12-001253MPI Agency For Health Care Administration vs. Nursing Quality Services, Inc. Status: Closed Recommended Order on Thursday, September 13, 2012.

Summary: Billing Medicaid for units of service at wrong rate resulted in overpayment to provider.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Petitioner, )

) Case No. 12 - 1253MPI

vs. )

)

NURSING QUALITY SERVICES, )

)

Respondent. )

)

RECOMMENDED OR DER

Pursuant to notice, a hearing was conducted in this case on

July 13, 2012, by telephone conference call at sites in Miami

and Tallahassee, Florida, before Administrative Law Judge (ALJ)

Claude B. Arrington of the Division of Administrative Hearings

(D OAH).

APPEARANCES

For Petitioner: Jeffries H. Duvall, Esquire

Office of the General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Station 3

Tallahassee, Florida 32308 - 5403

For Respondent: Dagmar Llaudy, Esquire

Law Office of Dagmar Llaudy, P.A.

Suite 513

814 Ponce de Leon Boulevard

Coral Gables, Florida 33134

STATEMENT OF THE ISSUE

Whether Nursing Quality Services, Inc. ( Respondent ) , a

Medicaid provider, was overpaid by the Florida Me dicaid Program

in the amount of $8,154.02, and, if so, whether Respondent must

pay to the Agency for Health Care Administration (Petitioner)

th e amount of the alleged overpayment , a penalty in the amount

of $1,630.80, costs in the amount of $43.94, and any applicable

interest.

PRELIMINARY STATEMENT

The audit period at issue is between July 1, 2007, and

March 31, 2011. During that time, Respondent was (and still is)

enrolled in the Florida Medicaid Program as a home health

services provider. As part of a r outine audit, Petitioner

determined that certain Medicaid units of service, which will be

discussed below, were billed by the provider at too high a rate,

thereby generating an overpayment.

Petitioner generated a Preliminary Audit Report (PAR) which

wa s se nt to Respondent by Federal Express. The PAR advised

Respondent of the overpayment and provided Respondent an

opportunity to provide documentation to refute that an

overpayment had been made. Respondent did not respond to the

PAR because Respondent did n ot receive the PAR.

Thereafter, Petitioner generated a Final Audit Report (FAR)

which assessed against Respondent the amount of the alleged

overpayment together with the fine and costs set forth above.

Among other topics, the FAR advised Respondent of i ts right

to request an administrative hearing pursuant to the provisions

of chapter 120. Thereafter, Respondent requested a formal

administrative hearing, the matter was referred to DOAH, and

this proceeding followed.

At the final hearing, Petitioner pres ented the testimony of

Pamela Fante (a program administrator for Petitioner's Office of

the Inspector General, Medicaid Program Integrity) and Sheri

Creel (an analyst in the unit supervised by Ms. Fante).

Petitioner offered five sequentially - numbered exhi bits, each of

which was admitted into evidence without objection. At

Petitioner's request, official recognition was taken of the

relevant handbooks, rules, and statutes , which are set forth in

Petitioner's exhibit book under tabs 6, 7, and 8.

Respondent p resented the testimony Simon Fernandez, the

owner and president of Respondent . Respondent offered no

exhibits .

A Transcript of the hearing , consisting of one volume, was

filed August 6, 2012. Both parties timely filed a Proposed

Recommended Order, which have been duly considered by the

undersigned in the preparation of this Recommended Order.

Unless otherwise noted, all statutory references are to

Florida Statutes (201 2 ).

FINDINGS OF FACT

1. At all times relevant to this proceeding, Respondent

has been a provider with the Florida Medicaid Program and has

had a valid Medicaid Provider Agreement with Petitioner.

Relevant to this proceeding, Respondent is a home health

services provider, providing nursing services to residents of

assisted living facilities (ALFs) .

2. Petitioner is the agency of the State of Florida

charged with the responsibility of administering the Florida

Medicaid Program.

3. At all times relevant to this proceeding, Respondent

was subject to all applicable federal and state laws,

regul ations, rules, and Medicaid Handbooks.

4. Respondent is required to comply with the Florida

Medicaid Provider General Handbook. Respondent is also required

to comply with the Home Health Services Coverage and Limitations

Handbook (Coverage Handbook).

5. Home health services are billed in units of service.

Each unit of service has a billing code that generates a

specified Medicare payment to the provider. The two billing

codes at issue in this proceeding are T1030 and T1031. A

billable unit of service is generated under these codes when

either a registered nurse or a licensed practical nurse go es to

an ALF and provid es a qualified service to a resident of the

ALF.

6. Tab 6 in Petitioner's exhibit book contains relevant

excerpts of the Coverage Handbook , which was last revised in

July 2008. Relevant to this proceeding, the Coverage Handbook

reflects the following reimbursement information under the

bulletin heading "Home Health Visits for Multiple Recipients at

One Location" with emphasis added by the u ndersigned :

Home health visit services provided to two

or more recipients with individual

residences at a single location are

reimbursed as one visit for each individual

receiving a home health service at that

location ( for example, visits at an assisted

l iving facility ).

Home health visit services provided to two

or more recipients sharing a residence at a

single location (for example, visits at a

group home) are reimbursed as follows:

For the first recipient, Medicaid

reimburses the service at the

estab lished Medicaid visit rate;

For the second recipient, Medicaid

reimburses the service at 50 percent of

the established Medicaid visit rate;

and

For any additional recipients, Medicaid

reimburses the services at 50 percent

of the established Medicaid visi t rate.

7. The Bureau of Medicaid Program Integrity (MPI) has

generated a memorandum that reflects its understanding of the

coverage and limitations set forth in the Coverage Handbook.

Key to this proceeding, the memorandum states the following as

t o services provided to a resident of an ALF with emphasis added

by the undersigned :

MPI further understands that residence in an

assisted living facility would not justify

an automatic authorization for a 100 percent

reimbursement of the established Medica id

reimbursement rated for home health

services. Providers will be given the

opportunity to submit documentation

demonstrating individual residence at a

single location for MPI review and

subsequent decision - making as to applicable

reimbursement policy. Should the

documentation substantiate an individual

residence at a single location for the

recipient(s) in question, the reimbursement

for home health services would be allowed at

100 percent of the established Medicaid

reimbursement rate appropriate for t h e date

of service.

8. As part of a larger audit of Medicaid providers,

Petitioner audited Respondent based on billings submitted by

Respondent and paid by Petitioner. Taking information reflected

by Respondent's billings, Petitioner prepared a PAR , w hich was

dated January 23, 2012 , and signed by Ms. Fante . The PAR cited

the Coverage Handbook, statues, and rules Petitioner relied upon

and attached a detailed audit report reflecting that Respondent

was overpaid $8,154.02.

9. All of the services at iss ue in this proceeding were

billed and paid at 100 percent of the established Medicaid visit

rate for identical units of service (either T1030 or T1031)

generated at the same facility location on the same date whether

or not it was the first recipient (the so - called anchor

recipient), a second recipient, or an additional recipient.

10. Respondent's billings provided the respective address

for each of the three ALFs at which these recipients resided ,

but the billings do not document that each recipient maint ained

an individual residence in that ALF. Consequently, a fter

payment for the anchor recipient at 100 percent of the Medicaid

reimbursement rate , Respondent should have been paid at 50

percent of the reimbursement rate for identical units of service

to t he other recipients at the same address on the same day.

11. The payments at 100 percent of the billing rate for

units of service that should have been reduced to 50 percent of

the billing rate constituted overpayments. Petitioner

established that the am ount of the overpayment totaled

$8,154.02.

12. The PAR was not final agency action. Respondent was

advised of the following options:

1) Pay the identified overpayment in this

notice within 15 days of the receipt of this

letter. Under this option, amnes ty will be

granted, sanctions will not be applied and

costs will not be assessed.

2) If you wish to submit further

documentation in support of the claims

identified as overpayments, you must do so

within 15 days of receipt of this letter.

Any additional documentation received will

be taken under consideration and you will be

notified of the results of the audit in a

final audit report. Under this option, a

final audit report will be issued and will

include application of sanctions, the

assessment of cos ts, and hearing rights.

3) If you chose not to respond, wait for

the issuance of the final audit report.

Under this option, a final audit report will

include the application of sanctions, the

assessment of costs, and inform you of any

hearing rights tha t you may wish to

exercise.

13. The PAR was sent to Respondent via Federal Express

using the following address: 8300 SW 8 Street, Suite 107, Miami,

F L 33144. Ms. Creel testified, credibly, that the foregoing was

the address of record for Respondent at t he time the PAR was

sent to Respondent. The Federal Express receipt reflects that

the PAR was delivered on January 25, 2012 at 9:41 a.m. , and

signed for by someone named "M. Mejia." The receipt reflects

that the PAR had been delivered to "Receptionist/Fr ont Desk."

14. Mr. Fernandez testified, credibly, th at he never

received the PAR because Respondent had moved its offices from

Suite 107 to Suite 103 in the same building. While that

evidence is accepted, Ms. Creel established that Respondent's

offic e of record with Petitioner had not been updated at the

time the PAR was sent to Respondent.

15. Respondent did not respond to the PAR.

16. Petitioner prepared a "Final Audit Report" (FAR),

which was dated March 2, 2012, and signed by Ms. Fante. The FAR

asserted that Respondent owed $8,154.02 as the overpayment, a

fine in the amount of $1,630.80, and costs in the amount of

$43.94, for a total of $9,828.76, plus applicable interest.

17. The FAR was sent to Respondent by Federal Express at

the same addres sed that had been used for the PAR. The Federal

Express receipt reflects that the FAR was del ivered on March 8

at 9:28 a.m. and signed for by "M. Mejia." The receipt reflects

that the PAR had been delivered to "Receptionist/Front Desk."

18. The FAR advi sed as follows:

Pursuant to section 409.913(25)(d), F.S.,

the Agency may collect money owed by all

means allowable by law, including, but not

limited to, exercising the option to collect

money from Medicare that is payable to the

provider. Pursuant to sec tion 409.913(27 ) ,

F.S., if within 30 days following this

notice you have not either repaid the

alleged overpayment amount or entered into a

satisfactory repayment agreement with the

Agency, your Medicaid reimbursements will be

withheld; they will continue to be withheld,

even during the pendency of an

administrative hearing, until such time as

the overpayment amount is satisfied.

Pursuant to section 409.913(30), F.S., the

Agency shall terminate your participation in

the Medicaid program if you fail to repa y an

overpayment or enter into a satisfactory

repayment agree ment with the Agency, within

35 days after the date of a final order

which is no longer subject to further

appeal. Pursuant to sections 409.913(15)(q)

and 409.913(25)(c), F.S., a provider that

d oes not adhere to the terms of a repayment

agreement is subject to termination from the

Medicaid program. Finally, failure to

comply with all sanctions applied or due

dates may result in additional sanctions

being imposed.

19. The FAR provided Responden t an explanation of its

right to request an administrative hearing pursuant to the

provisions of chapter 120.

20. Mr. Fernandez received the FAR. Promptly thereafter,

Mr. Fernandez called Ms. Creel to discuss the assessed

overpayment, fine, and costs. M r. Fernandez told her that he

had not receive the PAR, and asserted that there was no

overpayment because each recipient of the payments at issue

lived in an ALF. Ms. Creel answered his questions as to the

type documentation Respondent could submit to doc ument there was

no overpayment, but she explained to him that she had no

authority to extend any of the deadlines set forth in the FAR.

21. Respondent thereafter requested a formal

administrative hearing, the matter was referred to DOAH, and

this proceedi ng followed. As noted above in the Preliminary

Section, Respondent offered no exhibits at the formal hearing.

22. While Mr. Fernandez had visited each of the three ALFs

at issue in this proceeding, he knew nothing about the living

quarters of any of th e recipients. The term "individual

residence" is not defined in the Coverage Handbook, by rule, or

by statute. Consequently, the plain meaning of the phrase is

used in finding that t here was no evidence that any of the

recipients maintained an individual residence at the location of

his or her ALF.

CONCLUSIONS OF LAW

23 . The Division of Administrative Hearings has

jurisdiction over the subject matter of and the parties to this

proceeding pursuant to sections 120.569 , 120.57(1) , and

409.913(31).

24. Sect ion 409.913(1)(d) defines the term "overpayment"

to "include 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."

25. The overpayments at issue are the result of

Respondent's misinterpretation of the Coverage Handbook relating

to multiple visits to the same location. No fraud or abuse is

involved in this proceeding.

26 . Section 409.913(7)(e) provides that a Medicaid

provider is obligated to present claims that are "true and

accurate" and reflect services that are provided in accordance

with all Medicaid "rules, regulations, handbooks, and policies

and in accordance with federal, state, and local law."

27 . Section 409.913(2) requires Petitioner to conduct

audits to detect overpayments. Section 409.913(11) requires

Petitioner to require repayment of "inappropriate" goods or

services.

28 . The burden of proof is on Petitioner to prove the

material allegation s by a preponderance of the evidence.

Southpointe Pharmacy v. Dep't of Health & Rehab. Servs. , 596 So.

2d 106, 109 (Fla. 1st DCA 1992). The sole exception is that the

standard of proof is clear and convincing evidence for the fine

that Petitioner seeks t o impose. Dep't of Banking & Fin. v.

Osborne Stern & Co. , 670 So. 2d 932, 935 (Fla. 1996).

29 . Section 409.913(21) provides that Petitioner shall

prepare and issue audit reports when determining overpayments.

Section 409.913(22) provides that the " audit report , supported

by agency work papers , showing an overpayment to a provider

constitutes evidence of the overpayment." Petitioner presented

such evidence at the formal hearing. Respondent did not refute

that evidence.

30. That Respondent did not actual ly receive the PAR is

not dispositive of any issue involved in this proceeding.

Section 409.913(6) provides as follows:

(6) Any notice required to be given to a

provider under this section is presumed to

be sufficient notice if sent to the address

last s hown on the provider enrollment file.

It is the responsibility of the provider to

furnish and keep the agency informed of the

providerÓs current address. United States

Postal Service proof of mailing or certified

or registered mailing of such notice to t he

provider at the address shown on the

provider enrollment file constitutes

sufficient proof of notice . . . .

31. Section 429.02(5) defines the term assisted living

facility as:

(5) " Assisted living facility " means any

building or buildings, section o r distinct

part of a building, private home, boarding

home, home for the aged, or other

residential facility, whether operated for

profit or not, which undertakes through its

ownership or management to provide housing,

meals, and one or more personal servi ces for

a period exceeding 24 hours to one or more

adults who are not relatives of the owner or

administrator.

32. There is nothing in the term assisted living facility

that requires the facility to have an individual residence for

each residence.

33. P etitioner has the authority to impose an

administrative fine against Respondent based on the provisions

of subsections 409.913(15), (16), and (17) and Florida

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

impose an administrative fine in t he amount of $1,630.80, which

is 20 percent of the overpayment. The amount sought is less

than the maximum permitted amount as set forth in Florida

Administrative Code Rule 59G - 9.070(4)(b).

34. The undersigned recommends that no administrative fine

be im posed pursuant to the discretion afforded by section

409.913(16)(j) 1 because the use of visits at an assisted living

facility as an example of units of service that could be billed

at the full billing rate is misleading. The following language

in the Cove rage Handbook was quoted in the Findings of Fact and

is repeated here for clarity:

Home health visit services provided to two

or more recipients with individual

residences at a single location are

reimbursed as one visit for each individual

receiving a h ome health service at that

location (for example, visits at an assisted

living facility).

35 . Section 409.913(23)(a) authorizes Petitioner to

recover investigative costs if Petitioner prevails in this

proceeding. Petitioner prevailed and is entitled to these costs

in the amount of $43.94 .

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is hereby RECOMMENDED that the Agency for Health Care

Administration enter a final order finding that Nursing Quality

Services, Inc., was overpaid by the Florida Medicaid Program in

the principal amount of $8,154.02. It is further recommended

that the final order require Nursing Quality Services, Inc., to

repay the Florida Medicaid the amount of $8,154.02, together

with applicable inter est and cost in the amount of $43.94. It

is further recommended that no administrative fine be imposed.

DONE AND ENTERED this 1 3 th day of September 2012, in

Tallahassee, Leon County, Florida.

S

CLAUDE B. ARRINGTON

Division of Administrative Hearings

The DeSoto 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 1 3 th day of September , 201 2 .

ENDNOTE

1 Section 409.913(16)(j) provides, in relevant part as follows:

The Secretary of Health Care Administration

may make a determination that imposition of

a sanction or disincentive is not in the

best interest of the Medicaid Program , in

which case a sanction or disincentive shall

not be imposed.

COPIES FURNISHED :

Jeffries H. Duvall, Esquire

Agency for Health Care Administration

Fort Knox Building 3, Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308

Dagmar Llaudy, Esq uire

Law Office of Dagmar Llaudy, P.A.

Suite 513

814 Ponce de Leon Boulevard

Coral Gables, Florida 33134

Elizabeth Dudek, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

Stuart Williams, General Coun s el

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

Richard Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

N OTICE OF RIGHT TO SU BMIT 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.