09-003160MPI Agency For Health Care Administration vs. Florida Hospital Orlando Status: Closed Recommended Order on Wednesday, August 11, 2010.

Summary: Respondent provided adequate evidence to support the medical necessity for retaining the patient in the hospital the length of stay disputed by AHCA.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Petitioner, )

)

vs. ) Case No. 09-3160MPI

)

FLORIDA HOSPITAL ORLANDO, )

)

Respondent. )

)

RECOMMENDED ORDER

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

by video teleconference with Respondent appearing from Orlando,

Florida, and Petitioner present in Tallahassee, Florida, before

J.D. Parrish, a designated Administrative Law Judge of the

Division of Administrative Hearings (DOAH) on March 22, 2010.

APPEARANCES

For Petitioner: Debora E. Fridie, Esquire

Agency for Health Care Administration

Fort Knox Building III, Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308-5407

For Respondent: John D. Buchanan, Jr., Esquire

Henry, Buchanan, Hudson,

Suber & Carter, P.A.

Post Office Drawer 14079

Tallahassee, Florida 32317

STATEMENT OF THE ISSUES

Whether Respondent, Florida Hospital Orlando (Respondent or

FHO), was overpaid by Medicaid for care provided to the patient,

L.D., in the amount of $52,606.04, as alleged by Petitioner,

Agency for Health Care Administration (Petitioner or AHCA); or,

whether, as Respondent maintains, such care was medically

necessary and supported by the record presented in this cause.

Petitioner also maintains an administrative fine in the amount

of $2,000.00 is warranted in this matter.

PRELIMINARY STATEMENT

On June 11, 2009, AHCA referred the instant matter to DOAH

for formal proceedings. Pursuant to a Medicaid audit,

Petitioner maintains Respondent was overpaid for services

rendered in connection with an obstetrics/gynecology (OB/GYN)

patient that was identified in the audit period of January 1,

2007, through June 30, 2008. Although, initially, Petitioner

asserted an overpayment for more than one patient, at the

conclusion of the evidence, AHCA maintained that overpayment

related to only one OB/GYN patient, L.D. In that regard, the

amount claimed by AHCA as the overpayment was reduced from over

$200,000 (for multiple claims) to $52,606.04 (for the single

patient).

As it relates to all overpayment claims, Respondent

asserts: That the medical care and services provided to L.D.

were medically necessary; that all medical services were

pre-approved by Petitioner's fiscal agent; that AHCA is estopped

from its claim for reimbursement; and, that as all medical

services were medically necessary, an administrative fine is not

allowable in this cause. It is undisputed that Respondent

timely challenged AHCA's audit and that the matter is properly

before DOAH.

At the hearing, Petitioner presented the testimony of

Debbie Lynn, medical/health care program analyst with AHCA's

Bureau of Medicaid Program Integrity (MPI). Tammie Rikansrud,

administrative director of Patient Financial Services for

Respondent; Christine Howd, billing manager for Medicaid

collections for Respondent; and Cheryl Peasley, former Medicaid

coordinator for utilization management for Respondent, testified

on behalf of FHO. By stipulation and as indicated in the record

and transcript of this proceeding, the parties entered a number

of exhibits and depositions that have been considered in this

cause. Additionally, the parties agreed that the record would

remain open until a late-filled deposition of Dr. Thomas S.

Walter could be scheduled and filed. That deposition was filed

with DOAH on May 6, 2010.

The Transcript of the hearing was filed on April 8, 2010.

The parties timely filed Proposed Recommended Orders that have

been fully reviewed in the preparation of this Recommended

Order. Finally, the parties' Joint Prehearing Stipulation filed

in anticipation of hearing on March 15, 2010, has been adopted,

in pertinent part, and is incorporated in the Findings of Fact

below.

FINDINGS OF FACT

1. Petitioner is the state agency charged with the

responsibility of monitoring the Medicaid Program in Florida.

2. Petitioner, through MPI, audited FHO for the dates of

service from January 1, 2007, through June 30, 2008 (the audit

period). At all times material to the audit period, FHO was

enrolled as a Medicaid provider, governed by a Medicaid provider

agreement, and subject to all pertinent Medicaid rules and

regulations related to the provision of Medicaid services to

Medicaid recipients/patients.

3. Respondent's Medicaid Provider No. was 0010129001. All

services provided to Medicaid patients are billed and identified

by patient name, date of service, and provider. For purposes of

confidentiality, the names of patients are redacted in MPI

proceedings. Although this case began with a number of patients

being identified as part of the audit dispute, only one patient,

L.D., and the services provided to her remain at issue.

4. Before a Medicaid provider is authorized to bill

Medicaid for medical services rendered to a patient, several

checks are considered. First, the patient must be

Medicaid-eligible. There is no dispute that L.D. was

Medicaid-eligible.

5. Second, before an inpatient stay is reimbursable, a

Medicaid provider must seek prior authorization. To do so, at

all times material to this case, AHCA enlisted the assistance

of, and contracted with, KePro South (KePro) to perform

utilization management for inpatient hospital services for

Medicaid recipients. This meant the Medicaid provider contacted

KePro by email through a system known as "I-Exchange." In this

case, FHO followed the protocol and requested prior approval for

patient L.D.

6. KePro approved the inpatient stay for L.D.

7. All patient records for L.D. have been revisited in the

course of this case and have been thoroughly debated by doctors

for both parties.

8. In summary, AHCA's expert, Dr. Walter, opined that the

records for L.D. do not support the "medical necessity" for the

extended inpatient stay that was provided for her care.

9. In contrast, Dr. Busowski, opined that L.D. required

the inpatient stay based upon the medical conditions she and her

babies presented.

10. The events leading up to the instant dispute, set in

chronological context, are as follows: FHO provided medical

services to a patient, L.D.; those services were billed to and

paid by Medicaid; AHCA conducted its audit of FHO for the audit

period prior to August 12, 2008; on that date, AHCA issued its

Preliminary Audit Report (PAR); the PAR claimed a Medicaid

overpayment in the amount of $359,107.65 (overpaid claims for

the full audit period); in response, FHO set about to furnish

additional documentation to support its Medicaid billings; such

documentation was reviewed by Petitioner and its medical

consultants before the Final Audit Report (FAR) was entered;

then, the FAR reduced the amount claimed as overpayment, gave

Respondent the opportunity to challenge the FAR, and forwarded

the case to DOAH. Respondent continued to provide additional

information to AHCA throughout the pre-hearing and post-hearing

times. Subsequent to discovery in this case, AHCA considered

information from FHO and, ultimately, the overpayment claim was

reduced to $52,606.04 as noted above. Prior to entering the

FAR, Petitioner did not have the benefit of testimony from Dr.

Busowski or Dr. Fuentes. Additionally, Dr. Walter, AHCA's

consultant, did not have the benefit of reviewing the records

from Dr. Busowski's point of reference.

11. It is undisputed that FHO billed Medicaid and was paid

$52,606.04 for patient L.D.

12. Dr. Busowski is a board-certified physician whose

specialty is OB/GYN and whose subspecialty is Maternal Fetal

Medicine, also described as "perinatologist" in this record.

13. L.D. presented to a clinic staffed by Dr. Busowski and

his former associate, Dr. Fuentes. Both doctors have privileges

at FHO and took turns monitoring patients admitted to the

hospital. In examining L.D., it was discovered that her cervix

had shrunk from 2.6 to 1.2 centimeters. As L.D. was pregnant

with twins, the patient was admitted to FHO as a "high risk"

pregnancy.

14. Simply stated, the medical concern for L.D. was that

she would deliver her children prematurely and, thereby, cause

additional medical issues for herself, as well as her babies.

L.D. was only 26 weeks, two days along at the time, and it would

be very difficult for the twins to be delivered at that time.

Further, L.D. had had two prior deliveries by C-section, so it

was anticipated that her twins would also be delivered in that

fashion. Finally, the twins were locked with one in a breached

position so that if the children had prematurely delivered

vaginally, other complications would have been likely.

15. L.D. remained at FHO until she was discharged at

35 weeks, six days. During her stay at FHO, doctors were able

to monitor contractions, make sure her C-section scar did not

dehisce, and chart the growth, well-being, and viability of the

children.

16. Some patients, such as L.D., may be monitored in a

home setting with "take home" equipment. That device is not

covered by Medicaid and was, therefore, not an option for L.D.

It may have provided a less expensive treatment option had it

been available to L.D. and had her home environment been

suitable for its use. It is unknown whether L.D. and her home

environment would have been conducive to the home monitoring

some patients can use.

17. Another consideration in keeping L.D. hospitalized was

the well-being of the unborn twins. Medical costs for premature

babies are higher than full-term children. Had L.D. delivered

prematurely, there would have been three Medicaid patients with

serious medical needs rather than one.

18. Dr. Busowski candidly admitted that all considerations

in keeping L.D. hospitalized were not listed in the patient's

chart. As a specialist, Dr. Busowski did not think it was

necessary to have certain facts documented. It is not

Dr. Busowski's policy to keep any mother hospitalized

unnecessarily. It was not Dr. Busowski's practice to write "a

whole bunch because nothing has changed."

19. L.D.'s chart contained daily notes from an attending

OB/GYN or resident, but orders were not written for medication

unless it changed or was new. For example, if an order for

prenatal vitamins were written, it would naturally continue

throughout the patient's stay without additional orders.

20. In this case, L.D. was on the medication Procardia.

It was used to stop pre-term contractions. When L.D. was

discharged and the babies were not in danger, presumably,

Procardia was not necessary. Until she was stabilized during

her hospitalization, it was necessary.

21. Thus, the length of stay ultimately is the issue of

this proceeding. Not that L.D. was admitted inappropriately or

without medical basis, but that she was kept as an inpatient

longer than medically necessary.

22. Since L.D. was admitted at 26 weeks, two days and

discharged at 35 weeks, six days, the question then essentially

is: When in the interim should she have been discharged because

her continued inpatient care was not necessary? Arguably she

could have taken the medication to stop contractions at home,

monitored herself somehow, and rushed to the emergency room (ER)

if delivery was imminent. Delivery of the twins short of a

prescribed gestation period would have placed the children at

risk. Who would have borne the medical responsibility for

pre-term twins born under ER conditions when it was avoidable

and was, in fact, avoided in this case?

23. Medicaid has a "pay and chase" policy of paying

Medicaid claims as submitted by providers. Audits performed by

the Agency then, after-the-fact, reconcile the amounts paid to

providers with the amounts that were payable under the Medicaid

guidelines and pertinent rules.

24. The Medicaid provider agreement executed between the

parties governs the contractual relationship between FHO and

AHCA. The parties do not dispute that the provider agreement,

together with the pertinent laws or regulations, control the

billing and reimbursement of the claim that remains at issue.

The amount, if any, that was overpaid related solely to the

period of inpatient treatment that L.D. received from week 27 of

her pregnancy until her discharge. Dr. Walter conceded perhaps

a week would be required to stabilize the patient under her

presenting conditions.

25. The provider agreement pertinent to this case was

voluntarily entered into by the parties.

26. Any Medicaid provider whose billing is not in

compliance with the Medicaid billing policies may be subject to

the recoupment of Medicaid payments.

27. Petitioner administers the Medicaid program in

Florida. Pursuant to its authority, AHCA conducts audits to

ensure compliance with the Medicaid provisions and provider

agreements. The audits are routinely performed and Medicaid

providers are aware that they may be audited.

28. Audits are to ensure that the provider bill and

receive payment in accordance with applicable rules and

regulations. Respondent does not dispute Petitioner's authority

to perform audits. Respondent does, however, dispute that a

recoupment is appropriate, because FHO sought and was given

prior approval for the inpatient stay for L.D. through the KePro

system.

29. If the inpatient length of stay was medically

necessary for L.D., Petitioner does not dispute the amount

billed as accurately reflecting the services provided to L.D.

during that stay. There is no question that L.D. stayed in the

hospital for the length of stay noted in the record. Based upon

the weight of the persuasive evidence in this case, it is

determined that L.D.'s length of stay until week 35 of her

pregnancy was medically appropriate and necessary to protect the

medical health and well-being of L.D. and her unborn children.

CONCLUSIONS OF LAW

30. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of these

proceedings. § 120.57(1), Fla. Stat. (2009).

31. Pursuant to Chapter 409, Florida Statutes (2009),

Petitioner is responsible for administering the Medicaid Program

in Florida.

32. As the party asserting the overpayment, Petitioner

bears the burden of proof to establish the alleged overpayment

by a preponderance of the evidence. See Southpointe Pharmacy v.

Department of Health and Rehabilitative Services , 596 So. 2d 106

(Fla. 1st DCA 1992). AHCA has failed to meet its burden.

33. Section 409.913, Florida Statutes (2009), provides, in

pertinent part:

The agency shall operate a program to

oversee the activities of Florida Medicaid

recipients, and providers and their

representatives, to ensure that fraudulent

and abusive behavior and neglect of

recipients occur to the minimum extent

possible, and to recover overpayments and

impose sanctions as appropriate.

(1) For the purposes of this section, the

term:

* * *

(e) "Overpayment" includes 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.

* * *

(7) 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.

* * *

(21) When making a determination that an

overpayment has occurred, the agency shall

prepare and issue an audit report to the

provider showing the calculation of

overpayments.

34. In this case, Petitioner seeks reimbursement of an

overpayment based upon the lack of documentation to show medical

necessity for the length of stay for patient, L.D. It is

concluded that it was medically necessary to protect L.D. and her

unborn children and to allow the patient to remain in the

hospital for the time noted in this record. It is further

concluded that FHO did a poor job of documenting the basis for

that stay. The questions raised by Dr. Walter, AHCA's expert and

peer reviewer, could have been avoided with better documentation.

Nevertheless, poor documentation does not justify the denial of

the medical necessity for this patient. That the records could

have been more detailed does not equate to inadequate

documentation. Respondent undoubtedly provided a necessary

medical service to the Medicaid recipient and is entitled to

compensation for that treatment. In the absence of evidence that

the amount billed and claimed was erroneous, the amount of the

payment stands as the appropriate compensation for the services

provided.

35. In this case, although the FAR supports and

constitutes evidence of the overpayment claimed, it is erroneous

in light of the totality of all evidence presented in this

cause. Respondent presented substantial, credible evidence to

rebut the claim of overpayment or lack of medical necessity.

FHO has shown that the length of stay for patient L.D. was

medically necessary. L.D.'s health and the viability of her

unborn children were stabilized and kept from deteriorating.

FHO kept L.D. from a condition that threatened life, pain,

suffering, or other conditions likely to occur with a premature

delivery of twins. L.D. had complicating factors that resulted

in a high-risk pregnancy that could have ended with a poor to

devastating medical outcome. See § 409.913(1)(d), Fla. Stat.

(2009).

36. Finally, Respondent's asserted that AHCA was estopped

from pursuing its recoupment claim against FHO. Equitable

estoppel against an entity, such as AHCA, is rare. Respondent

has not shown exceptional circumstances that would warrant

equitable estoppel in this case. See Associated Industries

Insurance Company, Inc. v. State of Florida, Department of Labor

and Employment Security , 923 So. 2d 1252 (Fla. 1st DCA 2006).

Prior approval by KePro cannot estop AHCA from pursuing

overpayment claims when an audit does not support the charges

and services billed to Medicaid. AHCA has the daunting task of

chasing monies already paid to providers who may or may not have

submitted accurate or truthful information to KePro. Prior

approval does excuse fraud or misinformation or cases where

medical necessity cannot be established. In this case, FHO was

able to show that the patient required the length of stay

provided. In other cases, a provider who may be motivated by a

low census or other financial interests may not be able to,

after-the-fact, support its decision to hold a patient for a

given length of stay. AHCA must always protect the Medicaid

funds it is challenged to conserve so that bona fide recipients

receive the medical care they require. Medicaid providers must

provide adequate records to support the claims given prior

approval through KePro. In this case, while the records could

have better documented the necessity for L.D.'s length of stay,

it is concluded that the records taken in totality were adequate

to meet the recordkeeping requirements of the Medicaid Program.

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 dismissing the case, with each party bearing

its own costs and expenses of the litigation. Further, to the

extent that Petitioner may have already sought recoupment

against Respondent for the alleged overpayment, it is

recommended that those funds be credited back to FHO.

DONE AND ENTERED this 11th day of August, 2010, in

Tallahassee, Leon County, Florida.

S

J. D. PARRISH

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 11th day of August, 2010.

COPIES FURNISHED :

Thomas Arnold, Secretary

Agency for Health Care Administration

Fort Knox Building III

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

Justin Senior, General Counsel

Agency for Health Care Administration

Fort Knox Building III

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

Fort Knox Building III

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

John D. Buchanan, Jr., Esquire

Henry, Buchanan, Hudson,

Suber & Carter, P.A.

Post Office Drawer 14079

Tallahassee, Florida 32317

Debora E. Fridie, Esquire

Agency for Health Care Administration

Fort Knox Building III, Mail Stop 3

2727 Mahan Drive

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.