08-000103 Munroe Regional Medical Center vs. Agency For Health Care Administration Status: Closed Recommended Order on Thursday, April 10, 2008.

Summary: Petition for Resolution of Reimbursement Dispute was filed more than 30 days after Petitioner`s receipt of Explanation of Bill Review from carrier and, therefore, was untimely. Respondent should dismiss the petition.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MUNROE REGIONAL MEDICAL CENTER, )

)

Petitioner, )

)

vs. ) Case No. 08-0103

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

)

RECOMMENDED ORDER

This case is before Administrative Law Judge T. Kent

Wetherell, II, for resolution based upon the stipulated record

filed by the parties on March 20, 2008. No hearing is

necessary.

APPEARANCES

For Petitioner: Nicole K. Oeinck

Munroe Regional Medical Center

Post Office Box 60182

Fort Myers, Florida 33906-6182

For Respondent: Mari H. McCully, Esquire

Department of Financial Services

Division of Workers' Compensation

200 East Gaines Street

Tallahassee, Florida 32399-4229

STATEMENT OF THE ISSUE

The issue is whether the Petition for Resolution of Reimbursement Dispute was timely filed.

PRELIMINARY STATEMENT

On September 10, 2007, Petitioner filed a Petition for

Resolution of Reimbursement Dispute with the Agency for Health

Care Administration (Agency). On November 27, 2007, the Agency

dismissed the petition as untimely.

On or about December 24, 2007, the Agency received a letter

from Petitioner contesting the dismissal of the petition. The

Agency treated the letter as a request for a formal hearing, and

on January 4, 2008, the Agency referred the matter to the

Division of Administrative Hearings (DOAH) to "conduct all

necessary proceedings required under the law, and to submit a

Recommended Order to [the] Agency."

The Agency's referral letter indicates that copies of the

letter were sent to FairPay Solutions, Inc. (FairPay), and Lion

Insurance Company. Neither of those companies sought to

intervene in this proceeding.

This case was initially assigned to Administrative Law

Judge Bram D.E. Canter and set for final hearing on April 15,

2008. The case was transferred to the undersigned on

February 6, 2008.

On March 20, 2008, the parties filed a Joint Pre-hearing

Statement [and] Joint Motion for Determination Without Hearing

or Via Telephone (Joint Motion). The Joint Motion "request[s]

determination of the issues raised by the Petitioner based on

the pleadings, these stipulations and the exhibits submitted

herewith."

The final hearing was cancelled on March 21, 2008, based

upon the Joint Motion. The Order Canceling Hearing stated that

"[t]his case will be decided based upon a stipulated record

consisting of the exhibits attached to the Joint Motion and the

stipulations included in that filing." The exhibits attached to

the Joint Motion were marked as Joint Exhibits A through G.

The Order Canceling Hearing directed the parties to file

"copies of the governing statutes and rules, as well as a copy

of the repealed reconsideration rule referenced in the Joint

Motion." On March 28, 2008, the parties filed copies of

Sections 440.015 and 440.13, Florida Statutes 1/ ; Florida

Administrative Code Rule 69L-7.602; the current and prior

versions of Florida Administrative Code Rule Chapter 59A-31; and

the current and prior version of Florida Administrative Code

Rule 69L-7.501, along with the current and prior version of the

hospital reimbursement manual incorporated by reference in that

rule. Official recognition is taken of these statutes, rules,

and manuals.

The Order Canceling Hearing gave the parties until April 4,

2008, to file proposed recommended orders (PROs). Neither party

filed a PRO. On March 28, 2008, the parties filed a Joint

Response to Order Canceling Hearing, which included argument in

support of their respective positions. Due consideration has

been given to that filing.

FINDINGS OF FACT

1. Petitioner, a hospital, provided medical services to an

injured employee/claimant in March 2006.

2. In January 2007, Petitioner provided an itemized bill

totaling $3,401.12 to the workers' compensation insurance

carrier responsible for providing benefits to the injured

employee/claimant. The bill was submitted through the carrier's

claims handling entity, Packard Claims Administration (Packard).

3. On or about February 13, 2007, Packard issued payment

to Petitioner in the amount of $1,889.14. The payment was

accompanied by a document showing how much of each charge was

being paid. The parties refer to this document as the first

Explanation of Bill Review (EOBR).

4. The first EOBR uses Agency-approved "reason

codes"-- e.g. , 08 ("Reimbursement is based on the applicable

reimbursement fee schedule"); 13 ("Reimbursement is included in

the allowance of another service"); and 20 ("Other: Unique EOBR

code description")--in conjunction with other codes-- e.g. ,

S01 ("This charge has been reviewed to a standard of

reasonableness based on current industry benchmarks of charges

and typical reimbursement for comparable services in your

geographical area"--to explain the disallowances and reductions

in the hospital's charges.

5. Petitioner retained the services of The M.A.R.C. of the

Professionals, Inc. (M.A.R.C.), for the purposes of securing

additional payment from the carrier.

6. On March 16, 2007, M.A.R.C. sent a "Pre-Suit Demand

Letter" to FairPay, whose address and phone number was listed on

the first EOBR. 2/ The letter contested the disallowances and

reductions in the hospital's charges "due to Usual and Customary

allowances," and demanded payment "on the total hospital

charges."

7. On May 22, 2007, M.A.R.C. sent a "formal appeal" letter

to Packard, which stated in pertinent part:

The hospital received a payment but the

charges were reduced as usual and customary.

Per the Florida Statute all compensable

services for outpatient care shall be

reimbursed at 75 percent of the hospital

charges for medically necessary care.

We are asking that you review this claim and

reprocess for the correct amount of payment.

8. On or about June 4, 2007, a second EOBR was sent to

Petitioner. No additional payment accompanied the second EOBR.

9. The second EOBR refers to the $1,889.14 that was "paid

on prior bill," and denies additional payment based upon Agency-

approved "reason code" 18 ("Duplicate Billing: Service

previously paid, adjusted and paid, disallowed, or denied on

prior claim form or multiple billing of service(s) billed on

same date of service.").

10. Thereafter, M.A.R.C. sent two additional "formal

appeal" letters to Packard. The first letter, dated July 13,

2007, took issue with the payment being based upon "usual and

customary charges" rather than 75 percent of the hospital's

charges, as well as the disallowance of certain charges. The

second letter, dated August 3, 2007, stated that "a formal

complaint may be filed" if the correct payment is not received

within ten days.

11. On or about August 10, 2007, a third EOBR was sent to

Petitioner. No additional payment accompanied the third EOBR.

12. The third EOBR, like the second EOBR, refers to the

$1,889.14 that was "paid on prior bill," and cites "reason code"

18 as the basis for denying additional payment. The third EOBR

also cites code 901 ("Reviewer has previously reconsidered these

items timely and properly. Additional inquiries are untimely to

sustain any dispute over the payment recommendation.").

13. The third EOBR was received by Petitioner on

August 17, 2007.

14. On September 6, 2007, Petitioner mailed a Petition for

Resolution of Reimbursement Dispute to the Agency. The petition

contends that "the bill was not paid at 75%," that "some charges

were disallowed as included in other services," and that

"$668.45 [is] still due" on the bill.

15. The petition was received by the Agency on

September 10, 2007, which is more than 30 days after Petitioner

received the first and second EOBRs, but within 30 days after

Petitioner received the third EOBR.

16. The Agency dismissed the petition as untimely in a

letter dated November 27, 2007. The letter was addressed to

Petitioner, M.A.R.C., the workers' compensation insurance

carrier responsible for paying the claim, and FairPay.

CONCLUSIONS OF LAW

17. DOAH has jurisdiction over the parties to and subject

matter of this proceeding pursuant to Sections 120.569 and

120.57(1), Florida Statutes.

18. Workers' compensation insurance carriers are required

to disallow or adjust payment to health care providers if the

carrier, or its designee, "finds that overutilization of medical

services or a billing error has occurred, or there is a

violation of the practice parameters and protocols of treatment

established in accordance with this chapter." See § 440.13(6),

Fla. Stat.

19. The carrier is required to provide notice of its

disallowance or adjustment of payment to the provider through an

EOBR. See Fla. Admin. Code R. 69L-7.602(1)(v), (5)(q).

20. The EOBR is required to explain the disallowance or

adjustment of payment by using the "reason codes" listed in

Florida Administrative Code Rule 69L-7.602(5)(o). Id.

21. The EOBR must provide additional explanation when

reason code 20 is used. See Fla. Admin. Code R.

69L-7.602(5)(o)2.t. ("Use of EOBR code '20' is restricted to

circumstances when an above-listed EOBR code does not explain

the reason for payment, adjustment and payment, disallowance or

denial of payment. When using EOBR code '20,' an insurer must

reflect code '20' and include the specific explanation of the

code on the EOBR sent to the health care provider. . . .").

22. The health care provider has 30 days from the receipt

of the EOBR to petition the Agency to resolve any dispute

concerning the disallowance or adjustment of payment by the

carrier. See § 440.13(7)(a), Fla. Stat. ("Any health care

provider, carrier, or employer who elects to contest the

disallowance or adjustment of payment by a carrier under

subsection (6) must, within 30 days after receipt of notice of

disallowance or adjustment of payment, petition the agency to

resolve the dispute."); Fla. Admin. Code R. 59A-31.008(1)

("[T]he thirty (30) day time period within which a petition must

be served upon the Agency begins upon receipt of the [EOBR] by

the health care provider . . . .").

23. If the petition is not timely filed with the Agency,

it must be dismissed. See , e.g. , Specialty Risk Services v.

Agency for Health Care Admin. , Case No. 01-4148, at ¶ 98(DOAH

Jan. 9, 2003; AHCA Apr. 29, 2003) (dismissing untimely petition

for reimbursement dispute).

24. The primary dispute in this case is when the 30-day

period commenced. If the period commenced upon Petitioner's

receipt of the first EOBR (or the second EOBR), then the

petition is untimely. If, however, the period commenced upon

Petitioner's receipt of the third EOBR, then the petition is

timely.

25. Section 440.13(7)(a), Florida Statutes, is clear and

unambiguous, and must be strictly construed in accordance with

its plain meaning. See Fairpay Solutions v. Agency for Health

Care Admin. , 969 So. 2d 455, 458 (Fla. 1st DCA 2007) (strictly

construing Section 440.13(7)(b), Florida Statutes.)

26. There is nothing in Section 440.13(7), Florida

Statutes, that allows for the 30-day period for filing a

petition with the Agency to be tolled for any reason.

27. The Agency previously had a rule requiring the

provider to give the carrier an opportunity to "reconsider" its

disallowance or adjustment before the provider could file a

petition with the Agency, but that rule was repealed prior to

the events giving rise to this case. See Fla. Admin. Code R.

59A-31.001(5) (repealed Apr. 2, 2006). And cf. Mednet Connect,

Inc. v. Agency for Health Care Admin. , Case No. 04-2978, 2006

Fla. Div. Adm. Hear. LEXIS 383, at ¶¶ 109-129 (DOAH Aug. 9,

2006) (concluding that the "reconsideration process"

contemplated by the Agency's prior rules had been legally

ineffective since 1994 because the rule conflicted with the

timeframes in Section 440.13(7), Florida Statutes, including the

30-day period for filing a petition), recommendation rejected on

other grounds , Order No. AHCA-07-0002-FOF-OLC (AHCA Jan. 1,

2007), appeal pending , Case No. 1D07-0378.

28. The Agency's current rules provide for a period of

negotiations between the provider and the carrier after the

petition and the carrier's response to the petition are filed

with the Agency. See Fla. Admin. Code R. 59A-31.012. Moreover,

the Agency's current rules make clear that:

Neither the request for, nor the conducting

of, an on-site audit, nor the referral of

the health care provider for peer review

consultation, nor independent medical

examination shall toll the time period for

petitioning the Agency for the resolution of

a reimbursement dispute as set forth in

section 440.13(7)(a), F.S. or the time

period for the carrier to submit requested

documentation under section 440.13(7)(b),

F.S.

Fla. Admin. Code R. 59A-31.008(4).

29. It is not necessary to consider whether this rule

conflicts with Section 12 of the 2004 reimbursement manual,

which was incorporated by reference in the prior version of

Florida Administrative Code Rule 69L-7.501(1) and was in effect

at the time the medical services at issue in this case were

provided by Petitioner. Even if, as Petitioner argues, that

provision of the manual allows a petition to be filed with the

Agency after completion of an on-site audit, 3/ there is no

evidence that such an audit was conducted in this case.

30. The period within which Petitioner was required to

file a petition contesting the disallowances and adjustments in

the first EOBR was not tolled by Petitioner's use of "other

means to secure additional payment from the carrier," nor was

the period "revived" by the second or third EOBRs, which simply

reaffirmed the disallowances and adjustments in the first EOBR.

Likewise, the second and third EOBRs did not give Petitioner new

opportunities to petition the Agency for resolution of the

reimbursement dispute that was clearly framed by the first EOBR.

31. This is not a case where the EOBR was unclear or

otherwise insufficient to give the provider the required "notice

of disallowance or adjustment of payment" and commence the

30-day period in Section 440.13(7)(a), Florida Statutes.

Compare Wyatt Bros. Construction v. Dept. of Labor & Employment

Security , Case 00-2572, 2000 Fla. Div. Adm. Hear. LEXIS 5421, at

the contrary, the first EOBR used the Agency-approved reason

codes to explain the disallowances and adjustments to payments

and provided additional, more specific explanations where

required; and, as reflected in M.A.R.C.'s March 2007 letter to

FairPay on Petitioner's behalf, there was no confusion regarding

the carrier's rationale for the disallowances and adjustments in

the first EOBR.

32. In sum, the 30-day period in Section 440.13(7)(a),

Florida Statutes, commenced upon Petitioner's receipt of the

first EOBR, and the Agency properly dismissed the petition as

untimely because it was filed more than 30 days after Petitioner

received the first EOBR.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is

RECOMMENDED that the Agency issue a final order dismissing

the Petition for Resolution of Reimbursement Dispute as

untimely.

DONE AND ENTERED this 10th day of April, 2008, in

Tallahassee, Leon County, Florida.

S

T. KENT WETHERELL, II

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 10th day of April, 2008.

ENDNOTES

1/ All statutory references in this Recommended Order are to the

2007 version of the Florida Statutes.

2/ According to the parties' stipulations, FairPay is a medical

bill review company often retained by workers' compensation

insurance carriers or their claims handling entities to review

medical bills.

3/ The 2004 reimbursement manual defines "on-site audit" as "an

audit conducted at the hospital which compares the charges

listed on an itemized statement accompanying the DWC-90 (UB-92)

with the charges listed on the hospital's charge master. It

includes verifying that services were medically necessary,

related to the compensable admission, ordered and provided to

the patient based on the documentation in the patient's medical

record."

COPIES FURNISHED :

Nicole K. Oeinck

Munroe Regional Medical Center

Post Office Box 60182

Fort Myers, Florida 33906-6182

Mari H. McCully, Esquire

Department of Financial Services

Division of Workers' Compensation

200 East Gaines Street

Tallahassee, Florida 32399-4229

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Station 3

Tallahassee, Florida 32308

Holly Benson, Secretary

Agency for Health Care Administration

Fort Knox Building, Suite 3116

2727 Mahan Drive

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

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.