06-002455MPI Agency For Health Care Administration vs. Jesus Negrette, M.D. Status: Closed Recommended Order on Monday, February 5, 2007.

Summary: Petitioner demonstrated that Respondent received Medicaid overpayments for the audit period. Recommend repayment of overpayment.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Petitioner, )

)

vs. ) Case No. 06 - 2455MPI

)

JESUS NEGRETTE, M.D., )

)

Respondent. )

________________________________)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was scheduled in this

case by vide o teleconference on October 23, 2006 , with

connecting sites in Miami and Tallahassee, Florida, before

Errol H. Powell, a designated Administrative Law Judge of the

Division of Administrative Hearings. At the request of the

p arties, t he hearing was cancelled. The parties stipulated and

agr eed , among other things, that no hearing was necessary and

that a recommended order could be issued based upon the record.

APPEARANCES

For Petitioner: Jeffries H. Duvall , Esquire

Agency for Health Care Administration

Fort Knox Building III, Mail Station 3

2727 Mahan Drive

Tallahassee, Florida 32308

For Re spondent: Manuel R. Lopez , Esquire

Manuel Lopez & A ssociates, P.A.

770 Ponce De Leon Boulevard, Penthouse

Miami, Florida 33134

STATEMENT OF THE ISSUE

The issue for determination is whether Petitioner was

overpaid by t he Medicaid program as set forth in Petitioner 's

Final Agency Audit Report dated June 12 , 2006 for the period

January 1, 2002 through December 31, 2004 .

PRELIMINARY STATEMENT

By a preliminary audit report dated August 25, 2005, Jesus

Negrette, M.D., was notified by the Agency for Health Care

Administration (A HCA) that at review of his Medicaid claims for

the period January 1, 2002 through December 31, 2004, indicated

that he had been overpaid by the Medicaid program in the amount

of $137,051.25. By Final Audit Report (F AR) dated June 12 ,

2006 , Dr. Negrette wa s notified by the AHCA that , after a review

of all documentation submitted, it had determined that he had

been overpaid by the Medicaid prog ram in the amount of

$79,523.70 . The procedure and formula for the calculation of

the overpayment was i ncluded in t he FA R. Dr. Negrette , t hrough

counsel, disputed the FA R and requested a hearing. On July 13,

2006 , this matter was referred to the Division of Administrative

Hearings.

In his request for hearing, Dr. Negrette had set forth the

affirmative defense of seto ff. Prior to hearing, Dr. Negrette

filed a Memorandum of Law in Support of Affirmative Defense of

Set - Off (Affirmative Defense of Set - Off). Dr. Negrette

contended that, if he was overpaid, he was entitled to a set - off

for services that he had rendered du ring the audit period for

which he did not file claims but for which he was otherwise

entitled to receive payment. AHCA filed a response to the

Affirmative Defense of Set - Off (Response). The undersigned

ruled in an Order Denying Affirmative Defense of Se t - Off that a

set - off was not an applicable remedy in the instant matter and

that, therefore, Dr. Negrette was not entit led to a set - off. 1

Subsequently, the parties filed a Joint Pre - hearing

Stipulation in which certain facts were agreed upon . Further,

t he parties stipulated and agreed , among other things, that a

hearing was not necessary in the case at hand; and that the

undersigned could issue a recommended order on the record,

including that the amount calculated by AHCA the Medicaid

overpayment, $79,523 .70, was a proper computation and that

Dr. Negrette did not agree with the undersigned’s ruling on the

Affirmative Defense of Set - Off or relinquish any right to appeal

the ruling . The final hearing was canceled, and a telephone

conference was held regardi ng the parties’ Joint Pre - Hearing

Stipulation. During the telephone co nference, the parties ,

among other things, confirmed their stipulation and agreement .

This Recommended Order is issued in light of the

stipulation and agreement of the parties. § 120. 569(1), Fla.

Stat. (2006).

FINDINGS OF FACT

1. AHCA audited certain of Dr. Negrette's Medicaid claims

pertaining to services rendered between January 1, 2002 and

December 31, 2004, hereinafter the audit period.

2 . Dr. Negrette was an authorized Medicaid provider during

the audit period .

3 . During the audit period, Dr. Negrette had been issued

Med icaid provider number 061422000 .

4 . No dispute exists that, dur ing the audit period,

Dr. Negrette had a vali d Medicaid Provider Agreement with AHCA.

5 . For ser vices provided during the audit period,

Dr. Negrette received in excess $79,523.70 in payments for

services to Medicaid recipients.

6 . By a preliminary audit report dated August 25, 2005,

AHCA notified Dr. Negrette that a preliminary determination was

mad e that he was overpaid by the Medicaid program in the amount

of $137,051.25 .

7 . Subsequently, by a FAR dated June 12, 2006 , AHCA

notified Dr. Negrette that, after a review of all documentation

submitted, it determined that he had been overpaid by the

Me dicaid program in the amount of $79,523.70, thus, reducing the

amount of the overpayment.

8 . The FA R further provided how the overpayment was

calculate d using a sample of the claims submitted during the

audit period, including the statistical formula for cluster

sampling ; and indicated that the statistical formula was

generally accepted and that the statistical formula showed an

overpaym ent in the amount of $79,523.70 , with a 95 percent

probability of correctness.

9 . Dr. Negrette agrees that the mathemati cal computation

of the audit is correct.

CONCLUSIONS OF LAW

10 . The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and the

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

Florida Statutes (2006) .

11 . The burden of proof is on AHCA to establish a Medicaid

overpayment by a preponderance of the evidence. South Medical

Services, Inc. v. AHCA , 653 So. 2d 440, 441 (Fla. 3d DCA 1995).

12 . Section 409.913(10), Florida Statutes (2001 - 2003), and

Section 409.913(11), Florida Statutes (2004), provide that "The

agency may 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."

13 . Overpayment is defined by Sections 409.913(1)(d),

Florida Statutes (2001), and 409.913(1)(e), Florida Statutes

(2002 - 2004), as including "any amount that is not authorized to

be paid by the Medicaid program wheth er paid as a result of

inaccurate or improper cost reporting, improper claiming,

unacceptable practices, fraud, or abuse, or mistake.”

14 . Section 409.913, Florida Statutes (2001 - 2003 ),

provides in pertinent part:

(21) The audit report, supported by agen cy

work papers, showing an overpayment to a

provider constitutes evidence of the

overpayment. . . .

Section 409.913, Florida Statutes (2004), provides in pertinent

part:

(22) The audit report, supported by agency

work papers, showing an overpayment to a

provider constitutes evidence of the

overpayment. . . .

Pursuant to the said subsection s , AHCA can establish a prima

facie case of overpayment merely by the admission into evidence

of a properly supported audit report. See Maz Pharmaceuticals,

Inc. v. Ag ency for Health Care Administration , DOAH Case No. 97 -

3791 (Recommended Order, March 20, 1998).

15 . No dispute exists that AHCA has established a prima

facie case of overpayment.

16 . Moreover, no dispute exits that AHCA has es tablished a

case of overpaym ent and that the amount of $79,523.70 is a

proper computation of the overpayment.

17 . AHCA demonstrated that Dr. Negrette received Medicaid

overpayme nts in the amount of $79,523.70 for the audit period

January 1, 2002 through December 31, 2004 .

RECOMMENDA TION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Agency for Health Care Administration

enter a final orde r finding that Jesus Negrette, M.D. , received

overpayments from the Medicaid p rogram in the amount of

$7 9,523.70 , during the audit period January 1, 2002 through

December 31, 2004, and requiring Jesus Negrette, M.D. , to repay

the amount of overpayment .

DONE A ND ENTERED this 5th day of February , 2007 , 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 Filin g (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 5th day of February, 2007 .

ENDNOTE

1/ The text , including endnotes, of the Order Denying Affirmative

Defense of Set - Off is set forth below:

Ord er Denying Affirmative Defense of Set - Off

This cause came before the undersigned on

Respondent's Memorandum of Law in Support of

Affirmative Defense of Set - Off (Affirmative

Defense of Set - Off). Respondent seeks a

preliminary ruling as to whether he is

en titled to an affirmative defense of set -

off for vaccinations that he administered

during the audit period and for which he did

not receive payment due to the Medicaid

program's one year statute of limitation on

billing. Petitioner filed a Response to

Peti tioner's [sic] Affirmative Defense of

Set - Off (Response).

In his Affirmative Defense of Set - Off,

Respondent avers, among other things, in his

Statement of Facts that Petitioner's

documentation reviewing doctor informed

Respondent that he had not billed ce rtain

items related to vaccinations and advised

Respondent to bill the items, retroactively;

that Respondent billed the items as advised,

but that Medicaid regulations did not permit

billing beyond one year, retroactively, from

the date of service and that , therefore,

Respondent could not be paid for the certain

items related to vaccinations beyond one

year from the date of service; and that,

however, Respondent is entitled to a set - off

in that any overpayment should be reduced by

the aforementioned vaccina tions administered

by Respondent. Respondent included a

Memorandum of Law in support of his

position.

Petitioner avers, among other things, as to

facts, that no disagreement exists that

Medicaid's policy requires claims for

payment of Medicaid services be made within

12 months of the date service is rendered,

but that Respondent may not avail himself of

a set - off for any overpayment by Medicaid.

Petitioner also included case law and

argument in support of its position.

According to Petitioner's Final Aud it Report

(FAR) dated June 12, 2006, Petitioner

performed an audit of Respondent's Medicaid

claims for the period covering January 1,

2002 through December 31, 2004. Petitioner

indicated in its FAR, among other things,

that a preliminary audit report, dat ed

August 25, 2005, provided that Respondent

had been overpaid in the amount of

$137,051.25, but that, upon review of all

documentation submitted, Petitioner

determined that Respondent had been overpaid

by the Medicaid program in the amount of

$79,523.70 a nd that a fine of $1,500 should

be imposed; and, therefore, Petitioner

requested in its FAR that Respondent remit

$81,023.70 to it.

The Medicaid program originates in federal

law; Title XIX of the Social Security Act

creates the Medicaid program. The fed eral

law provides for the operation of Medicaid

programs by the states, within requirements

set forth in the federal law. The federal

regulations implementing the federal law

require, as to timely processing of claims,

that "[t]he Medicaid agency must req uire

providers to submit all claims no later than

12 months from the date of service." 42 CFR

§ 447.45(d)(1). The federal regulation does

not provide for a waiver of this requirement

for the filing of claims. Id. A claim is

defined in the federal regul ations as "(1) a

bill for services, (2) a line item of

service, or (3) all services for one

recipient within a bill." 42 CFR §

447.45(a)(2)(b).

Section 409.913(7)(e), Florida Statutes

(2005), requires all Medicaid providers to

submit claims "in accord wit h applicable

provisions of all Medicaid rules,

regulations, handbooks, and policies and in

accordance with federal, state, and local

law." In the instant matter, Petitioner is

asserting that Respondent was overpaid by

the Medicaid program during a specifi c

period of time for which Petitioner

performed an audit to make its

determination. Overpayment is defined in

Section 409.913(1)(e), Florida Statutes

(2005), as including "any amount that is not

authorized to be paid by the Medicaid

program whether paid a s a result of

inaccurate or improper cost reporting,

improper claiming, unacceptable practices,

fraud, abuse, or mistake." 1

For the instant matter, the requirement that

a Medicaid provider file a claim for

services rendered within 12 months of the

date th e service is rendered, without a

waiver provision for such filing, is

considered a statute of limitations.

The parties are in agreement that the law in

Florida is well - settled that, even though a

claim for damages may be time - barred by a

statute of limita tions as an independent

claim, the claim may be asserted or revived

in a defensive posture against an

affirmative action and in a defensive

posture as a set - off. Allie v. Ionata , 503

So. 2d 1237 (Fla. 1987); Hilsenroth v.

Kessler , 446 So. 2d 147 (Fla. 3rd DCA 1984);

Elbadramany v. Bryson Crane Rental Services,

Inc. , 630 So. 2d 214 (Fla. 5th DCA 1993);

Monroe County v. McCormick , 752 So. 2d 1239

(Fla. 3rd DCA 2000). 2

However, Petitioner argues that the legal

principle is not without limitation.

Petitioner argues that, when the right and

the remedy are created by the same law, if

the claim is not brought within the time -

period provided by the law, the claimant

lacks a remedy for collection and the claim

is null and void. Petitioner cites Rybovich

Boat Work s, Inc. v. Atkins , 585 So. 2d 270

(Fla. 1991) and Beach v. Great Western Bank ,

670 So. 2d 986 (Fla. 4th DCA 1996) in

support of its position.

The undersigned is not persuaded that a set -

off is an applicable remedy in the instant

matter. 3 The case at hand involves a

regulatory action, not a civil action, in

which Petitioner is seeking to recover an

alleged overpayment from Respondent, a

Medicaid provider. Respondent had a

specific time period in which to file

claims, which time period is dictated by the

f ederal regulations and for which a waiver

provision is not provided in the

regulations. Respondent failed to file

claims for the items, for which he allegedly

could have billed, within the specific time

period. Without a waiver provision, the

undersigned is not persuaded that Respondent

is entitled to revive time - barred claims

and, therefore, entitled to a set - off.

Based on the foregoing, it is

ORDERED that Respondent is not entitled to

an affirmative defense of set - off for

vaccinations that he adminis tered during the

audit period and for which he did not file a

claim within the Medicaid program's one - year

statute of limitations on filing claims.

* * *

ENDNOTES

1/ The definition of overpayment remained

the same in the years of 2001, 2002, 2003,

and 2004, which is the time period of the

audit. §§ 409.913(1)(d), Fla. Stat.(2001)

and 409.913(1)(e), Fla. Stat.(2002, 2003,

and 2004).

2/ Allie , supra , is the leading case.

3/ Had this Administrative Law Judge

determined that a set - off was an applic able

remedy in the instant matter, Beach v. Great

Western Bank , 670 So. 2d 986 (Fla. 4th DCA

1996) is persuasive. In Beach , supra , the

issue involved an affirmative defense of

rescission and Truth in Lending Act (TILA)

damages raised by a consumer to a mo rtgage

foreclosure action. The federal statute

creating TILA included a consumer remedy of

rescission and for money damages for TILA

violations. The federal statute provided a

three year statute of limitations for

rescission and a one year statute of

lim itations for money damages.

Additionally, the federal statute

"specifically" provided that "as a defense

of recoupment or set - off to an action for

collection of the debt, a consumer may

assert violations of TILA and the damages to

which the consumer would be entitled under

the statute." (citation omitted) Beach at

989. The Fourth District Court of Appeal

held that, once the three - year statute of

limitations expires for rescission, the

expired right of rescission "may not be

revived as a defense in recou pment," found

that no "public policy reason for extending

recoupment," and held that, therefore,

"under Florida law, a consumer is not

entitled to rescind the mortgage transaction

and is limited to a damage set - off as

provided in TILA." Beach at 988 and 9 93.

The damage set - off relates to the specific

federal statutory provision for a recoupment

or set - off.

Further, the Court in Beach , supra , cited

with approval Bowery v. Babbit , 99 Fla.

1151, 1163, 128 So. 801, 806 (Fla. 1930)

that "when the right and re medy are created

by the same statute, the limitations of the

remedy are treated as limitations of the

right." Consequently, in the case at hand,

since the right and the remedy are created

by the same statute, when the one - year

limitation period expired, R espondent's

right to file a claim for the services

provided extinguished and the right could

not be revived.

COPIES FURNISHED:

Jeffries H. Duvall, Esquire

Agency for Health Care Administration

Fort Knox Building III, Mail Station 3

2727 Mahan Drive

Tall ahassee, Florida 32308

Manuel R. Lopez, Esquire

Manuel Lopez & Associates, P.A.

770 Ponce De Leon Boulevard, Penthouse

Miami, Florida 33134

Dr. Andrew C. Agwunobi, Secretary

Agency for Health Care Administration

Fort Knox Building, Suite 3116

2727 Maha n Drive

Tallahassee, Florida 32308

Craig Smith , General Counsel

Agency for Health Care Administration

Fort Knox Building, Suite 3431

2727 Mahan Drive, Mail Station 3

Tallahassee, Florida 32308

Richard Shoop, Agency Clerk

Agency for Health Care Administ ration

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.