17-005741 Jupiter Outpatient Surgery Center vs. Department Of Financial Services, Division Of Workers' Compensation Status: Closed Recommended Order on Friday, March 2, 2018.

Summary: Petitioner, an ambulatory surgical center, is entitled to additional reimbursement from carrier for surgical implants pursuant to section 440.13, Florida Statutes.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JUPITER OUTPATIENT SURGERY

CENTER,

Petitioner,

vs. Case No. 17 - 5741

DEPARTMENT OF FINANCIAL

SERVICES, DIVISION OF WORKERS '

COMPENSATION,

Respondent.

_______________________________/

RECOMMENDED ORDER

This case came before Administrative Law Judge Darren A.

Schwartz of the Division of Administrative Hearings ( " DOAH " ) for

final hearing by video teleconference on January 3, 2018, at

sites in Tallahassee and West Palm Beach, Florida .

APPEARANCES

For Petitioner: Lucia Alcira , pro se

Jupiter Outpatient Surgery Center, LLC

2055 North Military Trail , Suite 100

Jupiter, Florida 33458

For Respondent: Thomas Nem ecek, Esquire

Taylor Anderson, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

Whether Petitioner, Jupiter Outpatient Surgery Center

( " Petitioner " ) , is entitled to additional reimbursement from the

carrier in the amount of $4,210.50 for Rotation Medical surgical

implants pursuant to section 440.13, Florida Statutes (2017).

PRELIMINARY STATEMENT

On July 14, 2017, Petitioner filed a Petition for Resolution

of Reimbursement Dispute with Respondent, Department of Financial

Services, Division of Workers ' Compensation ( " Department " ),

challenging Ace American Insurance Company ' s and Sedgwick Claims

Management S ervices ' ( " carrier " ) denial of Petitioner ' s request

for reimbursement for implants. On July 26, 2017, the Department

issued its Reimbursement Dispute Determination, concluding that

Petitioner is entitled to additional reimbursement in the amount

of $2,379 .00 for surgical implants.

Dissatisfied with the Department ' s d etermination, Petitioner

filed a request for an administrative hearing on August 23, 2017 ,

contending it is entitled to additional reimbursement for the

cost of the Rotation M edical surgical im plants. On October 16,

2017, the Department referred the matter to DOAH to assign an

administrative law judge to conduct the final hearing.

On October 19, 2017, the undersigned entered an Order

setting this matter for final hearing on January 3, 2018. Th e

final hearing was held on January 3, 2018, with both parties

present. Petitioner presented the testimony of its corporate

representative, Lucia Alcira . Petitioner did not offer any

exhibits into evidence. The Department presented the testimony

of Lynn e Metz, nurse consultant . The Department ' s Composite

Exhibit 1 and Exhibits 2 through 6 were received into evidence

upon stipulation of the parties.

The one - volume final hearing Transcript was filed at DOAH on

January 31, 2018. The parties timely submitt ed proposed

recommended orders, which were considered in the preparation of

this Recommended Order.

Unless otherwise indicated, citations to the Florida

Statutes are to the 2017 version.

FINDING S OF FACT

1. Petitioner is a Florida a mbulatory s urgical c ent er

("AS C ") with its principal office located at 2055 North Military

Trail, Suite 100, Jupiter, Florida 33458. Lucia Alcira is

Petitioner ' s b usiness o ffice m anager.

2. Petitioner is a health care provider as defined in

section 440.13(1).

3. Sedgwick Clai ms Management Services and Ace American

Insurance Company are carriers as defined in section 440.13(1).

4. On May 25, 2017, a representative of Rotation Medical,

Inc. ( " Rotation Medical " ) , arrived at Petitioner ' s surgical

facility and delivered to Petitio ner the Rotation Medical

implants that are the subject of this dispute . The implants are

described on a Rotation Medical acquisition form (inventory slip)

(Dep ' t Composite Ex . 1, p . 13) , provided by the manufacturer

representative to Petitioner on the dat e of surgery. The form

describes the Rotation Medical implants in pertinent part, as

follows:

Rotation Medical Im plant Set REF 2516 - 1,

$1,000.00

Rotation Medical Reconstituted Collagan

Scaffold - Arthroscopic , Medium , REF 2169 - 2,

$2,600 [.]

5 . The acquisi tion form, which is not an invoice,

identifies Dr. Ryan Simovitch as the physician , and a service

date of May 25, 2017. 1/

6 . O n May 25, 2017, a patient presented to Dr. Simovitch at

Petitioner ' s facility for a right shoulder rotator cuff

arthroscopic surg ical repair.

7 . Dr. Simovitch performed the surgical repair of the

patient ' s right shoulder on May 25, 2017. Dr. Simovitch ' s

operative report reflects the insertion of " a single 5 - 5 Cayenne

anchor double loaded " into the patient. In addition, an

" additi onal 4.5 mm titanium tipped cayeene knot - less anchor " was

utilized.

8 . The report further reflects that Dr. Simovitch

subsequently " assembled the guide and nitinol wire for the

Rotation Medical graft insert . " ( E mphasis added). According to

Dr. Simovitch , " [w]e did this in order to augment the tendon

because of the tendinopathy. " Dr. Simovitch ' s report goes o n to

state, in pertinent part:

We inserted the pin. We then inserted the

gun device in order to depl o y the graft.

Passing through a 10x3 passport cannula, we

deployed the graft. Once we held it, we ____

it with soft tissue staples and accessory

superior portal. Multiple soft tissues

samples were placed stapling the graft back

down to the supraspinatus tendon. Once that

was completed, the lateral edge of the graft

tensioned over the greater tuberosity and was

secured with two PEEK anchors one anterior

and one posterior into the bone. The graft

showed good tension. We then debrided all

soft tissue and bony debris in the

subacromial space. We then closed the

arthroscopic portals with 3 - 0 Monocryl

inverted subcutaneous followed by Mastisol

and Steri - Strips. A sterile compressive

dressing was applied. The patient was

awakened from anesthesia and transferred to

PACU in stable condition.

9 . On June 9, 2017, Petitioner submitted its bill charges

to the carrier for reimbursement for the Rotation Medical

i mplants , Cayenne implants, disposable items , and services

provided to the patient.

1 0 . However, Rotation Medical did not invoice Petitioner

for the Rotation Medical implants until June 24, 2017. ( Dep ' t

C omposite Ex . 1, p . 10 ) . The invoice identifies the Rotation

Medical implants by the same item numbers and prices as those in

the acquisition form. The invoice required payment by Petitioner

within 3 0 days.

1 1 . On July 5, 201 7 , t he carrier initially denied payment

to Petitioner for all of the items requested.

1 2 . On July 14, 2017, Petitioner filed the petition

disputing the carrier ' s denial for reimbursement of the implants.

Petitioner timely provi ded the Rotation Medical invoice and

Cayenne implants invoice s to the Department in response to a

Notice of Deficiency , which the Department considered in making

its Reimbursement Dispute Determination .

1 3 . The Department issued its Reimbursement Dispute

Determination on August 1, 2017. Out of the total of $6,589.00

that was requested by Petitioner for reimbursement, the

Department awarded Petitioner an additional $2,379 .00 for the

Cayenne implants. The Department awarded Petitioner this amount

because i t determined Petitioner had provided invoices showing it

purchased the Cayenne implants and the operative report

specifically referenced them.

1 4 . At hearing, Petitioner acknowledged i t is not seeking

reimbursement for the disposable items in the amount o f $266.76.

These disposable items are not reimbursable under the

reimbursement manual because they were not on the same invoice as

the implants. Consequently, the total amount Petitioner seeks to

recover as reimbursement in this proceeding is $4,210.50 , for the

Rotation Medical implants . 2 /

1 5 . The Department contends that reimbursement should be

disallowed for the Rotati on Medical implants because " there was

no substantiation that documented t he Rotation Medical implants

wer e , in fact, used " during the s urgery of the patient on May 25,

2017. In support of its position, the Department contends the

operative report does not specifically note the use of

bioinductive implants or an implant set.

1 6 . Although the operative report makes no specific mention

of the phrases " bioinductive implants " or " implant set, " no

specific language in the operative report is required to allow

for reimbursement. P age two of t he report specifically note s the

use of the " the Rotation Medical graft insert " during the

surgery. On page one, t he graft is specifically described as a

" rotational medical allograft . "

1 7 . Moreover, Petitioner ' s Implant Charge Sheet, prepared

by a nurse in the operating room at the time of the patient ' s

surgery, specifically identifies the use of the Rot ation Medical

Implant Set, Ref 2516 - 1 , and Rotation Medical/Reconstituted

Collagan Scaffold - Arthroscopic, M edium , Ref 2169 - 2, during the

patient ' s surgery. (Dep't Composite Ex. 1, p. 6).

1 8 . The persuasive and credible evidence adduced at hearing

demonst rates that the Rotation Medical implants were inserted

into the patient ' s body during the May 25, 2017, surgery , with

the intent to remain in the patient ' s body . 3 /

19 . The Department also contends that reimbursement for the

Rotation Medical implants shoul d not be allowed because the

billing was not done in accordance with the reimbursement manual.

Specifically, the Department argues that the implants were not

" purchased " before they were billed to the carrier because

Petitioner did not pay for them before the items were billed to

the carrier .

2 0 . Petitioner purchased the Rotation Medical implants

prior to billing the carrier.

2 1 . In sum, the persuasive and credible evidence adduced at

hearing demonstrates that Petitioner is entitled to additional

reimbur sement in the amount of $4,210.50 for the Rotation Medical

surgical implants .

CONCLUSIONS OF LAW

2 2 . The Division of Administrative Hearings has

jurisdiction over the parties to and subject matter of this

proceeding . §§ 120.569, 120.57(1), and 440.13, Fl a. Stat.

2 3 . The Department is the state agency charged with

administering the Workers ' Compensation Law, chapter 440, which

directs the Department to resolve reimbursement disputes when

they arise between a health care provider and the employer or

carrie r responsible for the provision of workers ' compensation

benefits to an injured employee/claimant. The Department ' s

determination in such disputes constitutes proposed final agency

action. § 440.13(7) , Fla. Stat .

2 4 . As the party claiming it was not pro perly reimbursed,

Petitioner has the burden of proving its position in this

proceeding by a preponderance of the evidence.

2 5 . " Surgical Implant (s), " for the purpose of determining

reimbursement, are defined in the Workers ' Compensation

Reimbursement Man ual for Ambulatory Surgical Centers , page 36,

incorporated by reference in Florida Administrative Code

Rule 69L - 7.100 as:

[A]ny single - use that is surgically inserted

and deemed to be medically necessary by an

authorized physician and which the physician

d oes not specify to be removed in less than

six weeks such as bone, cartilage, tendon, or

other anatomical material obtained from a

source other than the patient; plates;

screws; pins; internal fixators; joint

replacements; anchors; permanent

neurostimulato rs; and permanent pain pumps.

2 6 . To be reimbursed for implants, the implants must be

" purchased " by the ASC, billed only by the ASC, and reimbursed to

the ASC according to the policies for s urgical i mplants in the

reimbursement manual. ( Dep ' t Ex . 4, p . 41 (p . 14 of 38 of the

manual) ) .

2 7 . " Purchase " is defined as:

1 a archaic : GAIN, A Q UIRE

b : to acquire (real estate) by means

other than descent

c : to obtain by paying money or its

equivalent: BUY

d : to obtain by labor, dange r, or

sacrifice

2 : to constitute the means of buying ß our

dollars purchase less each year [.]

Merriam - Webster Online Dictionary , https://www.meriam -

webster.com/dictionary/purchase (last visited Feb . 18, 2018).

2 8 . In the instant case, the Department does not dispute

that Rotation Medical was paid by Petitioner for the implants.

Rather, the Department ' s position is that Petitioner is not

entitled to reimbursement because payment for the items was not

made prior the submission of the bill to the carrier .

29 . T he Department ' s position is not supported by the

reimbursement manual. Contrary to the Department ' s position, the

manual does not require payment of a manufacturer ' s invoice prior

to the submission of the bill to the carrier. The manu al does

not include t he word " payment. " Rather, the manual requires that

the item be " purchased. "

3 0 . An item can be purchased even though payment has not

been made . An item is purchased when payment is expected. No

evidence was presented at hearing th at Rotation Medical

gratuitously gave the implants to Petitioner without any

expectation of payment. In fact, the Department does not dispute

that Petitioner paid for the items. The Department ' s position

centers on the timeliness of payment, which is not a requirement

for reimbursement under the manual. Had the Department intended

to require payment before billing as a condition of

reimbursement, it should have said so in the reimbursement

manual. The Department did not. 4/

3 1 . The Department also conte n ds that there was no

substantiation that documented the Rotation Medical implants ' use

during the surgery of the patient on May 25, 2017 . The

reimbursement manual requires that a provider: " Submit copies of

the Implant Log or Tracking Sheet from the ope rating room to the

carrier along with the acquisition invoice(s) that substantiate

the utilization and cost of the item(s) billed. " As detailed

above, the Implant Charge Sheet, prepared by a nurse in the

operating room, along with the operative report, su bstantiate the

utilization of the Rotation Medical implants.

32. In support of its position, th e Department relies on

rule 69L - 7.710(1)(s), which provides that:

" Disallow " or " Disallowed " means payment for

a compensable injury or illness is not made

becau se the service rendered has not been

substantiated for reasons of medical

necessity, insufficient documentation , lack

of authorization or billing error. ( E mphasis

added).

This provision applies to disallowance of reimbursement for

medical services, not i tems such as implants. Even if this rule

applie s , however, it does not require that the physician d escribe

the exact terminology of the item s in the operative report in

order to allow for reimbursement.

33. A ccordingly, the Department ' s contention that t here was

no substantiation that documented the Rotation Medical implants '

use during the surgery on the patient on May 25, 2017, is

rejected for the reasons detailed above.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it i s RECOMMENDED that the Department of Financial Services,

Division of Workers ' Compensation, enter a final order granting

Petitioner ' s request for additional reimbursement from the

carrier in the amount of $4,210.50 for the Rotation Medical

surgical implant s pursuant to section 440.13, Florida Statutes.

DONE AND ENTERED this 2nd day of March , 2018 , in

Tallahassee, Leon County, Florida.

S

DARREN A. SCHWARTZ

Administrative Law Judge

Division of Administrative Hearings

The De Soto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 2nd day of March , 2018 .

ENDNOTE S

1/ A manufacturer ' s representative often delivers items to

Petitioner for use in patients on the same date of the surgeries.

In such situations, the representative may attend the surgical

case and, on the same day of the surgery, identify the type and

quantity of items us ed during the surgery in an acquisition form.

2 / T he $6,589.50 figure represents the sum of the amount of the

Rotation Medical and Cayenne implants, including the allowable

mark - up for profit under the reimbursement manual. Subtracting

$2,379.00 for the reimbursement allowed for the Cayenne implants

results in the disputed balance of $4,210.50 for the Rotation

Medical implants.

3/ The Rotation M edical implants are not disposable items. The

implants remain with the patient.

4/ Notably, the Department ' s P roposed R ecommended O rder

references a provision of the reimbursement manual which provides

that the manufacturer ' s invoice reflecting the actual cost for

the implants " shall " accompany the bill for reimbursement of each

component. ( Dep ' t Ex . 4, p. 59 (p . 32 of 38 of the manual) ) . In

the instant case, the Department accepted the late - filed invoices

for the Cayenne and Rotation Medical implants , even though they

were not submitted with the bill because they were timely filed

by Petitioner in response t o the Department ' s Notice of

Deficiency.

In this proceeding, the Department does not take issue with

any late - filed invoices. In fact, the Department paid the

Cayenne invoices. Rather, the instant dispute centers on the

fact that payment was not ma de by Petitioner before Petitioner

billed the carrier for the Rotation Medical implants and whether

there was sufficient documentation to evidence the use of the

Rotation Medical implants during the patient ' s surgery .

To the extent the Department may contend reimbursement

should be disallowed because the invoice for the Rotation Medical

implants did not accompany the bill, that argument has been

waived based on the Department ' s acceptance of the Rotation

Medical and Cayenne invoices timely submitted i n response to the

Notice of Deficiency , and the Department ' s subsequent approval of

payment of the Cayenne invoices.

COPIES FURNISHED:

Lucia Alcira

Jupiter Outpatient Surgery Center, LLC

2055 North Military Trail , Suite 100

Jupiter, Florida 33458

(eSer ved)

Thomas Nemecek, Esquire

Taylor Anderson, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

(eServed)

Julie Jones, CP, FRP, Agency Clerk

Division of Legal Services

Department of Financial Services

200 East G aines Street

Tallahassee, Florida 32399 - 0390

(eServed)

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 shoul d be filed with the agency that

will issue the Final Order in this case.