12-002487MPI Agency For Health Care Administration vs. Sun States Services, Inc. Status: Closed Recommended Order on Thursday, November 1, 2012.

Summary: Petitioner proved that Respondent received Medicaid overpayments that must be repaid. A fine of $1,000 is appropriate.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGENCY FOR HEALTH CARE )

ADMINISTRATION , )

)

Petitioner , )

)

vs. ) Case No. 12 - 2487MPI

)

SUN STATES SERVICES, INC. , )

)

Respondent . )

)

RECOMMENDED OR DER

A final administrative hearing was held in this case on

September 7, 2012, via video teleconference in Sarasota and

Tallahassee, Florida, before Lynne A. Quimby - Pennock, an

Administrative Law Judge of the Division of Administrative

Hearings (DOAH).

AP PEARANCES

For Petitioner: Andrew T. Sheeran, Esquire

Agency for Health Care Administration

Fort Knox Building 3, Mail Station 3

2727 Mahan Drive, Suite 3431

Tallahasse e, Florida 32308

For Respondent: Charles F. Johnson, III, Esquire

Blalock Walters, P.A.

802 11th Street, West

Bradenton, Florida 34205

STATEMENT OF THE ISSUE S

Whether Respondent, Sun St ates Services, Inc., a/k/a Always

Care Nursing Service, received Medicaid overpayments that

Petitioner, Agency for Health Care Administration (AHCA), is

entitled to recoup, and whether a fine should be imposed against

Respondent.

PRELIMINARY STATEMENT

Foll owing an audit of Respondent ' s Medicaid billing for the

period of July 1, 2005, 1/ through December 31, 2008, AHCA issued a

Final Audit Report (FAR) on August 5, 2010, concluding that

Respondent received $15,627.50 2/ in Medicaid overpayments. The

FAR infor med Respondent that AHCA intended to recoup the

overpayments, impose a fine of $1,000.00, and seek recovery of

its costs as authorized by statute.

Respondent timely requested an administrative hearing to

contest the FAR, and, on July 6, 2011, the case was forwarded to

DOAH for the assignment of an Administrative Law Judge to conduct

the requested hearing. 3/ The case was initially scheduled to be

heard on September 20, 2011; however, a week before the hearing,

the parties filed a joint motion to remand and relinquish

jurisdiction without prejudice. The parties represented that

they were in serious discussions to amicably resolve the case,

and they wanted to conserve resources in furtherance of that

posture. The September hearing was canceled, and the case was

relinquished to AHCA.

On July 10, 2012, AHCA filed a Motion to Re - open Case and

[for DOAH to] Assume Jurisdiction (Motion). In the Motion, AHCA

advised that the parties were "unable to resolve this matter."

AHCA ' s counsel was unable to confer with Re spondent ' s counsel

prior to filing the Motion. On July 17, a telephone conference

was held between the parties and the undersigned. Thereafter, an

Order was issued re - opening the case with the above case number.

Before the final hearing, the parties subm itted a Joint Pre -

hearing Stipulation, in which they stipulated to a number of

facts. These agreed facts are incorporated into the Findings of

Fact below, to the extent relevant.

At the final hearing, both parties provided opening

statements, but chose to rely on the exhibits offered into

evidence to support their respective case. AHCA ' s Exhibits 4/ 1

through 5 and 9 through 16 were admitted in to evidence by

stipulation. Official recognition was taken of the relevant

sections of the Florida Statutes (2012 ) , 5/ the Florida

Administrative Code rules, and those portions of various Medicaid

h andbooks provided without objection. Respondent ' s Exhibits 6 / A

and B were admitted into evidence by stipulation. Exhibit A is

the deposition of AHCA ' s program administrat or, Ruth (Robi) Anne

Olmstead.

At the conclusion of the hearing, the parties requested

30 days after the filing of the t ranscript to submit their

p roposed r ecommended o rders (PRO s ). The request was granted. On

September 18, 2012, the one - volume Transcrip t of the final

hearing was filed. Petitioner ti mely filed its PRO.

Respondent ' s PRO was filed on October 19, 2012. 7 / To date, AHCA

has not filed a m otion to strike Respondent ' s PRO, and ,

therefore , each has been duly considered in the preparation of

thi s Recommended Order.

FINDING S OF FACT

1. AHCA is the state agency responsible for administering

the Medicaid program in Florida. The Medicaid program is a

federal and state partnership to provide health care services to

certain qualified individuals.

2. From January 1, 2005, through December 31, 2008,

Respondent was an enrolled Medicaid provider operating under

provider number 6815065 - 96.

3. Beginning in 2003, the State of Florida accepted Lynk

Services, Inc. (Lynk), as a waiver support coordinator for

Medicaid. Lynk was, at all times material to this matter, an

enrolled waiver support coordinator for Medicaid.

4. In January 2004, there were discussions between Lynk and

Respondent about the possibility of Respondent providing Medicaid

services to a Med icaid recipient identified as B.L. B.L.

required insulin injections.

5. In a letter dated January 16, 2004, Lynk ' s w aiver

s upport c oordinator s upervisor, Thomas Engelke, wrote the

following to Respondent (addressed to " To Whom It May Concern " ):

[B.L.] i s authorized to receive nursing

services from [Respondent] at an accelerated

rate of $6.65 per quarter hour. He is to

receive 9 quarter hours for a total of $59. 8 5

per visit. The Department of Children

and Families has approved this rate on

December 22, 2003 by Cindy Totten and Linda

Schneider department liaisons.

Per the Service Authorization form that was

sent to you on December 22, 2003, [ 8 / ] you

[Respondent] are to provide service to [B.L.]

for the duration of his current support plan

year .

Should y ou have any further concerns or

questions please contact Julie Buckner

[B.L. ' s] support coordinator . . . .

( e mphasis added) .

6. Later on January 22, 2004, Lynk and Respondent exchanged

emails. The first email is from Howard Gruensfelder,

Respondent ' s " VP , " to Mr. Engelke and Julie Buckner, s upport

c oordinator of Lynk. It reads:

I have a concern that billing 9 units says

that the nurse is there for a full hour and

forty five minutes administering his

injection, when the nurse is not there for a

full hou r and forty five minutes. I want to

make sure that we are not committing any type

of fraud by doing this.

This message is to confirm that the

negotiated price for LPN insulin injections

for [B.L.] is $59.85 per injection under the

Skilled Waiver program. To do this,

administratively we must bill nine units to

achieve this price for service. You have

waved [sic] the normal definition of unit

(one quarter hour) for us in this case in

order to end up with the agreed upon rate.

According to your instructio ns we are to bill

for nine units for each injection regardless

of how much or how little time is required to

complete the nursing service visit.

Please confirm our understanding by replying

to this message with an affirmative answer.

Less than an hour later, Lynne Ballou, Lynk ' s p resident , sent the

following response to Mr. Gruensfelder:

Per the Service Authorization [ 9 / ] we sent to

you 1/5/04 you can bill 9 quarter hours each

visit. The negotiated rate was approved by

the Department of Children and Fa milies

liaison and liaison ' s supervisor. Your

company stated they needed this amount to

provide the service. The actual time spent

with the individual is no where [sic] near

the 2 hours and 15 minutes that is being

charged but the only way you can bill i n the

system is using the quarter hour. By DCF

approving the 9 quarter hours a visit they

are waiving the time requirement to be able

to have the service provided to the client.

7. Shortly after the letter and emails, Respondent began to

provide medical services to B.L. During the audit period,

Respondent provided skilled nursing services to B.L., submitted

claims to AHCA for services allegedly provided to B.L., and

received payment from AHCA on those claims.

8. The claims identified in AHCA ' s Exhibit 9 represent

claims submitted by Respondent for services to B.L. and paid by

AHCA .

9. Respondent billed $59. 8 5 " per visit, " regardless of the

actual time spent by Respondent ' s employees providing the

services.

10. In all but 12 of the claims identified in AHCA ' s

Exhibit 9, Respondent billed AHCA for nine units of service

($59. 8 5), each unit of service representing 15 minutes of time.

In the other 12 claims identified in AHCA ' s Exhibit 9, Respondent

billed AHCA for 18 units of service and received a higher

reimbursement.

11. The nursing notes, contained in AHCA ' s Exhibit 15,

reflect that Respondent did not spend two hours and 15 minutes

performing the services for which it billed nine units of

service, nor did it spend four hours and 30 minutes performing

the services for which it billed 18 units of service.

12. No evidence was offered or received to define the term

" current support plan year. " However, common sense dictates that

without any other definition, the entities operated on a calendar

year of Ja nuary 1 to December 31 of each year. 10 / Thus, the

letter itself ( AHCA ' s Exhibit 10, page 347) reflects that the

2004 current support plan year would have ended on December 31,

2004, six months prior to the audit period.

13. AHCA conducted an audit of the claims submitted by

Respondent between July 1, 2005, and December 31, 2008. 1 1 / AHCA

determined that Respondent was overpaid $16,518.60, which figure

was later reduced by AHCA based on further review of the claims

at issue.

14. All communications regardi ng services to be provided to

B.L. were between Respondent and Lynk.

15. Respondent relied on the January 16, 2004 , letter and

subsequent email exchange as authorization to bill " per visit, "

rather than on an hourly basis. However, it is undisputed that

the audit period was between July 1, 2005 , through December 31,

2008.

16. AHCA is responsible for conducting investigations and

audits to determine possible fraud, abuse, overpayment, or

neglect , and must report any findings of overpayment in audit

report s. AHCA is not only authorized to conduct random audits;

AHCA is required to conduct at least five percent o f its audits

on a random basis.

17. In this instance, in February 2010, AHCA notified

Respondent that it was in the process of reviewing claims bi lled

to Medicaid between July 1, 2005 , and December 31, 2008. The

purpose of the audit was to verify that claims for which

Respondent had already been paid by the Medicaid program were for

services that were provided, billed, and documented in accordance

with Medicaid statutes, rules, and provider handbooks. While

Respondent certified with each claim submission that the claim

was proper and that all records required to be maintained in

support of each claim were in fact maintained, the audit goes

behind t hat certification by actually reviewing those records.

The medical records for B.L. were provided to AHCA for review.

18. AHCA established the amount of overpayment for the

claims.

19. No evidence was offered of any additional

" authorization letter " (to support a " flat fee " payment for

services to B.L.) from AHCA, DCF, or Lynk for any period between

July 1, 2005 , and December 31, 2008.

20. No credible evidence was offered that AHCA authorized

that the Medicaid payment to Respondent would be by a flat " p er

visit " payment between July 1, 2005 , and December 31, 2008.

CONCLUSIONS OF LAW

21. The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of this

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

409.913( 31).

22. The burden of proof is on AHCA to prove the material

allegations by a preponderance of the evidence. Southpointe

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

1992).

23. Additionally, AHCA must carry the burden of proof with

respe ct to the imposition of fines by the clear and convincing

standard. Dep ' t of Banking & Fin. v. Osborne Stern & Co. , 670 So.

2d 932, 935 (Fla. 1996).

24. Section 409.913 provides in pertinent part:

The agency shall operate a program to oversee

the activit ies 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)(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.

* * *

(2) The agency shall conduct, or cause to be

conducted by contract or otherwise, reviews,

investigations, analyses, audits, or any

combination thereof, to determine possible

fraud, abuse, overpayment, or recipient

neglect in the Medicaid program and shall

report the findings of any overpayments in

audit reports as appropriate. At least

5 percent of all audits shall be conducted on

a random basis. . . .

* * *

(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:

(a) Have actually been furnished to the

recipient by the provider prior to submitting

the claim.

* * *

(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.

(f) Are documented by records made at the

time the goods or services were provided,

demonstrating the medical necessity for the

goods or services rendered. Medicaid goods

or services a re excessive or not medically

necessary unless both the medical basis and

the specific need for them are fully and

properly documented in the recipient ' s

medical record.

The agency shall deny payment or require

repayment for goods or services that are not

presented as required in this subsection.

* * *

(15) The agency shall seek a remedy provided

by law, including, but not limited to, any

remedy provided in subsections (13) and (16)

and s. 812.035 , if:

* * *

(e) The provider is not in compliance with

provisions of Medicaid provider publications

that have been adopted by reference as rules

in the Florida Administrative Code; with

provisions of state or federal laws, rules,

or regulations; with provisions of the

provider agreement between the agency and the

provider; or with certifications found on

claim forms or on transmittal forms for

electronica lly submitted claims that are

submitted by the provider or authorized

representative, as such provisions apply to

the Medicaid program;

* * *

A provider is subject to sanctions for

violations of this subsection as the result

of actions or inactio ns of the provider, or

actions or inactions of any principal,

officer, director, agent, managing employee,

or affiliated person of the provider, or any

partner or shareholder having an ownership

interest in the provider equal to 5 percent

or greater, in wh ich the provider

participated or acquiesced.

(16) The agency shall impose any of the

following sanctions or disincentives on a

provider or a person for any of the acts

described in subsection (15):

* * *

(c) Imposition of a fine of up to $5,00 0

for each violation. . . . Each instance

of improper billing of a Medicaid

recipient; . . . and each false or

erroneous Medicaid claim leading to an

overpayment to a provider is considered, for

the purposes of this section, to be a

separate violation.

* * *

(j) Other remedies as permitted by law to

effect the recovery of a fine or overpayment.

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 Me dicaid program, in which

case a sanction or disincentive shall not be

imposed .

* * *

(22) The audit report, supported by agency

work papers, showing an overpayment to a

provider constitutes evidence of the

overpayment. . . . Notwithstanding the

applicable rules of discovery, all

documentation that will be offered as

evidence at an administrative hearing on a

Medicaid overpayment must be exchanged by all

parties at least 14 days before the

administrative hearing or must be excluded

from considera tion.

(23)(a) In an audit or investigation of a

violation committed by a provider which is

conducted pursuant to this section, the

agency is entitled to recover all

investigative, legal, and expert witness

costs if the agency ' s findings were not

conteste d by the provider or, if contested,

the agency ultimately prevailed.

(b) The agency has the burden of documenting

the costs, which include salaries and

employee benefits and out - of - pocket expenses.

The amount of costs that may be recovered

must be reaso nable in relation to the

seriousness of the violation and must be set

taking into consideration the financial

resources, earning ability, and needs of the

provider, who has the burden of demonstrating

such factors.

25. AHCA made a prima facie case as to the overpayments to

Respondent by submitting into evidence its audit report.

Respondent stipulated to the exhibits. AHCA established that

Respondent ' s billing for B.L. ' s care did not comport with

applicable billing requirements. Consequently, the paymen ts at

issue constitute overpayments.

26. Once AHCA made the prima facie case as outlined by the

statute, then it was "incumbent upon the provider to rebut,

impeach, or otherwise undermine AHCA ' s evidence." See Ag. for

Health Care Admin. v. Bagloo , Case N o. 08 - 4921, RO at p. 33 (Fla.

DOAH Sept. 10, 2009; Fla. AHCA Nov. 8, 2010).

27. Respondent attempted to undermine AHCA ' s theory by

relying on a 2004 letter issued by a waiver support provider that

clearly provided an end point to a particular payment arra nge ment.

Respondent argue d that AHCA is estopped to claim the overpayments

were not authorized , that there was an expressed agency

authorization by Lynk to Respondent , and/or that Lynk was an

apparent agent of AHCA . Those arguments are rejected. Any

equ itable defense should be applied against an agency only in rare

instances and in compelling circumstances. State Dep ' t of Rev . v.

Anderson , 403 So. 2d 397, 400 (Fla. 1981). The facts of this case

do not constitute a rare instance nor do they constitute

c ompelling circumstances. Respondent relied to its determent on a

letter that clearly contained an end time for a payment schedule.

Respondent failed to effectively rebut, impeach, or otherwise

undermine AHCA 's evidence.

28. By presenting prima facie evi dence of the overpayment,

which was not credibly rebutted by Respondent, Petitioner met its

ultimate burden of proving that Respondent has received

overpayments in the total amount of $15,627.50, w hich is subject

to recoupment.

29. Section 409.913(16)(c) provided that, at all times

material to this case, AHCA "shall impose any of the following

sanctions . . . on a provider or a person for any of the acts

described in subsection (15): . . . Imposition of a fine of up

to $5,000 for each violation."

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

provides:

For failure to comply 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 viola tion. For a

third or subsequent offense, $5,000 fine per

claim found to be in violation. [Section

409.913(15)(e), F.S.] [.]

31. Respondent took the opportunity presented by this case

to offer evidence demonstrating why it billed in the manner it

did. Re spondent relied on an expired waiver and did nothing to

ensure it was properly billing after the 2004 current year ended.

The record fails to establish that imposing fines within the

applicable guidelines in this case would not be in the best

interest of the Medicaid program.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that Petitioner, Agency for Health Care

Administration, enter a final order requiring Respondent, Sun

States Services, Inc.:

(1) To repa y the sum of $15,627.50 for overpayments on

claims that did not comply with the requirements of Medicaid

laws, rules, and provider handbooks; and

(2) To pay a fine of $1,000.00 for the violations of the

requirements of Medicaid laws, rules, and provider h andbooks.

DONE AND ENTERED this 1st day of November , 2012 , in

Tallahassee, Leon County, Florida.

S

LYNNE A. QUIMBY - PENNOCK

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Pa rkway

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 1st day of November , 2012 .

ENDNOTE S

1/ Although the pre - hearing stipulation refle cts January 1, 2005,

both parties and all the documentation confirm that AHCA

conducted the audit from July 1, 2005 , through December 31, 2008.

2/ The overpayment was initially $16,518.60 ; however , this amount

was subsequently reduced.

3/ The original DOAH case number was 11 - 3345 MPI .

4/ After the hearing was concluded and the undersigned was

reviewing the admitted exhibits, confidential medical information

regarding Patient B.L. (name, social security number, Medicaid

identification number, other priv ate information, etc.) was noted

and redacted from Petitioner ' s E xhibits 1, 2, 3, 4, 9, 10, 12,

13, 14, and 15. Further, other personal information regarding

the owners of Lynk Services , Inc. (social security number) , was

noted and redacted from Petitione r ' s E xhibit 16. In the future,

Petitioner ' s counsel shall ensure that all confidential

information is redacted prior to submission to DOAH.

5/ Unless otherwise noted, all statutory references are to

Florida Statutes (2012).

6/ Several pages of the exh ibits attached to Respondent ' s

Exhibit A contained confidential medical information regarding

Patient B.L. That information (name, social security number,

Medicaid identification number, and other private information,

etc.) has been redacted. In the f utu re, Respondent ' s counsel

shall ensure that all confidential information is redacted prior

to submission to DOAH.

7 / Respondent ' s PRO does not contain a c ertificate of s ervice to

opposing counsel , and a N otice of E x - parte C ommunication was

issued. Follow ing the issuance of the N otice of E x - parte

C ommunication, the undersigned was notified that , at the time of

filing of Respond e nt ' s PRO, the opposing counsel was, in fact,

served.

8 / This specific Service Authorization is on a Florida Department

of Childr en and Families (DCF) form and is contained in AHCA ' s

Exhibit 12, page 353. I t reflects a " Begin Date " of December 23,

20 03 , and an " End Date " of February 1 , 20 04. Despite the pre -

hearing stipulation that Lynk and Respondent were in discussion

in January 2004 for services to be provided to B.L., it appears

that Lynk was already providing some type of skilled nursing

services to B.L. However, the specific services provided for in

this Service Authorization are outside the audit period.

9 / The Service Au thorization referenced was not part of any

exhibit provided. AHCA ' s Exhibit 12 contains two Service

Authorizations: one, as listed above in Endnote 8 ; and the

other with the begin and end dates of January 28 , 20 04 , and

September 30 , 20 04 , respectively. Both authorization periods

are outside the audit period.

10 / Even if the " current support plan year " ran on the state ' s

fiscal year (i.e., July 1 to June 30), the audit period started

on July 1, 2005, and the 2004 waiver would have expired the day

before the audit started.

1 1 / Respondent ' s services to B.L. ended in September 2006, at

B.L. ' s death.

COPIES FURNISHED:

Charles F. Johnson, III, Esquire

Blalock Walters, P.A.

802 11th Street, West

Bradenton, Florida 34205

Andrew T. Sheeran, Esquire

Agency for Health Care Administration

Fort Knox Building 3, Mail Station 3

2727 Mahan Drive, Suite 3431

Tallahassee, Florida 32308

Elizabeth Dudek, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

Stuar t Williams, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

NO TICE 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.