12-002813RU Radhakrishna K. Rao And Bay Regional And International Institute Of Neurology vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Friday, August 30, 2013.

Summary: Medical standards applied by AHCA Medicaid peer reviewer during MPI audit of providers' records are not agency statements defined as rules. The standards do not alone create rights, require compliance, or otherwise have the force and effect of law.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RADHAKRISHNA K. RAO AND BAY

REGIONAL AND INTERNATIONAL

INSTITUTE OF NEUROLOGY ,

Petitioners ,

vs. Case No. 12 - 2813RU

AGENCY FOR HEALTH CARE

ADMINISTRATION ,

Respondent .

/

FINAL ORDER

A duly - noticed hearing was held in this matter on May 6,

2013, in Tallahassee, Flori da, before Suzanne Van Wyk, an

a dministrative l aw j udge assigned by the Divis ion of

Administrative Hearings.

APPEARANCES

For Petitione r: Frank P. Rainer, Esquire

Broad and Cassel

Suite 400

215 South Monroe Street

Tallahassee, Florida 32301

For Respondent: Beverly H. Smith, Esquire

Shena L. Grantham, Esquire

Agency for Health Care Administration

Fort Knox Building, Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308

STATEMENT OF THE ISSUE

Whether Respondent, the Agency for Health Care

Ad ministration (AHCA or the agency ) , has an y agency statement s

with regard to reimbursement of Medicaid expenses by physician

providers for long - term electroencephalographic monitoring which

are agency rule s , as defined in section 120.52(16), Florida

Statute s, but have not been adopted as rule s in violation of

sect ion 120.54(1)(a), Florida Statutes, and if so, whether costs

and attorneyÓs fees shou ld be awarded.

PRELIMINARY STATEMENT

Petitioner, an authorized provider of Medica id services,

was audited by Resp ondentÓs Office of Medicaid Program Integrity

for the claims period July 1, 2007 , through June 30, 2009, and

found to be in violation of certain Medicaid provider policies.

Respondent prepared a Final Audit Letter on June 1, 2011,

informing Petitioner tha t he was overpaid $110,712.09 for

services provided during the audit period and imposing fines and

costs.

On July 1, 2011, Petitioner timely requested an

adminis trative hearing challenging Respondent Ós determination of

overpayments and imposition of fines and costs. That proceeding

is pending as Division of Administrative Hearings (Division)

Case No. 12 - 1447 MPI (the Overpayment Case).

On August 17, 2012, Petitioner filed the instant Unadopted

Rule Challenge alleging that the agencyÓs determination of

overp ayment was based, at least in part, on policies regarding

the medical necessity of long - term monitored

electroencephalograms (LTM EEGs), which constitute agency rules

that have not been adopted p ursuant to section 120.54 in

violation of section 120.54(1)(a ).

This unadopted rule challenge was initially assigned to

Administrative Law Judge Errol H. Powell, and the hearing was

scheduled for November 30, 2012. PetitionerÓs Motion to

Consolidate the unadopted rule challenge with the Overpayment

Case was denied. On November 28, 2012, Respondent filed a

Motion for Summary Final Order and Expedited Ruling, alleging

Petitioners had, both in their pre - hearing stipulation and in

deposition the preceding day, conceded they were not bringing a

non - rule policy challenge . Respondent filed a contemporaneous

Em ergency Motion for Continuance.

Followi ng a telephonic hearing on the m otions, Judge Powell

granted the Motion for Continuance, canceled the final hearing,

placed the case in abeyance, and ordered the parties to file a

status report by January 4, 2013. Further, the a dministrative

l aw j udge ordered Respondent to file an Amended Motion for

Summary Final Order by December 21, 2012, and ordered Petitioner

to file a response thereto on or before January 4, 2013.

Petitio ners subsequently filed amendments to their pre -

hearing stipulation. Respondent withdrew the Motion for Summary

Final Order, filed the deposition transcript of Petitioner Rao,

and filed a Motion for Clarification seeking to compel

Petitioners to clarify t he statements alleged to be attributed

to AHCA. By O rder dated January 30, 2013, Judge Powell granted

the Motion for Clarification, ordered Petitioners to file a

Second Amended Pre - hearing Stipulation by February 4, 2013, and

allowed further discovery. T he Order required the parties to

provide, by February 7, 2013, dates for re - scheduling the final

hearing. The final hearing was re - scheduled for May 6, 2013.

This case was transferred to the undersigned on April 3,

2013. The final hearing commenced as sc heduled on May 6, 2013.

The parties offered the testimony of Michael Bolin, AHCA

Administrator, Bureau of Medicaid Services; Fred Becknell, AHCA

Medicaid Program Integrity Administ rator; Dr. Radhakrishna Rao,

Petitioner; and Dr. Harry S. Abram, the AHCA p eer reviewer for

the underlying Overpayment Case. Dr. Rao was accepted a s an

expert in n eurology and Dr. Abram was accepted as an expert in

n eurology and p ediatric n eurology.

PetitionersÓ Exhibits P - 1 through P - 6 and P - 6a were

admitted into evidence, as w ere RespondentÓs Exhibit s R - 1

through R - 13. At final hearing, the undersigned sustained

objection to the introduction of RespondentÓs Exhibit R - 14, the

deposition transcript of Dr. Rao , but admitted Exhibit R - 14 on

RespondentÓs Motion to Recognize Deposit ion Transcript following

the hearing.

At the close of the final hearing, the parties agreed to

file Proposed Final Orders within 40 days following the date the

T ranscript was filed with the Division. The two - volume

T ranscript of the final hearing was file d on May 22, 2013, after

which Petitioners filed a Motion for Extension of time to file

Proposed Final Orders by June 18, 2013. The Motion was granted.

The parties timely filed Proposed Final Orders on June 18, 2013,

which have been considered by the und ersigned in preparing this

Final Order.

FINDINGS OF FACT

1 . Petitioner, Dr. Ra d h akrishna Rao , is a pediatric

neurologist licensed to practice in the State of Florida, and

was, at all times relevant hereto, an authorized provider of

Medicaid Services purs uant to a Non - Institutional Provider

Agreement with AHCA .

2 . Petitioner, Bay Regional and International Institute of

Neurology, Inc., is a corporation established by Dr. Rao through

which he provides pediatric neurological services to patients.

3 . AHCA is the state agency responsible for administering

the Florida Medicaid Program (Medicaid). Medicaid is a

federally funded state - administered program that provides health

care services to certain qualified individuals.

4 . AHCA is authorized to recover Me dicaid overpayments, as

appropriate. § 409.913(1)(e), Fla. Stat. 1/

5 . One method AHCA uses to discover Medicaid overpayments

is by auditing billing and payment records of Medicaid

providers. Such audits are performed by staff in the agency 's

Bureau of Medicaid Program Integrity (MPI).

A. The Overpayment Case

6 . In 2010, MPI detection unit staff identified

PetitionersÓ Medicaid billings for potential review. Fred

Becknell, AHCA MPI Administrator , reviewed the information from

the detection unit, deter mined an audit of PetitionersÓ Medicaid

billings was merited, and assigned the case to an investigator.

The time period from 2007 to 2009 was identified as the audit

period.

7 . The investigator generated a random sample of 30

Medicaid patients treated by Petitioners during the audit period

based on MPI standard statistical methodologies. AHCA notified

Petitioners of its decision to audit their Medicaid billings and

requested all m edical records for the randomly selected patients

during the audit period.

8 . As required by section 4 09.9131(5)(b), AHCA referred

Petiti onersÓ records for peer review.

9 . Section 409.9131(2)(d) defines Ðpeer reviewÑ as

follows:

[A]n evaluation of the professional

practices of a Medicaid physician provider

by a peer or peers in order to assess the

medical necessity, appropriateness, and

quality of care provided, as such care is

compared to that customarily furnished by

the physicianÓs peers and to recognized

health standards, and, in cases involving

determination of medical nece ssity, to

determine whether the documentation in the

physicianÓs records is adequate.

10 . Dr. Harry Abram conducted the peer review in this

case. Dr. Abram is a pediatric neurologist licensed to practice

in the State of Florida. He is a staff neurolog ist at Nemours

ChildrenÓs Clinic in Jacksonville, Florida; Director of the

ClinicÓs Pediatric Neurophysiology Laboratory; and Assistant

Professor of Pediatrics and Neurology at Mayo Medical School.

Dr. Ab ram has been practicing in the p ediatric n eurology

specialty for approximately 20 years.

11 . Dr. Abram has been under contract with AHCA as a peer

reviewer of Medicaid claims for neurological services since

2007.

12 . Dr. Abram initially reviewed PetitionersÓ claims on

October 13, 2010. For this review, Dr. Abram was provided each

sample claim, the relevant patient records for the audit period,

the Medicaid Provider General Handbook, the Medicaid Physician

Services and Limitations Handbook, copies of relevant statutes,

and the Current Procedural Terminolo gy Codebook, 2007 edition

(CPT). The CPT provides standard medical billing codes for

specific medical treatments and procedures.

13 . On November 8, 2010, Dr. Abram reported his findings

to the MPI staff nurse in a letter. Dr. Abram summarized the

follow ing pertinent concerns with PetitionersÓ billings:

Inappropriate and overuse of long term EEG

studies (95951 and 95956). These are

specialized studies used to classify,

quantify and localize seizures in patients

with suspected intractable epilepsy.

Provi der rarely ordered standard EEGÓs

(95916 or 95919) which should be obtained

initially as standard practice.

14 . Following receipt of Dr. AbramÓs summary and notes for

review, MPI staff prepared and delivered to Dr. Rao a

Preliminary Audit Report (PAR). In response to the PAR, Dr. Rao

sent additional records to MPI staff, which were forwarded to

Dr. Abram for further review.

15 . Dr. Abram completed his second review of PetitionersÓ

claims in April and May of 2011. He made no change to his

initial findin gs based upon the second review.

16 . In its Final Audit Report (FAR) dated June 1, 2011,

AHCA notified Dr. Rao that the MPI unit had determined that he

was overpaid by $110,712.09 for Medicaid Services provided

during the audit period. In explanation, th e FAR provides, in

pertinent part:

(010) Medicaid policy requires that services

performed be medically necessary for the

diagnosis and treatment of an illness. You

billed and received payments for services

for which the medical records, when reviewed

by a Medicaid physician consultant,

indicated that the services provided did not

meet the Medicaid criteria for medical

necessity. The claims which were considered

medically unnecessary were disallowed and

the money you were paid for these procedures

is consi dered an overpayment.

17 . The FAR also imposed on Petitioners a fine of

$24,642.00 for violations of Medicaid rules, and assessed

administrative costs of $7,336.12 for the audit.

B. Electroencephalography

18 . At the heart of PetitionersÓ challenge are the claims

for treatment of patients using long - term monitoring

electroencephalogram, or LTM EEG. An EEG is a diagnostic tool

in which electrodes are placed on the patientÓs scalp and the

leads are connected to a recording device. The EEG continuously

r ecords brain waves and is used in diagnosis and treatment of

seizure disorders.

19 . A standard, or resting, EEG usually records only 20 - 30

minutes of brain activity. Standard EEG is usually conducted in

the physicianÓs office or clinic.

20 . An ambulato ry, or LTM , EEG is conducted in the home

setting where the electrode leads are connected to a recording

device worn by the patient, such as a backpack, and brain waves

are recorded during regular daily activity. LTM EEG may be

performed for 24, 48, or 72 hours, or for longer periods.

21 . A LTM EEG can be billed to Medicaid at a higher

maximum rate than a standard EEG.

22 . CPT code 95951 corresponds to LMT EEG with video

recording, while CPT code 95956 corresponds to LMT EEG without

video.

C. The Non - Ru le Policy Challenge

23 . Petitioners have twice amended their position

statement to articulate the agency statements which they allege

constitute non - rule policy. In the second amendment to the

joint pre - hearing stipulation, Petitioners allege that the

fo llowing statements attributed to AHCA are unadopted rules

which must be adopted pursuant to section 120.56(4).

(1) A LTM EEG must be preceded by a resting EEG;

and,

(2) LTM may only be ordered if the medical

record contains documentation that there are

concerns o f spells, seizures, events of

uncertain origin, anticonvulsant medications

or intractable epilepsy.

24 . In PetitionersÓ Proposed Final Order, they frame the

issue as follows:

Whether well developed general medical

standards as to when long term

electroen cephalographic monitoring (LTM EEG)

is medically necessary and that have common

acceptance in the field of neurology and

which are used by AHCA as a basis for

overpayment and monetary fines is an agency

statement of general applicability that

implements, i nterprets, or prescribes law or

policy in violation of section 120.54(1)(a),

Fla. Stat. (2012).

25 . Petitioners argue, in essence, that AHCA has not

engaged in rulemaking to adopt Ðwell developed general medical

standardsÑ as indications of, and prerequi sites for, LTM EEG in

order to put Medicaid providers on notice that their billings

will be measured by those standards and that billings outside of

tho se standards will be deemed overpayments.

26 . As a qualified Medicaid provider, Dr. Rao is aware

that M edicaid will only cover medical goods and services which

are medically necessary.

27 . ÐMedically n ecessaryÑ is defined in

section 409.913(1)(d) as follows:

[G]oods or services necessary to palliate

the effects of a terminal condition or to

prevent, diagno se, correct, cure, alleviate,

or preclude deterioration of a condition

that threatens life, causes pain or

suffering, or results in illness or

infirmity, which goods or services are

provided in accordance with generally

accepted standards of medical practi ce. For

purposes of determining Medicaid

reimbursement, the agency is the final

arbiter of medical necessity. In making

determinations of medical necessity, the

agency must, to the maximum extent possible,

use a physician in active practice, either

emplo yed by or under contract with the

agency, of the same specialty or

subspecialty as the physician under review.

Such determination must be based upon the

information available at the time the goods

or services were provided.

1. LTM EEG Preceded by Standar d EEG

28 . Obtaining a standard EEG prior to or dering a LTM EEG

is a generally accepted medical practice. Dr. Rao testified

that in his practice, he orders a LTM EEG when the results of a

patientÓs standard EEG are abnormal, inconclusive, or

suspicious.

2 9 . As such, Dr. Rao acknowledges this well - recognized

medical standard.

30 . In his review of the sample claims, Dr. Abram

determined that many of the claims for LMT EEG were not

medically necessary because the medical records did not document

a resting E EG had been performed prior to LTM EEG.

31 . Dr. Abram testified that there may be circumstances in

which a LTM EEG is warranted , although not preceded by a

standard EEG, but he would expect the medical records to we ll

document the necessity of the procedu re. In his peer review of

Dr. RaoÓs medical records, he found no such documentation.

2. Indications for LTM EEG

32 . LTM EEG is a professionally accepted diagnostic tool.

However, there is no single standard symptomatic indication for

its use. Dr. Rao testified he uses LTM EEG for patients who

present with many types of neurological conditions, including

shaking, sleep disorders, crying during the night, seizures, and

syncope (fainting), among others.

33 . Dr. Abram disallowed as not medically necessary

PetitionersÓ Medicaid claims for LTM EEG where PetitionersÓ

medical records did not indicate the patient had a history of

seizures, spells, established epilepsy, or indications of

altered awareness. For example, Dr. Abram found as not

medically necessary claims for LTM EEG when the medical records

indicated concerns of headache, backache, and other non - seizure

related symptoms. He did allow LTM EEG claims for Dr. RaoÓs

patients with epilepsy.

34 . In August 2012, Dr. Rao held a telephonic provider - to -

pee r conference with Dr. Abram to discuss Dr. AbramÓs

determinations regarding the level of care, medical necessity,

and appropriateness of care prov ided by Dr. Rao to the randomly

selected patients during the audit period. Dr . Rao testified

that during the conference, Dr. Abram stated that LTM EEG is

indicated only for intractable epilepsy.

35 . Dr. RaoÓs testimony is hearsay, which is insufficient

alone to support any finding.

36 . At first blush, Dr. AbramÓs November 8, 2010, letter

to MPI staff appears to corroborate Dr. RaoÓs hearsay statement.

In the letter, Dr. Abram states, Ð[LTM EEGs] are specialized

studies used to classify, quantify and localize seizures in

patients with suspected intractable epilepsy.Ñ

37 . The letter clearly uses the word Ðsuspec tedÑ to modify

Ðintractable epilepsyÑ; as such, the letter is not a statement

limiting use of LTM EEG to patients with diagnosed epilepsy.

Further , the letter itself is merely a summary of Dr. AbramÓs

findings.

38 . Dr. Abram painstakingly reviewed betwee n 125 and 140

patient encounters during the audit period based upon his

considerable experience, education, and training to determine

the medical necessity, appropriateness , and quality of care

provided as compared with the level of care customarily

furnis hed based on recognized health standards. With regard to

Dr. RaoÓs use of LTM EEG, Dr. Abram based his findings on

whether LTM EEG would provide benefit or alter management of the

patientÓs symptoms after reviewing the patientÓs specific

medical records, including physical examinations, history,

symptoms, and other diagnostic test results.

39 . No evidence was presented as to the agencyÓs peer

review of any other Medicaid provider audits. While Petitioners

introduced a list of other MPI cases for which Dr . Abram

conducted the peer review, they introduced no evidence of his

findings, conclusions , or determinations.

40 . Dr. Abram testified that he makes every effort to be

consistent when peer reviewing each providerÓs records, as well

as in reviewing each e ncounter within a patientÓs records.

CONCLUSIONS OF LAW

41 . The Division of Administrative Hearings has

jurisdiction over the parties and subject matter in this

proceeding pursuant to sections 120.56(4), 120.569 , and

120.57(1), Florida Statutes (2012).

4 2 . AHCA is the agency with the statutory duty to provide

oversight of the Florida Medicaid program, and to ensure the

integrity of the program, including requiring Ðrepayment for

inappropriate, medically unnecessary, or excessive goods or

services from th e person furnishing them . . . .Ñ

§ 409.913(11), Fla. Stat.

43 . Petitioners are Ðpersons Ñ within the meaning of

section 409.913(1)(f) and are subject to the jurisdiction and

regulation of the MPI Office.

44 . An agency statement that comes within the d efinition

of a rule must be adopted according to rulemaking procedures.

Envtl. Trust, Inc. v. DepÓt of Envtl. Prot. , 714 So. 2d 493

(Fla. 1st DCA 1998); Christo v. DepÓt of Banking & Fin. , 649

So. 2d 318 (Fla. 1st DCA 1995). Section 120.54(1)(a) provides

in relevant part:

Rulemaking is not a matter of agency

discretion. Each agency statement defined

as a rule by s. 120.52 shall be adopted by

the rulemaking procedure provided by this

section as soon as feasible and practicable .

45 . Subsection 120.56(4) provides that a person

substantially affected by an agency statement that comes within

the definition of a rule, but which has not been adopted by

rulemaking procedures, may challenge that statement.

46 . In order to prove stand ing, Petitioners must show

that: 1) the agency statement of policy will result in a real

or immediate injury in fact; and 2) the alleged interest is

within the zone of interest to be protected or regulated.

Jacoby v. Fla. Bd. of Med . , 917 So. 2d 358, 360 (Fla. 1st DCA

2005).

47 . Petitioners have standing to bring this proceeding

pursuant to paragraph 120.56(4)(a). The statements at issue,

such as they exist, factored into AHCAÓs determination that

Petitioners were overpaid by Medicaid during the audit period.

AHCA seeks recoup ment of the overpayment amount as well as fines

and administrative costs.

48 . Under subsection 120.56(4), a p etitioner has the

burden to prove that the statement constitutes a rule and that

the agency has not adopted the statement by rulemaking

procedure s. Sw . Fla. Water Mgmt. Dist. v. Charlotte C nty. , 774

So. 2d 903, 908 (Fla. 2d DCA 2001). Under section 120.56(4)(b),

the burden to prove that rulemaking is not feasible or not

practicable then falls upon th e agency.

49 . AHCA has not adopted the stateme nts attributed to AHCA

by the Petitioners, or any similar statements, by rulemaking

procedures.

50 . The merit of AHCAÓs allegations that Petitioners

billed Medicaid during the audit period for services whi ch were

not medically necessary is not at issue in this proceeding.

Whether AHCA can prove that Dr. Rao ordered LTM EEGs witho ut

first ordering standard EEGs or ordered LTM EEGs when they were

not indicated by particular medical standards will be determined

in the pending overpayment case. The only is sue here is whether

or not the alleged statements constitute rules.

51 . Subsection 120.52(16) defines "rul e" in relevant part

as follows:

ÒRuleÓ means each agency statement of

general applicability that implements,

interprets, or prescribes law or policy or

describes the procedure or practice

requirements of an agency and includes any

form which imposes any requirement or

solicits any information not specifically

required by statute or by an existing rule.

52 . The challenged agency statements formed the basis, at

least partially, for AHCAÓs determination that Petitioners

received Medicaid overpayments, as well as its demand for

recoupment of said overpayments and imposition of fines and

costs. As such, the statements form one of the bases for AHCAÓs

adm inistrative complaint against Petitioners.

53 . The challenged agency statements are not rules as

defined in section 120.52(16). It is well - established that

allegations in an agency administrative complaint meant to

enforce regulatory statutes do not con stitute agency statements

defined as rules. See George Marshall Smith v. Alex Sink et

al. , Case No. 07 - 4746RU (DOAH Jan. 25, 2008), affÓd , 993 So. 2d

522 (Fla. 1st DCA 2008)(allegations in Department of Financial

Services complaint against the Petitioner for selling

unregistered securities in violation of chapter 517, Florida

Statutes, are not agency statements defined as rules); Unit ed

Wisconsin Life Ins. v. DepÓt of Ins . , Case No. 01 - 3135RU (DOAH

Nov. 27, 2001), affÓd , 831 So. 2d 239 (Fla. 1st DCA

2002)( particular allegations in the Department of Insurance

complaint against Petitioner for committing unfair and deceptive

practices in violation of chapter 626, Florida Statutes, are not

agency statements defined as rules).

54 . The First District Court prec edent continues to be

followed by the Division. See Dayspring Village, Inc. v. Ag .

for Health Care Admin , Case No. 13 - 1836RU (DOAH June 24,

2013)(allegations in AHCAÓs administrative complaint that

Petitioner, a licensed Assisted Living Facility Ðfailed t o

provide adequate and appropriate health care consistent with the

established and recognized standards within the community by

allowing diabetic residents to use the same glucometer without

disinfecting or cleaning the glucometer deviceÑ was not an

agency statement defined as a rule).

55 . The fact that AHCA did not specifically restate in the

FAR the peer reviewerÓs fi ndings, but rather alleged that

Petitioners received reimbursement for services which were not

determined to be medica lly necessary after p eer review is a

distinction without a difference. The peer reviewerÓs

statements were relied upon by the agency as findings to support

its FAR, seek reimbursement, and impose fines and costs. 2/

56 . Petitioners argue that th e statements made by

Dr. Abra m are rules because they are Ðgenerally applicable , Ñ

having been applied consistently by Dr. Abram as a peer reviewer

in other Medicaid provider audits. Petitioner did not prove,

however, that Dr. AbramÓs statements have been applied to any

other provider peer reviews.

57 . Assuming, arguendo, that Petitioner had proven that

Dr. Abram consistently applies the alleged statements as facts

which support a finding of medical necessity in MPI peer

reviews, that alone does not elevate the statements to the

statu re of agency policy with the force and effect of law.

58 . Whether an agency statement is a rule turns on the

effect of the statement, not on the agencyÓs characterization of

the statement. See DepÓt of Admin. v. Harvey , 356 So.2d 323,

325 (Fla. 1st DCA 1 977). ÐRepetition of the practice in

drafting administrative complaints in other disciplinary cases

does not change the character of the act, thus mandating

establishment of the agencyÓs statements or policies as rules by

proper adoption . . . . Ñ George Marshall Smith v. Alex Sink et

al. , Case No. 07 - 4746RU (DOAH Jan. 25, 2008); affÓd , 993 So. 2d

522 (Fla. 1st DCA 2008).

59 . In recent years, the First District Court of Appeal

has re - emphasized that agency statements that are not self -

executing and do not by their own effect create rights, require

compliance, or otherwise have the direct and consistent effect

of law are not rules. See Ag. for Health Care Admin v. Custom

Mobility, Inc. , 995 So. 2d 984 (Fla. 1st DCA 2008); DepÓt of

Fin . Servs . v. Capital Co llateral RegÓ l Counsel - Middle Region ,

969 So. 2d 527 (Fla. 1st DCA 2007).

60 . Likewise, where application of agency policy is

subject to the discretion of agency personnel, the policy is not

a rule. See Coventry First, LLC v. Off. of Ins. Reg. , 38 So. 3d

200, 204 (Fla. 1st DCA 2010)(quoting McDonald v. DepÓt of

Banking & Fin. , 346 So. 2d 569, 581 (Fla. 1st DCA 1977)).

61 . The medical standards at issue in this case are not

self - executing and require the exercise of discretion in their

application. As wa s the case in Custom Mobility , the statements

at issue do not, in and of themsel ves, Ðestablish that the

service p rovider owes money. Ñ 995 So. 2d at 987. Rather, the

medical standards of practice must be applied on a case - by - case

basis to determine wheth er the services provided were medically

necessary, and provided both an appropriate level of care and

standard of care Ðcustomarily furnished by the physicianÓs peers

and to recognized health care standards . . . . Ñ

§ 409.9131(2)(d) , Fla . Stat.

62 . In th e case at hand, Dr. Abram ÐappliedÑ the standards

to each of over 100 Medicaid claims Dr. Rao made during the

audit period. He exercised his discretion as to whether to

apply them based on the specifics of each patientÓs medical

records. As Dr. Abram tes tified, there may b e specific

circumstances when a LTM EEG is warranted without a preliminary

standard EEG, or when a LTM EEG is ordered for non - seizure

related symptoms, but Dr. Abram found no documentation to

support those indications in the specific fil es reviewed.

63 . Where an agencyÓs unpromulgated guidelines are applied

without discretion to determine the rights of licensees, they

may constitute agency statements defined as rules. See DepÓt of

Rev. v. Vanjaria , 675 So. 2d 252, 255 (Fla. 5 th DCA 1996 )(tax

assessment procedures in agency training manuals not simply a

direct application of statute; procedures afforded no discretion

to auditors and created the agency Ós entitlement to taxes while

adversely affecting property owners); Premier I ns. Grp. v. Off.

of Fin. Reg. , Case No. 12 - 1201RU (DOAH July 5, 2012)(concluding

that the OfficeÓs practice of excluding federal income taxes

from excess profits calculation, which affords auditors no

discretion in its application, has the direct and consistent

effect of law). The facts at hand are clearly distinguishable.

64 . Florida operates the Medicaid program pursuant to

se ction 409.902, which provides, in pertinent part:

[Medicaid] payments shall be made, subject

to any limitations or directions provided

for in the General Appropriations Act, only

for services included in the program, shall

be made only on behalf of eligible

individuals, and shall be made only to

qualified providers in accordance with

federal requirements for Title XIX of the

Social Security Act and the provisions of

state law.

AHCA is charged by the Legislature to implement MPI Ðto ensure

that fraudulent and abusive behavior and neglect of recipients

occur to the minimum extent possible, and to recover

overpayments and impose sanctions as appro priate.Ñ § 409.913 ,

Fla. Stat. Medicaid Program Integrity is an important policy of

the State of Florida, and one which ensures compliance with

federal mandates as well.

65 . As well - stated in United Wisconsin , Case No. 01 -

3135RU, FO at 27 - 28 :

65. [The statutory provisions which form

the basis for the Administrative Complaint],

are taken together, statutes which prohibit

described conduct. They are penal in

nature. Some sections . . . provide for

criminal sanctions. They are announcements

of policy e nacted into law by the Florida

Legislature. They represent policy of the

state. Because the Department is the agency

charged with implementing these statutes,

the Department is free to allege facts which

might prove to be violations of these

statutes, wi thout resort to explanatory

rules.

66 . The proper forum for resolution of the matters

contained in the FAR, as well as the agencyÓs findings

supporting the FAR, is the underlying Overpayment Case.

FINAL ORDER

Upon consideration of the above findings of f act and

conclusions of law, it is

ORDERED:

That t he Petition of Dr. Radhakrishna Rao and Bay Regional

and International Institute of Neurology to Challenge Unadopted

Rules is dismissed.

DONE AND ORDERED this 30th day of August , 2013 , in

Tallahasse e, Leon County, Florida.

S

SUZANNE VAN WYK

Administrative Law Judge

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 30th day of August , 2013 .

ENDNOTES

1/ Except as otherwise indicated, all references to statutes and

rules are to the versions in effect in 2011, the time the

sta tements alleged to be unadopted rules substantially affected

Petitioners by virtue of RespondentÓs Final Audit Letter.

2/ Petitioners argued that the statements were ripe for

rulemaking, in part because neit her the PAR nor the FAR put

Dr. Rao on notice t hat he was required to comply with statements

such as ÐA resting EEG must always precede a LTM EEGÑ and ÐLTM

EEG is indicated only in patients whose medical records

documents problems with spells, seizures, or intractable

epilepsy.Ñ He argued that rulemak ing would allow for input into

those standards and put physicians on notice of those standards.

First, PetitionersÓ due process rights are not at issue in this

proceeding. Second, PetitionersÓ arguments seem disingenuous

given Dr. RaoÓs testimony that he usually orders an LTM EEG when

the standard EEG results are abnorma l, inconclusive, or

suspicious.

COPIES FURNISHED :

Frank P. Rainer, Esquire

Broad and Cassel

Suite 400

215 South Monroe Street

Tallahassee, Florida 32301

Beverly H. Smith, Esquire

A gency for Health Care Administration

Fort Knox Building, Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(sServed)

Eli zabeth Dudek, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

(eServed)

Stuart Williams, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 3 2308

(eServed)

Ken Plante, Coordinator

Joint Admin istrative Proceedures Committee

Room 680, Pepper Building

111 West Madison Street

Tallahassee, Florida 32399 - 1400

(eServed)

Liz Cloud, Program Administrator

Administrative Code

Department of State

R.A. G ray Building, Suite 101

Tallahassee, Florida 32399

(eServed)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled to judicial review pursuant to section 120.68, Florida

Statutes. Review proceedings are g overned by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing one copy of a Notice of Administrative Appeal with the

agency clerk of the Division of Administrative Hearings and a

second copy, accompanied by filing fees pres cribed by law, with

the District Court of Appeal, First District, or with the

District Court of Appeal in the appellate district where the

party resides. The Notice of Administrative Appeal must be

filed within 30 days of rendition of the order to be revi ewed.