14-000136MPI Agency For Health Care Administration vs. The Chrysalis Center, Inc. Status: Closed DOAH Final Order on Friday, August 28, 2015.

Summary: Agency must pay Medicaid provider reasonable attorneys' fees incurred in defending a Medicaid overpayment case. Fees claimed by provider's attorneys reduced by nearly $120,000 because fees over $61,505 were unnecessary, excessive, or inappropriate.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Petitioner,

vs. Case No. 14 - 0136MPI

THE CHRYSALIS CENTER, INC.,

Respondent.

_______________________________/

FINAL ORDER

On October 21, 2 014, Robert E. Meale, Administrative Law

Judge of the Division of Administrative Hearings (DOAH),

conducted the final hearing in Tallahassee, Florida.

APPEARANCES

For Petitioner: Steven L. Perry , Esquire

Office of the Attorney General

PL - 01, The Capitol

Tallahassee, Florida 32399 - 1050

For Respondent: Steven A. Grigas, Esquire

Akerman , LLP

Suite 1200

106 East College Avenue

Tallahassee , Florida 32301

Eduardo R. Lacasa, Esquire

The Chrysalis Center, Inc.

351 Altara Avenue

Coral Gables, Florida 33146

STATEMENT OF THE ISSUE

The issue is the determination of reasonable attorneys'

fees, under section 57.105(1)(a) and (5), Florida Statutes,

incurred by Respondent in defending Petitioner's claims for the

recovery of alleged Medicaid overpayments and the imposition of

fines and costs.

PRELIMINARY STATEMENT

By Final Audit Re port (FAR) dated July 10, 2013, 1/

Petitioner advised that it was seeking to recover overpayments to

Respondent totaling $284,535.83, impose fines of $56,907.17, and

assess costs of $172.29. The FAR determined that the billed

services provided by Responde nt were reimbursable to various

managed care organizations (MCOs) under the Nursing Home

Diversion Waiver (NHDW) program standard contract and thus should

not have been reimbursed to Respondent on a fee - for - service

basis.

After obtaining an extension of time, by letter dated

August 23, 2013, Respondent requested a hearing or, in the

alternative, a revision to the FAR to reduce the total

overpayments to $2 , 587.38. Respondent stated that it had

properly billed and obtained payment for all but $2 , 587.38 of the

paid services. Respondent's letter state d that nearly all of the

Healthcare Common Procedure Coding System procedure codes (Codes)

at issue -- psychosocial rehabilitation services (Code H2017),

therapeutic behavioral services (Code H2019HR), and treatm ent

plan review (Code H0032TS) -- are services that Respondent properly

billed on a fee - for - service basis. The overpayment amount of

$2 , 587.38 represents the total overpayment attributable to

services under all of the Codes other than Codes H2017, H2019HR,

and H0032TS.

The August 23 letter states that Mr. Keith Young, a program

analyst employed by Petitioner, had previously determined that

services under the three above - mentioned Codes were reimbursable

on a fee - for - service basis, even when the recipients we re

enrollees of NHDW plans, because the NHDW service contract does

not cover services under these codes. The letter adds that

Ms. Megan O'Malley, a program analyst employed by the Department

of Elder Affairs ( DOEA ) , agreed with Mr. Young.

On September 10 , 2013, Petitioner transmitted the file 2/ to

DOAH. Three days later, the parties filed an Agreed Motion to

Relinquish Jurisdiction, which was granted on September 16, 2013.

Subsequently , on January 9, 2014, unable to settle the dispute,

Petitioner filed a Motion to Reopen Proceedings. By Notice of

Hearing issued January 15, 2014, the Administrative Law Judge set

the final hearing for March 17, 2014.

On February 25, 2014, Respondent filed a Notice of Intent to

Seek Costs and Fees. The notice cites sectio ns 57.105, 57.111,

and 120.595 , Florida Statutes , and "other applicable law."

The hearing on the overpayment issue took place as

scheduled. This hearing will be referred to as the Overpayment

Hearing, and the corresponding case will be referred to as th e

Overpayment Case. The hearing setting the amount of attorneys'

fees will be referred to as the Fees Hearing, and corresponding

case will be referred to as the Fees Case. References to the

"recommended order" are to the recommended order of the

undersig ned in the Overpayment Case, references to the "Final

Order" are to Petitioner's final order on the recommended order,

and references to the "final order" are to this order on the Fees

Case.

On May 16, 2014, the parties filed proposed recommended

orders. On June 3, 2014, the Administrative Law Judge issued the

recommended order. On July 2, 2014, Respondent filed a Petition

for Proceeding to Establish Amount of Reasonable Attorneys ' Fees.

On September 2, 2014, Petitioner fil ed the Final Order, which

ado pted the recommended order, except for certain matters

concerning Petitioner's liability for reasonable attorneys' fees

under section 57.105, Florida Statutes. After the issuance of

the recommended order, Petitioner appealed the determination that

it was liable for reasonable attorneys' fees, but the appellate

court later dismissed the appeal as premature until the liability

determination was joined by an award of reasonable attorneys'

fees. 3/

At the start of the Fees Hearing, the Administrative Law

Judge acknowledged that Respondent was seeking costs, in addition

to fees, but that the notice to Petitioner of this claim was

inadequate. The Administrative Law Judge offered to conduct an

evidentiary hearing on costs at a later date, if the parties were

unab le to agree upon an alternative means to present the factual

and legal issues as to costs. The parties have not subsequently

addressed this matter.

At the Fees Hearing, Petitioner called one witness and

offered into evidence one exhibit: Petitioner Exhib it 1.

Respondent called three witnesses and offered into evidence six

exhibits: Respondent Exhibits 1 through 6. All exhibits were

admitted, but, as to Respondent Exhibit 4, the pages starting

with "filename" are hearsay and were admitted solely to

sup plement or explain other admissible evidence, pursuant to

section 120.57(1)(c), Florida Statutes.

The court reporter filed the t ranscript of the Fees Hearing

on November 5, 2014. Respondent filed its proposed final order

on November 25, 2014, and Petition er filed its p roposed final

order on November 26, 2014 .

FINDING S OF FACT

1. At all material times, as an enrolled Medicaid provider,

Respondent provided community behavioral health services to

Medicaid recipients and submitted fee - for - service reimbursemen t

claims, which Petitioner paid. As a result of an audit of

Respondent ' s claims that were submitted from January 1, 20 08,

through December 31, 2011, P etitioner issued the above - described

FAR to recover these payments on the ground that they were

overpayme nts because these services were covered by NHDW plans

sponsored by various MCOs. The FAR represents Petitioner's

formal filing of its overpayment claims; the preliminary audit

report is merely part of the negotiations leading to the formal

claim. 4/

2. Th e FAR was issued by Petitioner ' s Office of Medicaid

Program Integrity (OMPI), which is responsible for the recovery

of Medicaid overpayments, but did 5/ not possess the same subject -

matter knowledge of the NHDW program that could be found

elsewhere in Petit ioner. B ecause operational authority for the

NHDW program was divided between Petitioner and DOEA, expertise

in the NHDW program primarily resided in two program analyst s

employed by these agencies: Mr. Young of Petitioner and

Ms. O ' Malley of DOEA .

3. As detailed in the recommended order, prior to the

issuance of the FAR, Petitioner was aware that Mr. Young had

expressed the opinion that Respondent was entitled to fee - for -

service reimbursement of community mental health services 6/ to

enrollees of NHDW plans because these services were not included

in the NHDW standard contract and, thus, were not included in the

capitated rates paid to the MCOs sponsoring NHDW plans. Shortly

after the issuance of the FAR, Ms. O'Malley confirmed Mr. Young's

opinion that services provided under Codes H2017, H2019HR, and

H0032TS were not covered under the NHDW standard contract and

were thus eligible for fee - for - service reimbursement.

4. In his request for hearing, Mr. Lacasa asserted that the

services that Respondent p rovided and billed under Codes H2017,

H2019HR, and H0032TS were not covered under the NHDW standard

contract and were properly reimbursed on a fee - for - service basis

to Respondent. This meant that, as noted in the Preliminary

Statement, Petitioner was enti tled to recover about one percent

of the total overpayment amount claimed in the FAR. 7/

5. The recommended order confirmed the opinions of

Mr. Young, Ms. O'Malley, and Mr. Lacasa and rejected the

overpayment determinations contained in the FAR. Determi ning

that Petitioner knew or should have known that its overpayment

claim -- in excess of the minor amount that Respondent never

disputed -- was not supported by the material facts necessary to

support the claim, the Administrative Law Judge, on his own

initia tive, determined in the recommended order that Petitioner

was liable for Respondent's attorneys' fees, under

section 57.105(1)(a) and (5) , Florida Statutes . 8/

6. At the start of the Fees Hearing, Petitioner stipulated

to the reasonableness of all of the hourly rates at issue in this

case. Ignoring relatively small amounts of time billed by other

attorneys at Mr. Grigas' law firm, which, as noted below, have

been rejected as excessive or inappropriate, these rates are $395

per hour for Mr. Grigas and $350 per hour for Mr. Lacasa. The

lodestar determination thus turns on a determination of how much

legal work was reasonable.

7. During the Fees Hearing, Respondent introduced exhibits

showing 240 hours of time for a total of $95,028 among lawyers at

Akerman LLP, of which 230.8 hours was attributable to Mr. Grigas,

and showing 244.9 hours of time by Mr. Lacasa for a total of

$86,170. The combined total of attorneys' fees that Respondent

seeks to recover in the Fees Case is therefore over $180,000.

8. As dis cussed in more detail below, Respondent argues

that the complexity of the Overpayment Case justified 475 billed

hours, which even Respondent's expert witness, Mr. William

Furlong, conceded is at the upper range of what is reasonable.

Respondent's complexi ty argument is at odds with the implied

determination of the Administrative Law Judge, in awarding

Petitioner its reasonable attorneys' fees under

section 57.105(1)(a) and (5) , Florida Statutes , that the facts of

the Overpayment Case are straightforward a nd clearly do not

support Petitioner's overpayment claim.

9. If the Overpayment Case had been as factually

complicated as Respondent now claims, somewhere, in the pile of

transcripts and exhibits constituting the record of the

Overpayment Hearing, a mat erial fact would have provided enough

support for Petitioner's overpayment claim to avoid liability for

attorneys' fees under section 57.105 , Florida Statutes . To the

contrary, Respondent is entitled to reimbursement of its

reasonable attorneys' fees beca use much of that pile of evidence

was irrelevant or at least unnecessary -- a fact that, at this

stage, now inures to the detriment of Respondent as it attempts

to prove the reasonableness of extensive legal work in the

Overpayment Case.

10. Respondent repe atedly argues that considerable lawyer

time was required to discharge Respondent's burden of proving a

negative -- that is, that services under the three Codes were not

covered under the NHDW standard contract. 9/ This assertion is

incorrect. 10/

11. At leas t by the time of the Overpayment Hearing,

Petitioner relied upon one provision of the NHDW standard

contract to prove that the NHDW plans covered the services under

the three Codes -- and, thus, to prove that these services were not

available for billing by Respondent on a fee - for - service basis.

The provision of the NHDW standard contract predicated coverage

upon two conditions: 1) the services were "psychiatric in

nature" and 2) the services were provided by, or at the

recommendation of, a physician. It b ears restating that both

conditions had to be satisfied for a service to have been covered

under the NHDW standard contract.

12. Surprisingly, the record of the Overpayment Hearing

contains little evidence concerning the first requirement. As

noted in th e recommended order, the record is oddly devoid of a

single record detailing the services under Code H2017, H2019HR,

or H0032TS. 11/ But a few minutes' analysis of the services

described under these three Codes reveals that they do not

satisfy the first re quirement , that they be psychiatric in

nature, for the reasons set forth in the recommended order. It

is , thus , unnecessary to address whether there was any legitimate

dispute concerning the second requirement. 12/ The lack of a

material issue of fact is underscored by the simplicity of this

analysis of the "psychiatric - in - nature" requirement and the lack

of any contrary evidence on this crucial point.

13. Petitioner also based its claim for overpayment on a

strained reading of various Medicaid documents governing the

procedures for submitting claims, including pre - authorization

procedures. For the reasons set forth in the recommended order,

the various Medicaid documents on which Petitioner relied do not

support Petitioner's procedural argument.

14. Pet itioner's procedural argument suffered from a

crucial problem. Respondent readily conceded that Petitioner

could not be required to pay the same claim twice -- once in the

capitated rate paid to the MCO in whose NHDW plan a particular

recipient was enrolled and once to Respondent as a fee - for -

service that Respondent provided to the same recipient.

Respondent incorporated this concession in its argument that it

was free to "roll the dice" in providing services to enrollees of

NHDW plans sponsored by MCOs wit hout first contacting the MCOs or

Petitioner; if a recipient was an enrollee of an MCO's NHDW plan

that covered the service, Respondent was not entitled to

reimbursement when it provided the same service to this enrollee.

15. In making its procedural ar gument, Petitioner

repeatedly addressed the double - pay scenario, even though

Respondent disclaimed any right to receive a double payment. By

directing attention to this moot point, Petitioner ignored the

livelier question of whether Respondent's so - called procedural

noncompliances in presenting reimbursement claims could relieve

Petitioner of the obligation of paying these claims, not twice,

but even once. The flaws in Petitioner's reading of its Medicaid

documents emerged more starkly in this unattractiv e no - pay

scenario. Petitioner's procedural argument was thus unsupported

by a material issue of fact.

16. As is evident in the preceding findings, the

Administrative Law Judge continues to find that the Overpayment

Case was so simple as to warrant reas onable attorneys' fees under

section 57.105(1)(a) and (5) , Florida Statutes , and, therefore,

Respondent's attempt to justify extensive attorneys' fees on the

ground of the complexity of the Overpayment Case must fail.

These findings require a substantial reduction in the hours of

legal work that Respondent presents for reimbursement.

17. Before undertaking these reductions, it is necessary to

note that nothing whatsoever in the record suggests any conscious

overbilling by any lawyer in the Overpayment Cas e. Other reasons

may exist for the billing of considerably more hours than were

reasonably necessary. 13/

18. The Administrative Law Judge , also , is not unmindful of

the point made by Mr. Lacasa during the Fees Hearing that, while

the Overpayment Case d id not present an existential threat to

Respondent, it was a very serious matter. Respondent had to note

the Overpayment Case as pending litigation on financial reports

and other documents, and Respondent was forced to postpone , by

almost one year , its pl ans to expand into Palm Beach County until

the Overpayment Case was resolved. The Administrative Law Judge

has taken these factors into account in making the following

reductions.

19. Both Mr. Furlong and Michael Riley, whom Petitioner

called as its expe rt witness, demonstrated considerable

familiarity with the Overpayment Case and possessed such

experience and expertise that their opinions are entitled to

thoughtful consideration. Mr. Riley did not opine that the

amount of time was unreasonable, but he testified that technical

problems with the supporting documentation, such as block

billing, insufficient detail, and apparent duplication of work

between Mr. Grigas and Mr. Lacasa, effectively precluded review

of the legal work for a reasonableness determi nation. These

technical problems made it difficult at times to assess the

necessity of time billed by each attorney, especially Mr. Lacasa,

but Mr. Riley overstates the magnitude of the problem. Noting

that Mr. Lacasa had not kept contemporaneous time re cords,

Mr. Riley also emphasized the comparative lack of reliability in

Mr. Lacasa's reconstructed time records. However, the rejection

of about 93 percent of Mr. Lacasa's time as unreasonable is not

based on a finding that he fabricated any of this time, or even

that he misrecorded it; the rejection is based on the fact that

this rejected time was unreasonable or inappropriate.

20. Turning to the itemized hours, by attorney, the Akerman

lawyers expended the following time:

Mr. Grigas: 230.8 hour s

Martin Dix: 1.1 hours

Katherine Giddings: 3.5 hours

Sheryl Rosen: 2.1 hours

Julie Gallagher: 0.8 hours

Kristen Fiore: 1.7 hours

Capable attorneys in their own right, the Akerman lawyers other

than Mr. Grigas, who is likewise a capable lawyer, provided a

little over nine hours of legal work that, on the facts of the

Overpayment Case, was unnecessary or inappropriate for the

reasons explained below.

21. Mr. Dix's 1.1 hours occurred very early in Akerman's

involvement in the case, which was over four months after the

issuance of the FAR and during the period when DOAH no longer had

jurisdiction. Mr. Dix appears to have duplicated work of

Mr. Grigas. Mr. Dix did no more work on the Overpayment Case and

his time is exc essive.

22. All of Ms. Giddings' time was spent on the Fees Case or

the appeal and is not appropriate for recovery in connection with

the Overpayment Case.

23. All of Ms. Rosen's time was spent on a public records

request, which appears in the billing records on June 25, 2014.

This date occurs between the recommended order and the Final

Order. Aside from a billing entry mentioning "certain

preliminary audit reports issued by the Agency," the billing

entries do not permit a determination that the work pertained to

the Overpayment Case, so this time is not appropriate for

recovery in connection with the Overpayment Case.

24. For 0.2 hours, Ms. Gallagher advised Mr. Grigas as to

Petitioner's exceptions to the recommended order. For 0.6 hours,

Ms. Gallag her read the portion of the recommended order

determining that Petitioner was liable for attorneys' fees and

prepared a strategy for filing a petition for attorneys' fees.

The 0.6 hours is not appropriate for recovery in connection with

the Overpayment Ca se. The 0.2 hours would be found to be

reasonable, if Respondent had established a difference in

experience or expertise between Ms. Gallagher and Mr. Grigas as

to the admittedly technical matter of filing exceptions; absent

such evidence, the 0.2 hours i s excessive.

25. All of Ms. Fiore's time was spent on the appeal and is

not appropriate for recovery in connection with the Overpayment

Case.

26. Thus, all of the time of the Akerman lawyers, other

than Mr. Grigas, is rejected for the reasons stated abov e. At

this point, the sole remaining question as to the Akerman lawyers

is the reasonableness of Mr. GrigasÓ time.

27. From November 21 through December 10, 2013, Mr. Grigas

spent 10.3 hours familiarizing himself with the file, discussing

the Overpayment Case with Petitioner's counsel and Mr. Lacasa,

and reviewing Medicaid documents. This time was reasonable.

28. As noted above, DOAH reopened the Overpayment Case in

early January 2014, and the hearing took place on March 17, 2014.

From the first Januar y time entry on January 6, 2014, through the

day prior to the hearing, Mr. Grigas recorded 98.8 hours of time.

29. The time spent in securing an expert witness on

Medicaid and preparing the witness, as well as contesting the

opinions of the OMPI witnesses , was unnecessary. As noted

above, 14/ the issues were amenable to the understanding of lawyers

without recourse to Medicaid experts. Regardless of the opinions

of these experts, whether outside consultants or OMPI employees,

there was no material fact su pporting the assertion that the NHDW

standard contract covered the services under the three Codes, and

there was no material fact supporting Petitioner's procedural

argument based on its misreading of its Medicaid documents.

30. The time spent securing a Medicaid actuary was likewise

unnecessary. Respondent eventually obtained testimony from the

actuary as to how little of the capitated rate paid to MCOs

sponsoring NHDW plans was attributable to community behavioral

health services. Given the lack of a ny material facts supporting

the assertion that the NHDW standard contract covered the

services under the three Codes or Petitioner's procedural

argument based on its misreading of its Medicaid documents, the

testimony of the actuary was an unnecessarily i ndirect way of

getting to the coverage issue.

31. The deposition of Mr. Young was reasonably necessary,

even though, ultimately, resolution of the coverage question and

procedural argument did not rely directly on his opinion.

Likewise, it was necessar y for Mr. Grigas to examine Petitioner's

24 exhibits, prepare his three witnesses, review his eight

exhibits, prepare a prehearing stipulation, conduct legal

research for the final hearing, and engage in detailed re - review

of the evidence in the days prece ding the final hearing.

32. The reasonable amount of time spent on the above - listed

tasks from January 6 through March 16, 2014, was 50 hours.

33. The time spent in the final hearing was 8.0 hours,

which is reasonable. 15/

34. Between March 18 and Ju ne 2, 2014, which is the day

before the recommended order was issued, Mr. Grigas spent

77.6 hours, including 40 hours preparing the proposed recommended

order. The time spent on the proposed recommended order was

reasonable; at the Fees Hearing, Petition er conceded as much.

35. The time spent on a posthearing deposition of

Mr. Young, which was taken at the instance of Petitioner, was

necessary. Due to the reasons set forth in the recommended

order, problems emerged from Petitioner's unsuccessful attem pt to

recall a witness who had testified at the hearing and from

Petitioner's substitution of Mr. Young in this posthearing

deposition. Additional problems emerged in Petitioner's attempt

to present documentary evidence through Mr. Young at this

postheari ng deposition. These problems were entirely of

Petitioner's making and occurred at the critical posthearing

stage of the Overpayment Case, prior to the issuance of the

recommended order, so all of Mr. GrigasÓ time dealing with these

problems was reasonabl e. Again, Mr. GrigasÓ block billing of

this time with other matters necessitates some approximations,

but he spent about 20 hours on these matters.

36. The remainder of Mr. GrigasÓ time during this period

was unnecessary. Adding the 40 hours for the pro posed

recommended order to the 20 hours for the matters detailed in the

preceding paragraph, 60 hours during this period were necessary,

and 17.6 hours, most of which were spent on a posthearing

deposition of the actuary, were unnecessary.

37. The last pe riod is from June 3, which is the day on

which the recommended order was issued, through the last entry of

Mr. GrigasÓ time before the issuance of the Final Order.

Mr. Grigas billed 37.8 hours during this period. About

12.7 hours was devoted to reading the recommended order, reading

Petitioner's exceptions, and preparing responses to Petitioner's

exceptions. Petitioner filed ten exceptions and a motion to

vacate the order awarding attorneys' fees in a 23 - page double -

spaced document. Petitioner eventual ly overruled all of the

exceptions and did not grant the motion to vacate. Mr. GrigasÓ

time on these matters was reasonable.

38. However, the remaining time was unnecessary or not

appropriate for recovery in connection with the Overpayment Case.

Much of this time involves the appeal, the Fees Case, and the

public records request.

39. Adding Mr. GrigasÓ reasonable time allowances generates

141.0 hour s , which, at $395 per hour, justifies $55,695 in legal

fees.

40. Mr. Lacasa was Respondent's sole cou nsel until

Akerman's first involvement on November 21, 2013. Following the

issuance of the FAR up to November 21, Mr. Lacasa spent 25.6

hours on the Overpayment Case. All of this time was reasonable

except the 9.0 hours spent on November 18, 2013, attend ing a

provider meeting in Tallahassee.

41. After Akerman's entry into the Overpayment Case, four

major problems arise in crediting Mr. Lacasa's time. First, as

noted above, it is reconstructed, although he appears to have

carefully correlated his time entries to documented dates,

including the time records of Mr. Grigas. Second, Mr. Lacasa

also was the chief operating officer of Respondent, raising the

possibility that, in some of his conversations with Mr. Grigas,

Mr. Lacasa was serving as the client, not the client's

co - counsel. Third, Mr. Lacasa billed some of his time in blocks

covering several items and sometimes failed to identify

specifically what his time was devoted to. Fourth, given the

above - described simplicity of the Overpayment Case, Mr. Grigas

has accounted for nearly all of the attorney time that can be

allocated to the Overpayment Case.

42. Given these problems, notwithstanding the

above - described seriousness of the Overpayment Case to

Respondent, it is impossible to credit any additi onal time of

Mr. Lacasa as reasonably necessary. Thus, the 16.6 hours that

Mr. Lacasa expended prior to Akerman's involvement is reasonable,

which, at $350 per hour, justifies an additional $5 , 810 in

reasonable attorneys' fees. Adding this sum to the $55 ,695

allowed for Mr. Grigas, the lodestar amount of reasonable

attorneys' fees is $61,505. In arriving at this figure, the

Administrative Law Judge has already considered t he time and

labor required, the novelty and difficulty of the question

involved, an d the skill requisite to perform the legal service

properly ; the amount involved, the importance of the case to

Respondent, and the results obtained; and the experience,

reputation, and ability of the attorneys representing Respondent.

No further adjustme nts are indicated.

CONCLUSIONS OF LAW

43. DOAH has jurisdiction. §§ 57.105(5), 120.569, and

120.57(1), Fla. Stat.

44. As noted above, 16/ the Administrative Law Judge has

already determined that Petitioner is liable for attorneys' fees

under section 57.1 05(1)(a) and (5) , Florida Statutes . This Fees

Case is thus limited to a determination of a reasonable amount of

attorneys' fees.

45. The burden of proof is on Respondent. See generally ,

United Services Automobile Ass Ón v. Kiibler , 364 So. 2d 57 (Fla.

3d DCA 1978). However, the burden of showing with specificity

which hours should be deducted falls on Petitioner. Centex -

Rooney Constr . Co. v. Martin Cnty . , 725 So. 2d 1255, 1259 (Fla.

4th DCA 1999). The allocation of the burden of proof in this

case, t hough, is irrelevant to the results reached.

46. In determining reasonable attorneys' fees, the trial

court must determine a reasonable hourly rate and a reasonable

number of hours expended on the litigation, so as to arrive at a

lodestar amount. Fla . Pa tients' Comp . Fund v. Rowe , 472 So. 2d

1145, 1150 (Fla. 1985). In the process, the trial court must

make "specific findings" stating the "grounds on which it

justifies the enhancement or reduction." Id. at 1151. The Rowe

opinion cites other factors to b e considered by the trial court

after it has arrived at the "lodestar," which represents the

reasonable hourly rate multiplied by the reasonable number of

hours.

47. After establishing the lodestar, the trial court must

consider a series of factors in d etermining whether to increase

or reduce the attorneys' fees award. Id. at 1150. As relevant

to this case, the factors are set forth in the final paragraph of

the Findings of Fact. These factors have little bearing on the

determination of a reasonable a ttorneys' fee award and have

already been duly considered in arriving at the lodestar amount.

48. For the reasons set forth in the Findings of Fact, the

reasonable attorneys' fees in the Overpayment Case are $61,505.

ORDER

It is

ORDERED that, pursuant to section 57.105(1)(a) and (5),

Florida Statutes, Petitioner shall pay Respondent $61,505 in

reasonable attorneys' fees.

It is further

ORDERED that, if, within 30 days from the date of this Final

Order , Respond ent does not file a petition seeking costs or t he

parties do not file a joint stipulation concerning costs, the

Administrative Law Judge will deem that Respondent has withdrawn

and waived any claim to costs in the Overpayment Case.

DONE AND ORDERED this 5th day of December , 2014 , in

Tallahassee, Leon C ounty, Florida.

S

ROBERT E. MEALE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah. state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 5th day of December , 2014 .

ENDNOTE S

1/ There are three FARs, as well as three preliminary audit

reports, due to Respondent's submittal of reimbursement claims

under three provider numbers. For ease of reference, this Final

Order will refer to the audits and reports in the singular. The

work papers admitted in the Overpayment Case pertain to only one

of the three audits and one of the three PARs and FARs, but

nothing in t he record suggests that the work papers for this audit

are not representative of the work papers supporting the other two

audits.

2 / As discussed in the preceding endnote, there were three FARs

and, thus, Petitioner transmitted three files, which became DOAH

Case Nos. 13 - 3380MPI, 13 - 3385MPI, and 13 - 3386MPI.

3/ AHCA v. Chrysalis Center, Inc. , 143 So. 3d 491 (Fla. 1st DCA

2014).

4 / Respondent contends that the filing of the preliminary audit

report marks the commencement of the overpayment claim for whi ch

Petitioner is now liable for attorneys' fees. As noted in the

text accompanying this endnote, negotiations, including the

submittal of additional documentation by the provider, typically

follow the issuance of the preliminary audit report. Somewhat in

support of Respondent's argument, though, Florida Administrative

Code Rule 59G - 9.070(2) provides that, unless Petitioner offers

amnesty, the provider's liability for sanctions attaches upon the

issuance of the preliminary audit report. However, the

Admin istrative Law Judge nonetheless finds that the formal

commencement of Petitioner's claim takes place with the issuance

of the FAR, not the preliminary audit report.

5 / In 2013, the NHDW program was incorporated into the Long - Term

Managed Care program.

6 / On the facts of this case, no material difference exists

between community behavioral health services and community mental

health services.

7 / As discussed in the recommended order, Respondent never

disputed the existence of a small overpayment of abo ut one percent

of the total overpayment claimed. Nearly the entire amount in

dispute is generated by three Codes (actually, one -- H2017) and,

for the sake of simplicity, this final order discusses only these

Codes. However, as noted in the recommended ord er, relatively

small adjustments were required based on the proper treatment of

other Codes. Apparently for this reason, the final order

determines that the overpayment is closer to two percent. These

matters, though, are irrelevant to the present issues .

8 / Having heard the Overpayment Case on the merits, the

Administrative Law Judge determined that a hearing on liability in

the Fees Case was unnecessary. Although in dictum, a line of

cases acknowledges that a trial judge, under appropriate

circumsta nces, may summarily determine liability for attorneys'

fees under section 57.105 , Florida Statutes . In one such case,

referring to the liability determination under section 57.105, a

court stated: "this finding must be predicated upon substantial

compete nt evidence presented to the court at the hearing on

attorney's fees or otherwise before the court and in the trial

court record." Strothman v. Henderson Mental Health Ctr. , 425 So.

2d 1185, 1185 - 86 (Fla. 4th DCA 1983) (reversing trial court's

section 57. 105 liability determination without evidentiary hearing

following an order granting a motion to dismiss). See also Mason

v. Highlands Cnty. Bd. of Cnty. Comm'rs , 817 So. 2d 922, 923 (Fla.

2d DCA 2002) (same); Murphy v. WISU Props. , 895 So. 2d 1088, 1094 -

9 5 (Fla. 3d DCA 2004) (same). In two cases, appellate courts have

reversed trial courts and mandated an award of attorneys' fees

under section 57.105 without an evidentiary hearing on liability.

Southford v. Hatton , 566 So. 2d 527 (Fla. 2d DCA 1990) (foll owing

a summary judgment on the grounds of res judicata and collateral

estoppel); Olson v. Potter , 650 So. 2d 635 (Fla. 2d DCA 1995)

(following a summary judgment on the ground of res judicata). In

Americana Assoc iate s v. WHUD Real Estate , 846 So. 2d 1194 (Fla.

5th DCA 2003), the court mandated an award of attorneys' fees

under section 57.105, reversing a trial court that granted a

summary judgment, but, without an evidentiary hearing, denied the

fees request, finding that the losing party had presented a good

faith argument for the modification of existing law or the

establishment of new law.

9 / The Administrative Law Judge questions the extent to which

Petitioner effectively relieved itself of its burden of proof by

introducing into evidence the FAR. A s discussed in the

recommended order, the FAR accomplished little else besides

establishing the Codes of the services that Respondent provided to

recipients who were simultaneously enrolled in NHDW plans of

various MCOs. Absent a clear statement for denyi ng reimbursement

for Respondent's resulting claims, it is unclear whether such a

FAR " constitutes evidence of the overpayment" as an " audit report,

supported by agency work papers, showing an overpayment to a

provider," as provided by § 409.913(22), Florid a Stat utes .

However, this Final Order assumes that Respondent bore the burden

of producing evidence following the admission of the FAR.

1 0 / Proving a lack of coverage under the NHDW standard contract

in the Overpayment Case was an uncomplicated process requiring, at

most, three steps. First, Respondent needed to obtain the NHDW

standard contract, if necessary, by a request to produce. Second,

by interrogatories and depositions, Respondent needed to ask

Petitioner and its OMPI witnesses to identify any provisions in

the NHDW standard contract covering the services under Codes

H2017, H2019HR, and H0032TS. Third, taking the provisions

identified by Petitioner and its OMPI witnesses or, if none was so

identified, finding the provision of the NHDW standard contract

that comes closest to providing coverage, Respondent needed to

show how these provisions do not apply to the services billed by

Respondent under Codes H2017, H2019HR, and H0032TS. As conceded

in Petitioner's proposed recommended order, there was never any

issue as to whether the services, if not covered under the NHDW

standard contract, were properly reimbursable to Respondent on a

fee - for - service basis.

1 1 / In this respect alone, the Overpayment Case lacked the

complexity of most Medicaid - overp ayment cases, which feature

hundreds or thousands of pages of patient records.

1 2 / In testimony that was fully credited, Respondent's

Administrative Director, Leslie Lynch, testified that no physician

provided any of the billed services, no physician rec ommended any

of the services billed under Code HI0032TS, and physicians

recommended no more than ten percent of the services billed under

Code H2017 and five percent of the services billed under

Code H2019.

1 3 / Two such reasons readily come to mind. Fi rst, Respondent's

counsel clearly spent excessive amounts of time trying to rebut

Petitioner's procedural argument, which was advanced almost

exclusively by OMPI employees. As the Administrative Law Judge

stated during the Fees Hearing, much legal work ma y be necessary

to prepare an attorney promoting or challenging a scientific

expert, such as a hydrologist opining as to groundwater movement,

as to which we lawyers, as lawyers, typically possess little, if

any, expertise. But much less legal work is nece ssary to address

a coverage question in a document approximating an insurance

policy or to interpret the procedural provisions of other

documents, as to which we lawyers possess considerably more

expertise. Second, the Administrative Law Judge cannot disc ount

the possibility that Respondent's counsel may have determined that

overpreparation was necessary on the delicate ground that

sometimes trial counsel do not share the same opinion as to the

perspicacity of the trial court as is held by the trial court

itself.

1 4/ See first reason set forth in endnote 13 above .

1 5/ Although the Administrative Law Judge recorded only 7.5 hours,

the difference may be due to a lunch break, during which

Mr. Grigas presumably continued to go over the case with Mr.

Lacasa or witnesses.

1 6/ See endnote 8 above and text accompanying this endnote.

COPIES FURNISHED:

Steven Alfons Grigas, Esquire

Akerman LLP

Suite 1200

106 East College Avenue

Tallahassee, Florida 32301

(eServed)

Eduardo R. Lacasa, Esquire

The Chrysalis C enter, Inc.

351 Altara Avenue

Coral Gables, Florida 33146

(eServed)

Steven Lee Perry, Esquire

Office of the Attorney General

PL - 01, The Capitol

Tallahassee, Florida 32399

(eServed)

Richard Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Stuart Williams, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Elizabeth Dudek, Secretary

Agency for Health Care A dministration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

(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.

Revi ew proceedings are governed by the Florida Rules of Appellate

Procedure. Such proceedings are commenced by filing the original

notice of administrative appeal with the agency clerk of the

Division of Administrative Hearings within 30 days of rendition

of the order to be reviewed, and a copy of the notice,

accompanied by any filing fees prescribed by law, with the clerk

of the District Court of Appeal in the appellate district where

the agency maintains its headquarters or where a party resides or

as otherw ise provided by law.