qualified proposer, AAA stood next in line to receive the contract not NEMT. The submissions made by NEMT with the proposed findings of fact have not been considered as evidence in this case. Rulings on the proposed findings of fact submitted by AAA: Inasmuch as this petitioner's proposed findings were not in numbered paragraphs, ruling has been made based upon the order of presentation. The first paragraph being considered paragraph 1. Paragraph is accepted as the applicable rule governing the fatal items checklist. Paragraph 2 is rejected as contrary to the weight of the evidence. Paragraph 3 is rejected as irrelevant, immaterial or contrary to the weight of the credible, relevant evidence. Paragraph 4 is rejected as irrelevant, immaterial or contrary to the weight of the evidence; additionally, such conclusion falls outside of the scope of this petitioner's contest. Paragraph 5 is rejected as contrary to the weight of the evidence. Ms. Sharitt also testified that the connection between B&L and the other entities was based upon insurance documentation submitted with the proposal. Paragraph 6 is rejected as a conclusion of law which, while correctly stately, is not a finding of fact and which has been erroneously applied. Paragraph 7 is rejected as irrelevant, immaterial or contrary to the evidence presented. The first five sentences of paragraph 8 are accepted. The balance of the paragraph is rejected as contrary to the weight of the credible evidence submitted. Paragraph 9 is rejected as unsupported by the record or contrary to the evidence submitted. Rulings on the proposed findings of fact submitted by HRS: Paragraphs 1-10 are accepted. To the extent paragraph 11 conforms with the findings made in paragraphs 5, 6, & 7 they are accepted. Otherwise the paragraph is rejected as contrary to the evidence presented. Paragraphs 12-14 are accepted. Rulings on the proposed findings of fact submitted by B&L: It is presumed the submittal reviewed below was from B&L; however, no identifying statement was included in the text of the proposal itself. The presumption is based on the fact that all other submittals were clearly identified by party name. Paragraphs 1-5 are accepted. Paragraph 6 is accepted see findings made in paragraph 8 as to the exact language of the fatal items checklist. Paragraph 7 is accepted. Paragraphs 8, 9, and 10 are accepted. The first two sentences of paragraph 11 are accepted; the balance of the paragraph is rejected as irrelevant or immaterial to the issues framed in this cause. COPIES FURNISHED: Robert J. Siedlecki 5890 Rodman Street Hollywood, Florida 33023 Brian M. Berman 2310 Hollywood Boulevard Hollywood, Florida 33020 Lawrence F. Kranert, Jr. Department of Health and Rehabilitative Services 201 West Broward Boulevard Fort Lauderdale, Florida 33301 John M. Camillo 301 Southeast 10th Court Fort Lauderdale, Florida 33316 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue The issues in this bid protest are whether, in making the decision to award Intervenor Prestige Health Choice, LLC ("Prestige"), a contract to provide Medicaid managed medical assistance services as a provider service network in Region 11 (covering Miami-Dade and Monroe Counties), Respondent Agency for Health Care Administration ("AHCA") acted contrary to a governing statute, rule, or solicitation specification; and, if so, whether such action was clearly erroneous, contrary to competition, arbitrary, or capricious. (In this protest, Petitioner Care Access PSN, LLC ("Care Access"), challenges AHCA's intended award to Prestige in Region 11, and only that award. Care Access does not seek to upset any other intended awards in Region 11 or in any other Region.)
Findings Of Fact On December 28, 2012, AHCA issued 11 separate invitations to negotiate, one for each region of Florida as established by the legislature in section 409.966, Florida Statutes. These invitations to negotiate solicited proposals from vendors seeking contracts to provide managed medical assistance services to Medicaid enrollees. The goal of these interrelated procurements was (and remains) to enable AHCA, as the agency responsible for administering the Medicaid program, to purchase medical goods and services for all Medicaid recipients throughout the entire state of Florida on a managed care basis instead of under a fee-for-service payment model. At issue in this case is Invitation to Negotiate No. 027-12/13 (the "ITN"), which sought proposals from eligible plans4/ to provide services to Medicaid enrollees in Region 11, which consists of Miami-Dade and Monroe Counties. In compliance with section 409.974(1)(k), Florida Statutes, the ITN stated that AHCA intended to enter into at least five contracts and up to ten contracts in Region 11, with at least one of those contracts being awarded to a provider service network ("PSN"), if a responsive bid from a responsible PSN were received. Fourteen plans responded to the ITN. Four of the bidders identified themselves as PSNs: Care Access; Prestige; Salubris PSN; and South Florida Community Care Network PSN. The other ten bidders were health maintenance organizations ("HMOs"). As described in the ITN, the evaluation phase of the selection process consisted of the following components: evaluation of mandatory criteria; (2) evaluation of financial stability; (3) review and scoring of comments from enrolled Medicaid providers regarding the vendor; (4) review and scoring of the vendor's past performance; and (5) evaluation and scoring of the technical responses. AHCA appointed 28 evaluators to evaluate and score the bids. At the completion of the evaluation phase, AHCA tabulated the evaluators' scores and ranked the 14 Region 11 bids from first to last. The HMOs occupied the first 10 places, followed by Prestige (No. 11), Care Access (No. 12), and the other two PSNs. Thereafter, in July 2013, AHCA invited the eight highest-ranked HMOs and the two highest-ranked PSNs (Prestige and Care Access) to participate in negotiations. AHCA held three negotiation sessions apiece with the ten vendors who advanced to this phase of the competition. Following these negotiations, AHCA presented the vendors with an offer of the contractual terms AHCA sought, including a composite capitation rate and a list of expanded benefits to be covered by the plans. Vendors were instructed to accept AHCA's proposed terms or make a counteroffer. On September 23, 2013, AHCA gave notice of its intent to award contracts in Region 11 to six plans, including Prestige, which was the only PSN to receive an intended award. AHCA later notified the public that four additional contracts would be awarded in Region 11, each to an HMO. With these announcements, which brought to ten the total number of intended awards, AHCA reached the maximum number of contracts it can offer in Region 11. Care Access was not selected for an intended award in Region 11. Care Access timely initiated the instant protest, seeking to have Prestige disqualified from the competition or, failing that, the proposed award to Prestige set aside for reasons independent of Prestige's alleged ineligibility. While Care Access protests the intended award on numerous grounds, the principal objective of this challenge is to establish that Prestige is not really a PSN, which if true would mean that AHCA's intended award is contrary to the mandate of section 409.974(1)(k) that at least one contract in Region 11 be let to a PSN. In this regard, Care Access contends that Prestige fails to meet the PSN provider control and financial interest requirements (about which more will be said) for two separate but related reasons, namely: (a) an HMO named Florida True Health ("FTH"), rather than a group of affiliated health care providers, effectively owns and controls Prestige; and (b) Prestige is not majority-owned (over 50%) by a group of affiliated health care providers. Care Access's position relating to FTH's alleged control of Prestige is based on the undisputed facts that FTH not only owns 40% of Prestige's shares, but also holds an option, which it can exercise at any time until December 31, 2020, to purchase the remaining 60%. Relying on the contractual instruments behind the complex transaction by which FTH purchased both its 40% stake in Prestige and the option to acquire the entire company, Care Access argues that FTH has already taken over Prestige through a "virtual merger," even though the option it holds has not yet been formally exercised. If this were the case, Prestige clearly would not be a provider- operated PSN, because FTH is not a health care provider. Concerning the requirement that a PSN be majority- owned by providers, Care Access asserts that affiliated health care providers, as a group, own less than 50% of Prestige because, even if FTH is merely a minority shareholder, one of the putative "provider owners"——Health Choice Network of Florida, Inc. ("HCNF")——is actually not a provider. There is no dispute that HCNF owns 13.333% of Prestige. There can be no dispute that if, in determining whether Prestige meets the PSN ownership requirement, HCNF's 13.333% interest were subtracted from the sum of Prestige's "provider ownership," Prestige would not be majority-owned by a group of health care providers (because, as everyone agrees, at least 40% of Prestige is owned by non-provider FTH)——and thus it would fail one of the tests for determining PSN status. Care Access's remaining protest grounds can be boiled down to three salient objections: (1) Prestige's bid deviated materially from the ITN specifications because the electronic version of the document Prestige submitted which identified its network providers had been saved in a file format not supported in Microsoft Excel, a popular spreadsheet application; Prestige improperly colluded with FTH, the HMO with which it has a business relationship; and (3) AHCA's decision to set a base price neutralized any competitive advantage for having the lowest bid, in violation of the statutory directive to achieve the "best value" for the state. As mentioned above, the ITN provides that "[a]t least one (1) award in this Region will be to a PSN provided a PSN submits a responsive reply and negotiates a rate acceptable to the Agency." The principal statutory definition of a PSN is set forth in section 409.912, Florida Statutes, which states as follows: (4) [For the purpose of purchasing goods and services for Medicaid recipients in the most cost-effective manner consistent with the delivery of quality medical care, the] agency may contract with: * * * (d)1. A provider service network, which may be reimbursed on a fee-for-service or prepaid basis. Prepaid provider service networks shall receive per-member, per-month payments. A provider service network that does not choose to be a prepaid plan shall receive fee-for-service rates with a shared savings settlement. The fee-for-service option shall be available to a provider service network only for the first 2 years of the plan's operation or until the contract year beginning September 1, 2014, whichever is later. * * * 4. A provider service network is a network established or organized and operated by a health care provider, or group of affiliated health care providers, including minority physician networks and emergency room diversion programs that meet the requirements of s. 409.91211, which provides a substantial proportion of the health care items and services under a contract directly through the provider or affiliated group of providers and may make arrangements with physicians or other health care professionals, health care institutions, or any combination of such individuals or institutions to assume all or part of the financial risk on a prospective basis for the provision of basic health services by the physicians, by other health professionals, or through the institutions. The health care providers must have a controlling interest in the governing body of the provider service network organization. (Emphasis added.)5/ Section 409.962(13) supplies another, slightly different definition of the term: "Provider service network" means an entity qualified pursuant to s. 409.912(4)(d) of which a controlling interest is owned by a health care provider, or group of affiliated providers, or a public agency or entity that delivers health services. Health care providers include Florida-licensed health care professionals or licensed health care facilities, federally qualified health care centers, and home health care agencies. The ITN required each bidder to include, with its submission, a signed Exhibit C-3 titled "Required Certifications and Statements." Item No. 8 of Exhibit C-3 required the bidder to certify that it was a type of plan eligible to respond to the ITN. Prestige certified its eligibility as a PSN by marking the following box: I hereby certify that my company currently operates as one (1) of the following: * * * ? Provider Service Network (PSN) qualified by Section 409.912(4)(d), Florida Statutes, which is majority owned (over 50%) by a health care provider, group of affiliated providers, public agency, or entity that delivers health services (Section 409.962(13), Florida Statutes), and possess a Florida Third Party Administrative License or a subcontract/letter of agreement with a Florida-licensed Third Party Administrator. In addition, the respondent shall complete Exhibit C-4, Disclosure of Ownership and Control Interest Statement (CMS 1513). (Emphasis added.) Prestige's certification was at least partially true. Prestige is a Florida limited liability company that was established in 2007 by a group of Florida-based, federally qualified health centers ("FQHC"s) and community mental health centers. First accepted by AHCA as a PSN in 2008, Prestige has provided services under continuous contract with AHCA ever since, with the most recent contract renewal effective October 1, 2013. The ITN, however, added a requirement that the statutes do not impose, i.e., that a network, to be a PSN, must be majority-owned (over 50%) by a provider or group of affiliated providers. Recall that the statutes, in contrast, mandate that a provider or group of affiliated providers have "a controlling interest" in both the entity and its governing body, which is not the same as owning a majority of its shares.6/ While owning more than 50% of a corporation is likely to ensure a controlling interest in the entity, having a controlling interest is not dependent upon or tantamount to majority ownership. As both AHCA and Prestige acknowledge in their respective proposed recommended orders, it is possible for a minority shareholder or group of affiliated shareholders whose combined ownership is less than 50% to have a controlling interest in a corporation.7/ It is possible, therefore, for an entity to satisfy the definitions of a PSN under sections 409.912(4) and 409.962(13) because a group of affiliated providers have a controlling interest in the network, and yet not be eligible for an award as a PSN pursuant to the ITN because the group of affiliated providers' combined ownership interests total less than 50%. As required by Item No. 8 of Exhibit C-3, Prestige submitted a fully executed Exhibit C-4, the form titled "Disclosure of Ownership and Control Interest Statement." This instrument——a form whose provenance is the Centers for Medicare and Medicaid Services——is commonly known as a "CMS 1513." In its CMS 1513, Prestige divided its shareholders into two categories: "Provider Owners" and "Other Owners." Within the category of Provider Owners, Prestige identified three subcategories: "Health Choice Network of Florida, Inc.-FQHC Controlled Network"; "FQHC Owners"; and "Other Provider Owners." The category of Other Owners, comprising non-providers, was not subdivided.8/ Under the respective subcategories of Provider Owners, Prestige named the shareholder or shareholders belonging to each subset; disclosed each shareholder's percentage of ownership; and provided a subtotal of the aggregate ownership interests within each subcategory. So, under the subcategory of Health Choice Network of Florida, Inc.-FQHC Controlled Network, one entity was identified, i.e., HCNF, whose 13.333% stake represented the subtotal of ownership for that subcategory. Under the subcategory of FQHC Owners, 17 separate entities were listed, whose respective interests added up to a subtotal of 21.139%. Under the subcategory of Other Provider Owners, Prestige enumerated 12 shareholders, some of whom are individuals, and others of which appear to be facilities or organizations. The subtotal of the Other Provider Owners' interests was shown to be 23.364%. For the whole category of Provider Owners, Prestige represented that the combined ownership interests——the sum of the several subtotals——amounted to 57.836%. In addition to the CMS 1513, PSN applicants needed to complete and submit a form titled "Managed Medical Assistance (MMA) Provider Service Network (PSN) Provider Ownership Interest and Disclosure Report," also known as Exhibit C-5. This exhibit contained the following directions: Directions: List each PSN respondent owner included on the completed CMS-1513, Disclosure of Ownership and Control Interest Statement in Column (1). Include direct and indirect owners. In Column 2, specify the percent of indirect and direct ownership of each owner in the PSN respondent (see Item III on the CMS-1513 Detailed Instructions for information on direct and indirect ownership interest). In Column (3), indicate if the owner is currently a Medicaid provider (Yes or No). Only MMA providers included in the legend below are considered providers for the purpose of meeting the MMA PSN ownership requirement pursuant to Section 409.962(13), Florida Statutes. If the answer to Column (3) is yes, complete Columns (4), (5) and (6); otherwise, leave these columns blank. If completing Column (5), preface the number with either "L" for License Number or "M" for Medicaid identification number. In Exhibit C-5's ownership disclosure table, a portion of which is reproduced below,9/ Prestige reported HCNF's ownership interest as follows: In answering "Yes" to the question of whether HCNF is a Medicaid provider, Prestige did not tell the truth. In reality, as the evidence persuasively demonstrates, at no time relevant to this case was HCNF a health care provider, much less an enrolled Medicaid provider. HCNF is a nonprofit corporation organized under chapter 617, Florida Statutes. As described in its bylaws, HCNF's purposes are as follows: [T]he Network's specific purposes shall be to operate and/or support clinical programs, to carry out certain community initiatives, and to perform certain management functions, including but not limited to, information systems and financial services, for the benefit of health centers as defined in Section 330 of the Public Health Service Act and similar community-based primary or behavioral health care organizations that serve medically underserved and uninsured populations . . . . Formed and governed by community medical and behavioral health centers, HCNF qualifies, under federal law, as a tax-exempt "501(c)(3) organization." Under its Articles of Incorporation, moreover, HCNF has chosen to be operated, at all times, "exclusively as a supporting organization within the meaning of Section 509(a)(3) of the [Internal Revenue] Code." As a section 509(a)(3) organization, HCNF is required to provide support services for the benefit of public agencies or private 501(c)(3) organizations. This it generally does for community mental health centers and FQHCs, which——unlike HCNF——directly provide health-care services. According to HCNF's CEO Kevin Kearns, whose testimony on this point is credited as truthful, HCNF is a "fiscal intermediary services organization" ("FISO"). As defined in section 641.316(2)(b), Florida Statutes, a FISO is: a person or entity that performs fiduciary or fiscal intermediary services to health care professionals who contract with health maintenance organizations other than a hospital licensed under chapter 395, an insurer licensed under chapter 624, a third- party administrator licensed under chapter 626, a prepaid limited health service organization licensed under chapter 636, a health maintenance organization licensed under this chapter, or a physician group practice as defined in s. 456.053(3)(h) which provides services under the scope of licenses of the members of the group practice. "Fiduciary or fiscal intermediary services" include: [receiving and collecting reimbursements] on behalf of health care professionals for services rendered, patient and provider accounting, financial reporting and auditing, receipts and collections management, compensation and reimbursement disbursement services, or other related fiduciary services pursuant to health care professional contracts with health maintenance organizations. § 641.316(2)(a), Fla. Stat. FISOs must register with the Florida Office of Insurance Regulation. § 641.316(6), Fla. Stat. HCNF is also a health center controlled network ("HCCN"). This term, as used by the Health Resources and Services Administration ("HRSA") of the U.S. Department of Health and Human Service, means:10/ group of safety net providers (a minimum of three collaborators/members) collaborating horizontally or vertically to improve access to care, enhance quality of care, and achieve cost efficiencies through the redesign of practices to integrate services, optimize patient outcomes, or negotiate managed care contracts on behalf of the participating members. As a FISO and an HCCN, HCNF does not provide health- care services. Rather, HCNF provides back-office services to its members, each of whom is either a behavioral health care center or FQHC and, thus, a health care provider.11/ The back- office services available to HCNF's members include financial services, information technology services, billing services, and centralized referral services. HCNF members pay annual dues for access to these services, and each of them pays additional fees to the corporation based upon the scope and volume of the services that HCNF renders to the individual member. In the abstract, HCNF's membership can reasonably be considered a "group of affiliated providers," for HCNF's members enjoy a mutually beneficial association under, and share a common interest in the continued operation of, the nonprofit corporation which is their jointly controlled service provider, i.e., HCNF. Prestige, however, identified HCNF as a "GP," thereby signifying that HCNF (as opposed to its collective membership) is a "group of affiliated providers," that is, one of the health care "provider types" listed in Exhibit C-5's ownership disclosure table. Given that HCNF is not any type of provider, the designation of HCNF as a GP was of debatable accuracy,12/ but Prestige had claimed HCNF as a GP owner in previous filings with AHCA (unrelated to this procurement), and AHCA had not objected, so there was at least some historical precedent for such a characterization of HCNF. In contrast, Prestige's statement in Exhibit C-5 that HCNF is a Medicaid provider was a material misrepresentation for which no persuasive justification has been made. While the evidence fails to establish that Prestige intended to deceive AHCA, it does show that AHCA relied on Prestige's representations, including this one, which it accepted at face value. As AHCA explains in its Proposed Recommended Order, "Nothing in the ITN required AHCA to look beyond Prestige's certifications and disclosures in Exhibits C-3, C-4 and C-5 in determining Prestige's status as PSN."13/ Thus, in making its decision to award Prestige the contract reserved for a PSN, AHCA did so in the mistaken belief that HCNF was a Medicaid provider, which in fact it is not. This is significant because if HCNF were a Medicaid provider, as AHCA thought, there would be no dispute over the treatment of HCNF's 13.333% interest in Prestige as "provider ownership" for the purpose of determining whether Prestige is majority-owned (over 50%) by a group of affiliated providers. As it is, there is no reason to consider non-provider HCNF's 13.333% interest for the purpose of meeting the PSN ownership requirement. For reasons that will be more fully explained below in the Conclusions of Law, the undersigned determines as a matter of ultimate fact that Prestige is not a PSN for the purposes of the ITN because: (a) HCNF is not a health care provider; (b) HCNF is not a "group of affiliated providers" as that term is used in sections 409.912(4) and 409.962(13) and in Item No. 8 of ITN Exhibit C-3, nor, as a non-provider, can it be a member of such a group; and (c) when HCNF's 13.333% ownership interest is excluded from consideration, as it must be, Prestige is not majority-owned (over 50%) by a group of affiliated providers, as required by Item No. 8 of ITN Exhibit C-3. Because Prestige is not a PSN for the purposes of the ITN, it is ineligible for the PSN award pursuant to the set- aside provided for in section 409.974(1)(k), Florida Statutes, which is what Prestige has tentatively won under AHCA's intended decision. AHCA's proposed action is, therefore, contrary to the plain and unambiguous language of the governing statutes and applicable ITN specifications. To the extent AHCA's proposed action is based upon interpretations of these statutes and specifications, such action is clearly erroneous. The determination, as a matter of ultimate fact, that Prestige fails to meet the ITN's majority-ownership test and, hence, is not a PSN for purposes of this procurement provides a sufficient basis, without more, for concluding that AHCA should not proceed with the intended award. This makes it unnecessary to decide whether FTH is either in exclusive control of Prestige or, alternatively, the sole legal and beneficial owner of Prestige's shares, as Care Access contends; accordingly——and because a thorough discussion of the dispute over the nature and extent of FTH's respective ownership and controlling interests might entail the disclosure of facts that Prestige considers confidential trade secrets——no further findings or conclusions on this issue will be made.14/ Although the merits of Care Access's remaining protest grounds need not be decided either, the undersigned will address them in abbreviated fashion. The Provider Network File. Each bidder was required to submit, as Exhibit E-3, a "Provider Network File" that contained a comprehensive listing of its proposed provider network. The ITN provided the following instructions for completing and submitting the Provider Network File: Respondents shall submit both a printed hard copy and electronic version of the Provider Network File saved to CD. The electronic version of the Provider Network File shall be an Excel spreadsheet, and should adhere to the data specifications outlined below. The Agency will evaluate the Provider Network File using a Provider Network Assessment Tool . . . . (Emphasis added.) Addendum 2 to the ITN warned bidders as follows: Respondents to the ITN shall utilize the Attachment E, Exhibits E-1 through E-5, as applicable. All respondents bidding on a Standard MMA Plan shall complete the following Exhibits to Attachment E: Exhibit E-1, Standard Submission Requirements and Evaluation Criteria; Exhibit E-2, Standard Quality Measurement Tool; and Exhibit E-3, Provider Network File. Failure to use the formats provided by the Agency or failure to properly complete any Exhibit may result in a reduction of the score (to include an award of zero (0) points for the submission.) (Emphasis added.) Neither Care Access nor any other vendor challenged this amendment to the ITN. Prestige submitted its digital Provider Network File in the Portable Document Format ("PDF"), which is not supported in Microsoft Excel. Therefore, the AHCA evaluators were unable to extract data from the electronic version of Prestige's Provider Network File and needed to review the printed hard copy instead——a less efficient method of performing the task of evaluating Prestige's network. Prestige's failure to submit the Provider Network File in the proper digital format did not give Prestige a competitive advantage over other bidders who strictly complied with the electronic filing requirements. A list of Prestige's providers was, after all, submitted (as required) in a printed hard copy and thus available for review. In addition, AHCA's evaluators deducted points from Prestige's score for the mistake of submitting an incompatible electronic file, a penalty which placed Prestige at a competitive disadvantage relative to compliant bidders. In giving Prestige zero points for evaluation criteria related to the Provider Network File, the evaluators took action consistent with the ITN's instructions. AHCA determined, as a matter of ultimate fact, that Prestige's submission of an electronic PDF document containing its provider list, rather than an Excel-compatible file, was a minor irregularity, not a material deviation. This determination, the undersigned finds, was not clearly erroneous. AHCA's decision to waive the minor irregularity is entitled to great deference and should be upheld unless it was arbitrary or capricious. The undersigned cannot say that waiving the technical deficiency was illogical, despotic, thoughtless, or otherwise an abuse of discretion. Therefore, the intended award should not be rescinded based upon Prestige's noncompliance with the electronic filing requirements. Collusion. The ITN contained three separate provisions prohibiting collusion and requiring the bidders to independently prepare their responses. In Attachment A, the ITN provided as follows: 9. Respondent's Representation and Authorization. In submitting a response, each respondent understands, represents, and acknowledges the following (if the respondent cannot so certify to any of following, the respondent shall submit with its response a written explanation of why it cannot do so). * * * The submission is made in good faith and not pursuant to any agreement or discussion with, or inducement from, any firm or person to submit a complementary or other noncompetitive response. * * * The respondent has made a diligent inquiry of its employees and agents responsible for preparing, approving, or submitting the response, and has been advised by each of them that he or she has not participated in any communication, consultation, discussion, agreement, collusion, act or other conduct inconsistent with any of the statements and representations made in the response. In Attachment C, the ITN provided these instructions for preparing a response: Independent Preparation of Response: A respondent shall not, directly or indirectly, collude, consult, communicate or agree with any other respondent as to any matter related to the response each is submitting. Additionally, a respondent shall not induce any other respondent to submit or not to submit a response. Finally, the ITN required bidders to sign a "Non- Collusion Certification," which provided as follows: I hereby certify that all persons, companies, or parties interested in the response as principals are named therein, that the response is made without collusion with any other person, persons, company, or parties submitting a response. In applying the foregoing anti-collusion provisions, consideration must be given to section 409.966(3)(b), Florida Statutes, which governs the instant procurement and provides as follows: An eligible plan must disclose any business relationship it has with any other eligible plan that responds to the invitation to negotiate. The agency may not select plans in the same region for the same managed care program that have a business relationship with each other. Failure to disclose any business relationship shall result in disqualification from participation in any region for the first full contract period after the discovery of the business relationship by the agency. For the purpose of this section, "business relationship" means an ownership or controlling interest, an affiliate or subsidiary relationship, a common parent, or any mutual interest in any limited partnership, limited liability partnership, limited liability company, or other entity or business association, including all wholly or partially owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates of such entities, business associations, or other enterprises, that exists for the purpose of making a profit. (Emphasis added.) It is not surprising that, in view of section 409.966(3)(b)——which practically requires potential bidders having a business relationship with each other to coordinate in some fashion so as to avoid an intra-regional competition that would be at best a zero-sum game between them——several vendors sought clarification of the anti-collusion provisions during the pre-bid question-and-answer process. Of interest are the following questions: 6. Can entities which have some common ownership, share common management or have Board of Directors that overlap, strategize and determine [through] communications and discussion which region under the SMMC ITN is appropriate for each such entity to respond to as a bidder without violating the prohibition against "inducement" set forth in the SMMC ITN? * * * 13. Does this section apply to respondents who are affiliates and who are preparing responses in different regions? * * * 23. How can entities which share some common ownership or are otherwise related in some manner AND who are responding to the SMMC ITN in separate and distinct regions collaborate, communicate, consult and strategize on each's respective response to the SMMC ITN for the applicable region without violating the requirement of "independent preparation of response" as set forth in the SMMC ITN? AHCA answered each of these questions with the same response: "Each Regional ITN is a separate procurement, the specifications of which apply to that region." This answer was made part of the ITN through Addendum 2. What AHCA meant by this, the evidence shows, is that the anti-collusion provisions were intended to apply only to bidders competing against each other within a particular region. While there might be other reasonable interpretations of the ITN's anti-collusion specifications, AHCA's is within the range of permissible interpretations and, thus, not clearly erroneous. Indeed, a stricter interpretation might have discouraged affiliated companies from competing.15/ FTH did not submit a bid in response to the ITN. Pursuant to AHCA's interpretation of the ITN's anti-collusion specifications——an interpretation which no one protested upon its publication in Addendum 2 to the ITN——Prestige and FTH were free to communicate with each other about one's bid in any region, such as Region 11, where the two would not be competing head-to-head. AHCA's proposed action should not be set aside based upon the objection that Prestige violated the ITN's anti- collusion provisions by communicating with FTH. Cost Proposals. Care Access objects to AHCA's refusal to allow a bidder to achieve an advantage over competitors by offering a lower price. The evidence shows that, after comparing and evaluating the price proposals submitted by each vendor for the region, AHCA developed a common base rate, which was presented to the bidders invited to participate in negotiations. This rate ($366.66) was higher than Care Access's initial offer ($317.46). During negotiations, Care Access acceded to AHCA's proposed rate, apparently because there was nothing to be gained by offering a lower price, as it had been willing to do. AHCA's establishment of a common base rate which a bidder willing to accept less was not allowed to beat for competitive advantage conformed to the answer AHCA had given in response to a pre-bid question, which had been published in Addendum 2 to the ITN. The question was: "Will the state consider plan specific reimbursement rates or will there be a common rate negotiated among the awarded plans within a region?" AHCA answered as follows: "The Agency intends to negotiate common base rates for each region." No potential bidder protested this response, which became part of the ITN. It is determined as a matter of ultimate fact that the procedure used by AHCA with respect to the common rate was not contrary to the terms of the ITN, but rather was consistent therewith. Consequently, AHCA's intended action should not be disturbed based upon Care Access's objection to use of a common base rate.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that AHCA enter a Final Order (a) rescinding the proposed award to Prestige on the ground that Prestige, being minority owned (under 50%) by a group of affiliated health care providers, is not a PSN for the purpose of this procurement; and (b) taking such further remedial action(s)——besides upsetting any other intended awards in any Region——as AHCA, in its discretion as the letting authority, deems necessary or appropriate in light of Prestige's ineligibility to receive the PSN contract in Region 11. DONE AND ENTERED this 2nd day of January, 2014, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings 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 2nd day of January, 2014.
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 is whether Petitioner satisfies the eligibility requirements in Subsection 121.081(1)(f), Florida Statutes (2005), to purchase past service credit in the Florida Retirement System (FRS).
Findings Of Fact Petitioner was employed as a State Certified Paramedic by Harbor City Volunteer Ambulance Squad, Inc. (HCVAS), in Brevard County, Florida, from sometime in December 1976 through September 30, 1999. From October 1, 1999, through the date of the formal hearing, Petitioner was employed as a county employee in an identical capacity with Brevard County Fire Rescue (BCFR). Petitioner's employment with HCVAS and BCFR was continuous, with no break in service. Petitioner performed identical services with HCVAS and BCFR and had identical duties and responsibilities. At BCFR, Petitioner received credit for 80 percent of the seniority and leave accrued while Petitioner was employed with HCVAS. From sometime in October 1992 through September 30, 1999, HCVAS furnished emergency and non-emergency ambulance service in an area the parties refer to as the central part of Brevard County, Florida, that is legally described in Petitioner's Exhibit A (the service area). HCVAS furnished ambulance service pursuant to a contract with the Brevard County Board of County Commissioners (the County). HCVAS was an independent contractor with the exclusive right to provide ambulance service in the service area. The County, rather than HCVAS, provided emergency ambulance service for that part of the County outside the service area. A company identified in the record as Coastal Health Services provided non-emergency ambulance service outside the service area. HCVAS was an "employing entity which was not an employer under the [FRS]," within the meaning of Subsection 121.081(1)(f), Florida Statutes (2005). HCVAS was a private, non-profit company rather than a government entity. However, employees of HCVAS were not volunteers, but were full-time employees of HCVAS. HCVAS paid its employees, including Petitioner, from funds received from the County. The County retained exclusive control of communication and dispatching of emergency calls for the entire County, including the service area. The County required HCVAS to maintain communication equipment that was compatible with the central communication system. On October 1, 1999, the County effected an "assumption of functions or activities" from HCVAS within the meaning of Subsection 121.081(1)(f), Florida Statutes (2005). The County allowed the contract with HCVAS to expire on September 30, 1999. On April 13, 1999, the County authorized BCFR to provide emergency ambulance service to the service area previously served by HCVAS. The County also authorized the county manager to purchase rescue units and equipment and required the county manager to give first priority to units and equipment of HCVAS. Eligibility for HCVAS employees such as Petitioner to participate in the FRS arose through the assumption of HCVAS functions by the County. The County did not employ HCVAS employees, including Petitioner, as a result of competitive selection. The primary conditions of employment for HCVAS employees such as Petitioner were that each HCVAS employee must apply for employment with the County no later than May 29, 1999; possess a valid Florida driver's license; and pass a criminal background check. The County directed its Public Safety Department (Department) to give special consideration to HCVAS employees, including Petitioner, by hiring as many HCVAS employees as possible. Applications for employment from the general public were to be accepted only if employment positions remained unfilled after placing all qualified HCVAS employees in available positions. Approximately 95 HCVAS employees, including Petitioner, applied for employment with the County. The County employed approximately 90 of the 95 applicants. The five applicants who were not employed were rejected because the applicants either did not possess a valid Florida driver's license or did not pass the criminal background screening. Rejection of an applicant required approval of two supervisors. On October 1, 1999, the County recognized past service with HCVAS by new employees such as Petitioner. The County credited each new employee with seniority, annual leave, and sick leave based on a contractual formula negotiated with the labor union equal to 80 percent of seniority, annual leave, and sick leave earned while employed by HCVAS. On October 1, 1999, former HCVAS employees employed by the County, including Petitioner, became entitled to participate in the FRS system through the "assumption of functions or activities" by the County from HCVAS "which was not an employer under the system" within the meaning of Subsection 121.021(1)(f), Florida Statutes (2005). On the same date, Petitioner became a member of the special risk class of FRS and is "entitled to receive past-service credit . . . for the time" Petitioner "was an employee of [HCVAS] . . . the "other employing entity." On November 6, 2003, Petitioner applied to purchase credit in the FRS for his past service with HCVAS. On December 23, 2003, Respondent denied Petitioner's request on the ground that a "merger, transfer or consolidation" of functions between units of government did not occur. On January 8, 2004, Petitioner provided Respondent with a written reply. The reply explained that the application to purchase credit for past service was based on the County's assumption of functions or services by an employing entity that was not an employer under the FRS and not on a merger, transfer, or consolidation of functions between units of government. By letters dated April 16 and May 25, 2004, Respondent issued written statements of proposed Final Agency Action. On April 16, 2004, Respondent based its proposed agency action on the express ground that a "merger, transfer or consolidation" had not occurred when the County undertook emergency ambulance service in the service area. On May 25, 2004, Respondent added the additional ground that an assumption of functions did not occur between governmental units because HCVAS was a "not-for- profit corporation" and not a "unit of government."
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order granting Petitioner's application to purchase credit in the FRS for past service with HCVAS. DONE AND ENTERED this 31st day of January, 2006, in Tallahassee, Leon County, Florida. S DANIEL MANRY 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 31st day of January, 2006. COPIES FURNISHED: Robert B. Button, Esquire Department of Management Services Division of Retirement 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950 Adrienne E. Trent, Esquire Allen & Trent, P.A. 700 North Wickham Road, Suite 107 Melbourne, Florida 32935 Alberto Dominguez, General Counsel Department of Management Services Post Office Box 9000 Tallahassee, Florida 32399-9000 Sarabeth Snuggs, Director Division of Retirement Department of Management Services Post Office Box 9000 Tallahassee, Florida 32399-9000
Conclusions Having reviewed the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part I], and Chapter 400, Part X, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaint and Election of Rights form to the Respondent. (Ex. 1) The parties have since entered into the attached Settlement Agreement, (Ex. 2). Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The facility’s Certificate of Exemption is deemed surrendered and is cancelled and of no further effect. 3. Each party shall bear its own costs and attorney’s fees. Any requests for administrative hearings are dismissed and the above-styled case is closed. 4. In accordance with Florida law, the Respondent is responsible for retaining and appropriately distributing all client records within the timeframes prescribed in the authorizing statutes and applicable administrative code provisions. The Respondent is advised of Section 408.810, Florida Statutes. 5. In accordance with Florida law, the Respondent is responsible for any refunds that may have to be made to the clients. Filed December 24, 2014 3:13 PM Division of Administrative Hearings 6. The Respondent is given notice of Florida law regarding unlicensed activity. The Respondent is advised of Section 408.804 and Section 408.812, Florida Statutes. The Respondent should also consult the applicable authorizing statutes and administrative code provisions. The Respondent is notified that the cancellation of an Agency license may have ramifications potentially affecting accrediting, third party billing including but not limited to the Florida Medicaid program, and private contracts. ORDERED at Tallahassee, Florida, on this 75 day of bam ee , 2014. NOTICE OF RIGHT TO JUDICIAL REVIEW. A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct of this Final Ogder was served on the below-named persons by the method designated on this ebrtay of en Lia , 2014. Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Thomas Jones, Unit Manager Facilities Intake Unit Licensure Unit Agency for Health Care Administration Agency for Health Care Administration (Electronic Mail) (Electronic Mail) Katrina Derico-Harris Arlene Mayo—Davis, Field Office Manager Medicaid Accounts Receivable Local Field Office Agency for Health Care Administration Agency for Health Care Administration (Electronic Mail) (Electronic Mail) Shawn McCauley Daniel A. Johnson, Senior Attorney Medicaid Contract Management Office of the General Counsel Agency for Health Care Administration Agency for Health Care Administration (Electronic Mail) (Electronic Mail) Division of Administrative Hearings Dagmar Llaudy, Esquire (Electronic Mail) Law Office of Dagmar Llaudy, P.A. 814 Ponce De Leon Blvd, Suite 513 Coral Gables, Florida 33134 (U.S. Mail) NOTICE OF FLORIDA LAW 408.804 License required; display.-- (1) It is unlawful to provide services that require licensure, or operate or maintain a provider that offers or provides services that require licensure, without first obtaining from the agency a license authorizing the provision of such services or the operation or maintenance of such provider. (2) A license must be displayed in a conspicuous place readily visible to clients who enter at the address that appears on the license and is valid only in the hands of the licensee to whom it is issued and may not be sold, assigned, or otherwise transferred, voluntarily or involuntarily. The license is valid only for the licensee, provider, and location for which the license is issued. 408.812 Unlicensed activity. -- (1) A person or entity may not offer or advertise services that require licensure as defined by this part, authorizing statutes, or applicable rules to the public without obtaining a valid license from the agency. A licenseholder may not advertise or hold out to the public that he or she holds a license for other than that for which he or she actually holds the license. (2) The operation or maintenance of an unlicensed provider or the performance of any services that require licensure without proper licensure is a violation of this part and authorizing statutes. Unlicensed activity constitutes harm that materially affects the health, safety, and welfare of clients. The agency or any state attorney may, in addition to other remedies provided in this part, bring an action for an injunction to restrain such violation, or to enjoin the future operation or maintenance of the unlicensed provider or the performance of any services in violation of this part and authorizing statutes, until compliance with this part, authorizing statutes, and agency rules has been demonstrated to the satisfaction of the agency. (3) It is unlawful for any person or entity to own, operate, or maintain an unlicensed provider. If after receiving notification from the agency, such person or entity fails to cease operation and apply for a license under this part and authorizing statutes, the person or entity shall be subject to penalties as prescribed by authorizing statutes and applicable rules. Each day of continued operation is a separate offense. (4) Any person or entity that fails to cease operation after agency notification may be fined $1,000 for each day of noncompliance. , (5) When a controlling interest or licensee has an interest in more than one provider and fails to license a provider rendering services that require licensure, the agency may revoke all licenses and impose actions under s. 408.814 and a fine of $1,000 per day, unless otherwise specified by authorizing statutes, against each licensee until such time as the appropriate license is obtained for the unlicensed operation. (6) In addition to granting injunctive relief pursuant to subsection (2), if the agency determines that a person or entity is operating or maintaining a provider without obtaining a license and determines that a condition exists that poses a threat to the health, safety, or welfare of a client of the provider, the person or entity is subject to the same actions and fines imposed against a licensee as specified in this part, authorizing statutes, and agency rules. (7) Any person aware of the operation of an unlicensed provider must report that provider to the agency.
The Issue Whether Medicaid overpayments were made to Petitioner and, if so, what is the total amount of these overpayments.
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following findings of fact are made to supplement and clarify the stipulations of fact set forth in the parties' March 5, 2002, Joint Prehearing Stipulation: Petitioner Petitioner was incorporated in 1989 by Mr. Taylor. It operated Choice Pharmacy, a pharmacy located at 9920 Northwest 27th Avenue in Miami, Florida, from around the time of its incorporation until approximately 1999. The Provider Agreement During the period from September 10, 1997, through August 31, 1998, Petitioner was authorized to provide pharmacy services and goods to eligible Medicaid recipients in Florida. Petitioner provided such services and goods pursuant to a Medicaid Provider Agreement Mr. Taylor had signed, on behalf of Petitioner, on February 21, 1997. The Provider Agreement contained the following provisions, among others: The Provider agrees to participate in the Florida Medicaid program under the following terms and conditions: * * * Quality of Service. . . . 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 or 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. This provider agreement shall become effective the date the provider's Florida Medicaid Enrollment Application is received by the state or its fiscal agent. It shall remain in effect until July 1, 1999, unless otherwise terminated. . . . 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 provided by law, the provider agrees to provide immediate access to authorized persons (included 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. . . . Prescribed Drug Services Coverage, Limitations and Reimbursement Handbook, and the Medicaid Provider Reimbursement Handbook The Prescribed Drug Services Coverage, Limitations and Reimbursement Handbook (referenced in the "Facts Not in Dispute" section of the parties' Joint Prehearing Stipulation) at all times material to the instant case contained the following "record keeping " provisions, among others: The provider must retain all medical, fiscal, professional and business records on all services provided to a Medicaid recipient. Records may be kept on paper, magnetic material, film, or other media. In order to qualify as a basis for reimbursement, the records must be signed and dated at the time of service, or otherwise attested to as appropriate to the media. Rubber stamp signatures must be initialed. The records must be accessible, legible and comprehensible. Records must be retained for a period of at least five years from the date of service. The following types of records, as appropriate for the type of service provided, must be retained (the list is not all inclusive): . . . . Business records, such as accounting ledgers, financial statements, purchase/acquisition records, invoices, inventory records, check registers, canceled checks, sales records, etc.; Tax records, including purchase documentation; . . . . 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. . . . The Medicaid Provider Reimbursement Handbook (referenced in the "Facts Not in Dispute" section of the parties' Joint Prehearing Stipulation) at all times material to the instant case contained similar provisions. The Prescribed Drug Services Coverage, Limitations and Reimbursement Handbook (referenced in the "Facts Not in Dispute" section of the parties' Joint Prehearing Stipulation) at all times material to the instant case further provided that "[r]eimbursement for prescribed drug services is based on the cost of the drug to the pharmacy plus a dispensing fee." The Audit and Aftermath In July of 1998, AHCA's Medicaid fiscal agent contractor (Unysis Corporation) conducted a "desk audit" of Medicaid claims submitted by Petitioner. Following the completion of the "desk audit," the matter was referred to AHCA's Office of Medicaid Program Integrity to conduct "a more in depth" audit (involving an examination of invoices and other documentation to determine whether Petitioner had available during the period under review sufficient quantities of goods to support its billings to the Medicaid program). The audit, which covered the period from September 10, 1997, through August 31, 1998 (Audit Period), was conducted by Kathryn Holland, with the assistance of an accounting firm retained by AHCA, Krause, Humphress, Pace & Wadsworth, CPA (Krause). Ms. Holland is a Florida-registered pharmacist who has been a senior pharmacist with AHCA for the past 12 years. She has no formal education or training in accounting, but does have 12 years of experience "doing the kind of audits" she conducted in the instant case. In an effort to obtain information needed for the audit, Krause requested that Petitioner fill out and return a Questionnaire for Medicaid Providers. The questionnaire was filled out and returned by Mr. Taylor, on behalf of Petitioner, on or about October 30, 1998. Mr. Taylor indicated on the questionnaire that, during the Audit Period, the "percentage of [Petitioner's] prescription business that [was] Medicaid" was approximately 90 percent. He further indicated on the questionnaire that Petitioner's "total dollar sales volume of prescription drugs" during the Audit Period was $5,732,028.84; Petitioner's "cost of prescription drugs sold during [the] Audit Period" was $5,220,200.27; Petitioner's "prescription drug inventory at cost, [at the] beginning of [the Audit] Period" was $180,721.00; and Petitioner's "prescription drug inventory at cost, [at the] end of [the Audit] Period" was $306,081.00. The questionnaire requested the name(s) of Petitioner's "major drug suppliers during the review period." All suppliers that "provided more than 10% of [Petitioner's] drug purchases" were to be listed. Mr. Taylor listed on the questionnaire the following "major drug suppliers": "McKesson Inc.," "Quality Medical," "Pharma Plus Wholesale Inc.," and "Quest Medical Supply." IV Pharmaceutical Wholesalers, Inc., was not among the "major drug suppliers" named by Mr. Taylor. According to the information provided on the questionnaire by Mr. Taylor, the purchases made by Petitioner from "McKesson Inc.," "Quality Medical," "Pharma Plus Wholesale Inc.," and "Quest Medical Supply" represented approximately 20 percent, 20 percent, 40 percent, and 10 percent, respectively, of Petitioner's "total [drug] purchases" during the Audit Period. By letter dated November 9, 1998, Krause requested Pharma Plus Wholesale, Inc. (Pharma Plus) to provide it "with a download of all transactions (all accounts) for the period September 1, 1997 through August 31, 1998," between Pharma Plus and Choice Pharmacy. Pharma Plus, in a letter dated January 18, 1999, provided the following response to Krause's request: [A]s per our conversation I am submitting this document to formally inform you and your office that Pharma Plus Wholesale, Inc. has never done any business with Choice Pharmacy (Legal Name: OKAN, Inc) 9920 N.W. 27th Avenue Miami, FL 33147.) By letter dated January 20, 1999, Ms. Holland requested McKesson Drug Company (McKesson) to provide her "with a download of all transactions for the period July 1, 1997, through August 31, 1998" between McKesson and Choice Pharmacy. On February 16, 1999, McKesson provided Ms. Holland with a "paper printout" containing the requested information. The material submitted by McKesson revealed that there were a considerable number of transactions between McKesson and Choice Pharmacy during the period in question. On April 2, 1999, Ms. Holland sent a letter to Mr. Taylor, which read, in part, as follows:: On or around July 16, 1998, an auditor from Unisys Corporation, the fiscal agent contractor for the Florida Medicaid program, conducted an audit of your pharmacy department. The audit is being reviewed by Medicaid Program Integrity. In order for us to complete our review, we are requesting and must receive the following: Documentation that identifies all purchases/acquisitions by Choice Pharmacy for the products listed on "Attachment A" for the period from July 1, 1997, through August 31, 1998. Documentation that identifies all credits/returns for the period stated above for the products listed on "Attachment A." . . . You have 30 days from the receipt of this letter to submit the requested information. . . . The "products" listed on "Attachment A" did not include "every single drug Petitioner had billed to Medicaid. Only the 50 "highest paid" drugs were listed on "Attachment A." Mr. Taylor responded to Ms. Holland's letter by providing her with, on May 13, 1999, a three-inch stack of documents reflecting transactions between Petitioner and "quite a few different [drug] wholesalers." Ms. Holland attempted (successfully in some instances and unsuccessfully in others) to contact wholesalers whose names appeared on the documentation provided by Mr. Taylor to obtain from them documentation regarding their transactions with Petitioner. After analyzing the documentation with which she had been provided by Petitioner and by the drug wholesalers she had been able to contact, and examining AHCA's records of the claims filed by Petitioner during the Audit Period, Ms. Holland determined that there was insufficient documentation to demonstrate that, during the Audit Period, Petitioner had available sufficient inventory to support $4,248,262.37 of its billings to the Medicaid program. By letter dated July 28, 1999, Ms. Holland advised Mr. Taylor of this "provisional finding." The letter read, in part, as follows: Medicaid Program Integrity has reviewed your paid Medicaid claims with dates of service from September 10, 1997, through August 31, 1998. We have also reviewed your product purchase/acquisition documentation received on May 13, 1999. Some of the purchase/acquisition documents that you furnished could not be substantiated by the distributor/wholesaler and were therefore not included in the review. You have failed to provide adequate documentation to the effect that the available quantity of certain drugs of given strength was as great as the quantity of those drugs billed to and reimbursed by Medicaid. Based on this review, we have made a provisional determination that you were overpaid $4,248,262.37 for claims that in whole or in part are not covered by Medicaid. The amount due for the overpayment is $4,248,262.37. This is, however, a provisional finding and we encourage you to submit any additional information or documentation that you may have that you feel may serve to change the overpayment. * * * Based on the above, we have reason to believe that you have been overpaid by the Medicaid program. The overpayment identified in the summary sheet attachment is with regard only to the 45 drugs listed and comprehends only the period audited, namely September 10, 1997, through August 31, 1998. A printout identifying all relevant claims involved in the overpayment and a copy of the drug purchase/acquisitions are attached. The overpayment calculation is based upon the assumption that all stock demonstrated as available during the audit period was exclusively dispensed to Medicaid recipients; this is undoubtedly not the case and the assumption serves to reduce the amount of the overpayment. Medicaid payments that have been substantiated by documented inventory are assumed to be valid; and payments in excess of that amount are regarded to be invalid. Accordingly, as shown in the summary sheet attachment, we have determined at this time that you have been overpaid by the Medicaid program in the amount of $4,248,262.37. If additional overpayments are found subsequently, you will be notified. * * * If you have any additional invoices or other relevant documentation that you wish to submit that you feel would alter these findings, please submit your written explanation and legible copies of the documentation to us immediately. . . . If you have not submitted documentation or made payment within 30 days, we will send you notice regarding the agency's final determination, taking into consideration any information or documentation that you submit within this time period. On August 16, 1999, Mr. Diamond, on behalf of Petitioner, telephonically requested a 21-day extension of time to submit additional documentation for Ms. Holland's consideration. By letter dated August 17, 1999, Ms. Holland advised Mr. Diamond that the requested extension of time had been granted. Mr. Diamond, on behalf of Petitioner, on September 14, 1999, provided Ms. Holland with an "additional package of documentation." Ms. Holland reviewed these documents. "Most everything in this package was a duplicate" of documents that Ms. Holland had already been provided by Mr. Taylor. The following day, Ms. Holland, by facsimile transmission, requested Mr. Diamond to provide her with cancelled checks evidencing Petitioner's payment of eight, specified invoices included in the "additional package of documentation" she had received from Mr. Diamond. Mr. Diamond provided Ms. Holland with five cancelled checks on October 8, 1999. Ms. Holland determined, in light of the additional documentation she had received following her "provisional finding" that Petitioner had been overpaid $4,248,262.37 by the Medicaid program, that the amount of that overpayment should be reduced by $764.67. She advised Mr. Taylor of this "final agency audit" determination, by letter dated October 27, 1999, which read, in part, as follows: Medicaid Program Integrity has completed a review of your paid Medicaid claims with dates of service from September 10, 1997, through August 31, 1998. We have also reviewed your product purchase/acquisition documentation received on May 13, 1999, September 14, 1999, and October 8, 1999. You have failed to provide adequate documentation to the effect that the available quantity of certain drugs of given strength was as great as the quantity of those drugs billed to and reimbursed by Medicaid. You are hereby notified that Okan, Inc. d/b/a Choice Pharmacy was overpaid $4,247,497.70 for claims that in whole or in part are not covered by Medicaid. The total amount due for the overpayment is $4,247,497.70. The above action and your right or appeal are discussed below. * * * We have required that you submit invoices from your suppliers to substantiate the availability of drugs that you billed to Medicaid. You have not fully substantiated such availability. Section 409.913(10), F.S., states in part that the Agency may require repayment for inappropriate, medically unnecessary, or excessive goods or services. Section 409.913(14)(n), F.S., states that "The agency may seek any remedy provided by law, including but not limited to, the remedies provided in subsection (12) and (15) and s. 812.035, if: * * * (n) The provider fails to demonstrate that it had available during a specific audit or review period sufficient quantities of goods, or sufficient time in the case of services, to support the provider's billings to the Medicaid program." Billing Medicaid for drugs that have not been demonstrated as available for dispensing is a violation of Medicaid laws and regulations and has resulted in the finding that you been overpaid by the Medicaid program. The overpayment identified in the summary sheet attachment is with regard only to the 45 drugs listed and comprehends only the period audited, namely September 10, 1997, through August 31, 1998. A printout identifying all relevant claims involved in the overpayment and a copy of the drug purchase/acquisition review are attached. The overpayment calculation is based upon the assumption that all stock demonstrated as available during the audit period was exclusively dispensed to Medicaid recipients; this is undoubtedly not the case and the assumption serves to reduce the amount of the calculated overpayment. All Medicaid payments sufficient to cover documented inventory have been assumed to be valid, and payments in excess of that amount are regarded to be invalid. Accordingly, as shown in the summary sheet attachment, we have determined at this time that you have been overpaid by the Medicaid program in the amount of $4,247,497.70. If additional overpayments are found subsequently, you will be notified. * * * If you accept or concur with these finding, please send your check in the amount of $4,247,497.70, made payable to the Florida Agency for Health Care Administration, to: . . . . You have the right to request a formal or informal hearing pursuant to section 120.569, F.S. . . . [I]f a request for a hearing is made, the request or petition must be received within twenty-one (21) days of receipt of this letter. Failure to timely request a hearing shall be deemed a waiver of your right to a hearing. . . . Mr. Diamond, on behalf of Petitioner, filed with AHCA a Petition for Formal Hearing on December 7, 1999. The Petition for Formal Hearing was accompanied by 50 "invoices" purporting to reflect sales of prescription drugs (totaling approximately $4 million dollars) made by IV Pharmaceutical Wholesalers, Inc., to Choice Pharmacy during the Audit Period, as well as the following cover letter from Mr. Diamond to Ms. Holland: Consistent with our prior discussions regarding our above referenced client, you will find enclosed the final documentation from [IV] Pharmaceutical Wholesalers, Inc. As I indicated in our prior discussions it would appear at this time that our independent audit has concluded. Our accounting reveals, based on all invoices provided, our above referenced client has correctly accounted for all medications billed through Medicaid. I also enclose consistent with our prior discussion a copy of our request for a formal hearing in the event that you are not in agreement with our conclusions. In the event that you are satisfied with the conclusions, please advise Mr. John A. Owens, Chief, Medicaid Program Integrity, that we will withdraw our request for formal hearing. Prior to the submission of these "invoices," AHCA had not received any information (in the form of documentation or otherwise) indicating that Petitioner had purchased or otherwise acquired drugs from IV Pharmaceutical Wholesalers, Inc. Ms. Holland examined the "invoices." "They did not look like forms [she had] seen from this wholesaler before, and . . . after years of looking at invoices they just appeared not right" to her. On January 28, 2000, Ms. Holland sent the following letter to Mr. Diamond: Thank you for the documents received on December 7, 1999. As they were received after the Final Agency Action, the Agency will consider them as possible evidence for trial or hearing. Once the hearing date and discovery schedule are set, we will propound interrogatories and take depositions in conjunction with these documents. If you have any question, please contact Mr. L. William Porter, II, senior attorney . . . . Ms. Holland's suspicions regarding the genuineness of the IV Pharmaceutical Wholesalers, Inc., "invoices" submitted by Petitioner were correct. Petitioner had never purchased or otherwise acquired any drugs from IV Pharmaceutical Wholesalers, Inc. The "invoices" were fabricated. They were created by Mr. Pinkoff, for a fee ($800,000.18, which he was paid, in two installments, in November of 1999), at the request of Mr. Taylor and a Betty Bills. 13/ Mr. Pinkoff was told that the "invoices" were needed for an audit to "substantiate the purchases of [certain] product[s]." 14/ Mr. Pinkoff was subsequently charged with criminal wrongdoing for his participation in this fraudulent scheme and "voluntarily surrendered" to the authorities. 15/ The charges were filed after Mr. Pinkoff's place of business had been searched by law enforcement authorities on December 1, 1999, pursuant to a search warrant obtained by the Florida Attorney General's Medicaid Fraud Control Unit, which was conducting a criminal investigation of another matter unrelated to Choice Pharmacy. 16/ The computer that Mr. Pinkoff used to create the falsified "invoices" for Petitioner was seized during the search. Mr. Pinkoff entered into a Plea Agreement with the State of Florida in his criminal case. The Plea Agreement was filed in Leon County Circuit Court (Case No. 2000-4310) on November 8, 2000. Section II of the Plea Agreement contained the "Factual Predicate for this Plea Agreement." It provided as follows: The Defendant and the State agree that the following is the factual basis for the entry of plea in this matter, (hereafter "SUBJECT MATTER"): In June of 1999, the Defendant was approached by Louis A. Petrillo ("Petrillo"),[17/] who told the Defendant that Choice Pharmacy (Okan, Inc. d/b/a Choice Pharmacy ("Choice") and "Betty," an owner, needed certain invoices. Specifically, Choice and Betty needed to demonstrate that Choice had purchased a number of prescription drugs with a value of $4,000,000 dollars dating back to the period of 1997 through 1998. Choice was owned and operated by Raufu ("Ralph") Taylor and Betty (Last Name Unknown). The Defendant owned a 1/2 interest in IV Pharmaceuticals, Inc., a Florida corporation that was a licensed prescription drug wholesale company. IV Pharmaceuticals had not sold any prescription drugs to Choice in 1997 or at any other time. Petrillo knew this fact but asked the Defendant if he could produce invoices for a specific list of drugs; the understanding was that the invoices would be false. The Defendant told Petrillo, Betty and Ralph that he could create or otherwise produce invoices from IV Pharmaceutical[s] to give to Choice for prescription drugs that IV Pharmaceutical[s], Inc. had previously purchased from manufacturers or other licensed wholesalers. This was necessary in case IV Pharmaceutical[s] was asked to produce its records to substantiate the invoices from IV Pharmaceutical[s] to Choice. All of the drugs Betty and Ralph requested invoices for were oncology or HIV prescription drugs, largely Neup[o]g[e]n and Procrit. IV Pharmaceutical[s] had invoices to substantiate its own purchases of those drugs. A meeting was arranged by Petrillo. In attendance were the Defendant, Petrillo, Betty, and Ralph. After making introductions, Petrillo left the meeting.[18/] Before leaving, Petrillo told the Defendant that it was up to him whether or not to create the invoices. The Defendant discussed with Betty and Ralph what specific prescription drug invoices were required. Betty and Ralph provided the Defendant with a list of drugs, including dates of purchase and quantities. The Defendant believed that the invoices were to be used for some unlawful purpose, presumably involving AHCA, since the Defendant was familiar with the AHCA audit process and knew that AHCA required such invoices when conducting an audit. Betty and Ralph told the Defendant that the invoices were needed for drugs they had actually purchased but had no invoices for. The Defendant had at least one conversation with Petrillo related to the production following the meeting. Six months after the meeting, the Defendant drafted invoices under the IV Parmaceutical[s] name based upon the list provided by Betty and Ralph. The Defendant gave the invoices to Petrillo to give to Betty and Ralph. Each false invoice produced by Defendant was submitted to AHCA. The foregoing assertions of fact made in this section of the Plea Agreement are true and accurate. Section III of the Plea Agreement indicated that Pinkoff understood that "pursuant to this plea agreement his minimum potential exposure under the Sentencing Guidelines [was] 55.5 months of imprisonment" and "[h]is maximum potential exposure under the Sentencing Guidelines [was] the statutory maximum of thirty-five years in State Prison and a $25,000.00 fine." Section IV of the Plea Agreement set forth the "Defendant's Obligations." It read as follows: The Defendant agrees to plead Guilty to the following charges contained in the information filed in the above-styled criminal case: one count of "Racketeering activity" in violation of Florida Statutes, Section 895.03(3), a first degree felony; and one count of Medicaid Provider Fraud in violation of Florida Statutes, Section 409.920(2)(a), a third degree felony. The Defendant agrees to make himself accessible upon notice to receive and testify truthfully pursuant to any subpoena lawfully issued compelling such testimony pursuant to §914.04, Florida Statutes, However, by this AGREEMENT Defendant does not and shall not waive his Fifth Amendment privilege as to any statement or testimony except and only as to the specific facts set forth as the SUBJECT MATTER of this AGREEMENT; Defendant shall maintain his Fifth Amendment rights as to all other allegations of facts, including those facts related to the charges alleged in the Information not included in the factual predicate herein. The Defendant understands that if lawfully compelled to provide testimony, any perjury committed by him would constitute a violation of the ordinary terms and conditions of Defendant's community control and probation even if related to the charges alleged in the Information. Section V of the Pleas Agreement contained the "sentence the State will recommend," which was as follows: Seven (7) years of probation with the following special conditions: Defendant with will serve 24 months of community control under the terms and conditions set by the Department of Corrections. . . . Defendant shall pay a total of $3,475,000 to the State of Florida as compensation to the State of Florida for its losses, both known and unknown. Such reimbursement shall not be deemed or otherwise construed as a fine or similar penalty. . . . At the entry of this plea, Defendant agrees to provide the State of Florida with sufficient security to guarantee the payment of one million dollars ($1,000,000.00). This security shall be in the form of two Notes secured by two mortgages to be held by the State of two properties. The first property is located at 5721 Oakview Terrace, Hollywood, Florida. The Note on this property shall be in the amount of $400,000.00. The second property secured by a Note is located at 6001 North Ocean Drive, PHS, Hollywood, Florida [and the note on this property] shall be in the amount of $600,000.00.[19/] . . . Defendant shall pay a fine in the amount of $25,000.00 which is the Statutory maximum; Defendant shall be Adjudicated Guilty on all counts; Defendant shall be precluded from working or having a business interest in or receiving remuneration or payment of any kind from any health care related facility that receives any funds or participates in any way with the Medicare and/or Medicaid programs under Titles XVIII and XIX of the United States Code. However, this does not preclude the Defendant from receiving proceeds from the divestment of his interests or assets through the sale or transfer of said assets or interest to an entity that receives any funds or participates in any way with the Medicare and/or Medicaid programs of the United States. Defendant shall pay court costs; The monetary obligation under the AGREEMENT shall be paid over the course of probation and community control. However, the STATE and the Defendant agree that there is a value to the STATE in terms of economics and deterrence to receive swift and complete payment and the commitment of the Defendant to attempt to do so reflects his willingness to accept responsibility for his acts. Therefore, in the event that the Defendant pays $3,000,000.00 within 15 months of sentencing and has satisfied all other terms and conditions of community control and probation, the State agrees to the following: the community control portion of the defendant's sentence shall be reduced to 15 months; the term of probation shall be reduced to five (5) years; The STATE agrees to return to court for an Order reducing the total obligation by $500,000.00. Thus, the Defendant's total obligation under this Agreement would become Three Million dollars ($3,000,000.00). . . . The State has no objection to the entry of any Order by the court to permit travel outside of the United States for business purposes upon at least 2 weeks notice to the probation department and the permission of the defendant's probation officer. The Defendant understands that he may not travel outside the United States during the course of the community control portion of his sentence. Section VI was entitled "Withdrawal of Guilty Plea and Vacation of Sentence." It read as follows: In the event that the State files additional charges against the Defendant for matters currently under investigation, but not charged in the Information described in this AGREEMENT, the Defendant shall have the right and full entitlement to vacate the sentence imposed pursuant to this AGREEMENT and to withdraw his plea of guilty. The only condition to the Defendant's right and entitlement to vacate (as just described) shall be that the Defendant must not have breached this AGREEMENT prior to the additional charges being filed. If the Defendant does vacate and withdraw, all monies paid pursuant to this AGREEMENT shall be returned to the Defendant. The Plea Agreement also contained a "Waiver of Rights," which provided, in pertinent part, as follows: My entering into the AGREEMENT is not the result of force, threats, assurances or promises other than the promises contained in the attached agreement. I agree to the provision of this agreement as a voluntary act on my part, rather than at the discretion of or because of the recommendation of any other person, and I agree to be bound by its provisions. I agree that this written plea agreement contains all the terms and conditions of my plea and that promises made by anyone that are not contained within this written agreement are without force and effect and are null and void. . . . The Plea Agreement was signed by Mr. Pinkoff (on September 26, 2001), his attorneys (on September 26, 2001 and November 8, 2000), and the Special Counsel of Health Care Fraud Prosecution (on September 26, 2000). Mr. Pinkoff is currently under "house arrest" at his residence (which he owns) located at 5721 Oakview Terrace in Hollywood, Florida; however, he is allowed to leave his home to work at his office (which is also located in Florida). Mr. Pinkoff is still in the "pharmaceutical wholesaling" business. His business is licensed "out of Georgia." Mr. Pinkoff has paid approximately $200,000.00 of the amount that he owes the State of Florida pursuant to the terms of his Plea Agreement. He sold the 6001 North Ocean Drive property referenced in the Plea Agreement for $1.2 million. The state received approximately $192,000.00 of the proceeds from the sale Mr. Pinkoff is presently paying the state $1,000.00 a month.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that AHCA enter a final order finding that Petitioner received $4,247,497.70 in Medicaid overpayments for claims covering the period from September 10, 1997, through August 31, 1998, and requiring Petitioner to repay this amount to AHCA. DONE AND ENTERED this 3rd day of October, 2002, in Tallahassee, Leon County, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of October, 2002.
Findings Of Fact On an application received by the Respondent on September 5, 1979, the Petitioner, Community Medical Transporters, Inc. (CMT), applied for a temporary non-emergency medical transportation license. CMT indicated that it proposed covering the Broward County area and had three vehicles available. The application was denied on September 21, 1979, by Respondent for the reasons already set out above. CMT was recently incorporated in September, 1979, and has not operated a non-emergency medical transportation service in Broward County or any place else. While at present and at the time of the denial there are no medical transportation services in Broward County providing exclusively non-emergency service, there are at least four HRS licensed ambulance services which provide both emergency and non-emergency service in the area. In addition, there are several transportation services licensed by the Public Service Commission under Chapter 323, Florida Statutes, providing non-emergency service in Broward County. CMT does not hold a certificate of public convenience and necessity from the Broward County Commission. Respondent has no rules which define what statutes the public interest, safety, or convenience and the Department's witness was unable to define what the terms meant except to say that they meant holding a certificate of public convenience and necessity from the appropriate county commission.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That the application of Community Medical Transporters, Inc., for a non- emergency medical transportation services license be DENIED BUT WITHOUT PREJUDICE to an application for a permanent license. DONE and ENTERED this 28th day of December, 1979, in Tallahassee, Florida. MICHAEL P. DODSON Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: S. Steven Craycraft Community Medical Transporters, Inc. 5270 N.W. 15th Street Margate, Florida 33063 Harold Braynon, Esquire District X Counsel Department of HRS 201 West Broward Boulevard Fort Lauderdale, Florida 33301 =================================================================
The Issue Whether Petitioner is liable for overpayment of Medicaid claims for the period of January 1, 1997, through December 31, 1998, as stated in Respondent's Final Agency Audit dated March 10, 2000.
Findings Of Fact At all times material hereto, the Agency for Health Care Administration (Respondent) was the state agency charged with administration of the Medicaid program in the State of Florida pursuant to Section 409.907, Florida Statutes (1997). At all times material hereto, C. Dwight Groves, M.D. (Petitioner) was a licensed medical doctor in the State of Florida and was providing medical services to Medicaid recipients. Petitioner provided the medical services pursuant to a contract with Respondent. When first accepted as a Medicaid provider in June of 1995, Petitioner was assigned provider number 3777278-00 and was approved for providing and billing for physician services. The letter notifying Respondent that he was accepted as a Medicaid provider referenced an enclosed handbook which explained how the Medicaid program operates and how to bill Medicaid. At that time Petitioner practiced in Key West, Florida. In October of 1997, Petitioner notified Respondent of a change of address to Southern Group for Women in Lake City, Florida. According to the answers provided to a Medicaid Provider Questionnaire, Petitioner became affiliated with Southern Group for Women on October 16, 1997. Petitioner's medical practice was and is in the area of obstetrics and gynecology. Respondent's witness, Toni Steele, is employed by Respondent in its Medicaid program integrity division. During the audit period in question, she was a senior human services program specialist. Her job responsibility was to ensure that Medicaid providers in Florida adhered to Medicaid policy and rules. Medicaid program integrity uses several detection devices to audit Medicaid provider billing. One such device is what is referred to as a "one and a half report." This type of report will indicate when a provider "spikes" one and a half times his or her normal billings. During December of 1998, Ms. Steele noticed a "spike" in Petitioner's billings. Because of this spike, Medicaid program integrity, ordered an ad hoc sampling of his billings within a two-year billing period, January 1, 1997, through December 31, 1998. She reviewed the sample and, using the Medicaid Management Information System, was able to look at the actual dates of service and view the procedure code that was billed and paid by Medicaid. Ms. Steele then conducted an on-site visit to Petitioner's office. As is her usual practice, she took a tour of Petitioner's office looking at what types of lab equipment were there, the State of Florida license, and the number of medical personnel employed. During the on-site visit, Ms. Steele presented the office manager with a computer-generated list of patients and requested that the office manager provide the medical records of those patients on the list. The requested 31 files were provided to her within the requested time frame. Ms. Steele reviewed the patients' files received from Petitioner's office for the purpose of determining policy violations according to the Medicaid Physician Coverage and Limitations Handbook (Nov. 1997), the Advanced Registered Nurse Practitioner Coverage and Limitations Handbook (Nov. 1997), and the Medicaid Provider Reimbursement Handbook (Nov. 1996). The Medicaid Provider Reimbursement Handbook (Nov. 1996) provides in pertinent part: Introduction: Every facility, individual and group practice must submit an application and sign an agreement in order to provide Medicaid services. Note: See the Coverage and Limitations Handbook for specific enrollment requirements. Group Enrollment: When two or more Medicaid providers form a group practice, a group enrollment application must be filed with the Medicaid fiscal agent. * * * Renewal: A provider agreement is valid for the time period stated in the agreement and must be renewed by the provider by completing a new provider agreement and submitting it to the Medicaid fiscal agent 30 days prior to the expiration date of the existing agreement. The Physician Coverage and Limitations Handbook (Nov. 1997) provides in pertinent part: Other Licensed Health Care Practitioners: If a physician provider employs or contracts with a non-physician health care practitioner who can enroll as a Medicaid provider and that health care provider is treating Medicaid recipients, he or she must enroll as a Medicaid provider. Examples of non-physician health care practitioners who can enroll as Medicaid providers include but are not limited to: physician assistants, advanced registered nurse practitioners, registered nurse first assistants, physician therapists, etc. If the services rendered by a non-physician health care practitioner are billed with that practitioner as the treating provider, the services must be provided in accordance with the policies and limitations contained in that practitioner's program-specific Coverage and Limitations Handbook. * * * Physician Supervision: Delivery of all services must be done by or under the personal supervision of the physician. Personal supervision means the physician: . is in the building when the services are rendered, and . reviews, signs and dates the medical record within 24 hours of providing the service. The Advanced Registered Nurse Practitioner Coverage and Limitations Handbook (November 1997) provides in pertinent part: ARNP in a Physician Group: If an ARNP 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 ARNP must enroll as a treating provider within the group. If the services rendered by the ARNP are billed with the ARNP as the treating provider, the services must be provided in accordance with the policies and limitations contained in this handbook. According to answers provided on a Medicaid Provider Questionnaire completed in February of 1999, Anna Hall Kelley, ARNP, became affiliated with Southern Group for Women on October 16, 1997. The answers provided on the Questionnaire indicated that Petitioner and Nurse Kelley formed a partnership and practiced together at Southern Group for Women. Nurse Kelley did not testify at the hearing. In reviewing the requested medical records, Ms. Steele noted that some of the medical records were signed by Nurse Kelley, ARNP, indicating that Nurse Kelley, not Petitioner, performed the services. They were not countersigned by Petitioner. Nurse Kelly was not an enrolled Medicaid provider at the time the services were rendered as her provider number expired on May 31, 1997. Nurse Kelley signed a new enrollment application to be a Medicaid provider in October of 1999. Thus, she was not an enrolled provider from June 1, 1997, through the remainder of the audit period. Nurse Kelley saw patients and billed for those services under Petitioner's individual provider number. Neither Nurse Kelley nor Petitioner applied for a group Medicaid provider number during the audit period. Respondent sent a Preliminary Agency Audit Report to Petitioner on September 21, 1999, notifying him of a preliminary determination of a Medicaid overpayment in the amount of $71,261.92. Respondent sent a Final Agency Audit Report to Petitioner on March 10, 2000, notifying him that the Agency made a determination of a Medicaid overpayment in the amount of $55,829.04. Because of recalculations made by Respondent, the amount of reimbursement sought was reduced to $55,647.92. As a result of a stipulation of the parties prior to the hearing, the amount of reimbursement was further reduced to approximately $51,000. As to the statistical aspect of Respondent's audit, Respondent presented testimony of a statistical expert, Dr. Robert Peirce, who is employed by Respondent as an administrator in the Bureau of Program Integrity. Dr. Peirce's testimony is considered credible. Dr. Peirce developed the statistical methodology used in the statistical sampling of Dr. Groves' medical files. Dr. Peirce studied the methodology used by Respondent in this case, and concluded that the statistical procedures used in the audit of Petitioner were in accordance with customary statistical methodology. The statistical analysis of a Medicaid provider's billing begins with the selection of an audit period, which in Petitioner's case was calendar years 1997 and 1998. During that audit period, Petitioner submitted 3912 claims for Medicaid reimbursement. A random sample of recipients, 31 out of a possible 315, was selected by a computerized random sample generator from the claims submitted by Petitioner during the audit period. All of the claims in the sample were reviewed by an analyst, who determined whether any overpayment existed with respect to those claims. An overpayment totaling $5,130.99 was determined for the 302 claims of the 31 recipients in the sample. The amount of overpayment from the sample was extended to the population of the claims through a widely accepted statistical sampling formula. In extending the results of the 302 claims to the 3,912 claims, the total amount of overpayments was calculated as $55,647.92. The determination of that amount was made at the 95 percent confidence level, meaning that Respondent is confident that the overpayment is the amount that was calculated or more. There is a five percent probability that it might be less and a 95 percent chance that it would be more then the $55,647.92 that was calculated. The process used by Respondent is in accordance with customary statistical methodology. However, the result does not take into account the fact that the audit period began January 1, 1997, whereas Nurse Kelley did not begin to practice at Southern Women's Group until October 16, 1997, and, therefore, worked there only 14 and one-half months (or approximately 60%) of the audit period. Despite the stipulation of the parties that all issues other than the ARNP services had been resolved and that the amount in dispute was now approximately $51,000, no evidence was presented to indicate the exact amount remaining in dispute.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Agency for Health Care Administration enter a final order sustaining the Final Agency Audit Report in part, recalculating the amount of overpayment as indicated and consistent with this Recommended Order, and requiring Petitioner to repay overpayments in the amount determined by the recalculation. DONE AND ENTERED this 21st day of December, 2000, in Tallahassee, Leon County, Florida. BARBARA J. STAROS 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 21st day of December, 2000.
The Issue The issues in these cases are whether Respondent’s proposed contract award pursuant to a Request for Proposals for Medicaid Non-Emergency Medical Transportation in Palm Beach County, Florida, and whether Respondent’s proposed contract award pursuant to a Request for Proposals for Medicaid Non-Emergency Medical Transportation Services in Duval County, Florida, are contrary to Respondent’s governing statutes, Respondent’s rules or policies, or the request for proposals.
Findings Of Fact The Commission is an independent commission of the State of Florida created pursuant to Section 427.012, Florida Statutes (2009),1 and is housed administratively within the Department. The Commission sought proposals to provide Medicaid non-emergency medical transportation, and the Department administered the procurement process for the Commission by issuing the RFP and otherwise administratively handling the procurement for the Commission. Contracts were to be awarded for ten counties, including Palm Beach and Duval Counties. The proposers were required to submit a separate proposal for each county for which they were seeking a contract. The RFP incorporated three separate addenda, numbered one through three. Addendum No. 2 included a list of potential proposers’ questions concerning the RFP and the Commission’s responses to those questions. Each proposer was required to include with its proposal a signed acknowledgement certifying its receipt of each addendum. When the notice of solicitation was posted and the addenda were issued, no party filed a protest of the specifications within 72 hours of the posting or issuance of the addenda. MV Contract Transportation, Inc., and TMS Joint Venture submitted their responses to the RFP for both Duval and Palm Beach Counties. MV Contract Transportation, Inc., is a Delaware Corporation, which was incorporated on September 23, 2003. It is a wholly-owned subsidiary of MV Transportation, Inc., which is a California corporation incorporated on December 18, 1978. MV Contract Transportation, Inc., is a separate corporation from MV Transportation, Inc. MV Contract Transportation, Inc., and MV Transportation, Inc., have separate federal employer identification numbers, bank accounts, officers, and directors. TMS Joint Venture was formed by TMS Management Group, Inc., and Transportation Management Services of Brevard, Inc., pursuant to a Joint Venture Agreement dated October 15, 2009. TMS Joint Venture refers to the term “TMS” throughout its proposals as TMS Joint Venture and its respective venturers. TMS Management Group, Inc., was formed on January 4, 2005. Transportation Management Services of Brevard, Inc., was formed on November 23, 2004. Relevant portions of the Joint Venture Agreement provide: TMSG [TMS Management Group, Inc.] and TMSB [Transportation Management Services of Brevard, Inc.] do hereby acknowledge, pledge, and covenant with one another to allow the full use of their personnel, equipment, assets, and facilities to support and perform any contract(s) to which the Joint Venture may become a party and to do such other things and provide other support to TMS [TMS Joint Venture], as may be reasonably necessary, to allow TMS to submit bids, proposals, or otherwise respond to solicitations for its services on the projects and to perform all contracts which may be awarded to TMS. * * * TMSG shall provide financial and administrative support to TMS. In doing so, it is hereby authorized to submit bids and proposals on behalf of TMS. It is further authorized to execute contracts on TMS’ behalf and to thereby bind both TMSG and TMSB as Venturers. TMSG shall also be authorized to accept and cash checks made payable to TMS and to deposit such into its accounts for subsequent use and distribution in accordance with the joint instructions of the Venturers. TMSG shall otherwise be authorized to take all actions, including but not limited to the submission of all payment requests, payment of related bills and expenses, negotiate and execute any needed subcontracts, provider agreements, obtain insurance or bonds if needed and to otherwise execute all documents and conduct all of the business of TMS for the benefit of the Venture. TMS Joint Venture has been awarded contracts pursuant to the RFP for other counties. Those contracts have been entered into by the Commission and TMS Joint Venture/TMS Management Group, Inc., and Transportation Management Services of Brevard, Inc. The Department posted its initial Notice of Intent to Award the contracts pursuant to the RFP at 5:00 p.m. on November 16, 2009. For the Duval County contract, the posting showed that “MV Contract Transportation” had earned a total score of 88.33 and that TMS Joint Venture had earned a total score of 83.99. The initial Notice of Intent to Award proposed to award the Duval County contract to MV Contract Transportation, Inc. On November 19, 2009, TMS Joint Venture filed a notice of intent to protest the contract award for Duval County pursuant to the RFP. The notice of intent to protest identified the RFP by number, RFP-DOT 09/10-9005-JP-Duval County, Fl. The notice of protest stated: Please be advised that this firm represents the interests of TMS Joint Venture (“TMS”) regarding the above referenced matter. Please accept this as written notice of TMS’s intent to protest the above referenced intended award to MV Transportation, Inc. (“MV”). This Notice of Intent to Protest is being forwarded to you pursuant to paragraph 29.1 of the RFP and Florida Statute 120.57. No evidence was presented that any of the parties were confused about who was the intended awardee for the Duval County contract. No evidence was presented that, at the time of the filing of the notice of intent to protest, any of the parties were uncertain that TMS Joint Venture was protesting the intended award of the Duval County contract to MV Contract Transportation, Inc. In its Petition to Intervene for the Duval County contract, MV Contract Transportation, Inc., stated: On November 16, 2009, the Department posted a Notice of Intent to Award the Duval Contract to MV Contract. On November 19, 2009, TMS filed its Notice of Intent to Protest the award to MV Contract. On November 30, TMS filed a Formal Written Protest and Petition for Formal Administrative Hearing (“the Petition”). The initial posting for Palm Beach County showed that TMS Joint Venture had a total score of 91.66 and that “MV Contract Transportation” had a total score of 91.65. The initial Notice of Intent to Award proposed to award the Palm Beach County contract to TMS Joint Venture. On November 18, 2009, MV Contract Transportation, Inc., filed a notice of intent to protest the award of the Palm Beach County contract to TMS Joint Venture. On December 16, 2009, the Department posted a revised Notice of Intent to Award the Palm Beach County contract to “MV Contract Transportation.” The total score of TMS Joint Venture was revised to 89.65, based on a scrivener’s error by an evaluator. One of the evaluators had made a mistake in recording the scores from his handwritten score sheet to the typed score sheet. There was no evidence presented that any of the evaluators were given an opportunity to revisit or change their original scoring of the proposals. On December 18, 2009, TMS Joint Venture filed a notice of intent to protest the intended award of the Palm Beach County contract to MV Contract Transportation, Inc. TMS Joint Venture filed a Petition for Formal Hearing concerning the Palm Beach County contract with the Commission on December 28, 2009, as stated in the Certificate of Service. Section 1 of the Introduction portion of the RFP provides: The Department intends to award contracts to responsive and responsible Proposer or Proposers whose proposal is determined to be the most advantageous to the Department. . . . After the award, said Proposer will be referred to as the “Vendors.” For the purpose of each document, the term “Proposer” means the prime Vendor acting on its own behalf and those individuals, partnerships, firms, or corporations comprising the Proposer team. The term “prime vendor” is not defined in the RFP. There are references in other sections of the RFP which require the identification of the “prime contractor” in the completion of the Bidder Opportunity List and the Anticipated DBE Participation Statement. The terms prime contractor and prime vendor are synonymous. The Department interprets the term “prime vendor” to mean the entity that will be entering into the contract with the Commission and that will be bound legally to the terms of the contract. The cover letter of each proposal and the forms submitted which required a signature are signed by W.C. Pihl, vice president. Mr. Pihl is a vice president of business development for MV Contract Transportation, Inc. The cover pages of the proposals at issue submitted by MV Contract Transportation, Inc., state that the proposal is submitted by MV Contract Transportation, Inc., and underneath that name further state in italics “A Wholly Owned Subsidiary of MV Transportation, Inc.” The cover letter in each proposal states: “Enclosed please find MV Contract Transportation’s proposal in response to the State of Florida Department of Transportation’s Request for Proposal for Medicaid Non-Emergency Transportation Services” for the county in which the proposal is being submitted, and “I encourage you to select MV Contract Transportation as your partner for the provision of Medicaid Non-Emergency Transportation Services” for the county in which the proposal is being submitted. The Bid Opportunity List, which was required to be submitted with each proposal, identified the prime contractor as MV Contract Transportation, Inc. If awarded the contracts for Duval and Palm Beach Counties, MV Contract Transportation, Inc., is the entity who would be entering into the contracts and who would be legally bound to the contracts. It is clear that MV Contract Transportation, Inc., is the prime vendor for the proposals at issue. The proposals submitted by TMS Joint Venture stated: “The TMS Joint Venture with its respective Venturers are hereinafter collectively referenced throughout this proposal as ‘TMS,’ which is the entity submitting this proposal.” The proposals identified TMS Joint Venture as the prime vendor. On October 12, 2009, the Department issued Addendum No. 2 to the RFP, which included questions that were received from prospective proposers and the Commission’s responses. Question 7 stated: “Page 18, Section 28, Proposal Evaluation: Is the evaluation of the proposal strictly limited to the prime vendor and the Proposer Team as identified in Section 1, invitation?” The Commission’s written response was: “The evaluation of the proposal is based on the prime vendor and their demonstration of their ability to fulfill the requirements of the scope of services.” TMS Joint Venture takes the position that question 7 in Addendum No. 2 means that the evaluation of a proposer’s experience and capability to fulfill the requirement of the scope of services is limited to a review of the experience and capability of the prime vendor and that the experience of others who are part of the proposer team may not be considered by the evaluators. MV Contract Transportation, Inc., takes the position that the experience of others who are a part of the proposer team may be considered in determining whether the prime vendor has the ability to fulfill the requirements of the scope of services. It is not clear from the testimony what the position of the Commission is concerning whether question 7 in Addendum No. 2 limited the evaluation to the prime vendors’ experience. Joyce Plummer, the Department employee responsible for the procurement, relied on the Commission for the answers to the questions asked by the proposers. Bobby Jernigan, the executive director of the Commission, relied on his staff to answer the questions. Thus, no one clearly stated the Commission’s position as to what the Commission intended by the response to question 7 in Addendum No. 2. The proposed recommended order of the Commission does little to shed light on whether the Commission intended to limit the evaluation to the experience of the prime vendor. For example, in its proposed recommended order, the Commission states that the statements about MV Contract Transportation, Inc.’s, experience which included MV Transportation, Inc.’s, experience were not misrepresentations, “as long as it is proper for the proposer to have included information about its parent company” and certain claims made by MV Contract Transportation, Inc., are true, “unless MV can only make claims as to the particulars of MV Contract Transportation, Inc.” Based on question 7 and the response to question 7 in Addendum No. 2 and the definition of proposer in the RFP, the evaluation and scoring of the proposals were to be based on the experience, solvency, assets, and capabilities of the prime vendor and not the prime vendor and the proposer team. If the Commission had wanted the experience and solvency of parent companies and affiliates to be considered in the evaluation, it could have said so in its response to question 7, but it did not do so. Section 8.1 of the Special Conditions of the RFP states: The Department will determine whether the Proposer is qualified to perform the services being contracted based upon their proposal demonstrating satisfactory experience and capability in the work area. The Proposer shall identify necessary experienced personnel and facilities to support the activities associated with this proposal. Section 20.2 of the Special Conditions of the RFP provides that the proposals shall include an executive summary, a management plan, and a technical plan. The sections were described in the RFP as follows: EXECUTIVE SUMMARY The Proposer shall provide an Executive Summary to be written in nontechnical language to summarize the Proposer’s overall capabilities and approaches for accomplishing the services specified herein. The Proposer is encouraged to limit the summary to no more than ten (10) pages. PROPOSER’S MANAGEMENT PLAN The Proposer shall provide a management plan which describes administration, management and key personnel. Administration and Management The Proposer should include a description of the organizational structure and management style established and the methodology to be used to control costs, services, reliability and to maintain schedules; as well as the means of coordination and communication between the Proposer and the Commission. The Proposer shall provide a management plan which describes administration, management and key personnel. The plan should address the following: Company’s experience in providing specialized transportation services, including but not limited to Medicaid NET. Include location and duration. Company’s assets available to operate in the county proposed to be served. List all assets that will be committed to this project. Describe the proposed local service area organizational structure and how it fits into the overall organizational structure of your company. Company’s ability to comply with the reporting requirements and the Scope of Services. Cite any failures to provide adequate and timely reporting in the past. Company’s solvency and ability to assume the risks of service provision in the proposed county. Does your company have a policies and procedures manual? If so, describe the type of policies and procedures contained in your manual, how often they are updated and how they are maintained. (Please provide a copy.) Describe your company’s driver training program. How will you ensure you’re [sic] your drivers and the drivers of any subcontracted transportation providers are trained? Does your company have a Quality Management Plan? If so, please provide a copy. If not, describe your methods for ensuring quality of services. Describe your company’s process for the procurement of subcontracted operators, if applicable, including your efforts for recruitment and retention of minority businesses. Please describe how your company’s internal office practices lessen the impact on non-renewable resources and global climate change (reduction in water, energy, paper use, minimalization of hazardous materials, compressed or flexible work week schedules, etc.). Discuss what initiatives your company will implement to effectively manage current funding levels and secure additional funds to support the system. Provide 3-5 professional references regarding your organization’s ability and experience in providing specialized transportation, including but not limited to Medicaid NET services. The references should state the period of time service was provided. Identification of Key Personnel The Proposer should provide the names of key personnel on the Proposer’s team, as well as a resume for each individual proposed and a description of the functions and responsibilities of each key person relative to the task to be performed. The approximate percent of time to be devoted exclusively for the project and to the assigned tasks should also be indicated. 3. PROPOSER’S TECHNICAL PLAN The Proposer shall provide a technical plan which explains technical approach and facility capabilities. Technical Approach The Proposer should explain the approach, capabilities, and means to be used in accomplishing the tasks in the Scope of Services, and where significant development difficulties may be anticipated and resolved. Any specific techniques to be used should also be addressed in addition to the following: The Proposer should provide a description and location of the Proposer’s facilities as they currently exist and as they will be employed for the purpose of this work. Identify your company’s software and demonstrate its ability to comply with CMS, HIPPA and Commission software necessary for reporting data as required in Exhibit A, scope of services. Provide documentation demonstrating the number of specialized transportation trips, including but not limited to, Medicaid NET, provided on a monthly basis and show the complaint ration on said trips. Please state when and where these trips were provided. Describe your company’s process for tracking and resolving complaints received. Please include the length of time it takes a complaint to be resolved by your organization. Describe your company’s ability to monitor activities of subcontracted operators. Reference evaluation tools used and include copies in proposals if available. Please describe your company’s vehicle inspection and maintenance program to ensure safe and reliable functioning of their vehicles. Address how your company will comply with the requirements of Chapter 14- 90, FAC. Have your vehicles or your subcontractors vehicles, been involved in any accidents that resulted in a fatality over the last year? Please attach the accident report(s). Describe the process to acquire vehicles for use in the service area. Provide the estimated amount of time required to acquire vehicles. Please describe any alternative energy resources your company or your subcontractors (or expectations listed in procurement for subcontractors) may utilize, such as solar or wind energy, and use of bio-diesel or other alternative fuels in support of your company’s energy needs. Provide a detailed plan describing the process that will be followed to ensure a smooth contract start-up on January 1, 2010. Based on the definition of proposer, which includes the prime vendor and the proposer team, and based on the information which was required to be submitted, it is clear that the Commission contemplated that the prime vendor would not necessarily be providing all the services required by the contract and that some services could be subcontracted. In Addendum No. 2, the Commission responded affirmatively to question 8 which provided: Page 15, Section 2a, Proposer’s Management Plan, #1 through #12 and Page 16, Section 3. Proposer’s Technical Plan #1 through #10, the terms “company” and “organization” are used throughout this section. Please verify that these terms are to mean the “Proposer.” The RFP and Addenda are not models of clarity; however, when the responses to questions 7 and 8 in Addendum No. 2 are considered together, information could be included about the prime vendor and the proposer team, but only the information about the prime vendor would be used in the evaluation process. Thus, the proposals would have to identify what information related to the prime vendor and what information related to the proposer team. The parties have stipulated as follows: MV Contract’s proposals, in part, described the experience, contracts, facilities, assets and/or personnel of some of its related entities (parent and affiliated corporations). Throughout its proposals MV Contract Transportation, Inc., refers to the term “MV,” which it identifies on page 9 of each of the proposals as “MV Transportation, Inc. and its affiliates.” The cover letters for the proposals state that MV is the current Subcontracted Transportation Provider (STP) for the county for which the proposal is being submitted, meaning that MV is the current STP for Palm Beach and Duval Counties. However, MV is not the current STP provider in each of the counties; MV Contract Transportation, Inc., is the current STP provider in the two counties. In its proposals, MV Contract Transportation, Inc., refers to the experience of MV, meaning MV Transportation, Inc., and its affiliates. The proposals do not identify who the affiliates are. One would presume that MV Contract Transportation, Inc., is one of the affiliates, since it is a wholly-owned subsidiary of MV Transportation, Inc., and is submitting the proposals. The proposals do not delineate between the experience and capabilities of MV Contract Transportation, Inc., and MV Transportation, Inc., and its affiliates. The RFP required that each proposal address the “Company’s solvency and ability to assume the risks of service provision in the proposed county.” The RFP did not require that certain documents, such as a financial statement, be submitted to satisfy this requirement. How this requirement was to be addressed was to be left to the proposer. MV Contract Transportation, Inc.’s proposals address the solvency issue by the following: 5. Financial Resources and Stability MV is a privately held firm that has neither been bought by nor merged with another firm. The lack of this debt load associated with such transactions has allowed MV to control interest costs and keep money in the pockets of our customers and employees and out of those of lenders. MV is in sound financial condition and has proven ability to run services efficiently. We are well positioned to handle the risks of this program, and understand the contractual expectations of the CTD, and the service expectations of our passengers. The Company’s financial position is solid, and has strengthened over the last three years as evidenced by the increase in working capital and working capital ratios. The Company has the financial resources and wherewithal to meet its financial obligations. For more information regarding the financial viability of MV, please contact Mr. Jeff Heavin, Chief Financial Officer, at (707)863-8980, extension 3009. Based on the definition of MV in MV Contract Transportation, Inc.’s, proposals, an evaluator could not tell to what extent the proposal is addressing the solvency of MV Contract Transportation, Inc., and the ability of MV Contract Transportation, Inc., to assume the risks of service provision in the proposed county. This is important because MV Contract Transportation, Inc., is the entity that would be legally bound and responsible to perform under the contract. The Commission would not be contracting with MV Transportation, Inc., or other affiliates of MV Contract Transportation, Inc., and, therefore, cannot hold MV Transportation, Inc., liable for the performance of the contract. Section 28 of the Special Conditions of the RFP provides: Evaluation Process: A Technical Review team will be established to review and evaluate each proposal submitted in response to the Request for Proposals (RFP). The Technical Review team will be comprised of at least three persons with background, experience, and/or professional credentials in relative service areas. The Procurement Office will distribute to each member of the Technical Review team a copy of each technical proposal. The Technical Review team members will independently evaluate the proposals on the criteria established in the section below entitled “Criteria for Evaluation” in order to assure that proposals are uniformly rated. The Technical Review team will assign points, utilizing the technical evaluation criteria identified herein and complete a technical summary. Proposing firms must attain a score of seventy (70) points or higher on the Technical Proposal to be considered responsive. During the process of evaluation, the Procurement Office will conduct examinations of proposals for responsiveness to requirements of the RFP. Those determined to be non-responsive will be automatically rejected. Criteria for Evaluation Proposals will be evaluated and graded in accordance with the criteria detailed below. Technical Proposal (100 Points) Technical evaluation is the process of reviewing the Proposer’s Executive Summary, Management Plan, and Technical Plan for understanding of project, qualifications, approach and capabilities, to assure a quality product. The following point system is established for scoring the technical proposals: Point Value Executive Summary 25 Management Plan 30 Technical Plan 45 The evaluators selected by the Commission to evaluate the proposals for Duval County were Karen Somerset, Douglas Harper, and Elizabeth De Jesus. The evaluators selected to evaluate the proposals for Palm Beach County were Karen Somerset, Douglas Harper, and Angela Morlok. The evaluators were advised that they were not to discuss the proposals with the other evaluators and that they were required to do an independent evaluation. Each evaluator was to fill out a technical evaluation summary sheet, which essentially tracked the areas listed in Section 20.2 of the RFP for what was to be included in the proposals for the executive summary, the management plan, and the technical plan. Each evaluator based his or her scoring on the maximum allowable points per category. Some evaluators assigned points for various aspects of the proposals, and others just gave points on the overall quality of the category being evaluated. Regardless of the method that an evaluator used to allocate the maximum points for each category, the evaluator evaluated all the proposals in the same manner. None of the evaluators discussed the proposals with the other evaluators, nor did the evaluators discuss how the proposals were to be scored with one another. The RFP did not require the evaluation team members to meet to develop a method to allocate the maximum amount of points for the categories to be evaluated. Although the RFP states, “[t]he Technical Review team will assign points utilizing the technical evaluation criteria identified herein,” it is reasonable to construe the RFP to mean that each of the evaluators was to assign points independently. This reading is reasonable because the rest of the sentence in which that language appears reads “and complete a technical summary.” The technical summary was not to be completed by the evaluation team as a whole. Each evaluator was to complete his or her own technical summary for each of the proposals evaluated. Other than Ms. Somerset, who skimmed the contents of the RFP, none of the evaluators had reviewed the RFP, including the addenda, prior to their evaluations of the proposals. Thus, the evaluators were not aware that they were to evaluate the prime vendor, rather than the proposer as defined by the RFP. The evaluators did not consider whether the experience and capabilities being evaluated were those of MV Contract Transportation, Inc., or MV Transportation, Inc. They thought the proposer was “MV.” Some of the evaluators knew that “MV” had the STP transportation contracts in Palm Beach and Duval Counties and assumed that entity who had those contracts was the proposer. Section 1 of the Special Conditions of the RFP provides: Since July 1, 2003, the Department has been using the State of Florida’s web-based electronic procurement system. MyFloridaMarketPlace. PROPOSERS MUST BE REGISTERED IN THE STATE OF FLORIDA’S MYFLORIDAMARKETPLACE SYSTEM BY THE TIME AND DATE OF THE TECHNICAL PROPOSAL OPENING OR THEY WILL BE CONSIDERED NON-RESPONSIVE (see Special Condition 18). (Emphasis in original) TMS Joint Venture is not registered with the myFloridaMarketPlace system; however, the venturers, TMS Management Group, Inc., and Transportation Management Services of Brevard, Inc., are registered with the myFloridaMarketPlace system. No credible evidence was presented on whether the joint venture could have been registered with the myFloridaMarketPlace system. Question 9 of Addendum No. 2 of the RFP stated: “On several forms, the proposer’s FEID number is referenced. If the proposer is a joint venture, shall the FEID numbers of each venturer be listed or shall only the lead administrative venturer’s FEID number be listed?” The Commission’s written response stated: “Only the lead administrative venturer’s FEID number should be listed.” An entity’s FEID number can be used to register with the myFloridaMarketPlace system. Thus, TMS Joint Venture took this response also to mean that, since both the venturers were registered on the myFloridaMarketPlace system, the listing of the lead administrative venturer as being registered on the myFloridaMarketPlace system was sufficient to make the proposals responsive. When Ms. Plummer received the proposals from TMS Joint Venture, she questioned whether the proposals were responsive and discussed it with her supervisor. The Department took the position that both venturers were listed on the system; thus, the registering of the lead administrative venturer was sufficient to deem the proposals of TMS Joint Venture responsive to the requirement to be registered on the myFloridaMarketPlace system. The parties have stipulated that “TMS’s proposals described the experience, contracts, facilities, assets and/or personnel of its Joint Venturers.” MV Contract Transportation, Inc., contends that TMS Joint Venture is not responsive to the RFP because it listed Greater Pinellas Transportation Management Services, Inc. (GPTMS), as the provider for a contract that was listed in the experience section of TMS Joint Venture’s proposals. The listing was clear that GPTMS had been the contractor for the project listed and not TMS Joint Venture. The evaluators could tell by reading TMS Joint Venture’s proposals what experience related to TMS Joint Venture and what experience related to GPTMS. The evaluators could not tell from reading the proposals of MV Contract Transportation, Inc., what experience was related to MV Contract Transportation, Inc., because the experience was described as the experience of MV, which was defined as MV Transportation, Inc., and its affiliates. The RFP required proposers to provide “a description and location of the Proposer’s facilities as they currently exist and as they will be employed for the purpose of this contract.” TMS Joint Venture described its call center in Clearwater, which “contains 6,000 square feet, with 3,700 feet of additional space to rapidly expand, of administrative space and provides for all functional areas.” TMS Joint Venture leases the building in which the call center is located, but it currently shares space in the call center with GPTMS. TMS Joint Venture did not disclose that it is currently sharing space with GPTMS. However, there was no evidence presented that the call center as it currently exists does not have sufficient capability to meet the needs of the contracts at issue. In TMS Joint Venture’s proposals, the Management Plan section states: The TMS senior management has spent years constructing and honing our client eligibility screening systems. TMS staff began innovating these systems in 1991, when management quantitatively analyzed our existing transportation systems. TMS was alarmed when we quantified the considerable costs that running trips for ineligible clients, imposed on the business. The Management Plan goes on to say what measures TMS Joint Venture takes to ensure that ineligible clients do not receive services. Mr. David McDonald, the president of TMS Management Group, Inc., explained that the language was meant to demonstrate that the senior staff members of TMS Joint Venture had been constructing and honing eligibility systems since 1991 and that they had applied their experience in developing the screening measures used by TMS Joint Venture. In TMS Joint Venture’s proposals, the Management Plan includes the following statement: For more than 15 years, the TMS team has managed the administration, coordination, and provision of Medicaid and all other types of human transportation. The TMS operations team has nearly 350 years of Medicaid and other transportation related service delivery experience. This statement is referring to the experience of the management team members and not specifically to the number of years that TMS Joint Venture or the venturers had been in business. That portion of the proposals goes on to list the various current contracts of the venturers of TMS Joint Venture. Section 19 of the Special Conditions of the RFP provides: Proposals found to be non-responsive shall not be considered. Proposals may be rejected if found to be irregular or not in conformance with the requirements and instructions herein contained. A proposal may be found to be irregular or non- responsive by reasons that include, but are not limited to, failure to utilize or complete prescribed forms, conditional proposals, incomplete proposals, indefinite or ambiguous proposals, and improper and/or undated signatures. Section 16 of Pur 1001 form attached to the RFP provides: Minor Irregularities/Right to Reject. The Buyer reserves the right to accept or reject any and all bids, or separable portions thereof, and to waive any minor irregularity, technicality, or omission if the Buyer determines that doing so will serve the State’s best interests. The Buyer may reject any response not submitted in the manner specified by the solicitation documents.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that the evaluation of the proposals of MV Contract Transportation, Inc., were contrary to the RFP; that the way in which MV Contract Transportation, Inc., submitted its proposals prevents the evaluators from evaluating the proposals in accordance with the RFP; that the notices of protests and formal protests of TMS Joint Venture were timely filed; and that the proposals of TMS Joint Venture are responsive to the RFP. DONE AND ENTERED this 25th day of March, 2010, in Tallahassee, Leon County, Florida. S SUSAN B. HARRELL 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 25th day of March, 2010.
The Issue The issues in this case are whether Petitioner received Medicaid overpayments, and, if so, what is the aggregate amount of the overpayments.
Findings Of Fact The Parties Respondent, the Agency for Health Care Administration, is the single state agency charged with administration of the Medicaid program in Florida under Section 409.907, Florida Statutes. Petitioner, The Doctor's Office, was a Florida corporation approved by the Agency to provide group Medicaid services. At all times relevant to this matter, Petitioner was owned entirely by non-physicians who employed salaried physicians to provide Medicaid services. Petitioner, at all times relevant to this matter, offered physician services to Medicaid beneficiaries pursuant to a contract with the Agency under provider number 371236P-00. Petitioner, pursuant to the specific terms in the contract with the Agency, agreed to abide by the Florida Administrative Code, Florida Statutes, policies, procedures, manuals of the Florida Medicaid Program, and Federal laws and regulations. Petitioner, pursuant to its contract with the Agency, agreed to only seek reimbursement from the Medicaid program for services that were "medically necessary" and "Medicaid compensable." The Audit In mid-1996, the Agency, pursuant to its statutory responsibility, advised Petitioner that it intended to audit Petitioner's paid Medicaid claims for the alleged medical services it provided between July 1, 1994 and June 30, 1996. In September 1996, the Agency conducted an initial audit site visit, and randomly selected 61 patient files for review. The complete patient files, provided by Petitioner, were reviewed by Sharon Dewey, a registered nurse consultant and Agency employee, as well as Dr. Solenberger, a physician consultant and Agency employee. In accordance with its procedure, the Agency determined that Petitioner had submitted a total of 580 claims for reimbursement relating to the 61 patient files and had received full payment from the Medicaid program for each claim. On March 3, 1997, the Agency issued a Preliminary Agency Audit Report (PAAR), and advised Petitioner that it had over-billed Medicaid and received an overpayment from the program. Shortly thereafter, the Agency auditors, Dr. Solenberger and Ms. Dewey, met with Frank Colavecchio, Petitioner's Corporate Representative, and discussed the Medicaid violations alleged in the review. During the meeting, the Agency requested Mr. Colavecchio to instruct Petitioner's staff physicians to review their records and provide a written rebuttal to the Agency's initial determinations. Within days, and prior to any further action, the Agency placed the audit on indefinite hold. The Agency decided to delay the audit until certain proposed legislation relating to peer review and the integrity of the Medicaid reimbursement program was enacted. Two years later, Section 409.9131, Florida Statutes, was enacted during the 1999 legislative session and became law. Shortly thereafter, in 1999, the Agency hired Dr. Larry Deeb, a board-certified, practicing pediatrician, to perform a peer review of Petitioner's practices and procedures. Dr. Deeb has performed similar medical records reviews for the Medicaid program since 1981 and possesses a thorough understanding of CPT coding and the EPSDT requirements. Dr. Deeb received the medical files provided by Petitioner, and reviewed each patient file in the random sample, including the medical services and Medicaid-related claim records. On November 11, 1999, Dr. Deeb completed his peer review of 564 of the 580 claims provided in the random sample and forwarded his findings to the Agency. Dr. Deeb advised the Agency that 16 reimbursement claims involved adult patients and he therefore did not review them. Utilizing Dr. Deebs findings, the Agency employed appropriate and valid auditing and statistical methods, and calculated the total Medicaid overpayment that Petitioner received during the two year audit period. On July 17, 2000, approximately four years after the original audit notification, the Agency issued its Final Agency Audit Report (FAAR). The Agency advised Petitioner that, based upon its review of the random sample of 61 patients for whom Petitioner submitted 580 claims for payment between 1994 and 1996, Petitioner received $875,261.03 in total overpayment from the Medicaid program during the audit period. Petitioner denied the overpayment and requested a formal administrative hearing. Following the initial commencement of the final hearing in this matter in December 2001, Dr. Deeb, again, reviewed the disputed claims and modified his opinion relating to 6 claims. Thereafter, the Agency recalculated the alleged overpayment and demanded Petitioner to pay $870,748.31. The Allegations The Agency alleges that specific claims submitted by Petitioner, which were paid by the Medicaid program, fail to comply with specific Medicaid requirements and therefore must be reimbursed. Since its inception, the Medicaid program has required providers to meet the Medicaid program's policies and procedures as set forth in federal, state, and local law. To qualify for payment, it is the provider's duty to ensure that all claims "[a]re provided in accord with applicable provisions of all Medicaid rules, regulations, handbooks, and policies and in accordance with . . . state . . . law." Section 409.913(5)(e), Florida Statutes (1993). Medicaid manuals are available to all Providers. Petitioner, as a condition of providing Medicaid services pursuant to the Medicaid program, is bound by the requirements and restrictions specified in the manuals, and under the contract, is required to reimburse the Medicaid program for any paid claims found to be in violation of Medicaid policies and procedures. The evidence presented at hearing established that Petitioner frequently violated various Medicaid policies and procedures. First, Petitioner repeatedly failed to comply with Section 10.9 of the Medicaid Physician's Provider Handbook, (MPPH), and Sections 409.905(9), 409.913(5)(e), 409.913(7)(e), and 409.913(7)(f), (1993, 1994 Supp. 1995, and 1996), Florida Statutes, which require all medical services to be rendered by, or supervised by a physician, and attested to by the physician's signature. Medical records reflecting services for paid claims must be physician signature certified and dated, or the services are not defined as physician's services. In addition, Petitioner routinely failed to correctly document the provision of certain physician's assistant (P.A.) Medicaid services that require the personal supervision of a physician or osteopath. See Chapter 1 of the Physician Assistant Coverage and Limitations Handbook, March 1995, and Appendix D (Glossary) in the Medicaid Provider Reimbursement Handbook, HCFA-1500 (HCFA-1500). In addition, Petitioner failed to comply with Medicaid regulations that require an approved physician to be present in the facility when certain P.A. services are delivered and to attest to it by signature within twenty-four hours of service. See Section 11.1 of the MPPH, effective July 1994, and Sections 409.905, and 409.913 (1993, 1994 Supp., 1995, and 1996 Supp.), Florida Statutes. The evidence presented at hearing also demonstrates that Petitioner repeatedly violated specific record keeping requirements located in Section 10.9 of the MPPH, Sections 10.6 and 11.5 of the Medicaid EPSDT Provider Handbook (EPSDT), and Sections 409.913(5)(e), 409.913(7)(e), and 409.913(7)(f), (1993, 1994 Supp., 1995, and 1996), Florida Statutes. In addition, the Agency demonstrated that Petitioner occasionally failed to document support for the necessity of certain services or simply billed for services that were not medically necessary. As indicated, Medicaid policy limits a physician to bill only for services that are medically necessary and defines the circumstances and varying levels of care authorized. In fact, Section 11.1 of the MPPH, effective July 1994, provides in part: The physician services program pays for services performed by a licensed physician or osteopath within the scope of the practice of medicine or osteopathy as defined by state law . . . . The services in this program must be performed for medical necessity for diagnosis and treatment of an illness on an eligible Medicaid recipient. Delivery of all services in this handbook must be done by or under the personal supervision of a physician or osteopath . . . at any place of service . . . . Each service type listed has special policy requirements that apply specifically to it. These must be adhered to for payment. The manual further provides clear guidelines defining authorized services for reimbursement which Petitioner apparently overlooked. For example, the manual defines the four types of medical history exams that Medicaid providers may conduct, the nature of the problems presented, and the appropriate and authorized tests. The manual also identifies the varying degrees of medical decision-making complexity related to Medicaid services and provides instructions relating to the method of selecting the correct evaluation and management code for billing. Petitioner consistently violated coding restrictions. Moreover, the Medicaid policy manual also outlines the specific procedures and billing requirements necessary for seeking payment for medical services including the early periodic screening for diagnosis and treatment (EPSDT) services. Chapter 10 and 11 of the MPPH specifically state that services that do not include all listed components of the EPSDT are not defined as an EPSDT, and upon audit, the Agency re-calculated Petitioner's medical services at the appropriate procedure code. Stipulation Prior to the commencement of the hearing, the parties stipulated that certain paid claims were correctly determined by the Agency to be overpayments. Specifically, the parties agreed that portions of samples 1, 3, 14, 21, 28, 41, 46, 47, 51, 53, and 56 could not be claimed for reimbursement since lab services which are part of an office visit reimbursement and/or lab service fees performed by an independent outside lab are not permitted. In addition, the parties agreed that specific portions of samples 1, 13, 14, 27, 28, 33, 35, 43, 46, 47, 52, 53, and 55 could not be claimed since Modifier 26 billing, the professional component, is only appropriate when the service is rendered in a hospital and Petitioner's services were rendered in an office. Pediatric Sample With regard to the random sample of pediatric files, upon careful review, the evidence presented at hearing sufficiently demonstrates that Petitioner was overpaid the following amounts on the following paid claims for the following reasons: The prolonged physician's services billed to Medicaid were not documented as having been provided or medically necessary. Cluster Number Date of Service Procedure Code Billed and Paid Overpayment 1 1/18/1996 99354 $ 36.64 1 5/14/1996 99354 $ 36.64 13 9/25/1995 99354 $ 36.64 19 9/28/1994 99354 $ 39.50 21 12/18/1995 99354 $ 36.64 28 3/06/1995 99354 $ 36.64 42 6/04/1996 99354 $ 36.64 43 12/19/1994 99354 $ 36.64 47 9/28/1994 99354 $ 39.50 47 10/17/1995 99354 $ 36.64 51 4/05/1995 99354 $ 36.64 53 11/02/1995 99354 $ 36.64 56 5/01/1996 99354 $ 36.64 The level of care billed to and reimbursed by Medicaid at the 99215 office visit procedure code level was improper since the level of care provided was at the 99213 office visit procedure code level. Cluster Number Date of Service Overpayment 1 9/14/1995 $ 34.14 1 1/18/1996 $ 34.14 1 5/14/1996 $ 34.14 33 9/28/1994 $ 20.00 47 10/17/1995 $ 34.14 The level of care billed and paid at the 99215 office visit procedure code level was improper since the level of care that was provided was at the 99214 office visit procedure code level. Cluster Number Date of Service Overpayment 53 5/31/1995 $ 21.69 The level of care billed and paid at the 99205 office visit procedure code level was improper since the level of care that was provided was at the 99204 office visit procedure code level. Cluster Number Date of Service Overpayment 25 7/27/1994 $ 2.00 The level of care that was billed and paid at the 99205 office visit procedure code level was improper since the level of care that was provided was at the 99203 office visit procedure code level. Cluster Number Date of Service Overpayment 35 5/11/1995 $ 37.96 51 12/08/1994 $ 15.00 55 11/21/1995 $ 37.96 58 9/22/1995 $ 37.96 The level of care that was billed and paid at the 99215 office visit procedure code level was improper since the level of care that was provided was at the 99204 office visit procedure code level. Cluster Number Date of Service Overpayment 43 12/11/1994 ($ 3.00) credit The level of care that was billed and paid at the 99205 office visit procedure code level was improper since the medical services provided and documentation supported an EPSDT visit. Cluster Number Date of Service Overpayment 53 2/06/1995 $ 16.53 The required components of the EPSDT were not documented as being performed at the office visit that had been claimed and paid as an EPSDT and therefore, the difference between the EPSDT payment received and the value of the procedure code for the documented level of office visit that occurred (i.e., 99214, 99213, 99212, 99211, or 99203), is deemed an overpayment. Cluster Number Date of Service Level of Visit Overpayment 1 7/28/1995 99213 $ 39.82 3 6/28/1995 99213 $ 39.82 5 3/03/1995 99203 $ 21.43 6 7/07/1994 99213 $ 5.00 10 8/17/1995 99212 $ 43.82 12 1/31/1996 99204 $ 0.00 14 5/31/1995 99213 $ 39.82 18 10/04/1994 99213 $ 5.00 18 1/29/1996 99214 $ 27.37 20 8/25/1994 99213 $ 5.00 21 12/11/1995 99214 $ 27.37 29 8/17/1994 99212 $ 9.00 Cluster Number Date of Service Level of Visit Overpayment 29 9/06/1995 99213 $ 39.82 40 7/25/1994 99203 $ 0.00 41 5/06/1996 99214 $ 27.37 46 9/19/1994 99213 $ 5.00 46 10/19/1995 99213 $ 39.82 47 11/02/1994 99213 $ 5.00 51 9/07/1995 99213 $ 39.82 53 7/10/1995 99213 $ 39.82 53 1/19/1995 99213 $ 39.82 59 5/02/1996 99203 $ 43.39 Adult Samples At hearing, Petitioner disputed all of the Agency's findings relating to patients over the age of 21 and objected to Dr. Deeb, a pediatrician, performing any review of their files. While Dr. Deeb is not the appropriate peer to review adult patient files, the following adult claims did not require substantive peer review and resulted in overpayment due to the stated reason: There were not any medical records in existence to indicate that any medical services were performed. Cluster Number Date of Service Procedure Code Billed and Paid Overpayment 2 2/20/1995 99215 $ 53.00 2 7/11/1995 99215 $ 59.14 2 8/09/1995 99215 $ 57.14 2 9/07/1995 99213 $ 23.00 2 10/11/1995 99213 $ 23.00 2 1/02/1996 99213 $ 23.00 2 3/22/1996 73560/Rad.Ex. $ 16.36 2 4/01/1996 99215 $ 57.14 2 4/05/1996 99213 $ 23.00 2 4/23/1996 99213 $ 23.00 15 2/16/1996 99213 $ 23.00 15 2/19/1996 99215 $ 57.14 16 5/14/1996 Blood Count $ 8.00 Cluster Number Date of Service Procedure Code Billed and Paid Overpayment 16 5/14/1996 UA $ 3.00 16 5/14/1996 99215 $ 57.14 23 7/28/1994 99213 $ 23.00 23 5/09/1995 72069/26 Rad.Ex. $ 6.98 23 5/09/1995 72069/Rad.Ex. $ 17.45 23 10/20/1995 99213 $ 23.00 34 4/24/1996 99214 $ 35.45 57 11/17/1995 99215 $ 59.14 60 4/10/1996 99215 $ 57.14 61 5/22/1995 99213 $ 23.00 The medical records failed to contain the required physician's signature and date authenticating the fact that the services billed were performed by either P.A. Olsen or P.A. Avidon under physician supervision. The services provided by the non-physician employee were reviewed and down-coded by the Agency to the appropriate level physician's office visit code. Cluster Number Date of Service Proc. Code Pd./ P. Code Allowed Overpayment 2 6/30/1995 99215/99212 $ 36.14 2 7/20/1995 99215/99213 $ 34.14 2 7/28/1995 99215/99213 $ 34.14 2 9/05/1995 99215/99212 $ 36.14 8 4/17/1995 99205/99203 $ 35.96 17 3/27/1995 99205/99203 $ 35.96 23 5/09/1995 99215/99213 $ 32.14 23 6/09/1995 99215/99213 $ 32.14 34 4/23/1996 99205/99203 $ 35.96 The medical records failed to contain the required physician signature authenticating the fact that the services were provided by a physician. The services provided were reviewed and down-coded by the Agency to the appropriate level physician's office visit code. Procedure Code Cluster Number Date of Service Billed and Paid Overpayment 2 6/14/1995 99215/99211 $ 45.14 16 5/15/1996 99215/99211 $ 45.14 61 5/05/1995 99205/99204 $ 14.53 The provider improperly sought payment for lab services that were part of the office visit reimbursement and/or lab services performed by an independent outside lab. Cluster Number Date of Service Procedure Billed and Paid Overpayment 2 3/08/1996 UA $ 3.00 2 4/03/1996 UA $ 3.00 15 2/08/1996 UA $ 3.00 16 5/15/1996 Blood Count $ 8.50 16 5/15/1996 Blood Count $ 8.00 The provider improperly sought payment for Modifier 26 billings (professional component) which are only appropriate when the service is rendered in a hospital. Cluster Number Date of Service Procedure Billed and Paid Overpayment 2 2/17/1995 Radiologic exam $ 6.98 2 6/14/1995 Radiologic exam $ 7.20 8 4/17/1995 Tympanometry $ 9.00 16 5/13/1996 Radiologic exam $ 5.45 16 5/15/1996 Radiologic exam $ 6.98 In addition to the policy and procedural violations, Petitioner, in egregious violation of the Medicaid program, admittedly submitted Medicaid claims for the services of specialist physicians (such as an allergist, OB/GYN, podiatrist, psychologists, and ophthalmologists) not within its Provider group, collected Medicaid funds based on those claims, and reimbursed the respective specialist. While Petitioner's corporate representative, Mr. Colavecchio, was admittedly responsible for the coding and billing of the Medicaid services submitted for reimbursement, he was minimally aware of the Medicaid policy requirements and possessed limited working knowledge of CPT coding and EPSDT billing. In addition, Petitioner's employees, Dr. Keith Wintermeyer and Dr. Marcia Malcolm, were only moderately familiar with the CPT coding and EPSDT component requirements. They provided little input to Petitioner regarding CPT coding and the sufficiency of certain physician's services relating to EPSDT billing.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency re-calculate the overpayment consistent with the Findings of Fact, and include only those identified violations in the cluster samples of the adult patient files, and issue a Final Order requiring Petitioner to reimburse, within 60 days, the Agency for the Medicaid overpayments plus any interest that may accrue after entry of the Final Order. DONE AND ENTERED this 14th day of February, 2003, in Tallahassee, Leon County, Florida. WILLIAM R. PFEIFFER 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 14th day of February, 2003. COPIES FURNISHED: Susan Felker-Little, Esquire Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox Building III Tallahassee, Florida 32308 Charles D. Jamieson, Esquire Ward, Damon & Posner, P.A. 4420 Beacon Circle West Palm Beach, Florida 33407 Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308 Rhonda M. Medows, M.D., Secretary Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3116 Tallahassee, Florida 32308
