13-000795MPI Agency For Health Care Administration vs. Alfred Ivan Murciano, M.D. Status: Closed Recommended Order on Tuesday, July 7, 2015.

Summary: Recommended that the Agency for Health Care Administration issue a Final Order dismissing the Final Audit Report.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Petitioner,

vs. Case No. 13 - 0795MPI

ALFRED IVAN MURCIANO, M.D.,

Respondent.

_______________________________/

RECOMMENDED ORDER

This case came before Administrative Law Judge Todd P.

Resavage for final hearing by video teleconference on January 21,

2014, at sites in Tallahassee and Miami, Florida.

APPEARANCES

For Petitioner: Jeffries H. Duvall, Esquire

Agency for Health C are Administration

Mail Station 3

2727 Mahan Drive

Tallahassee, Florida 32308

For Respondent: William J. Sanchez, Esquire

William J. Sanchez, P.A.

Suite 102

12600 Southwest 120th Street

Miami, Florida 33186

STATEMENT OF THE ISSUE S

The issues for determination are whether Respondent must

reimburse Petitioner an amount up to $1,051,992.99, which sum

Respondent received fr om the Florida Medicaid Program in payment

of claims arising from his treatment of pediatric patients

between September 1, 2008 , and August 31, 2010; and whether

Petitioner is entitled to sanctions in the amount of $210,398.60,

and costs of $3,349.86.

PRELIMINARY STATEMENT

Petitioner, Agency for Health Care Administration, is the

agency responsible for administering the Florida Medicaid

Program. Respondent, Alfred Ivan Murciano, M.D., is a Medicaid

provider.

After completing a review of Respondent ' s cl aims for

Medicaid reimbursement for dates of service during the period of

September 1, 2008, through August 31, 2010 ( " the audit period " ) ,

Petitioner issued a Final Agency Audit Report ( " FAR " ) on

January 8, 2013, wherein it alleged that Respondent h ad bee n

overpaid $1,051,992.99 for services that in whole or in part were

not covered by Medicaid. The FAR further provided that

Petitioner was seeking sanctions in the amount of $210,398.60,

and costs of $3,349.86.

The FAR advised Respondent that he had the right to request

a formal or informal hearing pursuant to section 120.569, Florida

Statutes. Respondent timely requested a formal hearing on the

matter. On March 5, 2013, Petitioner referred the matter to the

Division of Administrative Hearings ( " DOAH " ) where it was

assigned to the undersigned.

The final hearing was initially scheduled for June 3, 2013.

On May 23, 2013, the parties filed a Joint Motion for

C ontinuance, which was granted, and the final hearing was

ultimately rescheduled for January 21, 2 014.

On January 14, 2014, the parties filed u nilateral p rehearing

s tatements. The parties commonly stipulated that, during the

audit period, Respondent operated as an authorized Medicaid

provider and had been issued Medicaid provider number 0632431 - 00.

Additionally, the parties stipulated that, during the audit

period, Respondent had a valid Medicaid provider agreement .

Both parties were represented by counsel at the hearing,

which went forward as planned. The final hearing Transcript was

filed on Fe bruary 19, 2014. The identity of the witnesses and

exhibits and the rulings regarding each are as set forth in the

Transcript.

On March 18, 2014, Respondent file d an U noppos ed Motion for

Extension of Time to File Proposed Recommended O rders. Said

motion was granted and the parties were ordered to submit

proposed recommended orders on or before April 24, 2014. The

parties timely filed proposed recommended orders, which were

considered in preparing this Recommended Order. Unless otherwise

indicated, all rule and statutory references are to the versions

in ef fect at the time of the audit period.

FINDING S OF FACT

1. Petitioner is the state agency responsible for, inter

alia, administering the Florida Medicaid Program.

2. Respondent is, and at all time s relevant was, a

physician licensed to practice medicine in Florida. Respondent

w as certified by the American Board of Pediatrics in General

Pediatrics in 1989. Additionally, Respondent was certified by

the American Board of Pediatrics in Pediatric Infe ctious Diseases

in 2005. Respondent ' s practice is solely hospital - based and

exclusive to pediatric infectious disease. Respondent evaluates,

and provides care and treatment to , patients in Level III

Neonatal Intensive Care Units ( " NICU " ) and Pediatric In tensive

Care Units ( " PICU " ) in Miami - Dade, Broward, and Palm Beach

County, Florida hospitals. 1 /

3. Respondent has never be en the subject of any

disciplinary proceedings.

4 . Exercising its statutory authority to oversee the

integrity of the Medic aid program, Petitioner identified

Respondent as a Medicaid provider who had submitted a high volume

of claims for inpatient recipients. Accordingly, Petitioner

conducted a review or audit to verify the claims paid by Medicaid

during the audit period.

5. On or about September 14, 2011, Petitioner issued a

request for records letter to R espondent . Said correspondence

notified Respondent that Petitioner was in the process of

completing a review of claims Respondent billed to Medicaid

during the audi t period to determine whether the claims were

billed and paid in accordance with Medicaid policy. The request

identified 30 of Respondent ' s patients and requested copies of

the patients ' Medicaid - related records, including all hospital

records. The reque sted records were to be submitted within 21

days.

6. Respondent provided records responsive to the

September 14, 201 1 , request for records. 2 /

7 . Upon receipt, Petitioner organize d the submitted records

and provide d the same to a reviewing n urse , Blanca Nottman . Th e

reviewing nurse preliminarily inspect ed t he same to determine if

any policy violations were apparent and not ed any findings .

8. Ms. Nottman, in turn, provided the records and notations

to Petitioner ' s " peer coordinator. " The peer coordinator

maintains a list of all the peers that have a contract with

Petitioner . A peer " means a Florida licensed physician who is,

to the maximum extent possible, of the same specialty or

subspecialty, licensed under the same chapter, and in active

practice. " § 409.9131(2)(c), Fla. Stat .

9. The peer coordinator then forwarded all records and

documents provided by Respondent to Richard Keith O ' Hern, M.D.,

to conduct a peer review of Respondent ' s claims. Section

409.9131(2)(d), define s a peer review as follows:

an 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 customari ly furnished by the physician ' s

peers, and to recognized health care

standards, and, in cases involving

determination of medical necessity, to

determine whether the documentation in the

physician ' s records is adequate.

10. Dr. O ' Hern was certified, in 1979, by the American

Board of Pediatrics in General Pediatrics. Dr. O ' Hern completed

a one - year infectious disease fellowship during his training at

the University of Florida in 1977 - 78. Dr. O ' Hern retired from a

private general pediatric practice i n December 2012. During his

thirty - seven year career, he provided care and treatment to

approximately 80,000 babies, of which approximately 16,000 were

sick with infectious disease issues. 3 /

11. During his career, Dr. O ' Hern was on three hospital

medical staffs, and estimated that his practice involved working

in the hospital setting approximately 10 - 20 percent of the time,

with the balance in his office.

1 2 . Dr. O ' Hern was never certified by the American Board of

Pediatrics in p ediatric i n fectious d iseases and would not, at the

time of the review, have been eligible to become certified in

p ediatric i nfectious d iseases. Additionally, Respondent provided

unrefuted testimony that Dr. O ' Hern would not be permitted to

treat Respondent ' s patient s at L evel III NICU s and PICUs.

13. Dr. O ' Hern received copies of the medical records

submitted by Respondent as well as " copies of the worksheets that

Medicaid uses to determine the appropriateness of medical

reimbursement. " For each of the thirt y patients, whose

encounters were under review for the audit period, Dr. O ' Hern

reviewed the patient ' s noted complaint; whether the patient was a

new or existing patient; whether the patient was in patient or

outpatient; the medical history, physical exam, and assessment of

the patient ; and the amount of time spent with the patient.

Dr. O ' Hern would then, based upon the above information,

" determine the level of coding that leads to reimbursement. "

14. Upon completion o f his review, Dr. O ' Hern nota te d his

findings and return ed the same to the peer coordinator, who in

turn, provide d them to the reviewing nurse . The reviewing nurse

then " comes up with a review finding that give s the reason for

the adjusted or denied claim. " As there were findings fo r

adjusting or denying Respondent ' s claims, Jennifer Ellingen, an

investigator for Petitioner, prepare d a P reliminary A udit R eport

( " PAR " ).

1 5 . On April 18, 2012, Petitioner issued the PAR to

Respondent. The PAR advised Respondent that Petitioner had

completed a review of claims for Medicaid reimbursement for the

audit period, and a preliminary determination had been made that

Respondent was overpaid $1,051,992.99 for claims that in whole or

in part were not covered by Medicaid. The PAR advised Re spondent

that the documentation he provided supported a lower level of

office visit(s) than the ones for which he billed and received

payment , and that some services for which he billed and received

payment were not documented.

1 6 . The PAR notified Respondent that he could (1) pay the

identified overpayment within 15 days and wait for the issuance

of the final audit report ( " FAR " ); (2) submit further

documentation in support of the claims within 15 days; however,

such additional documentation may " be deemed evidence of non -

compliance with [Petitioner ' s] initial request for

documentation; " or (3) not respond, and wait for the issuance of

the final audit report.

1 7 . The PAR further notified Respondent that t he findings

contained in the PAR wer e preliminary in nature, and that it was

not a final agency action.

1 8 . Respondent opted to submit further doc umentation in

support of his claims. Upon doing so, the process repeated

itself, with the reviewing nurse, now Karen Kinser, reviewing al l

of the submitted do cumentation, which was then forwarded to Dr.

O ' Hern for an additional review.

19 . On January 8, 2013, Respondent issued a FAR. The

amount previously determined as overpayment in the PAR remained

unchanged in the FAR. The FAR further documented that a fine in

the amount of $210,398.60 had been applied and costs ha d been

assessed in the amount of $3,349.86.

20 . As noted above, upon receipt of the FAR, Respondent

timely requested a formal hearing.

21 . R ather than e xamine the records of all recipients

served by Respondent during the audit period, a random sample of

30 recipients (patients) was reviewed. For these patients,

Respondent identified 701 reimbursements from Petitioner to

Respondent during the audit period . At hearing, Petitioner

presented evidence specific to three of the 30 patients. A

review of the three patients is instructive.

22 . Patient 1 was born premature at 33 weeks gestation ,

with a birth weight of three pounds seven ounces , and was two

months old at time of the subject hospital ization. At birth,

Patient 1 ' s medical condition necessitated placement in the N ICU

for three weeks and required nasogastric tube feeding. During

the hospitalization under review, the patient ' s discharge

diagnos es included, inter alia, septicemia and streptococcal

meningitis. During the hospitalization, Respondent provided

pediatric infectious disease care to the recipient.

23 . Patient 2 was born on January 27, 2009, at 27 weeks

gestation. At the time o f the subject admission, Patient 2 was

37 days old, with an adju sted gestation age of 32 weeks two days,

weighing 1.040 kg (approximately two pounds five ounces) . The

admitting diagnoses were prematurity, possible sepsis,

respiratory distress , and a femor al fracture. Respondent

provided care and treatment concerning a pediatric infectious

disease condition, sepsis . The patient was not discharged from

the hospital until July 28, 2009.

24 . Patient 3 was born premature ly on July 15, 2009. On

August 27, 2009, the child was 43 days old with an adjusted

gestation of 32 weeks five days and weighed 1.180 kg

(approximately two pounds ten ounces) . The admitting indications

were prematurity, possible sepsis , and respiratory distress.

Respondent provided ca re and treatment concerning potential

sepsis, a pediatric infectious disease medical condition.

25 . Consistent with the abov e - findings concerning

Patients 1 - 3, Respondent testified that his typical

patient/recipient is premature an d weighs approxi mately 500 grams

(approximately one pound). Respondent explained that his

patients are immune - compromised and that patients under 28 weeks

gestation do not possess an independent immune system .

Respondent opined that the greate st cause of morbidity or

mo rtality among these p ediatric p atients is infectious diseases.

CONCLUSIONS OF LAW

26 . DOAH has personal and subject matter jurisdiction in

this proceeding pursuant to s ections 120.569 and 120.57(1),

Florida Statutes.

27 . Section 409.913(7)(e) provide s 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. "

28 . Section 409.913(2) requires Petitioner to conduct

audits to detect overpayments. Section 409.913(11) requires

Petitioner to " deny payment or require repayment for

inappropriate, medically unnecessary, or excessive goods or

services from the perso n furnishing them . . . . "

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

material allegations by a preponderance of the evidence.

Dep ' t of Banking & Fin. , Div. of Sec. & Inv. Prot. v. Osbourne

Stern & Co. , 670 So. 2d 932, 934 (Fla. 1996); see also Young v.

Dep ' t of Cmty. Aff. , 625 So. 2d 831 (Fla. 1993); Southpointe

Pharmacy v. Dep ' t of HRS , 596 S o. 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 se eks to

impose. Osbourne , 670 So. 2d at 935.

30 . Section 409.9131 sets forth special provisions relating

to integrity of the Medicaid program. Section 409.9131(5)

specifically addresses determinations of overpayment and

provides, in pertinent part , as fo llows:

In making a determination of overpayment to a

physician, the agency must:

(a) Use accepted and valid auditing,

accounting, analytical, statistical, or peer -

review me thods or combinations thereof

. . . . In meeting its burden of proof in

any adm inistrative or court proceeding, the

agency may introduce the results of such

statistical methods and its other audit

findings as evidence of overpayment.

(b) Refer all physician service claims for

peer review when the agency ' s preliminary

analysis ind icates that an evaluation of the

medical necessity, appropriateness, and

quality of care needs to be undertaken to

determine a potential overpayment, and before

any formal proceedings are initiated against

the physician, except as require by s.

409.913.

31 . Section 409.9131(2)(d) defines peer review as follows:

" Peer review " means an 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 physician ' s

peers and to recognized health care

standards, and, in cases involving

determination of medical necessity, to

determine whether the documentation in the

physician ' s re cords is adequate.

32 . To reiterate, a " peer " is defined as " a Florida

licensed physician who is, to the maximum extent possible, of the

same specialty or subspecialty, licensed under the same chapter,

and in active practice. " § 409.9131(2)(c) , Fl a. Stat . " Active

practice " means " a physician must have regularly provided medical

care and treatment to patients with in the past two years. "

§ 409.9131(2)(a) , Fla. Stat .

33 . The Florida Legislature has designed a statutory

framework for reviewi ng potential Medicaid overpaym ents to a

physician. Petitioner must seek to obtain a Florida licensed

physician, to the maximum extent possible, of the same specialty

or subspecialty to conduct the peer review. Respondent argues,

and the undersigned concl udes, that b ased upon the above - findings

of fact , Dr. O ' Hern is not Respondent ' s " peer " as the term is

defined in section 409.9131(2)(c). 4 /

34 . Having concluded that Dr. O ' Hern was not a statutorily -

defined peer of Respondent, it follows that an ap propriate peer

review was not performed before formal proceedings (the FAR) were

initiated against Respondent, as required by section

409.9131(5)(b). This failure to satisfy a condition precedent to

initi a ti ng formal proceedings is fatal to the agency ' s c ase and

requires that the case be dismissed.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that t he Agency for Health Care

Administration issue a Final Order dismissing the Final Audit

Report.

DONE AN D ENTERED this 22nd day of May , 2014 , in Tallahassee,

Leon County, Florida.

S

TODD P. RESAVAGE

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 22nd day of May , 2014 .

ENDNOTE S

1 / Hospital units providing neonatal care are classified

according to the int ensity and specialization of the care which

c an be provided. Florida Adminis trativ e Code Rule 59C -

1.042(2)(g)(3) defines Level III Neonatal Intensive Care

Services, in pertinent part, as follows:

Services which include the provision of

continuous cardio pulmonary support services,

12 or more hours of nursing care per day,

complex neonatal surgery, neonatal

cardiovascular surgery, pediatric neurology

and neurosurgery, and pediatric cardiac

catheterization, shall be classified as Level

III neonatal intensiv e care services . . . .

A facility with a Level III neonatal

intensive care service that does not provide

treatment of complex major congenital

anomalies that require the services of a

pediatric surgeon, or pediatric cardiac

catheterization and cardiovascu lar surgery

shall enter into a written agreement with a

facility providing Level III neonatal

intensive care services in the same or

nearest service area for the provision of

these services.

2 / The record is silent as to when any particular medical reco rd

was provided to Petitioner for review.

3 / The undersigned was unable to locate any evidence indicating

Dr. O ' Hern ' s experience treating premature infants with

infectious disease medical issues.

4 / The unders igned recognizes that Petitioner is not r equired to

retain a reviewing physician who has the exact credentials as the

physician under revi ew. To the contrary, Petitioner ' s obligation

in this regard is met when it retains a reviewing physician who

is, to the maximum extent possible, of the same s pecialty or

subspecialty as the physician under review. The undersigned has

concluded that Dr. O ' Hern is not of the same specialty as

Respondent. As Petitioner failed to present any evidence

concerning what efforts were undertaken to obtain an appropriat e

peer to review Respondent ' s claims, the undersigned is compelled

to conclude Dr. O ' Hern is not a peer.

COPIES FURNISHED:

Jeffries H. Duvall, Esquire

Agency for Health Care

Administration

Mail Station 3

2727 Mahan Drive

Tallahassee, Florida 32308

William J. Sanchez, Esquire

William J. Sanchez, P.A.

Suite 102

12600 Southwest 120th Street

Miami, Florida 33186

Richard J. Shoop, Agency Clerk

Agency for Health Care

Administration

Mail Station 3

2727 Mahan Drive

Tallahassee, Florida 32308

Stuart Williams, General Counsel

Agency for Health Care

Administration

Mail Station 3

2727 Mahan Drive

Tallahassee, Florida 32308

Elizabeth Dudek, Secretary

Agency for Health Care

Administration

Mail Station 1

2727 Mahan Drive

Tallahassee, Florida 32308

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.