The Issue The issue is whether Petitioner received a Medicaid overpayment in the amount of $11,077.65 for claims filed between April 15, 1998, and December 31, 2001.
Findings Of Fact Respondent is the agency responsible for administering the Florida Medicaid Program. One of its duties is to recover Medicaid overpayments from physicians providing care to Medicaid recipients. Petitioner is a licensed chiropractor in the State of Florida. His Medicaid provider number is No. 3801578-00. At all times relevant here, Petitioner provided services to Medicaid patients pursuant to a valid Medicaid provider agreement. Therefore, Respondent was subject to all statutes, rules, and policy guidelines that govern Medicaid providers. Specifically, Petitioner was required to follow the guidelines set forth in the Medicaid Coverage and Limitation Handbook and the Medicaid Reimbursement Handbook. Additionally, Petitioner was required to maintain all "Medicaid-related records" that supported his Medicaid invoices and claims and to furnish those records to Respondent upon request. In 1997 and until April 1998, Petitioner's advertisement in the yellow pages of the Panama City, Florida, telephone book invited the public to make an appointment for a "free spinal exam," which specifically included two X-rays, if medically necessary. The advertisement indicated that Petitioner's office accepted patients with major medical insurance, workers' compensation insurance, and Medicare and Medicaid coverage. The advertisement did not specifically exclude Medicare and Medicaid patients, but specifically stated that the free spinal exam did not include further examination, treatment, or workers' compensation and personal injury cases. However, Petitioner's subsequent advertisements in the telephone book specifically included Medicaid as a type of case that Petitioner excluded from the offer of free services. The original and subsequent advertisements further stated as follows: Our office policy: The patient and any other person responsible for payment has the right to cancel payment, or be reimbursed for payment for any other service, exam, or treatment which is performed as a result of and within 72 hours of responding to the ad for the free service, exam or treatment. ($99.00 value) Respondent's investigator, Julie Canfield-Buddin, saw the advertisement excluding Medicaid patients as recipients of the free services. After confirming that Petitioner was a Medicaid provider, Ms. Canfield-Buddin performed an audit of Petitioner's paid Medicaid claims between April 15, 1998, and December 31, 2001. The audit revealed that Petitioner had not provided the advertised free services to Medicaid patients. In other words, Petitioner had received Medicaid reimbursements for initial office visits and X-rays of new patients who were Medicaid eligible. Petitioner received reimbursements for these services even though Medicaid policy prohibits payments to providers for services that are given to non-Medicaid patients free of charge. In April 2002, Respondent sent Petitioner a preliminary audit report. The preliminary report indicated that for the period beginning April 15, 1998, up to and including December 31, 2001, Petitioner had received $13,522.02 for certain claims that were not covered by Medicaid. The report included a request for Petitioner to send Respondent that amount for the Medicaid overpayment. After receiving the preliminary report, Petitioner's office contacted Ms. Canfield-Buddin, stating that Petitioner had some issues with the denied claims. Ms. Canfield-Buddin responded that Petitioner should state his concerns in writing and furnish Respondent with any additional medical documentation that would serve to reduce the overpayment. Petitioner sent Ms. Canfield-Buddin a letter dated April 25, 2002. Petitioner did not send Respondent any additional medical documentation with the letter to substantiate his position regarding the denied claims. Additionally, Petitioner did not provide Respondent with any written office policy that delineated any difference in the services provided to Medicaid and non-Medicaid patients. In a final audit report dated May 9, 2002, Respondent informed Petitioner that he had been overpaid $13,522.02 for Medicaid claims that, in whole or in part, were not covered by Medicaid. The final audit report included a request for Petitioner to pay that amount for the Medicaid overpayment. Ms. Canfield-Buddin subsequently received a telephone call from Petitioner's office on May 30, 2002. She received Petitioner's written request for a formal administrative hearing on June 3, 2002. After receiving Petitioner's request for a hearing, Ms. Canfield-Buddin reviewed Petitioner's account statements that related to the Medicaid overpayments. Based on that review, Ms. Canfield-Buddin reduced the amount of overpayment to $11,077.65. The revised overpayment reversed denied charges for X-rays of Medicaid patients in excess of the two X-rays that should have been provided free of charge pursuant to the offer for free services. For example, Petitioner was reimbursed for services provided to B.A. on August 10, 2001. These charges included an initial office visit under the Current Procedures Terminology (CPT) code 99203, two X-rays under the CPT code 7240, two X-rays under the CPT code 72072, and two or three X-rays under the CPT code 72100. The final audit denied reimbursement for all charges except the two or three X-rays under CPT code 72100. The revised overpayment reversed the denied charges for two X-rays under the CPT code 72070. The end result was that Respondent denied Petitioner reimbursement only for the initial office visit and two X-rays that ordinarily would have been provided free to non-Medicaid patients. Medicaid allows reimbursement for services equal to the lesser of the Medicaid fee or the provider's usual and customary charge. Petitioner's advertisement offered free services to the public at large with certain exceptions. Petitioner cannot exclude Medicaid patients from that offer by also excluding patients with personal injury or workers' compensation claims. All patients who are not Medicaid eligible are non-Medicaid patients regardless of their payment source. Just because Petitioner excludes free services to non-Medicaid patients with personal injury and workers' compensation claims, does not mean that he can deny those free services to Medicaid patients when his usual and customary practice is to provide the services free to non-Medicaid patients. Some of the denied charges at issue here allegedly involve spinal manipulations that Petitioner claims he performed on Medicaid patients during their initial office visits. Medicaid reimbursement policy requires a spinal manipulation performed during an initial office visit under a 99203 CPT code for a new patient visit to be included as part of the examination conducted during that visit. Medicaid does not allow Petitioner to be separately reimbursed for a spinal manipulation performed on the same day of service as an initial office visit. Petitioner did not include more than two X-rays or any spinal manipulations in his offer of free services for any patient. When a patient has an initial office visit in response to Petitioner's offer of free services, Petitioner first takes the patient's history, performs an examination, and reviews the first two free X-rays. Depending on the results of the evaluation, Petitioner may or may not advise the patient that additional X-rays and/or a spinal manipulation are medically necessary. Petitioner then allows the patient to arrange for payment of those services with his office staff. If the patient is non-Medicaid eligible and is able to pay for services, Petitioner proceeds to take the additional X-rays and/or to perform the spinal manipulation immediately or during a subsequent visit with payment due as arranged. If a non-Medicaid patient requires subsequent examinations during the course of treatment, Petitioner bills the patient or his or her insurance carrier for those services. If the patient is Medicaid eligible, Petitioner may either proceed with taking the X-rays and/or performing the spinal examination immediately, knowing that he will not be separately reimbursed for the spinal manipulation, or make an appointment for the Medicaid patient to return on another day so that he can be reimbursed for the spinal manipulation. In any event, Medicaid regulations do not allow reimbursement for further examinations within a three-year period. During the hearing, Petitioner testified that some of the denied charges for initial office visits under the CPT code 99203 included spinal manipulations that he never intended to be free and that he did not provide spinal manipulations as a free service to non-Medicaid patients. Petitioner's testimony in this regard is not credited for two reasons. First, he did not produce any medical documentation to support his testimony as to any Medicaid patient receiving a spinal manipulation during an initial office visit. Second, he did not identify any such patient during his testimony. Respondent performs Medicaid audits after a provider renders services. Therefore, it is essential for providers like Petitioner, who contest denied claims, to be able to substantiate their billing with appropriate documentation. Such documentation must be created at the time of service, maintained pursuant to statutory and rule requirements, and furnished to Respondent upon request. Petitioner never responded to Ms. Canfield-Buddin's request for medical documentation to substantiate Petitioner's challenge to the denied claims. Additionally, Petitioner testified that the services he performed for some Medicaid patients were not equivalent to the free services he performed for non-Medicaid patients because they often involved a higher level of service, including additional services, tests, or examinations. According to Petitioner, some of the Medicaid patients required more extensive screening and counseling that consumed more of Petitioner's time. Despite this testimony, Petitioner admitted that the histories he took of Medicaid patients and non-Medicaid patients were basically the same. Petitioner testified that the difference in the level of service provided to all patients varied based upon the individual patients and did not depend on whether they were or were not Medicaid patients. He had no written or unwritten guidelines or policies that limited the scope of screening or level of service in an initial office visit for either type of patient. Petitioner's testimony that the level of services provided to Medicaid patients differed from the level of services offered to non-Medicaid patients is not persuasive. Once again, Petitioner failed to provide the required medical documentation to support his testimony or to identify in his testimony Medicaid patients who required a higher level of service. Moreover, Petitioner knew, when he made his offer of free services, that he would not be able to claim reimbursement for services provided to Medicaid patients that were not separately reimbursable even if Petitioner was entitled to exclude Medicaid patients from the offer. This includes cases where a Medicaid patient may have required a high level of service in terms of the time expended during the screening or a spinal manipulation during the initial office visit. Petitioner provides free services to members of his family. The provision of free services to family does not establish that Petitioner had a usual and customary practice of providing free services. At times, Petitioner treats police officers and indigent persons free of charge. However, Petitioner does not publicly advertise that he treats these patients free of charge because he does not want to be overrun with people taking advantage of the offer. There is no persuasive evidence that Petitioner routinely treats police officers covered by private health insurance and indigent patients covered by Medicaid free of charge. Therefore, it cannot be said that Petitioner's usual and customary practice is to furnish services to these patients free of charge. A Medicaid provider is allowed to use the CPT code 99203 for a new patient visit once per recipient every three years. Petitioner's offer of free services for non-Medicaid patients allows them one free office visit and two free X-rays regardless of the passage of time. According to Petitioner, this means that Respondent's interpretation of Medicare regulations would entitle a Medicaid patient to the free services every three years whereas a non-Medicaid patient would not be so entitled, showing yet another difference in the services provided to Medicaid and non-Medicaid patients under the offer of free services. However, Petitioner's testimony in this regard is not persuasive because it is not based on medical documentation or testimony showing that Petitioner ever treated a Medicaid patient as a new patient more than once.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Respondent enter a final order determining that Petitioner owes $11,077.65 for Medicaid reimbursement overpayments. DONE AND ENTERED this 18th day of November, 2002, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD 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 18th day of November, 2002. COPIES FURNISHED: Anthony L. Conticello, Esquire Grant P. Dearborn, Esquire Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308-5403 Hal Cowen ChiroNetwork Health Care Centers 127 West 23rd Panama City, Florida 32405 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
The Issue Whether the Petitioner, Agency for Health Care Administration (Petitioner or Agency), is entitled to a Medicaid reimbursement and, if so, in what amount.
Findings Of Fact The Petitioner is the state agency charged with the authority and responsibility of administering the Florida Medicaid Program. As part of this authority, the Petitioner is required to recover Medicaid overpayments when appropriate. See § 409.913, Fla. Stat. (2006). At all times material to the allegations of this case, the Respondent was a licensed physician and a Medicaid provider subject to the provisions of Chapter 409. As a Medicaid provider, the Respondent was authorized to provide services to eligible patients but was obligated to comply with the Medicaid Provider Agreement in doing so. The Medicaid Program contemplates that authorized providers will provide services to eligible patients, bill the program and be paid according to the Medicaid standards. All Medicaid providers must practice within the guidelines of the Physicians Coverage and Limitations Handbook and applicable law. Providers may be audited so that it can be verified the process was appropriately followed. In this case, the Respondent was audited. According to the audit findings, the Respondent received payment for services that he did not perform. Dr. Eiber (a physician not part of the Respondent’s practice group) reviewed and signed off on x-ray studies and reports for which the Respondent billed and was paid by Medicaid. Dr. Eiber is a Medicaid provider but he is not affiliated with the Respondent or the Respondent’s group. In order for the Respondent to bill and receive payment for Dr. Eiber’s work, the latter physician would have to be listed and identified within the group in which the Respondent practiced. The Respondent was responsible for all billings for which he received payments. In connection with billing, the Respondent was required to maintain and retain all Medicaid- related invoices or claims for the audit period. In this regard, the Physician Coverage and Limitations Handbook specifies that when a radiological study is performed in an office setting, either the physician billing the maximum fee must have performed or indirectly supervised the performance and interpreted the study; or if a group practice, a member of the group must perform all components of the services. That procedure was not followed. When the Agency disallows a paid Medicaid claim, it must seek to recover the overpayment from the Medicaid provider who received payment on the claim. This is the basis of the “pay and chase” methodology used in the Medicaid program. The claims are paid, subject to audit, and recovery is sought when the claim is disallowed. Based on the audit findings in this cause, the Agency seeks $32,935.96 as an overpayment of Medicaid claims paid to the Respondent. The Petitioner also seeks an administrative fine in the amount of $1000.00. The Respondent was given the results of the audit and afforded an opportunity to respond and provide additional information to the Agency to show that the amounts billed were correct. The Respondent has presented no supplemental information to corroborate the correctness of the claims at issue.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Agency for Health Care Administration enter a Final Order sustaining the Final Audit Report and finding an overpayment against the Respondent in the amount of $32,9935.96. The Final Order should also impose an administrative fine in the amount of $1,000.00. S DONE AND ENTERED this 21st day of February, 2007, in Tallahassee, Leon County, Florida. J. D. PARRISH 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 February, 2007. COPIES FURNISHED: Craig A. Brand, Esquire Law Offices of Craig A. Brand, P.A. Grove Forest Plaza 2937 Southwest 27th Avenue, Suite 101 Miami, Florida 33133 Willis Melvin, Esquire Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox Building III, Mail Stop 3 Tallahassee, Florida 32308 Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308 Craig H. Smith, General Counsel Agency for Health Care Administration Fort Knox Building, Suite 3431 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308 Dr. Andrew C. Agwunobi, Secretary Agency for Health Care Administration Fort Knox Building, Suite 3116 2727 Mahan Drive Tallahassee, Florida 32308
The Issue The issue for determination is whether Petitioner must reimburse Respondent for payments totaling $1,140,763.88 that Petitioner received from the Medicaid Program in compensation for the provision of prescription drugs between late-August and November of 1998. Respondent contends that Petitioner is not entitled to retain the payments in question because Petitioner allegedly has failed to demonstrate that it had available during the pertinent period a sufficient quantity of the prescription drugs in question.
Findings Of Fact The parties' Joint Stipulation of Facts and the evidence presented at final hearing established the facts that follow. The Parties The Agency for Health Care Administration (the “Agency”) is responsible for administering the Florida Medicaid Program. As one of its duties, the Agency must recover "overpayments . . . as appropriate," the term "overpayment" being statutorily defined to mean "any amount that is not authorized to be paid by the Medicaid program whether paid as a result of inaccurate or improper cost reporting, improper claiming, unacceptable practices, fraud, abuse, or mistake." See Section 409.913(1)(d), Florida Statutes. Palm Beach Pharmacy, Inc. (“PBPI”), d/b/a Eddie’s Drug (“Eddie’s”) was, at all times material hereto, a duly contracted Medicaid provider, having entered into a Medicaid Provider Agreement with the Agency and been assigned a Medicaid Provider Number: 106343000. Eddie’s is a Florida licensed pharmacy.1 As an enrolled Medicaid provider, Eddie’s is authorized to dispense drugs and supplies to Medicaid recipients. In return, Eddie’s has agreed to comply with all governing statutes, rules, and policies, including those policies set forth in the Florida Medicaid Prescribed Drug Services Coverage, Limitations and Reimbursement Handbook (the “Handbook”). The Agency, which prepared the Handbook and furnishes it to Medicaid providers, has incorporated the Handbook by reference into Rule 59G-4.250(2), Florida Administrative Code. PBPI, which owned and operated a number of pharmacies (including Eddie’s), maintained its corporate headquarters in West Palm Beach, Florida. Eddie’s was located in Miami, Florida. On July 1, 1998, PBPI acquired a drug store known as Jay’s Drugs (“Jay’s”). Jay’s was located in Miami, Florida, across the street from Eddie’s. Thus, before both stores came under common ownership, they had been competitors. This case arises out of the Agency's attempt to recover alleged overpayments on Medicaid claims for which Eddie’s was paid several years ago. The "audit period" that is the subject of the Agency's recoupment effort is April 1, 1998 to July 31, 1999, although the actual period in controversy is much shorter. From July 1, 1998, until the end of the audit period, PBPI owned and operated both Eddie’s and Jay’s. The Underlying Facts The transactions at the heart of this case occurred between late-August and November of 1998, during which period (the “Focal Period”) Medicaid reimbursed Eddie’s more than $1 million for prescription drugs including Neupogen and Epogen/Procrit (collectively, the “Drugs”). The Drugs are used to treat AIDS patients and persons infected with HIV. Prior to the Focal Period, Eddie’s had not dispensed $1 million worth of the Drugs——or any figure approaching that amount——in three or four months’ time. The reason for the dramatic spike in Eddie’s business is that Eddie’s was dispensing the Drugs to customers of Jay’s pursuant to an arrangement designed to manipulate PBPI’s contractual obligations to the former owner of Jay’s under the purchase and sale agreement by which PBPI had acquired Jay’s. Essentially, the arrangement was this. Jay’s was dispensing the Drugs to a large number (approximately 150) of Medicaid beneficiaries who were receiving treatment at a nearby clinic. Because the Drugs were administered to the patients via intravenous infusion, the clinic typically obtained the Drugs from Jay’s in bulk. To fill these prescriptions, Jay’s ordered the Drugs from a wholesale supplier, which usually delivered the Drugs to Jay’s the next day. At some point before the Focal Period, arrangements were made to have the clinic present its prescriptions for the Drugs to Eddie’s rather than Jay’s.2 The evidence does not show, exactly, how this was accomplished, but whatever the means, the clinic abruptly began bringing prescriptions for the Drugs to Eddie’s.3 This diversion of Jay’s’ business to Eddie’s was intended to deprive Jay’s of Medicaid reimbursements to which Jay’s’ former owner had access as a source of funds for paying down a note that PBPI had given for the purchase of Jay’s. By having Eddie’s dispense the Drugs and submit the Medicaid claims, Medicaid money flowed into Eddie’s’ bank account (rather than Jay’s’ bank account) and hence was not immediately available to the former owner of Jay’s to reduce PBPI’s debt. During the Focal Period, Eddie’s did not purchase the Drugs from a wholesaler but instead acquired them from Jay’s. The process by which this was accomplished involved a pharmacy technician named Wright, who was employed at Eddie’s, and a pharmacist named Shafor, who worked at Jay’s. Wright (at Eddie’s) accepted the prescriptions for the Drugs as the clinic brought them in Then, she called Shafor (at Jay’s) and told him the quantities needed to fill the prescriptions. Shafor ordered the Drugs from a wholesaler, which delivered them in bulk to Jay’s, usually the next day. Upon receiving the Drugs, Shafor personally delivered them to Wright, who, recall, was across the street at Eddie’s. Wright labeled and dispensed the Drugs. Eddie’s submitted a claim for the Drugs to Medicaid, and Medicaid paid Eddie’s. PBPI maintained separate accounting ledgers for Eddie’s and Jay’s, respectively. The company’s accountants recorded the subject transactions in these ledgers so that Jay’s——not Eddie’s——would “recognize” the sales of the Drugs. In a nutshell, this was done through “inter-company” transfers whereby all of the money that Eddie’s received from Medicaid for the Drugs was moved, on the books, into an account of Jay’s. In this way, any profit from the sales of the Drugs (the difference between the wholesale cost of the Drugs and the Medicaid reimbursement therefor, less overhead) was realized on Jay’s’ books.4 The Medicaid payments to Eddie’s that the Agency seeks to recoup were included in four remittance vouchers dated September 2, 1998; September 30, 1998; October 28, 1998; and November 25, 1998, respectively. The September 2 payment to Eddie’s totaled $287,205.52. Of this amount, $276,033.23 reimbursed Eddie’s for dispensing the Drugs. Eddie’s’ accounting ledger reflects that, as of September 30, 1998, the sum of $276,033.23 had been transferred from an account of Eddie’s to an account of Jay’s. The September 30 payment to Eddie’s totaled $439,175.77, of which $432,700.36 was paid in consideration of the Drugs. The October 28 Medicaid payment was $431,753.82, of which total the Drugs accounted for $424,202.76. Eddie’s’ accounting ledger reflects that, as of October 31, 1998, the sum of $870,929.59 (439,175.77 + 431,753.82) had been transferred from an account of Eddie’s to an account of Jay’s. The November 25 payment to Eddie’s totaled $407,088.00. Of this amount, $393,063.00 reimbursed Eddie’s for dispensing the Drugs. Eddie’s’ accounting ledger reflects that, as of November 30, 1998, the sum of $407,088.00 had been transferred from an account of Eddie’s to an account of Jay’s. The Agency’s Allegations On October 31, 2000, the Agency issued its Final Agency Audit Report (“Audit”) in which Eddie’s was alleged to have received $1,143,612.68 in overpayments relating to the Drugs. In the Audit, the Agency spelled out its theory of the case; indeed, the Audit is the only document in the record that does so. The Agency cited several statutory provisions. First, Section 409.913(7)(e), Florida Statutes, was referenced. This section states: When presenting a claim for payment under the Medicaid program, a provider has an affirmative duty to supervise the provision of, and be responsible for, goods and services claimed to have been provided, to supervise and be responsible for preparation and submission of the claim, and to present a claim that is true and accurate and that is for goods and services that: * * * (e) Are provided in accord with applicable provisions of all Medicaid rules, regulations, handbooks, and policies and in accordance with federal, state, and local law. Section 409.913(7)(e), Florida Statutes. The Agency did not allege (or prove), however, that Eddie’s had violated Section 409.913(7)(e), Florida Statutes.5 Put another way, the Agency did not plead or prove lack of supervision, submission of a false claim, or that the Drugs were not provided in accordance with applicable law. Next, the Agency cited Section 409.913(8), Florida Statutes, which provides: A Medicaid provider shall retain medical, professional, financial, and business records pertaining to services and goods furnished to a Medicaid recipient and billed to Medicaid for a period of 5 years after the date of furnishing such services or goods. The agency may investigate, review, or analyze such records, which must be made available during normal business hours. However, 24-hour notice must be provided if patient treatment would be disrupted. The provider is responsible for furnishing to the agency, and keeping the agency informed of the location of, the provider's Medicaid- related records. The authority of the agency to obtain Medicaid-related records from a provider is neither curtailed nor limited during a period of litigation between the agency and the provider. The Agency further alleged, as fact, that Eddie’s had failed, upon request, “to submit invoices from [its] suppliers to substantiate the availability of drugs that [were] billed to Medicaid” and thus had not “fully substantiated such availability.” The Agency, however, did not invoke any of the available remedial provisions as authority to impose a sanction for this alleged failure to turn over Medicaid-related records. See, e.g., Sections 409.913(14)(b), (c), and (d), Florida Statutes. The Agency cited Section 409.913(10), Florida Statutes, which authorizes the Agency to “require repayment for inappropriate, medically unnecessary, or excessive goods or services from the person furnishing them, the person under whose supervision they were furnished, or the person causing them to be furnished.” There was no allegation (or proof), however, that the Drugs which Eddie’s had purported to dispense (i.e. the Drugs for which it had submitted Medicaid claims) were “inappropriate, medically unnecessary, or excessive.” Thus, Eddie’s was not alleged (or shown) to have violated Section 409.913(10), Florida Statutes. Finally, the Agency relied upon Section 409.913(14)(n), Florida Statutes, which is the basis of the Agency’s legal theory. This section provides: The agency may seek any remedy provided by law, including, but not limited to, the remedies provided in subsections (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[.] The Agency contended, additionally, that “[b]illing Medicaid for drugs that have not been demonstrated as available for dispensing is a violation of the Medicaid laws and regulations and has resulted in the finding that [Eddie’s] ha[s] been overpaid by the Medicaid program.” (Emphasis added). The Agency explained, “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.” Thus, the Agency’s theory of recovery is that Eddie’s must forfeit “overpayments” arising from its failure to demonstrate the availability, in inventory, of a sufficient quantity of the Drugs for which claims were submitted, as required by Section 409.913(14)(n), Florida Statutes. After the Audit was issued, the Agency accepted a handwritten note regarding the transfer of a small quantity of Drugs from Jay’s to Eddie’s as sufficient to demonstrate the availability of such amount. This resulted in a slight reduction of the amount of the alleged overpayment, to $1,140,763.88. The Separate Audit of Jay’s The Agency conducted a separate audit of Jay’s, concerning which some evidence was introduced at hearing. Without getting into unnecessary detail, the audit of Jay’s revealed that Jay’s had purchased, during and around the Focal Period, a quantity of the Drugs that exceeded the number of units that Jay’s had billed to Medicaid. It was Eddie’s theory that this “excess inventory” of Jay’s matched, more or less, the alleged inventory shortfall at Eddie’s, thereby corroborating the testimony concerning the transfer of these Drugs from Jay’s to Eddie’s for dispensation. At hearing, the parties sharply disputed whether, in fact, Jay’s had transferred the Drugs to Eddie’s. The Agency, of course, maintained that such transfers were not properly documented; Eddie’s argued that the documents and other evidence, including testimony about the transactions in question, adequately demonstrated that the transfers had, in fact, occurred. There was no dispute, however, that if it were found that such transfers had occurred, and if, further, the documents (and other evidence) pertaining to the inventory of Jay’s were accepted as proof of the quantities of Drugs so transferred, then all but $176,078.30 worth of the Drugs could be accounted for. Thus, as counsel for Eddie’s conceded at hearing, the Agency is entitled to recoup some sum of money. The question is whether that sum is $1,140,763.88 or $176,078.30. Ultimate Factual Determination Based on all of the evidence in the record, including the deposition testimony received through the parties’ joint stipulation, it is determined that, more likely than not, Eddie’s had available during the Focal Period a sufficient quantity of the Drugs to support all but $176,078.30 worth of the claims in dispute.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency enter a final order requiring Eddie’s to repay the Agency the principal amount of $176,078.30. DONE AND ENTERED this 12th day of March, 2002, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM 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 12th day of March, 2002.
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 in this proceeding is the amount payable to the Agency for Health Care Administration (Respondent) to satisfy a Medicaid lien under section 409.910, Florida Statutes (2015).1/
Findings Of Fact Nakila Merriex is the natural mother and legal guardian of Nivea Merriex (Nivea). At the time of her birth on November 30, 2011, Nivea suffered a shoulder injury and damage to the brachial plexus nerve. Nivea underwent surgery and subsequent physical therapy to treat the deficit related to the shoulder injury and nerve damage. The Petitioner filed a lawsuit against parties involved in Nivea’s birth and recovered monetary damages through settlement of the lawsuit. The terms of the settlement are confidential. Nivea also required speech therapy to treat a disorder wholly unrelated to the shoulder damage and nerve injury. The physical therapy and the speech therapy were delivered by the same provider, Lampert’s Home Therapy. For reasons unknown, Lampert’s Home Therapy utilized the primary billing diagnosis code of “9534-Brachial Plexus Injury” for both the physical therapy and the speech therapy services in submitting the claims to Medicaid. In calculating the Medicaid lien, the Respondent included all the charges for services rendered by Lampert’s Home Therapy. The Medicaid lien at issue in this case is for $37,679.56. According to the billing records admitted into evidence at the hearing, $5,603.54 of the charges billed by Lampert’s Home Therapy and paid by Medicaid were solely attributable to speech therapy services. Nivea’s speech disorder was not the subject of litigation. The Petitioner has received no award of damages from a third party related to the speech disorder. At the commencement of the hearing, the Petitioner conceded responsibility for satisfying the amount of the Medicaid lien related to charges for physical therapy services provided to treat the shoulder injury and nerve damage. Deducting the charges incurred for speech therapy from the total Medicaid lien results in a remaining lien of $32,076.02.
The Issue Whether Emergency Rule 10CER92-4 should be invalidated because it constitutes an invalid exercise of delegated legislative authority.
Findings Of Fact The Medicaid program is a program authorized under Title XIX of the federal Social Security Act that provides for payments for medical items or services for eligible recipients. Section 409.901(7), Florida Statutes. Prior to July 1, 1993, the Medicaid program was administered by the Department of Health and Rehabilitative Services (HRS). Effective July 1, 1993, Section 20.42, Florida Statutes, 1992 Supplement, was amended by Chapter 93-129, Section 58, Laws of Florida, to give the Agency for Health Care Administration (AHCA) the responsibility for the Medicaid program. The Medicaid program provides for mandatory and optional services to eligible recipients. Prescribed drug services are optional Medicaid services. Medicaid services may be provided only when medically necessary, must be provided in accordance with state and federal law, and are subject to any limitation established by the general appropriations act or Chapter 216, Florida Statutes. Sections 409.905 and 409.906, Florida Statutes. Medical providers participating in the Medicaid program receive reimbursement from Medicaid. Section 409.908, Florida Statutes. States are given the option to charge Medicaid recipients copayments for services. 42 CFR Section 447.50. Certain categories of services and recipients are exempt from copayments. 42 CFR Section 447.53. Forty-five percent of the Medicaid program is funded by state funds and fifty-five percent is funded with federal "matching funds." In order to receive federal matching funds for its Medicaid program, the state must submit a plan describing the nature and scope of its Medicaid program and giving assurances that the program will be administered in accordance with Title XIX and applicable federal regulations. This plan is known as the State plan. Effective February 14, 1992, the Legislature enacted Chapter 92-5, Laws of Florida, which amended the appropriations Act for fiscal year 1991-92. Proviso language in Chapter 92-5 relating to Specific Appropriation 1035 for Medicaid prescribed medicine/drug provides: The Department of Health and Rehabilitative Services is directed to implement, beginning April 1, 1992, a co-payment program for Prescribed Medicine in order to implement spending reductions of at least $770,213 from general revenue and $929,661 from the Medical Care Trust Fund in Specific Appropriation 1035. The State plan was amended effective April 10, 1992, to require a copayment of $1.00 per prescription for pharmacy services provided to Medicaid recipients. Certain categories of services and recipients were exempted from the copayment requirement. Providers were prohibited from denying services to recipients who were unable to pay the copayment. Prior to April 10, 1992, copayments had not been required for prescribed drug services. HRS adopted Emergency Rule 10CER92-4, effective April 10, 1992. HRS published notice of the emergency rule in the Florida Administrative Weekly, Vol. 18, No. 16, April 17, 1992. In this notice under the section entitled "SPECIFIC REASONS FOR FINDING AN IMMEDIATE DANGER TO THE PUBLIC HEALTH, SAFETY OR WELFARE," it states in pertinent part: The 1992 Legislature reduced the prescribed drug services program FY 1991-1992 budget in Senate Bill 2408 which was signed by the Governor on February 14, 1992. This law requires the Medicaid program to implement a copayment requirement for prescription drugs by April 1992. . . . The emergency rule amended Rule 10C-7.042, Florida Administrative Code and required recipients to pay the pharmacy provider a $1.00 co-payment for each prescription or other prescribed drug service reimbursed by Medicaid. Certain categories of recipients and services were exempted from the copayment requirement. The pharmacy provider was required to request a copayment from non-exempt recipients. The pharmacy must determine a recipient's ability to pay the copayment based on the recipient's reply to the request for copayment, the recipient's past purchase history with that provider, and the recipient's recent purchase of non-essential items. A provider could not deny prescribed drug services to eligible recipients because of inability to pay the copayment. Although a recipient may not be able to pay the copayment, the recipient remains liable for the copayment. HRS began the rulemaking process to adopt the same amendments to Rule 10C-7.042 as a regular rule. Emergency Rule 10CER92-4 was challenged via a lawsuit in state court and was later removed to federal court. The proposed amendments to Rule 10C-7.042 were challenged in an administrative rule challenge, which was withdrawn and added to the lawsuit in federal court dealing with the challenge to the emergency rule. Chapter 92-293, Laws of Florida, the Appropriations Act for fiscal year beginning July 1, 1992 and ending June 30, 1993 contains the following proviso language relating to Medicaid prescribed drug services: Funds in Specific Appropriation 1019 are reduced by $18,581,894 from the General Revenue Fund, $3,281,004 from the Grants and Donations Trust Fund, $22,647,089 from the Medical Care Trust Fund, $2,632,000 from the Public Medical Assistance Trust Fund, and $58,013 from the Special Grants Trust Fund for the Department to implement a Medicaid comprehensive cost containment program. This program shall, at a minimum, incorporate: a prior authorization component; a co-payment program; an on site education program for providers prescribing the drugs; enhancements to the Department's ability to identify fraud and abuse; utilization of specific nursing home pharmacy consultants; and, shall implement new electronic technology to speed payments and capture third party liability information. By notice in the Florida Administrative Weekly, Rule 10CER92-4 has been continued pursuant to Section 120.54(9)(c), Florida Statutes. Chapter 93-184, Laws of Florida, the Appropriations Act for the fiscal year beginning July 1, 1993 and ending June 30, 1994, contains no language concerning reductions in the appropriations for Medicaid prescription medicine services and contains no language concerning copayments for recipients receiving Medicaid prescription medicine services. The amounts appropriated for the Medicaid prescription medicine services was at or below the amounts appropriated in Chapter 92-293 Laws of Florida. Chapter 93-129, Section 48, Laws of Florida, created section 409.9081, Florida Statutes, which requires Medicaid recipients to pay nominal copayments for hospital outpatient services and physician services effective July 1, 1993. Prior to the enactment of section 409.9081, Florida Statutes, a one dollar copayment had been required for Medicaid outpatient hospital and physician service. Effective July 1, 1993, the copayments were raised to two dollars. Current revenues generated by the copayments for the Medicaid prescribed drug services is approximately $12 million. Thus, the discontinuance of the copayment would result in a $12 million shortfall for the provision of Medicaid prescribed drug services, and a restriction on services to the extent necessary to account for the shortfall. The Social Services Estimating Conference (SSEC) is a statutorily created body established to develop official information relating to the social service system of the state for use in the state planning and budgeting system. Section 216.136(6), Florida Statutes. Section 216.134(1), Florida Statutes, provides in pertinent part: Unless otherwise provided by law or decided by unanimous agreement of the principals of the conference, all official information developed by the conference shall be based on the assumption that current law and current administrative practices will remain in effect throughout the period for which the official information is to be used. . . . The social services estimating conference for 1993-94 took into consideration the revenues from the copayments for the Medicaid prescribed drug services. Petitioner, Mildred Henry, resides in Jacksonville, Florida, and is disabled. She has received Medicaid since December, 1991. Her only income is Supplemental Income ("SSI") benefits of $434 per month. Ms. Henry suffers from many disabilities including chronic obstructive pulmonary disease, asthma, hypertension, severe and chronic urinary tract infections, and depression. Her physicians have prescribed a number of medications to address these conditions including Cardizem (for high blood pressure), Zantac (for ulcers), Cipro (for chronic urinary tract infections), Phenazopyridine (for bladder problems), Imipramine (for depression), Premarin (hormone), Thes-dur (for asthma), Brethine (for asthma), Ventalin (for asthma), Furosemide (for excess fluid), K-Dur (potassium), Propoxy N (for pain), Nizoral (for skin irritations), Darvoset (for pain), Tylenol 3 (for pain), and Halcion (for anxiety). She needs to refill most of these prescriptions each month. Copayments for all of Ms. Henry's prescription medications amount to $16.00. Ms. Henry's income is below the federal poverty level. She cannot afford to pay a copayment for all her medications. Petitioner has informed her pharmacy that she does not have the money to pay copayments. However, the pharmacy has refused to provide the medications without payment of the co-payments. As a result, Petitioner runs out of medications and delays getting her prescriptions refilled until she can pay the copayment.
