10-009318MPI Agency For Health Care Administration vs. Hal M. Tobias Status: Closed Recommended Order on Thursday, May 19, 2011.

Summary: HCA proved overpayments to physician, primarily based on claims submitted for neural scans using an Axon II device. CMS had assigned a unique code to such procedures, rendering them ineligible for Medicaid reimbursement.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Petitioner, )

)

vs. ) Case No. 10 - 9318MPI

)

HAL M. TOBIAS, )

)

Respondent. )

________________________________)

RECOMMENDED ORD ER

Robert E. Meale, Administrative Law Judge of the Division

of Administrative Hearings, conducted the final hearing in

Tallahassee, Florida, on April 4 and 5, 2011.

APPEARANCES

For Petitioner: Monica Ryan

Jeffries H. Duvall

Assistant General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Station #3

Tallahassee, Florida 32308

For Respondent: George K. Brew

Law Office of George K. Brew,

6817 Southpoint Parkway, Suite 1804

Jacksonville, Florida 32216

STATEMENT OF THE ISSUE

The issue is whether Petitioner can prove Medicaid

overpayments to Respondent and, if so, how much Petitioner is

entitled to recoup.

PRELIMINARY STATEMENT

By Final Audit Report dated August 16, 2010, Petitioner

advised Respondent that it had completed a review of claims for

Medicaid services provided from January 1, 2007, through

June 3 0, 2008. Petitioner had determined that it had overpaid

Respondent $123,393.06 in claims . Petitioner imposed $5 , 000 in

administrative fines -- $4 , 000 for a violation of Florida

Administrative Code Rule 59G - 9.070(7)(e) and $1 , 000 for a

violation of Rule 59G - 9.070(7)(c) -- and $5 , 658.09 for the cost of

audit , pursuant to section 409.913(23)(a), Florida Statutes.

The total sought by Petitioner was therefore $134,051.15.

A major part of the dispute involves nerve conduction

studies performed by Respondent and billed under the Physician's

Current Procedural Terminology Manual (CPT) Code 95904. T he

Final Audit Report addresses this issue as follows:

Specifically, sensory nerve conduction

threshold tests (sNCT), as stated in the

Medicare National Coverage Deter minations

Manual Chapter 1, Part 2 (Section 160.23)

(Rev. 15, 06 - 18 - 04), are different and

distinct from assessment of nerve conduction

velocity, amplitude and latency. It [sic]

is also different from short - latency

somatosensory evoked potentials. Claims

submitted for reimbursement of sNCT as CPT

code 95904 (Nerve conduction, amplitude and

latency/velocity study, each nerve; sensory)

are erroneous and are therefore denied.

On September 28, 2010, Respondent filed its Amended Request

for Formal Administra tive Hearing.

The court reporter filed the transcript on April 25, 2011 .

The witnesses and exhibits are identified in the transcript.

The parties and one exceptionally enthusiastic witness filed

propo sed recommended orders by May 17 , 2011.

FINDINGS OF FACT

1. Respondent is a licensed physician with an office in

Stuart. He is Board - certified in neurology and pain medicine.

During the audit period and until recently, Respondent was an

enrolled Medicaid provider.

2. The audit in this case involved 2 37 claims on behalf of

30 recipients. Of these 237 claims, Petitioner determined that

59 were overpayments. After determining the total of these 59

overpayments , Petitioner referred the file to a statistician,

w ho extended these 59 overpayment s to the to tal overpayment

shown in the Final Audit Report.

3. The statistician based the extension on generally

accepted statistical methods that he explained, at the hearing,

to everyone's satisfaction, as evidenced by the fact that no one

asked to hear more . During the statistician's testimony , the

parties agreed that, if the overpayments in the Final Audit

Report are altered in the Final Order, Petitioner will refer the

new determinations to a statistician for another extension ,

based again, of course, on gen erally accepted statistical

methods.

4. Recipients will be identified by the numbers assigned

them in Petitioner Exhibit 7. The only recipients addressed are

those for whom Petitioner has determined overpayments.

5. Nine billings are at issue wit h Recipient 1 . O n

March 8, 2007, Respondent saw Recipient 1 and billed a CPT Code

99245 office consultation . Petitioner downcoded this to a CPT

Code 99244 office consultation and generated an overpayment of

$20.39.

6. The CPT desc ribes these office c onsultation codes as

follows:

99244

Office consultation for a new or established

patient, which requires these three key

components:

A comprehensive history;

A comprehensive examination;

Medical decision making of moderate

complexity.

* * *

Usually, the presenting problem(s) are of

moderate to high severity. Physicians

typically spend 60 minutes face - to - face with

the patient and/or family.

99245

Office consultation for a new or established

patient, which re quires these three key

components:

A comprehensive history;

A comprehensive examination;

Medical decision making of high

complexity.

* * *

Usually, the presenting problem(s) are of

moderate to high severity. Phys icians

typically spend 80 minutes face - to - face with

the patient and/or family.

7. Recipient 1 was the victim of a severe beating at the

hands of her husband in July 2006. Petitioner's determinations

concerning this case partly arose out of the failure of its

consultant to find in Respondent's medical records a date of

incident, but Respondent provided this information at the

hearing.

8. Recipient 1 suffered fractures of the skull and orbital

bone from the spousal battery. Continuously since the inc ident,

she had suffered headaches; vertigo, especially when blowing her

nose; memory loss; and a complete inability to use her left

hand. The initial office consultation was on March 8, 2007, and

Respondent billed it correctly, given the complexity of the

medical decisionmaking . She had five diagnoses, and Respondent

gave her 11 recommendations. Considerable time and effort were

required of Respondent to address her case at this initial

office consultation, for which there is thus no overpayment .

9. On March 20, 2007, Recipient 1 underwent an MRI of the

brain, for which Respondent billed a CPT Code 70553 , which is

for brain MRIs with and without dye or contrast . Petitioner

downcoded this to a CPT Code 70551, with a reduction of $76.59,

because Respon dent had ordered only an MRI of the brain without

dye.

10. Respondent produced at hearing a copy of the

prescription, which cryptically states: " MRI Brain c /o

contrast. " The " c " and the " o " have dashes over them. The " c "

with a dash is a traditiona l abbreviation of cum , so it means

" with. " The meaning of the dash over the " o " is unclear.

Lacking a conjunctive symbol in the space between the letters,

it appears that the combination means " without, " rather than

" with " and " without. " The downcoding is appropriate, and the

overpayment is $76.59.

11. On the same date, Recipient 1 underwent an MRI of the

neck and spine without dye. Petitioner denied this billing,

which was for $233.47, for lack of medical necessity due to the

absence of appropriate p ain symptoms , especially radiating pain .

12. At the hearing, Respondent explained that Recipient 1

suffered from moderate to severe stenosis , and he needed to rule

out neck involvement in the patient's inability to use her left

arm. The neck and spine MRI was medically necessary, so there

is no overpayment for this test.

13. On May 2, 2007, Recipient 1 underwent a muscle test,

one limb -- billed as CPT Code 95860; a sense nerve conduction

test -- billed as C PT Code 95904; and a motor nerve conduction

t est -- billed as CPT 95903. On the next day, she underwent the

identical tests -- all billed under the identical codes.

Petitioner denied all of these, and generated overpayments of

$40.81, $73.05, $65.60, $40.81, $73.05, and $65.60,

respectively.

14. Peti tioner denied these tests because Respondent had

not ordered them. This does not seem to have been inadvertent

on Respondent's part. None of these tests appeared to be part

of Respondent's treatment plan for this patient. Petitioner

thus determined corr ectly that these six sums are overpayments.

15. Five billings are at issue with Recipient 3. The

first is an office consultation on April 9, 2008. Petitioner

has downcoded this from CPT Code 99245 to CPT Code 99244 due to

a lack of complexity of decisi onmaking. This generates an

overpayment of $20.18.

16. Respondent testified that Recipient 3 was a 63 - year -

old patient with " total body pain. " Respondent testified that

the patient complained of neck pain, low back pain, and chronic

pain, all emanati ng from a bicycle accident five years earlier

that had necessitated the placement of a titanium rod in the

patient's leg. However, the eight diagnoses and 18

recommendations do not, on these facts, merit the complexity of

decisionmaking claimed by Respond ent in his billing. Petitioner

has proved an overpayment of $20.18.

17. Recipient 3 raises the issue of the reimbursability of

a n s NCT administered by Respondent. On April 21, Recipient 3

underwent two procedures billed as sense nerve conduction tests

under CPT Code 95904 at $143.70 each. Two days later, Recipient

3 underwent two procedures bill ed under the same name and CPT

C ode at $141.70 and $14 3 .70. Petitioner has disallowed all four

of these billed amounts.

18. CPT Codes 95900 - 95904 describe ne rve conduction tests

that measure the nerve's response to an electrical stimulation

in terms of speed, size, and shape. CPT Code 95904 is " nerve

conduction, amplitude and latency/velocity study, each nerve;

sensory. " A procedure meeting the definition of CPT Code 95904

must measure the nerve's response in terms of amplitude and

latency/velocity. Amplitude is a measure of size. Latency is a

measure of time of travel, so, provided travel distance is

known, as it typically is, velocity, or speed, may be de rived

from latency.

19 . The device used by Respondent for all of the sense

nerve conduction tests that he billed as CPT Code 95904 was an

Axon II device. The inventor of the device testified at the

hearing and explained how conventional sense nerve co nduction

tests, which were developed during World War II, are appropriate

for the detection of gross injuries because they detect damage

in the large nerve fibers. Fifty to 100 times smaller than

these large fibers are the small nerve fibers, which transm it

pain. Among the se fibers are the fast - transmitting A - delta

fibers and the slow - transmitting fibers are C - fibers . The Axon

II focuses on the activity of the A - delta fibers.

20 . Originally, the witness produced a neurometer that

relied on patient resp onse to the application of increasing

voltage to the point that the nerve produced a response in the

form of a stimulus. Seven years later, in 2002, the witness

added a potentiometer, or voltage meter, to allow what he terms

a psychophysical assessment of a sensory nerve conduction test

that applies electricity and records amplitude, but not latency

or velocity.

21 . The witness claims that the A - delta fibers are too

small for a useful test o f latency or velocity. Among A - delta

fibers, the only useful parameter for measurement is amplitude.

He added that, similarly, the shape of the signal emanating from

the nerve is also irrelevant when dealing with the smaller A -

delta fibers.

22 . Whatever larger issues of medical necessity that may

attach to the Ax on II device, the issue in this case is whether

it may be billed under Florida Medicaid law, which reimburses

only those services designated in Chapter 2, Physician Services

Coverage and Limitations Handbook. Pursuant to this

requirement, Respondent bille d the sNCTs that he performed with

the Axon II device under CPT Code 95904. But, a s noted above,

this code requires at least a measure of latency and possibly

me asures of latency and velocity , and the sNCTs do not provide

latency or velocity data. Respon dent thus miscoded all of the

sNCT procedures that he performed in this case.

23 . The sNCTs performed with the Axon II device are

described by CPT Code 95999, which is assigned to unlisted

neurological diagnostic procedures, and Code G0255 , which is a

un ique code for sNCTs . If the sNCTs performed in this case were

properly coded only under CPT Code 95999, another issue would

emerge because the fee schedule for this code in the Physician

Services Coverage and Limitations Handbook bears an " R " code.

This means that the pr ovider performing a procedure falling into

the residual category of CPT Code 95999 may submit " either

documentation of medical necess ity for the procedure performed .

. . or information . . . in order to review and price the

procedure corre ctly. " Physician Services Coverage and

Limitations Handbook, p. 3 - 3.

24 . It is unnecessary to determine whether Respondent

complied with the " by - report procedure " established for

procedures classified within CPT Code 95999, or whether,

consistent with t he de novo nature of the proceeding, as

discussed in the Conclusions of Law, Respondent could first

present such evidence at hearing. The Centers for Medicare and

Medica id Services (CMS) created CPT C ode G0255 for sNCTs because

it determined that the devi ces producing this data were not

medically necessary, and Medicare and Medicaid would not

reimburse claims for these procedures.

25. On March 19, 2004, CMS revised its National Coverage

Determinations Manual regarding sNCTs . Noting that these

procedure s are different from the assessment of nerve conduction

velocity, amplitude, and latency, section 160.23 of the manual

states that providers may not use codes for tests eliciting

nerve conduction velocity, latency, or amplitude for sNCTs . CMS

has clearly expressed its intent that, although falling within

the residual CPT Code 95999 procedures, sNCTs are ineligible for

reimbursement , even by the " by - report procedure . "

26. Petitioner thus correctly disallowed the four

procedures performed on April 21 and 23, 2008, because they were

miscoded and are ineligible for Medicaid reimbursement.

27. Recipient 3 raises another recurring issue. This one

concerns an H - Reflex Test, CPT Code 95934. For Recipient 3, it

was billed on May 8, 2008, for $27.49. Petitio ner properly

disallowed the billing because the procedure was not done.

Respondent concedes that he never performed an H - Reflex Test on

an upper extremity and explains that an inexperienced office

worker misconstrued a handwritten mark indicative of a neg ative

to mean that the test had in fact been ordered and conducted.

28. The issue on the H - Reflex Test is not whether

Respondent was initially entitled to reim bursement -- it was not.

The issues are 1) whether this overpayment may be extended to

the large r total overpayment determined in this case and 2)

whether Respondent has already reimbursed Petitioner for this

overpayment of $27.49, if not considerably more. The answer to

the first question is no, and the answer to the second question

is probably not . The bottom line is that Petitioner may add

$27.49 to the total overpayment, but may not include this sum in

the extension calculations due to Respondent's timely correction

of this billing error.

29. Respondent dis covered that his office had wrongly

billed this procedure on 28 different occasions, but he (or his

wife/office manager) informed Petitioner of this fact prior to

the audit. Among the 30 patients randomly selected for the

audit, four of them had these incorrect billings for an H - Reflex

Tes t on an upper extremity. For obvious reasons, corrections

after the start of an audit may not be allowed, but a timely

correction remedies the overbilling, as though it had never

taken place.

30. Respondent contends that the situation is even more

compl icated. Respondent 's wife testified that she voided the

claims on Petitioner's automated electronic claims paying

process , which is the proper procedure, but, for some reason,

all other procedures performed on the same day as the procedure

date reported f or the H - Reflex Tests were also voided. If so,

it would mean that Respondent has already reimbursed Petitioner

for the $27.49 erroneous billing, and Petitioner must credit

Respondent -- and possibly extend the credit -- for any other

allowable procedures perf ormed on the same date. For Recipient

3 on May 8, 2008, for i nstance, this would amount to a direct

credit of $107.78 for the two other allowable procedures

performed on the same day that the H - Reflex Test was reported as

performed .

31. Respondent's w ife failed to detail these wrongfully

aggregated voids, nor did anyone on Petitioner's side of the

hearing room have any idea what she was talking about. On this

record, it is impossible to credit the testimony so as to

require Petitioner to restore the v alue of other procedures

billed on the same date as the H - Reflex Test (here, $107.78),

extend this value to a much higher credit, or even re store the

value of the H - Reflex Test itself ($27.49).

32. Three billings are at issue with Recipient 6. Two of

them are sNCTs billed under CPT Code 95904 for two procedures

done on February 27, 2008. They were billed at $141.70 and

$143.70, respectively. For the reasons discussed above, these

are miscoded and are ineligible for reimbursement, so they are

overpay ments.

33. The third issue involves an office visit on April 3,

2008, which Respondent billed under CPT Code 99211. Respondent

admitted at the hearing that he lacked documentation for this

office visit, so Petitioner properly disallowed the $12.48

assoc iated with it.

34. One billing is at issue with Recipient 7. It is a

brain MRI with and without dye, which is billed on May 23, 2007,

under CPT Code 70553. Petitioner properly disallowed the entire

$410.85 because it was obviously double - billed, and Pe titioner

allowed the " other " procedure.

35. Three billings are at issue with Recipient 9. On

November 2, 2007, Respondent billed a neck and spine MRI without

dye as CPT Code 72141 and a lumbar spine MRI without dye as CPT

Code 72148. On November 13, 20 07, Respondent billed a head

angiography without dye as CPT Code 70544. Citing a lack of

medical necessity, Petitioner denied all of these items, which

amount to $233.47, $236.65, and $300.09, respectively.

36. At the time of the procedures in question, Respondent

had been seeing this 37 - year - old patient for only one month.

Another physician had referred the patient, who, for three

months, had been suffering from headaches in the right frontal

temporal area. The pain was severe enough to cause the pati ent

to go to the hospital emergency room three times. Finally, the

emergency room physicians instructed the patient not to come to

the emergency room, and they referred him to a neurologist -- who

had been dead for two years at the time of the referral.

37 . The emergency room physicians had prescribed Dilaudin,

but the patient, who was also on a blood thinner, presented to

Respondent with the need for a full neurological workup. He was

a construction worker and needed to return to work. Respondent

ordere d the angiography to rule out vascular malformation, which

could have caused the headaches and could be fatal. Respondent

ordered the MRIs to assess significant anatomical problems and

rule out metastatic disease. These three procedures were

medically ne cessary, so there is no overpayment due in

connection with them.

38. One billing is at issue with Recipient 11. On January

10, 2007, Respondent billed an office consultation under CPT

Code 99243. Petitioner allowed only an office visit, not an

office c onsultation, resulting in an overpayment of $15.33.

Respondent has not contested this adjustment, which appears to

be correct.

39. Four billings are at issue with Recipient 15. They

are sNCTs billed under CPT Code 95904 for two procedures done on

March 4, 2008, and two procedures done on March 24, 2008. Two

of the procedures were billed at $141.70 and two were billed at

$143.70. For the reasons discussed above, these are miscoded

and are ineligible for reimbursement, so they are overpayments.

40. Fo ur billings are at issue with Recipient 16. They

are sNCTs billed under CPT Code 95904 for two procedures done on

January 22, 2008, and two procedures done on March 5, 2008.

They are billed the same as those described in the preceding

paragraph. They ar e miscoded and ineligible for reimbursement,

so they are overpayments.

41. Three billings are at issue with Recipient 17. They

are sNCTs billed under CPT Code 95904 for one procedure done on

March 17, 2008, and two procedures done on March 19, 2008. Th ey

are billed at $141.70 for two procedures and $143.70 for the

third procedure. They are miscoded and ineligible for

reimbursement, so they are overpayments.

42. Four billings are at issue with Recipient 20. They

are sNCTs billed under CPT Code 95904 for two procedures done

one June 24, 2008, and two procedures done on June 30, 2008.

They are each billed at $143.70. They are miscoded and

ineligible for reimbursement, so they are overpayments.

43. Six billings are at issue with Recipient 21. Four a re

sNCTs billed under CPT Code 95904 for two procedures done on

February 20, 2008, and two procedures done on February 28, 2008.

They are each billed at $143.70. They are miscoded and

ineligible for reimbursement, so they are overpayments.

44. The othe r two billings are for H - Reflex Tests of upper

extremities -- one on March 25, 2008, and one on April 2, 2008.

As noted above, Respondent never performed these tests, but

corrected the misbilling prior to the audit. The $27.49 billed

for each of these test s may not be extended in determining the

total overpayment , but Petitioner may add $54.98 to the total

overpayment determination, and Petitioner is not required to

credit Respondent for additional sums due to claimed problems in

voiding these billings.

45 . Four billings are at issue with Recipient 25. They

are sNCTs billed under CPT Code 95904 for two procedures done on

June 5, 2008, and two procedures done on June 10, 2008. They

are each billed at $143.70. They are miscoded and ineligible

for reimburs ement, so they are overpayments.

46. One billing is at issue with Recipient 26. On

February 15, 2007, Respondent billed a n office visit under CPT

Code 99205, which Petitioner reduced by $16.64 by downcoding it

to CPT Code 99204.

47. The CPT Manual d escribes these office visit codes as

follows:

99204

Office or other outpatient visit of the

evaluation and management of a new patient,

which requires these three key components:

A comprehensive history;

A comprehensive examination;

Medical d ecision making of moderate

complexity.

* * *

Usually, the presenting problem(s) are of

moderate to high severity. Physicians

typically spend 45 minutes face - to - face with

the patient and/or family.

99205

Office or other outpatient visit of the

evaluation and management of a new patient,

which requires these three key components:

A comprehensive history;

A comprehensive examination;

Medical decision making of high

complexity.

* * *

Usually, the presenting problem(s) are of

moderate to high severity. Physicians

typically spend 60 minutes face - to - face with

the patient and/or family.

48. Recipient 26 is a 43 - year - old with migraines. She has

suffered three headaches weekly since fourth grade. An MRI of

her lower back in 2004 revealed a herniated disk, and she has

pain in her right leg and foot numbness, if she drives too long.

The medical decisionmaking was no more than moderately complex,

so Petitioner properly downcoded this o ffice visit, resulting in

an overpayment of $16.64.

49. Four billings are at issue with Recipient 27. On

January 15, 2008, Respondent billed a n office visit under CPT

Code 99205, which Petitioner reduced by $18.64 by downcoding it

to CPT Code 99204.

50. Recipient 27 was referred by her obstetrician and saw

Respondent two and one - half months post - partum. She was unable

to lift her right arm. She had pain in her right outside

shoulder. Her fingers were numb. Based on a physical

examination, Respond ent detected nerve damage in the axilla, and

she reported cervical radiculopathy. The constellation of

symptoms suggested three or four problems that obviously

required immediate attention to facilitate her caring for her

newborn. The medical decisionmak ing was highly complex, so

there is no overpayment for this office visit.

51. Respondent billed two sNCTs under CPT Code 95904 for

two procedures done on January 24, 2008, for $143.70 each. They

are miscoded and ineligible for reimbursement, so they are

overpayments.

52. Respondent billed an H - Reflex Test under CPT Code

95934 on February 7, 2008, for $27.49. As noted above,

Respondent never performed this test, but corrected the

misbilling prior to the audit. The $27.49 may not be extended

in determ ining the total overpayment , but Petitioner may add

$27.49 to the total overpayment determination, and Petitioner is

not required to credit Respondent for additional sums due to

claimed problems in voiding these billings.

53. Petitioner conceded error in its disallowance

concerning Recipient 28, for whom Respondent billed $41.00 under

CPT Code 95860 for a muscle test conducted on February 21, 2008.

See Petitioner's proposed recommended order, paragraph 21. This

is therefore not an overpayment.

54. Thr ee billings are at issue with Recipient 29. On

February 7, 2007, Respondent billed an office consultation under

CPT Code 99245, which Petitioner reduced by $46.24 by downcoding

it to CPT Code 99205 , which is for an office visit . This was an

office visit, not an office consultation, as billed by

Respondent, so the downcoding was correct, and there is an

overpayment of $46.24.

55. On February 16, 2007, Respondent billed for a neck and

spine MRI without dye under CPT Code 72141 and a chest and spine

MRI wi thout dye under CPT Code 72146 -- twice each. Petitioner

properly disallowed $357.60 and $305.18 for one pair of these

procedures, which obviously were double - billed, so there are

overpayments of these amounts.

56. Two billings are at issue with Recipient 30.

Respondent billed two sNCTs under CPT Code 95904 for two

procedures done on April 14, 2008, for $141.70 and $143.70.

They are miscoded and ineligible for reimbursement, so they are

overpayments.

57. The Final Audit Report claims that the audit cos t

$5658.09 , but Petitioner failed to produce any evidence on these

costs .

CONCLUSIONS OF LAW

58. The Division of Administrative Hearings has

jurisdiction over the subject matter. §§ 120.569, 120.57(1) ,

and 409.913(31) , Fla. Stat.

59. Petitioner is au thorized to seek repayment of

overpayments that it may have made for goods or services for

which reimbursement under the Medicaid program is available.

§ 409.913(11), (12)(a), (16)(j), and (31), Fla. Stat.

60. The burden of proof is on Petitioner to p rove

overpayments by a preponderance of the evidence . Southpointe

Pharmacy v. Dep't of HRS , 596 So. 2d 106, 109 (Fla. 1st DCA

1992); S. Medical Services v. Agency for Health Care Admin. , 653

So. 2d 440, 441 (Fla. 3d DCA 1995) (per curiam). See also §

409 .913(20), Fla. Stat. ( " In meeting its burden of proof in any

administrative or court proceeding , the agency may introduce the

results of such statistical methods as evidence of

overpayment. " ) (Emphasis supplied.)

61. Section 409.913(22) provides: " The audit report,

supported by agency work papers, showing an overpayment to a

provider constitutes evidence of the overpayment. " This

suggests that an audit report prepared in a manner consistent

with all applicable statutory requirements establishes a prim a

facie case of overpayment. However, the allocation of the

burden of proof or burden of going forward with the evidence is

not determinative as to any of the individual alleged

overpayments considered in this case. The cited statute covers

overpayments, not audit costs, so the inclusion of audit costs

in the Final Audit Report does not dispense with the necessity

of proving up these costs at the hearing.

62 . The hearing is de novo. § 120.57(1)(k), Fla. Stat.

In the context of the present case, a de n ovo hearing means that

the provider may introduce evidence that it did not present

during the audit. Wistedt v. Dep't of HRS , 551 So. 2d 1236

(Fla. 1st DCA 1989); HBA Corp. v. Dep't HRS , 482 So. 2d 461, 468

(Fla. 1st DCA 1986) (dictum). As noted above, t hough, it is

unnecessary to determine if this principle means that a provider

seeking reimbursement for a procedure bearing an " R " code may

provide the required documentation, for the first time, at the

hearing.

63 . Section 409.913(7)(e) and (f), Florida Statutes,

requires that providers present claims for reimbursement only in

accordance with all Medicaid rules, regulations, and handbooks

and for goods and services that are medically necessary, which

includes both actual medical necessity and documented medical

necessity. This provision incorporates, among other things, the

Physician Services Coverage and Limitations Handbook.

64. It is within the scope of this proceeding to determine

the applicable facts and whether an otherwise - eligible service

is medically necessary under these facts. It is generally not

within the scope of this proceeding to determine whether a

procedure itself is medically necessary, regardless of the

circumstances surrounding its use with respect to an individual

recipient. Al though procedures bearing an " R " code may tend to

raise issues involving the medical necessity of a procedure

itself, as distinguished from the medical necessity of a

procedure applied to a specific recipient, CMS has assigned

sNCTs a uniq ue code to expres s its determination that these

procedures are not eligible for reimbursement. A n overpayment

case is not the vehicle for overturning Petitioner's

incorporation of this determination into Florida Medicaid law,

and Petitioner's concession in its proposed re commended order

that the " by - report procedure " is available for an sNCT

performed on the Axon II device is unsupported by the applicable

authority and wrong .

64 . Petitioner has proved the overpayments identified in

the Findings of Fact. Using generall y accepted statistical

methods, as r equired by section 409.913(20) , a qualified

statistician may extend the overpayments identified in the

Findings of Fact to a total overpayment determination .

Overpayments bear interest at the statutory rate set f orth in

section 409.913(25)(c), " from the date of determination of the

overpayment by the agency . "

65 . S ection 409.913 (23) (a) allows Petitioner to recover

its investigative, legal, and expert witness costs . However,

Petitioner has offered no proof of such expe nses, so these costs

may not be included in the Final Order.

66 . Florida Administrative Code Rule 59G - 9.070(7)(c) and

(e) provides in part:

SANCTIONS: In addition to the recoupment of

the overpayment, if any, the Agency will

impose sanctions as outlined in this

subsection. Except when the Secretary of

the Agency determines not to impose a

sanction, pursuant to Section

409.913(16)(j), F.S., sanctions shall be

imposed as follows:

* * *

(c) For failure to make available or

fu rnish all Medicaid - related records, to be

used in determining whether and what amount

should have or should be reimbursed: For a

first offense, $2,500 fine per record

request and suspension until the records are

made available; if after 10 days the

violat ion continues, an additional $1,000

fine per day; and, if after 30 days the

violation remains ongoing, termination. For

a second offense, $5,000 fine per record

request and suspension until the records are

made available; if after 10 days the

violation co ntinues, an additional $2,000

fine per day; and if after 30 days the

violation remains ongoing, termination. For

a third or subsequent offense, termination.

[Section 409.913(15)(c), F.S.]; [and]

* * *

(e) For failure to comp ly with the

provisions of the Medicaid laws: For a

first offense, $1,000 fine per claim found

to be in violation. For a second offense,

$2,500 fine per claim found to be in

violation. For a third or subsequent

offense, $5,000 fine per claim found to be

in violation. [Section 409.913(15)(e),

F.S.][.]

67 . Petitioner has proved that at least four of

Respondent's claims violated Florida Medicaid law . Petitioner

thus may impose a $4 , 000 administrative fine under r ule 59G -

9.070(7)(e) . However, Petitioner has not proved that Respondent

failed to make available specific Medicaid records, so

Petitioner may not impose a $1 , 000 administrative fine r ule 59G -

9.070(7)(c) .

RECOMMENDATION

It is

RECOMMENDED that:

1. Petitioner submit the file to a statistician fo r an

extension , using generally accepted statistical methods, of the

redetermined overpayments, as set forth in the Findings of Fact,

to a total overpayment determination.

2. Petitioner issue a Final Order determining that

Petitioner is entitled to rec oup the total overpayment

de termined in the preceding par agraph, statutory interest on

this sum from the date of the Final Order , and a $4 , 000

administrative fine for multiple violations of Florida

Administrative Code Rule 59G - 9.070(7)(e).

DONE AND ENTERE D this 19th day of May, 2011, in

Tallahassee, Leon County, Florida.

S

___________________________________

ROBERT E. MEALE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 19th day of May, 2011.

COPIES FURNISHED :

George Kellen Brew, Esquire

Law Office of George K. Brew

6817 Southpoint Parkway, Suite 1804

Jacksonville, Florida 32216

L. William Porter, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Station 3

Tallahassee, Florida 32308

Monica Ryan, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Station 3

Tallahassee, Florida 32308

Jeffries H. Duvall , Esquire

Agency for Health Care Administration

2 727 Mahan Drive, Mail Station 3

Tallahassee, Florida 32308

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Station 3

Tallahassee, Florida 32308

Elizabeth Dudek, Secretary

Agency for Health Care Administr ation

2727 Mahan Drive, Mail Station 3

Tallahassee, Florida 32308

Justin Senior, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Station 3

Tallahassee, Florida 32308

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties ha ve 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.