09-003001MPI Agency For Health Care Administration vs. Grand Pharmacy Discount Status: Closed Recommended Order on Monday, December 21, 2009.

Summary: Petitioner failed to prove there was change in ownership or date certain for proposed change in ownership of pharmacy. Recommend withdrawing Final Agency Audit Report, including sanctions for failure to give 60 days' notice of proposed ownership change.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Petitioner, )

)

vs. ) Case No. 09-3001MPI

)

GRAND PHARMACY DISCOUNT, )

)

Respondent. )

_________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on August 5, 2009, in Tallahassee, Florida, with the Respondent

appearing by telephone, Florida, before Patricia M. Hart, a

duly-designated Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Daniel Lake, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Suite 3431

Tallahassee, Florida 32308

For Respondent: Dino H. Mohebbi, former owner

Grand Pharmacy Discount

Post Office Box 266695

Weston, Florida 33326

STATEMENT OF THE ISSUE

Whether the Petitioner must reimburse the Respondent for

Medicaid overpayments as set out in the Final Agency Audit

Report dated January 24, 2008, and pay an administrative fine,

and, if so, the amount of the fine and the amount to be repaid.

PRELIMINARY STATEMENT

In a Final Audit Report ("FAR") dated January 24, 2008, the

Agency for Health Care Administration ("AHCA") notified

Hamid D. Mohebbi, in his capacity as owner of Grand Pharmacy

Discount, that it had determined that Grand Pharmacy Discount

had been overpaid $10,655.44 for services that were, in whole or

in part, not covered by Medicaid during the audit period

extending from April 19, 2007, through June 5, 2007 ("Audit

Period"). In addition, AHCA indicated that it intended to

impose an administrative fine in the amount of $1,000.00 in

connection with the alleged overpayment. AHCA's rationale for

determining that Grand Pharmacy Discount had been overpaid

during the Audit Period was stated in the FAR as follows:

The audit included a review, of paid claims

with dates of service during the audit

period. The audit period for this review

was from April 19, 2007, through June 5,

2007. Grand Pharmacy Discount, Florida

Pharmacy license number PH0021403, located

at 2140 N.W. 36th Street, Miami,

Florida 33142 was issued Medicaid provider

number 030940100 effective July 25, 2005.

The Department of Health, due to a change of

owners, issued Florida Pharmacy license

number PH0022661 for Grand Pharmacy Discount

at the same address effective April 19,

2007, which closed the previous license

number, PH0021403. Medicaid requires an

active pharmacy license for your Medicaid

provider number to be valid. Additionally,

Medicaid requires providers to notify the

Agency of any proposed change of ownership

60 days prior to the date on which that

ownership change will occur, per

Section 409.907(6), F.S. Paid claims to

your provider number were found with dates

of service after April 19, 2007, when your

pharmacy license number was closed. The

paid claims identified for the period when

your provider number was invalid due to the

closed pharmacy license number and ownership

change resulted in an overpayment of

$10,655.44. . . .

Grand Pharmacy Discount timely requested a formal

administrative hearing, but the request was dismissed by AHCA as

insufficient in a final order entered by AHCA on February 27,

2008. As permitted by the final order, Mr. Mohebbi, on behalf

of Grand Pharmacy Discount, filed an amended request, which was

transmitted to the Division of Administrative Hearings for

assignment of an administrative law judge. The case was

assigned DOAH Case No. 08-1448MPI.

The final hearing in DOAH Case No. 08-1448MPI was convened

on August 13, 2008. At that time, the parties announced that

they had reached a settlement agreement resolving the issues

presented in the FAR, which they intended to reduce to writing.

Based on this representation, the file of the Division of

Administrative Hearings was closed and jurisdiction of the

matter was relinquished to AHCA.

On May 22, 2009, AHCA filed a Motion to Re-Open Formal

Administrative Proceeding, in which it represented that the

parties had reached an impasse in settlement negotiations and

were not able to resolve the issues presented in the FAR. Grand

Pharmacy Discount did not respond to the motion within the time

specified in Florida Administrative Code Rule 28-106.204(1), and

an Order Re-Opening the File as DOAH Case No. 09-3001MPI was

entered on June 2, 2009. A Notice of Hearing was issued on

June 18, 2008, and the final hearing was conducted on August 5,

2009.

At the hearing, the undersigned took up the Petitioner's

Motion to Deem 1st and 2nd Request for Admissions Admitted and

its Objection to Respondent's List of Exhibits; Notice of

Failure to Comply with Court's Pre-Hearing Order & Notice of

Compliance with Chapter 409.913(22), F.S. After argument, the

motion was denied, as was the Petitioner's request in the

objection that all of the Respondent's exhibits be stricken.

AHCA then presented the testimony of Ramona Stewart and Kathryn

Holland, and Petitioner's Exhibits 1 through 10 and 23 were

offered and received into evidence. Grand Pharmacy Discount

presented the testimony of Mr. Mohebbi, and Respondent's

Exhibits 1 through 4, 6, and 18 were offered and received into

evidence. Respondent's Exhibits 7 and 9 were offered into

evidence but rejected as not relevant to the issues presented in

the FAR. Official recognition was granted to

Section 409.907(3)(a), (4), and (6), Florida Statutes (2007) 1 ;

Section 409.913, Florida Statutes; Florida Administrative Code

Rules 59G-4.250, 5.020, and 9.070; Florida Administrative Code

Rules 64B16-28.2021 and 28.113; Medicaid Provider Handbook

(June 2006), page 1-10; Medicaid Provider Handbook,

(October 2003), pages 2-2 and 3, 2-13, 2-36 and 37, and 5-5; and

Medicaid Provider Handbook (January 2007), pages 2-3, 2-14, 2-41

and 42, and 5-5.

The two-volume transcript of the proceedings was filed with

the Division of Administrative Hearings on August 18, 2009.

AHCA timely filed its proposed findings of fact and conclusions

of law; Grand Pharmacy Discount filed its proposed findings of

fact and conclusions of law, together with a Motion for

Extension of Proposed Recommended Order, two days late. AHCA

did not respond to the motion, and, upon consideration, the

motion is granted, and Grand Pharmacy Discount's proposed

findings of fact and conclusions of law are accepted.

FINDINGS OF FACT

Based on the oral and documentary evidence presented at the

final hearing and on the entire record of this proceeding, the

following findings of fact are made:

1. AHCA is the state agency charged with responsibility

for overseeing the Florida Medicaid system, including the

recovery of overpayments to Medicaid providers. § 409.913, Fla.

Stat.

2. Grand Pharmacy Discount was first issued a pharmacy

license by the Department of Health on June 3, 2004; the license

number was PH20078, and the owner of Grand Pharmacy Discount was

Ana M. Grajales.

3. On or about May 19, 2005, Mr. Mohebbi purchased Grand

Pharmacy Discount from Ms. Grajales. At that time and at all

times material to this proceeding, Mr. Mohebbi was a licensed

pharmacist, license number PS33552. On July 6, 2005,

Mr. Mohebbi applied to the Department of Health, Board of

Pharmacy, for a new pharmacy license for Grand Pharmacy

Discount, based on a change of ownership. A new pharmacy

license, number PH21403, was issued.

4. On July 10, 2005, Grand Pharmacy Discount, through

Mr. Mohebbi, submitted a Florida Medicaid Provider Enrollment

Application to AHCA, together with a signed Non-Institutional

Medicaid Provider Agreement ("Provider Agreement"). The Florida

Medicaid Provider Enrollment Application was submitted by

Mr. Mohebbi because of a change in ownership, and the Grand

Pharmacy Discount pharmacy license referenced in the application

was numbered PH21403.

5. Among the provisions of the Provider Agreement were the

following:

(5) Provider Responsibilities. The

Medicaid provider shall

(1) Possess at the time of the signing of

the provider agreement, and maintain in good

standing throughout the period of the

agreement's effectiveness, a valid

professional, occupational, facility or

other license appropriate to the services or

goods being provided, as required by law.

* * *

(8) Ownership . The provider agrees to give

AHCA sixty (60) days written notice before

making any change in ownership of the entity

named in the provider agreement as the

provider.

6. Grand Pharmacy Discount was assigned Medicaid provider

numbers 0309401-00 and 0309401-01.

7. At the times material to this proceeding, Mr. Mohebbi

was the pharmacy manager for Grand Pharmacy Discount and

dispensed all medications. 2

8. On March 30, 2007, David Santiago filed papers with the

Florida Department of State incorporating Grand Pharmacy

Discount as a limited liability company. Mr. Santiago and

Mr. Mohebbi entered into negotiations for Mr. Santiago to

purchase Grand Pharmacy Discount, and Mr. Santiago and

Mr. Mohebbi had a verbal agreement that Mr. Santiago would pay

Mr. Mohebbi a deposit on the business, with the balance due at

the time of the sale.

9. In furtherance of his intention to purchase Grand

Pharmacy Discount, Mr. Santiago, with the assistance of

Mr. Mohebbi, prepared and signed an Application for Pharmacy

requesting a new pharmacy license for Grand Pharmacy Discount.

It was indicated on the Application for Pharmacy that the

application was based on a change of ownership from Mr. Mohebbi

to Mr. Santiago, and Mr. Santiago filed the application with the

Department of Health on April 2, 2007. A new pharmacy license,

license number PH22661, was issued to Grand Pharmacy Discount on

April 19, 2007.

10. Mr. Santiago did not fulfill his promise to pay

Mr. Mohebbi a deposit on the purchase of Grand Pharmacy

Discount, and the negotiations for the purchase and sale

terminated.

11. Mr. Santiago and Mr. Mohebbi did not enter into a

purchase and sale agreement, and Mr. Mohebbi at no time

relinquished ownership or control of Grand Pharmacy Discount,

its assets or liabilities, to Mr. Santiago.

12. On June 5, 2007, Mr. Mohebbi submitted an Application

for Pharmacy to the Department of Health, Board of Pharmacy,

requesting that a new permit be issued to Grand Pharmacy

Discount based on a change of ownership; Mr. Mohebbi was listed

as the owner. On August 2, 2007, Grand Pharmacy Discount was

issued a new pharmacy license, number PH22843.

13. In a letter dated June 13, 2007, AHCA notified Grand

Pharmacy Discount that its Medicaid provider numbers had been

terminated effective April 19, 2007, because it had been

notified that Grand Pharmacy Discount's license number PH21403

had been "closed."

14. AHCA conducted a review of the claims for Medicaid

reimbursement submitted by Grand Pharmacy Discount from

April 19, 2007, through September 30, 2007. In a Preliminary

Audit Report dated October 30, 2007, AHCA notified Grand

Pharmacy Discount that it found that Grand Pharmacy Discount was

overpaid $10,655.44.

15. On January 24, 2008, AHCA issued the FAR, in which it

notified Grand Pharmacy Discount that it owed AHCA a total of

$11,655.44, which included the previously-identified overpayment

of $10,655.44 and a penalty in the amount of $1,000.00.

16. The reasoning for finding an overpayment was stated as

follows:

The audit period for this review was from

April 19, 2007, through June 5, 2007. Grand

Pharmacy Discount, Florida Pharmacy license

number PH0021403, located at 2140 N.W. 36th

Street, Miami, Florida 33142 was issued

Medicaid provider number 030940100 effective

July 25, 2005. The Department of Health,

due to a change of owners, issued Florida

Pharmacy license number PH0022661 for Grand

Pharmacy Discount at the same address

effective April 19, 2007, which closed the

previous license number, PH0021403.

Medicaid requires an active pharmacy license

for your Medicaid provider number to be

valid. Additionally, Medicaid requires

providers to notify the Agency of any

proposed change of ownership 60 days prior

to the date on which that ownership change

will occur, per Section 409.907(6), F.S.

Paid claims to your provider number were

found with dates of service after April 19,

2007, when your pharmacy license was closed.

The paid claims identified for the period

when your provider number was invalid due to

the closed pharmacy license number and

ownership change resulted in an overpayment

of $10,655.44.

17. The termination date of the Audit Period was changed

in the FAR from September 30, 2007, to June 5, 2007. The Audit

Period was changed to June 5, 2007, because no Medicaid claims

were submitted by Grand Pharmacy Discount after that date.

18. According to AHCA's Documentation Worksheet for

Imposing Administrative Sanctions, the $1,000.00 sanction was

imposed because of Grand Pharmacy Discount's alleged failure "to

report CHOW [Change of Ownership] & allowed unauthorized use of

provider # to submit Rx claims."

19. Grand Pharmacy Discount has never been disciplined by

AHCA, and AHCA has never sought to recoup any Medicaid

overpayments from Grand Pharmacy Discount.

CONCLUSIONS OF LAW

20. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

the parties thereto pursuant to Sections 120.569 and 120.57(1),

Florida Statutes (2009).

21. AHCA bears the burden of establishing a Medicaid

overpayment by a preponderance of the evidence. South Medical

Services, Inc. v. Agency for Health Care Administration ,

653 So. 2d 440, 441 (Fla. 3d DCA 1995); Southpointe Pharmacy v.

Department of Health and Rehabilitative Services ,

596 So. 2d 106, 109 (Fla. 1st DCA 1992); see also

Section 120.57(1)(j), Florida Statutes (2002)("Findings of fact

shall be based on a preponderance of the evidence, except in

penal or licensure disciplinary proceedings or except as

otherwise provided by statute . . . ."). In this case, however,

AHCA is also seeking to impose an administrative fine for the

acts underlying the finding of an alleged overpayment.

Accordingly, AHCA bears the burden of proving by clear and

convincing evidence that Grand Pharmacy Discount committed the

violations identified in the FAR to support the overpayment and

its decision to impose of a $1,000.00 administrative fine.

Department of Banking & Finance, Division of Securities &

Investor Protection v. Osborne Stern & Co. , 670 So. 2d 932 (Fla.

1996); Ferris v. Turlington , 510 So. 2d 292 (Fla. 1987).

22. Section 409.907, Florida Statutes, provides in

pertinent part:

The agency may make payments for medical

assistance and related services rendered to

Medicaid recipients only to an individual or

entity who has a provider agreement in

effect with the agency, who is performing

services or supplying goods in accordance

with federal, state, and local law, . . . .

1) Each provider agreement shall require

the provider to comply fully with all state

and federal laws pertaining to the Medicaid

program, as well as all federal, state, and

local laws pertaining to licensure, if

required, and the practice of any of the

healing arts, and shall require the provider

to provide services or goods of not less

than the scope and quality it provides to

the general public

(2) Each provider agreement shall be a

voluntary contract between the agency and

the provider, in which the provider agrees

to comply with all laws and rules pertaining

to the Medicaid program when furnishing a

service or goods to a Medicaid recipient and

the agency agrees to pay a sum, determined

by fee schedule, payment methodology, or

other manner, for the service or goods

provided to the Medicaid recipient. Each

provider agreement shall be effective for a

stipulated period of time, shall be

terminable by either party after reasonable

notice, and shall be renewable by mutual

agreement.

(3) The provider agreement developed by the

agency, in addition to the requirements

specified in subsections (1) and (2), shall

require the provider to:

(a) Have in its possession at the time of

signing the provider agreement, and maintain

in good standing throughout the period of

the agreement's effectiveness, a valid

professional or facility license pertinent

to the services or goods being provided, as

required by the state or locality in which

the provider is located, and the Federal

Government, if applicable.

* * *

(6) A Medicaid provider agreement may be

revoked, at the option of the agency, as the

result of a change of ownership of any

facility, association, partnership, or other

entity named as the provider in the provider

agreement. A provider shall give the agency

60 days' notice before making any change in

ownership of the entity named in the

provider agreement as the provider.

(7) The agency may require, as a condition

of participating in the Medicaid program and

before entering into the provider agreement,

that the provider submit information, in an

initial and any required renewal

applications, including the professional,

business, and personal background of the

provider and permit an onsite inspection of

the provider's service location by agency

staff or other personnel designated by the

agency to perform this function. . . . The

information must include:

(a) Proof of holding a valid license or

operating certificate, as applicable, if

required by the state or local jurisdiction

in which the provider is located or if

required by the Federal Government.

23. Florida Administrative Code Rule 59G-5.020, as adopted

on January 15, 2005, provides that "[a]ll Medicaid providers

enrolled in the Medicaid program and billing agents who submit

claims to Medicaid on behalf of an enrolled Medicaid provider

must comply with the provisions of the Florida Medicaid Provider

General Handbook, October 2003, updated January 2004, which is

incorporated by reference and available from the fiscal agent." 3

24. The pertinent provisions of the Florida Medicaid

Provider General Handbook are as follows:

Ongoing Eligibility Providers must continue

to meet all the provider qualifications to

remain enrolled in Medicaid. Medicaid will

terminate a provider who no longer meets a

provider qualification.

If a provider continues to receive payment

for services rendered after it no longer

meets the provider qualifications, the

payments will be subject to recoupment; and,

if applicable, the provider will be referred

to the Attorney General, Medicaid Fraud

Control Unit. [ 4 ]

* * *

Professional Licenses Health care

practitioners must be actively licensed to

practice as required in the applicable

Coverage and Limitations Handbook to enroll

as Medicaid providers and to remain

enrolled.

The Department of Health, Division of

Medical Quality Assurance, Licensing Boards

issue health care practitioner license.

Providers must renew their professional

licenses when the Department of Health,

Licensing Board requires renewal. Medicaid

will terminate providers who fail to

maintain professional licensure effective

the date that the license was terminated.

If a provider continues to receive payment

for services rendered after his license has

expired, the payments will be subject to

recoupment; and, if applicable, the provider

will be referred to the Attorney General,

Medicaid Fraud Control Unit. [ 5 ]

Medicaid Provider Identifier When providers

are enrolled in Florida Medicaid they are

assigned a unique nine-digit number that

identifies the provider to Medicaid. . . . [ 6 ]

Transfer of Medicaid Provider Identification

(ID) Number The Medicaid provider ID number

is assigned to the individual or entity that

signed the agreement and cannot be

transferred or used by any other individual

or entity. [ 7 ]

Notification Providers are required by law

to notify AHCA of any proposed change of

ownership 60 days prior to the date on which

that ownership change will occur, per

Section 409.907(6), Florida Statutes.

If the provider has not notified Medicaid of

a change of ownership, the new provider may

not be eligible for Medicaid payment between

the date the change of ownership occurred

and the date that such notification is

finally received. All reimbursements

received by the prior owner between the date

the change of ownership occurred and the

date that such notification is finally

received may be subject to recoupment. [ 8 ]

What constitutes a Change of Ownership A

change of ownership occurs whenever the

stock or assets and liabilities of a

business are purchased or transferred by the

existing owners to new owners. . . . [ 9 ]

The Change of Ownership Process The change

of ownership procedures are as follows:

1. At least sixty (60) days before a

change of ownership is scheduled to occur,

the provider (owner who is transferring

the business) must send a letter indicating

that the change will occur and the proposed

date of the change to the fiscal agent or

AHCA. . . . . [ 10 ]

25. The Department of Health, Board of Pharmacy, is the

state agency that approves applications for licensure of

pharmacies. § 465.022(8), Fla. Stat. Section 465.018, Florida

Statutes, provides:

Any person desiring a permit to operate a

community pharmacy shall apply to the

department. If the board office certifies

that the application complies with the laws

of the state and the rules of the board

governing pharmacies, the department shall

issue the permit. No permit shall be issued

unless a licensed pharmacist is designated

as the prescription department manager

responsible for maintaining all drug

records, providing for the security of the

prescription department, and following such

other rules as relate to the practice of the

profession of pharmacy. The permittee and

the newly designated prescription department

manager shall notify the department within

10 days of any change in prescription

department manager.

Section 465.022(7), Florida Statutes, provides: "Permits issued

by the department are not transferable," and Florida

Administrative Code Rule 64.B16-28.2021(1) provides in pertinent

part: "A pharmacy permit is not transferable. Upon the sale of

an existing pharmacy, a new application must be filed."

Overpayment

26. AHCA is seeking to recover an alleged overpayment of

$10,655.44 because (1) Grand Pharmacy Discount failed to

maintain an active pharmacy license for its Medicaid number, and

(2) Grand Pharmacy Discount failed to provide notice of a

proposed change in ownership.

27. Based on the findings of fact herein, the

uncontroverted evidence establishes that the ownership of Grand

Pharmacy Discount did not change at any time pertinent to this

proceeding; Mr. Mohebbi was the only owner of Grand Pharmacy

Discount between May 2005 and June 5, 2007, the end of the Audit

Period. At some point, Mr. Santiago apparently intended to

purchase Grand Pharmacy Discount, since he registered "Grand

Pharmacy Discount LLC" with the Department of State on March 30,

2007, and signed and submitted an Application for Pharmacy to

the Department of Health, Board of Pharmacy in April 2007. At

some point, Mr. Mohebbi apparently intended to sell Grand

Pharmacy Discount to Mr. Santiago, since he completed the

Application for Pharmacy for Mr. Santiago's signature.

28. An application for a new community pharmacy license

is, however, to be filed only upon the sale of an existing

pharmacy. See Fla. Admin. Code R. 64B16-28.2021. Because he

never had an ownership interest in Grand Pharmacy Discount,

Mr. Santiago had no legal basis for filing the Application for

Pharmacy based on a change of ownership. Nonetheless, on

April 19, 2007, the Department of Health, Board of Pharmacy,

issued a new license, number PH22661, to Grand Pharmacy Discount

pursuant to Mr. Santiago's application, and the previous

license, number PH21403, was superseded by the new one. Even so

Grand Pharmacy Discount had an active license to operate as a

community pharmacy at all times pertinent to this proceeding,

since license number PH21403 was not closed until license

number PH22661 was issued.

29. Clearly, Mr. Santiago's submission of the application

for a new pharmacy license for Grand Pharmacy Discount due to a

change in ownership was improper, 11 and the Department of Health,

Board of Pharmacy, was not authorized to issue a new license

when there was no change in the ownership of Grand Pharmacy

Discount. See Fla. Admin. Code R. 64B16-28.2021. Yet AHCA is

attempting to collect $10,655.44 in alleged Medicaid

overpayments based solely on AHCA's decision to terminate the

Medicaid provider number associated with Grand Pharmacy

Discount's license number PH21403, which decision was, in turn,

based solely on the erroneous issuance of the new license and

the closure of the former license by the Department of Health,

Board of Pharmacy. 12

30. AHCA's decision to terminate Grand Pharmacy Discount's

Medicaid provider number associated with pharmacy license

number PH21403 was purely discretionary. Section 409.907,

Florida Statutes, allows AHCA to "make payments for medical

assistance and related services rendered to Medicaid recipients

only to an individual or entity who has a provider agreement in

effect with the agency." Although the Provider Agreement

between Grand Pharmacy Discount and AHCA referenced pharmacy

license number PH21403, which was closed effective April 19,

2007, upon issuance of the new license, Section 409.907(6),

Florida Statutes, expressly allows AHCA the "option" of revoking

a Medicaid provider agreement even when the ownership of a

facility has, in fact, changed. Moreover, the Florida Medicaid

Provider General Handbook provides that AHCA may seek to recoup

Medicaid payments made to a previous owner when there has been

no timely notification of a change in ownership that has, in

fact, occurred.

31. Under the circumstances of this case, AHCA should opt

not to revoke Grand Pharmacy Discount's Medicaid Provider

Agreement during the period of time covered by the Audit Period

and should exercise its discretion not to recoup Medicaid

payments paid to Grand Pharmacy Discount by withdrawing the

January 24, 2008, FAR. There was no transfer of ownership of

Grand Pharmacy Discount, and Grand Pharmacy Discount's

dispensing medications under the Medicaid program presented no

danger of harm to the public since Grand Pharmacy Discount was,

at all pertinent times, a duly-licensed community pharmacy and

Mr. Mohebbi was a duly-licensed pharmacist. In addition, AHCA

has made no allegations that Grand Pharmacy Discount committed a

substantive violation of the statutes and rules applicable to

Medicaid payments during the Audit Period or that any of the

Medicaid claims submitted by Grand Pharmacy Discount for

reimbursement were improper. Rather, the FAR seeking recoupment

of $10,655.44 is based on a technical violation caused by the

improper submission of an application for pharmacy license by

Mr. Santiago.

Sanctions

32. AHCA's decision to impose a $1,000.00 administrative

fine was based on the following grounds: "Failed to report CHOW

[change of ownership] and allowed unauthorized use of provider #

to submit Rx claims."

33. Section 409.913(15), Florida Statutes, provides in

pertinent part:

The agency shall seek a remedy provided by

law, including, but not limited to, any

remedy provided in subsections (13) and (16)

and s. 812.035, if:

* * *

(e) The provider is not in compliance with

provisions of Medicaid provider publications

that have been adopted by reference as rules

in the Florida Administrative Code; with

provisions of state or federal laws, rules,

or regulations; with provisions of the

provider agreement between the agency and

the provider; or with certifications found

on claim forms or on transmittal forms for

electronically submitted claims that are

submitted by the provider or authorized

representative, as such provisions apply to

the Medicaid program;

* * *

(o) The provider has failed to comply with

the notice and reporting requirements of s.

409.907.

* * *

A provider is subject to sanctions for

violations of this subsection as the result

of actions or inactions of the provider, or

actions or inactions of any principal,

officer, director, agent, managing employee,

or affiliated person of the provider, or any

partner or shareholder having an ownership

interest in the provider equal to 5 percent

or greater, in which the provider

participated or acquiesced.

34. Based on the findings of fact herein, there was no

sales agreement between Mr. Mohebbi and Mr. Santiago, and no

evidence was presented to establish a specific date on which

Mr. Mohebbi was to transfer ownership of Grand Pharmacy Discount

to Mr. Santiago. Consequently, there is no way to calculate the

date on which Mr. Mohebbi was required to give AHCA notice of

the proposed change of ownership to Mr. Santiago. Therefore,

AHCA has failed to prove by clear and convincing evidence that

Grand Pharmacy Discount violated the requirements in

Section 409.907(6), Florida Statutes, and the Florida Medicaid

Provider General Handbook by failing to notify AHCA of a

proposed change of ownership at least 60 days prior to the

proposed change. AHCA cannot impose sanctions on Grand Pharmacy

Discount for failure "to report CHOW."

35. In addition, for the reasons stated above, AHCA should

not impose sanctions on Grand Pharmacy Discount for its

submission of Medicaid claims under its Medicaid provider number

associated with pharmacy license number PH21403 because a new

pharmacy license should not have been issued to Mr. Santiago.

Had this new license not been improperly applied for and issued,

Grand Pharmacy Discount's pharmacy license number PH21403 would

not have been closed and Grand Pharmacy Discount's Medicaid

Provider Agreement would have been valid during the Audit

Period.

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 withdrawing the Final Audit

Report issued January 24, 2008, with respect to both the

$10,655.44 overpayment and the $1,000.00 administrative fine.

DONE AND ENTERED this 21st day of December, 2009, in

Tallahassee, Leon County, Florida.

___________________________________

PATRICIA M. HART

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 21st day of December, 2009.

ENDNOTES

1 / All references to the Florida Statutes are to the 2007

edition unless otherwise indicated.

2 / In an application submitted to the Board of Pharmacy and

dated June 5, 2007, Edward Vince was identified as the pharmacy

manager, but the date he assumed the position was listed as

June 20, 2007. See Petitioner's Exhibit 5 at page 41.

3 / It is noted that Florida Administrative Code Rule 59G-5.020

was updated on May 24, 2007, apparently to incorporate the

January 2007 edition of the Medicaid Provider General Handbook.

Some of the pertinent provisions of the January 2007 edition of

the publication differ from the provisions of the October 2003

edition, and the differences are noted in the endnotes below.

4 / Petitioner's Exhibit 15 at 2-3, page 134, January 2007;

Petitioner's Exhibit 15 at 2-2, page 128, October 2003.

5 / Id.

6 / Petitioner's Exhibit 15 at 2-14, page 135, January 2007. The

October 2003 edition provides:

Assignment of Unique Provider Number When a

provider is enrolled, the provider is

assigned a nine-digit provider number to

identify the provider on the Florida

Medicaid Management Information System

(FMMIS). . . .

Petitioner's Exhibit 15 at 2-2, page 130, October 2003.

7 / Petitioner's Exhibit 15 at 2-14, page 135, January 2007. The

October 2003 edition provides:

Non-Transfer Of Provider Numbers The

provider number is assigned to the entity

that signed the agreement and cannot be

transferred to or used by any other person

or entity. The provider number entered on a

claim form must identify the provider who

actually performed the service.

Petitioner's Exhibit 15 at 2-2, page 130, October 2003.

8 / Petitioner's Exhibit 15 at 2-41, page 136, January 2007;

Petitioner's Exhibit 15 at 2-36, page 131, October 2003.

9 / Id.

10 / Petitioner's Exhibit 15 at 2-42, page 137, January 2007;

Petitioner's Exhibit 15 at 2-37, page 132, October 2003.

11 / AHCA did not present any evidence regarding the validity of

the April 19, 2007, license pursuant to the provisions of

Chapter 465, Florida Statutes, nor did it present any evidence

regarding the effect of the new license on Grand Pharmacy

Discount's existing license, number PH21403, when Mr. Santiago

had no ownership interest in Grand Pharmacy Discount.

12 / AHCA has made no allegations that the claims for

reimbursement made between April 19, 2007, and June 5, 2007,

were substantively unsupported.

COPIES FURNISHED:

Daniel Lake, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Suite 3431

Tallahassee, Florida 32308

Dino H. Mohebbi

Grand Pharmacy Discount

Post Office Box 266695

Weston, Florida 33326

Richard Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

Thomas W. Arnold, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Suite 3116

Tallahassee, Florida 32308

Justin Senior, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Suite 3431

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.