14-003606MPI Agency For Health Care Administration vs. Cape Memorial Hospital, Inc., D/B/A Cape Coral Hospital Status: Closed Recommended Order on Wednesday, July 27, 2016.

Summary: Petitioner may receive Medicaid overpayment from provider.

In determining how to rule ·upon Respondent's exceptions and whether to adopt the ALJ' s

Recommended Order in whole or in part, the Agency must follow section 120.57(1 )(l), Florida

Statutes (20 15), which provides in pertinent part:

The agency may adopt the recommended order as the final order of the agency.

The agency in its final order may reject or modify the conclusions of law over

which it has substantive jurisdiction and interpretation of administrative rules

over which it has substantive jurisdiction. When rejecting or modifying such

conclusion of law or interpretation of administrative rule, the agency must state

with particularity its reasons for rejecting or modifying such conclusion of law or

interpretation of administrative rule and must make a finding that its substituted

conclusion of law or interpretation of administrative rule is as or more reasonable

than that which was rejected or modified. Rejection or modification of

conclusions of law may not form the basis for rejection or modification of

findings of fact. The agency may not reject or modify the findings of fact unless

the agency first determines from a review of the entire record, and states with

particularity in the order, that the findings of fact were not based upon competent

substantial evidence or that the proceedings on which the findings were based did

not comply with essential requirements of law ....

§ 120.57(1)(/), Fla. Stat. Additionally, "[t]he final order shall include an explicit ruling on each

exception, but an agency need not rule on an exception that does not clearly identify the disputed

portion of the recommended order by page number or paragraph, that does not identify the legal

basis for the exception, or that does not include appropriate and specific citations to the record."

§ 120.57(1)(k), Fla. Stat. In accordance with these legal standards, the Agency makes the

following rulings on Respondent's exceptions:

In its first exception, Respondent takes exception to Paragraph 6 of the Recommended

Order, arguing it is incomplete. Respondent's argument does not constitute a valid reason for the

Agency to reject or modify the finding of fact in Paragraph 6 of the Recommended Order. See§

120.57(1)(/), Fla. Stat.; Heifetz v. Department of Business Regulation, 475 So. 2d 1277, 1281

(Fla. 1st DCA 1985) (holding that an agency "may not reject the hearing officer's finding [of

fact] unless there is no competent, substantial evidence from which the finding could reasonably

be inferred"). Since the finding of fact in Paragraph 6 of the Recommended Order is based on

competent, substantial record evidence (See Petitioner's Exhibit 1 ), the Agency must deny

Respondent's first exception.

In its second exception, Respondent takes exception to Paragraph 8 of the Recommended

Order because "it does not accurately set out the individuals who are eligible for Medicaid."

Respondent's argument does not constitute a valid reason for the Agency to reject or modify the

finding of fact in Paragraph 8 of the Recommended Order. See § 120.57(1)(/), Fla. Stat.;

Heifetz, 475 So. 2d at 1281. Paragraph 8 of the Recommended Order is a mixed finding of fact

and conclusion of law. To the extent it is a finding of fact, it is based on competent, substantial

record evidence. See Transcript, Page 44; Petitioner's Exhibit 21 at 1-2 and 3-2; Respondent's

Exhibit 19 at Page 58; § 414.095(2), Fla. Stat. To the extent it is a conclusion of law, the

Agency finds that, while it has substantive jurisdiction over the conclusion of law in Paragraph 8

of the Recommended Order, it cannot substitute a conclusion of law that is as or more reasonable

than that of the ALJ. Accordingly, the Agency denies Respondent's second exception.

In its third exception, Respondent takes exception to Paragraph 9 of the Recommended

Order, arguing: 1) section 409.902(2)(b), Florida Statutes is not applicable to this proceeding; 2)

the statute speaks for itself and the ALJ's paraphrasing of it causes a misconstruction of the

statute; and 3) it is a conclusion oflaw that is erroneous. Although labeled as a finding of fact by

the ALJ, Paragraph 9 of the Recommended Order is actually a conclusion of law because the

ALJ is quoting and interpreting a statutory provision. Respondent's first and third arguments are

valid, but only to an extent. Section 409.902(2)(b), Florida Statutes, is not applicable to this

proceeding. However, because section 409.904(4), Florida Statutes, contains substantially the

same language as section 409.902(2)(b), Florida Statutes, Respondent's contention that

paragraph 9 of the Recommended Order is erroneous or misconstrues the law is not true. The

Agency finds that it has substantive jurisdiction over the conclusions of law in Paragraph 9 of the

Recommended Order because it is the single state agency in charge of administering Florida's

Medicaid Program, and also finds that it can substitute conclusions of law that are as or more

reasonable than those of the ALJ. See § 120.57(1)(1), Fla. Stat. Therefore, the Agency grants

Respondent's third exception only to the extent that it modifies Paragraph 9 of the

Recommended Order as follows:

9. Pursuant to section 409.902(2)(b)409.904(4), Medicaid funds

canftet be used to provide medical services to individuals who do

net-meet the statutory eligibility criteria "except citizenship" and

are "in need of emergency medical services." These individuals

are only eligible for emergency medical services for "the period of

the emergency, in accordance with federal regulations." "unless

the serviees are neeessacy to treat an emergeney medieal

eondition" or are for pregnant v;omen. The eited statute further

provides that sueh serviees are "authorized only to the extent

provided under federal law."

In its fourth exception, Respondent takes exception to Paragraph 12 of the Recommended

Order, arguing: 1) it mischaracterizes section 409.904(4), Florida Statutes; 2) confuses eligibility

with payment; and 3) fails to state that the period of emergency is not limited by federal law.

Paragraph 12 is a conclusion of law within AHCA's substantive jurisdiction because it quotes

and interprets section 409.904(4), a statute that AHCA is charged with administering. The ALJ's

interpretation of section 409. 904( 4 ), Florida Statutes, is consistent with the plain statutory

language; it does not mischaracterize the statutory language and is not incomplete, as

Respondent suggests, nor does it confuse eligibility with payment. Thus, AHCA concludes that

it cannot substitute conclusions of law that are as or more reasonable than the ALJ' s, and denies

Respondent's fourth exception.

In its fifth exception, Respondent takes exception to Paragraph 13 of the Recommended

Order, arguing it is incomplete because it fails to reference other rules that Respondent believes

are relevant. Respondent's argument does not constitute a valid basis for rejecting findings of

fact. The finding of fact in Paragraph 13 of the Recommended Order is based on competent,

substantial record evidence. See Transcript, Pages 44 and 47; Petitioner's Exhibits 21 and 23;

Respondent's Exhibit 20 at Pages 33 and 54-55. Thus, the Agency is not at liberty to reject or

modify it. See § 120.57(1)(/), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Therefore, the Agency

must deny Respondent's fifth exception.

In its sixth exception, Respondent takes exception to Paragraph 16 of the Recommended

Order, arguing it is incomplete and fails to take into consideration the limitations imposed on the

Agency by sections 409.905(5)(a) and section 409.913(3), Florida Statutes, where the Agency

has implemented a prior authorization program and/or engaged in prepayment review.

Paragraph 16 of the Recommended Order is a mislabeled conclusion of law that correctly

interprets the Agency's role in the oversight of Medicaid providers, as set forth in section

409.913, Florida Statutes. While the Agency has substantive jurisdiction over the conclusion of

law in Paragraph 16 of the Recommended Order because it is the single state agency in charge of

administering Florida's Medicaid program, including the interpretation and application section

409.913, Florida Statutes, in light of other statutory sections, AHCA agrees with the ALJ's

interpretation of the law and cannot substitute a conclusions of law that is as or more reasonable.

Therefore, for these reasons and for the reasons set forth in AHCA's ruling on Respondent's

fourteenth exception, the Agency denies Respondent's sixth exception.

In its seventh exception, Respondent takes exception to Paragraph 17 of the

Recommended Order, arguing it is not supported by competent, substantial evidence. The

finding of fact in Paragraph 1 7 of the Recommended Order is supported by competent,

substantial record evidence. See Transcript, Pages 37-38, 66-67; Respondent's Exhibit 30 at

Page 7. Thus, the Agency cannot reject or modify it. See § 120.57(1)(/), Fla. Stat.; Heifetz, 475

So. 2d at 1281. Therefore, the Agency denies Respondent's seventh exception.

In its eighth exception, Respondent takes exception to Paragraph 19 of the Recommended

Order because: 1) "AHCA conducted the review of Respondent's claims through one of its

divisions, BMPI"; and 2) "the peer reviewers were reviewing the recipient's status as to whether

it had an [emergency medical condition ("EMC")] and its duration; not the services rendered."

Respondent's arguments are not valid reasons for the Agency to disturb the finding of fact in

Paragraph 19 of the Recommended Order. The finding of fact in Paragraph 19 of the

Recommended Order is supported by competent, substantial record evidence. See Petitioner's

, Exhibits 2, 3 and 4. Thus, the Agency is prohibited by law from rejecting or modifying it. See §

120.57(1)(1), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Therefore, the Agency denies Respondent's

eighth exception.

In its ninth exception, Respondent takes exception to Paragraph 21 of the Recommended

Order because: 1) "the designated peer reviewers made a determination for each claim as to

whether the [undocumented alien] had an EMC and its duration; not whether the claim was

related to an EMC"; and 2) the finding of fact in Paragraph 21 is not complete. Neither of

Respondent's arguments constitute a valid basis for the Agency to reject or modify a finding of

fact. See § 120.57(1)(!), Fla. Stat. The finding of fact in Paragraph 21 of the Recommended

Order is based on competent, substantial record evidence. See Transcript, Pages 49-50;

Petitioner's Exhibit 24 at Pages 26-29; Petitioner's Exhibit 25 at Pages 30-34; and Petitioner's

Exhibit 26 at Pages 13-21. Thus, the Agency is not permitted to reject or modify it. See §

120.57(1)(/), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Therefore, the Agency denies Respondent's

ninth exception.

In its tenth exception, Respondent takes exception to Paragraph 22 of the Recommended

Order because: 1) Respondent believes the phrase "fully credited" is "vague and without any

clear meaning"; 2) "the peer reviewers' testimony is not competent, substantial evidence to

support a finding of fact that AHCA made an overpayment to Respondent"; and 3) the finding is

incomplete. Respondent's first and third arguments do not constitute valid bases upon which the

Agency can reject or modify a finding of fact. See § 120.57(1)(1), Fla. Stat. Respondent's

second argument concerns both the validity ofthe peer reviewers' testimony, which is outside of

the Agency's substantive jurisdiction (See Barfield v. Department of Health, 805 So. 2d 1008

(Fla. 1st DCA 2002)), and the weight the ALJ gave to the peer reviewers' testimony, which is

not something that the Agency can second guess (See Heifetz, 475 So. 2d at 1281). Therefore,

the Agency denies Respondent's tenth exception.

In its eleventh exception, Respondent takes exception to Paragraphs 24, 26, 28, 30, 32

and 34 of the Recommended Order, arguing they are incomplete and for the reasons set forth in

its ninth and tenth exceptions. The Agency cannot reject or modify findings of fact because they

are "incomplete," as Respondent believes. Instead, the Agency may only reject findings of fact

if they are not based on competent, substantial evidence in the record or the proceedings on

which they are based departed from the essential requirements of law. See§ 120.57(1), Fla. Stat.

Respondent made no such allegations in regard to the findings of fact in Paragraphs 24, 26, 28,

30, 32 and 34 of the Recommended Order. Additionally, the findings of fact in Paragraphs 24,

26, 28, 30, 32 and 34 of the Recommended Order are based on competent, substantial record

evidence. See Petitioner's Exhibit 24 at Pages 26-29; Petitioner's Exhibit 25 at Pages 30-34; and

Petitioner's Exhibit 26 at Pages 13-21. Thus, the Agency cannot disturb them. See §

120.57(1)(/), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Therefore, the Agency must deny

Respondent's eleventh exception for this reason, as well as the reasons set forth in the ruling on

Respondent's ninth and tenth exceptions supra, which are hereby incorporated by reference.

In its twelfth exception, Respondent takes exception to Paragraph 36 of the

Recommended Order, arguing it is incomplete for the reasons set forth in its sixth exception.

Based on the reasoning set forth in the Agency's ruling on Respondent's sixth exception supra,

which is hereby incorporated by reference, the Agency finds that, while it does have substantive

jurisdiction over the ALJ's conclusions of law in Paragraph 36 of the Recommended Order

because it is the single state agency in charge of administering Florida's Medicaid program, it

cannot substitute conclusions of law that are as or more reasonable than those of the ALJ.

Therefore, the Agency must deny Respondent's twelfth exception.

In its thirteenth exception, Respondent takes exception to Paragraph 3 7 of the

Recommended Order, arguing "there has been no finding that the Respondent submitted claims

for services that were not medically necessary or not fully documented" and "Respondent

submitted its claims in accordance with AHCA's policies at the time." The ALJ's conclusion of

law in Paragraph 3 7 of the Recommended Order correctly quotes and interprets section 409.913

Florida Statutes, including subsection (7). While the Agency has substantive jurisdiction over

the conclusions of law in Paragraph 3 7 of the Recommended Order because it is the single state

agency in charge of administering Florida's Medicaid Program, it cannot not substitute a

conclusion of law that is as or more reasonable than that of the ALJ; indeed, AHCA agrees with

the ALJ's interpretation. Therefore, the Agency denies Respondent's thirteenth exception.

In its fourteenth exception, Respondent takes exception to Paragraph 39 of the

Recommended Order, arguing: 1) "the audit report does not identify an overpayment"; 2) "the

retrospective review is barred by administrative finality and § 409.905(5)(a)"; 3) "AHCA has no

authority to determine the existence or duration of an EMC"; 4) "the peer reviewers' reports

exceed their statutory authority"; 5) "AHCA's application of the rules to arrive at the

determination of the alleged overpayment is inconsistent with both Bayfront I and Bayfront II,

and is an unadopted, invalid rule"; and 6) "the review was conducted beyond the statute of

limitations."

Respondent's first argument is contrary to competent, substantial record evidence. See

Petitioner's Exhibit 4.

In regard to Respondent's second argument, the Agency has substantive jurisdiction over

the conclusion of law in Paragraph 16 of the Recommended Order because it is the single state

agency in charge of administering Florida's Medicaid program, including the interpretation and

application section 409.913, Florida Statutes, in light of other statutory sections, including

section 409.905(5)(a), Florida Statutes. To construe section 409.905(5)(a), Florida Statutes, as a

bar that prohibits the Agency from conducting any retrospective audits under section 409.913,

Florida Statutes, would lead to an absurd result. Instead, the Agency interprets the two statutory

sections in the same manner as the ALJ did in the case of Agency for Health Care

Administration v. Florida Hospital Orlando, ll-2892MPI (AHCA 2012), which also dealt with

the issue of whether services rendered to undocumented aliens were medically necessary to treat

an EMC, and which AHCA hereby adopts and incorporates by reference. In the Florida Hospital

Orlando case, the ALJ concluded

Prior approval by KeP[RO] does not estop AHCA from pursuing

overpayment claims when an audit does not support the charges

and services billed to Medicaid. AHCA has the daunting task of

chasing monies already paid to providers who may or may not

have submitted accurate or truthful information to KeP[RO]. Prior

approval does not justify payment when contrary to law. AHCA

must always protect the Medicaid funds it is challenged to

conserve so that bona fide recipients receive the medical care they

reqmre.

Recommended Order at Page 11 (adopted by AHCA's Final Order). AHCA need not address the

applicability of the doctrine of administrative finality to this matter because it was not addressed

by the ALJ in this paragraph and because application of the doctrine is a conclusion of law that is

outside of the Agency's substantive jurisdiction. See, Deep Lagoon Boat Club, Ltd. v.

Sheridan, 784 So. 2d 1140, 1142 (Fla. 2d DCA 2001) (stating an agency does not have

substantive jurisdiction to decide whether the doctrine of collateral estoppel applies to a

particular case).

In regard to Respondent's third, fourth and fifth arguments, DCF is the state agency

responsible for determining whether persons are eligible 1 to enroll in Medicaid. § 409.902, Fla.

Stat. 2 DCF reviews applications for Medicaid enrollment submitted by or on behalf of

individuals and families to determine whether they meet the income, asset, and categorical

eligibility tests set forth in federal and state law such that they may be enrolled as Medicaid

recipients. § 409.902, Fla. Stat.; § 409.903, Fla. Stat.; § 409.904, Fla. Stat. In determining

whether an applicant is categorically eligible to enroll in Medicaid based on a medical condition

(such as pregnancy, age, blindness or other disability, or the need for certain services, including

undocumented aliens in need of emergency medical services), DCF may consider any

1 Webster's Dictionary defines the term "eligible" as "able to be chosen for something; able to do or receive

something; qualified to participate or be chosen." Merriam-Webster Dictionary, http://www.merriam­

webster.com/dictionary/eligible (last visited March 21, 20 16).

2 Unless otherwise stated, all statutory references from this point forward are to the 2005 through 2007 versions of

the Florida Statutes, which were in effect during the period when the claims at issue in this case were submitted to

AHCA for payment.

documentation submitted to it by or on behalf of the applicant.

§ 409.902, Fla. Stat.;§ 409.903(5), (8), Fla. Stat.;§ 409.904(1), (2), (3), (4), (5), Fla. Stat. With

respect to undocumented aliens, DCF must consider the application and supporting

documentation to determine whether and when the alien had an emergency medical condition

("EMC"), as such aliens are only Medicaid-eligible for the period of the EMC. See

Respondent's Exhibit 23 at Pages 8-9; 42 U.S.C. § 1396b(v)(2); 42 C.F.R. § 440.255; § 409.902,

, Fla. Stat.; § 409.904(4), Fla. Stat.; Fla. Admin. CodeR. 65A-1.715(1). However, in making its

eligibility determinations, DCF relies on the documentation provided to it, and does not

necessarily receive and review any medical records. See Respondent's Exhibit 23 at Pages 33-

34.

In contrast, AHCA is "the single state agency authorized to make payments for medical

assistance and related services under Title XIX of the Social Security Act," codified at 42 U.S.C.

§ 1396a, et seq. § 409.902, Fla. Stat. AHCA contracts with health care providers to provide

medical goods and services to enrolled Medicaid recipients, receives and pays the claims health

care providers submit for goods and services furnished, conducts claims audits, and recovers any

overpayments for paid claims that it determines were not reimbursable.

§§ 409.903-.906, Fla. Stat.; § 409.907(1)-(3), (5)(a), (5)(b), (7)-(9), Fla. Stat.; § 409.908, Fla.

Stat.; § 409.913(1)(e), (2), (3), (5), (7), (9), (11), (15), (20)-(23), (27), Fla. Stat. As part of its

post-payment audits, AHCA requests and then reviews the provider's contemporaneous records,

including medical records, supporting each audited claim to determine whether the goods or

services billed for were rendered in accordance with the requirements of federal and state

Medicaid law, including whether they were "medically necessary" for the recipient, as

determined by a contracted, licensed physician or "peer"; if not, the claim is not payable by

Medicaid, and the Agency may refuse to pay it or require repayment. § 409.905, Fla. Stat.; §

409.906, Fla. Stat.; §409.913(1)(d), (7)(b), (7)(f), (9), (11), (15), (20)-(23), Fla. Stat.;§ 409.9131,

Fla. Stat.; Fla. Admin. CodeR. 590-1.010(166). See also 42 C.P.R.§ 440.230(d); Moore ex rel.

Moore v. Reese, 637 F.3d 1220, 1232-33 (11th Cir. 2011) ("Although the standard of "medical

necessity" is not explicitly denoted in the Medicaid Act, it has become a judicially accepted

component of the federal legislative scheme .... Accordingly, even if a category of medical

' services or treatments is mandatory under the Medicaid Act, participating states must provide

those medical services or treatments for Medicaid recipients only if they are 'medically

necessary."'). With respect to undocumented aliens, AHCA must make the additional

determination whether the goods or services billed were necessary to treat an EMC, as

determined by a contracted, licensed physician or "peer" and based on the provider's supporting

medical records; if not, the claim is not payable. See 42 U.S.C. § 1396b(v)(2); 42 C.P.R. §

440.255; § 409.902, Fla. Stat.; § 409.904(4), Fla. Stat.; § 409.913(l)(d), (7), (9), (11), (15)(b)­

(d), Fla. Stat.;§ 409.9131, Fla. Stat.; Fla. Admin. CodeR. 590-1.010(166).

Indeed, for Medicaid payment purposes, a provider's claims must be "documented by

records made at the time the goods or services were provided, demonstrating the medical

necessity for the goods or services rendered. Medical goods or services are excessive or not

medically necessary unless both the medical basis and specific need for them are fully and

properly documented in the recipient's medical record." § 409.913(7)(£), Fla. Stat. In addition, a

Medicaid provider must "retain medical, professional, financial, and business records pertaining

to services and goods furnished to a Medicaid recipient and billed to Medicaid for a period of 5

years after the date of furnishing such services or goods." § 409.913(9), Fla. Stat. Section

409.913(1)(d), Florida Statutes, expressly provides: "For purposes of determining Medicaid

reimbursement, [AHCA] is the final arbiter of medical necessity. Determinations of medical

necessity must be made by a licensed physician or "peer" employed by or under contract with

[AHCA] and must be based upon information available at the time the goods or services are

provided." See§ 409.901, Fla. Stat.;§ 409.9131(2), (5)(b), Fla. Stat.

AHCA cannot refuse to make payments to a Medicaid provider on the basis that it

believes DCF erroneously determined the recipient was eligible for Medicaid, based on the

application submitted to DCF. § 409.907(5)(b), Fla. Stat. However, AHCA can and must

refuse to pay the provider or require repayment if it finds a claim is not supported by the

provider's contemporaneous records, including medical records, demonstrating that the goods or

services billed for were provided in accordance with the requirement of law and were "medically

necessary" for the recipient, as determined by the Agency's contracted, licensed physician or

"peer." § 409.905, Fla. Stat.; § 409.906, Fla. Stat.; §409.913(l)(d), (2), (7)(b), (7)(f), (9), (11),

(15), (20)-(23), Fla. Stat.;§ 409.9131, Fla. Stat.

The difference in the roles played by the agencies is made quite clear in the record of this

case. In Respondent's Exhibit 45 at Pages 23-24, Tracy Ryder, an investigator with AHCA's

Bureau of Medicaid Program Integrity, testified that DCF "is determining eligibility to receive

Medicaid, while the other determination as performed by AHCA is to determine whether or not­

to determine the duration of the emergency medical condition in terms of the medical

presentation and care and the patient's response to treatment. It is a medical review." In

Respondent's Exhibit 19 at Page 64, Shevaun Harris, an administrator for AHCA's Bureau of

Medicaid Services, stated that "DCF determines a from and through date of when someone is

eligible for Medicaid but that does not mean that that person is eligible - would have a condition

that requires [AHCA] to pay for services during that entire time frame." In Respondent's Exhibit

20 at Page 57, Johnnie Shepherd, an administrator with AHCA's Bureau of Medicaid Program

Integrity, stated that "Department of Children and Families determines eligibility ... they do not

determine coverage." In Respondent's Exhibit 23 at Page 12, Dianna Laffey, the chief of

program policy for DCF, stated that "we just do the Medicaid eligibility piece, and then AHCA

is the one that pays claims in that. So from what I have always understood, they then determine

whether or not those services met that higher level, that higher threshold ... we don't determine

that because we don't get medical records." In Respondent's Exhibit 26 at Page 43, Beth

Kidder, AHCA's Deputy Secretary for Medicaid Operations, explained that "[e]ligibility and

coverage are two different things, and so I want to make that distinction that a span of eligibility

may be open but not all services would be covered for that person."

Thus, an application for Medicaid eligibility submitted to DCF by or on behalf of a

person seeking to enroll in the Medicaid program and a claim for payment submitted to AHCA

by a provider seeking reimbursement from Medicaid for a good or service provided to an

enrolled recipient have no meaningful overlap. The fact that DCF has determined an

undocumented alien is eligible for Medicaid due to an EMC based on the documentation in the

eligibility application does not mean that all claims submitted by a provider for goods or services

provided to the alien are payable by AHCA. The eligibility application and claim are submitted

to different agencies, by different persons, for different purposes, and require different

documentation and levels of documentation, i.e. type, detail, and completeness, in support. The

eligibility application reviewed by DCF may be accompanied by different documentation,

including medical records, than those maintained and supplied by the provider in support of a

claim for payment. For instance, this could occur if there was more than one provider of goods

or services, if the alien did not submit complete documentation to DCF, or if the provider did not

maintain and supply contemporaneous medical record supporting his or her claims to AHCA

upon request, as required by law.

Further, even assuming the same documentation is submitted in support of both an

application for Medicaid eligibility and a provider's claim for payment, DCF's eligibility

determination is not the equivalent of AHCA's medical necessity determination. See

Respondent's Exhibit 23 at page 12; Respondent's Exhibit 26 at Page 50. AHCA utilizes a

contracted, licensed physician to conduct a medical review of claims and supporting

documentation; DCF's review of eligibility applications utilizes no such personnel and includes

no such component. See Respondent's Exhibit 23 at page 12; Respondent's Exhibit 20 at Page

28. In addition, the legislature has specified that AHCA, not DCF, is the final arbiter of

"medical necessity" for Medicaid payment purposes. § 409.913(l)(d), Fla. Stat.

With regard to the fifth claim, Respondent is incorrect regarding its statute of limitations

argument. Section 409.913(9), Florida Statutes, requires a Medicaid provider to "retain medical,

professional, financial, and business records pertaining to services and goods furnished to a

Medicaid recipient and billed to Medicaid for a period of 5 years after the date of furnishing such

services or goods." The statute further states that the Agency "may investigate, review, or

analyze such records." The audit at issue in this matter began in October 20 I 0 (See

Petitioner's Exhibit 2), well within the 5 year period from the date of the earliest claim at issue in

this matter.

Finally, the ALJ's conclusion of law in Paragraph 39 of the Recommended Order is a

correct interpretation of section 409.913(22), Florida Statutes. While the Agency has substantive

jurisdiction over the conclusions of law in Paragraph 39 of the Recommended Order because it is

the single state agency in charge of administering Florida's Medicaid Program, it cannot not

substitute a conclusion of law that is as or more reasonable than that of the ALJ; indeed, AHCA

agrees with the ALJ' s interpretation. Therefore, the Agency denies Respondent's fourteenth

exception for these reasons and for the reasons stated in the ruling Respondent's sixth exception.

In its fifteenth exception, Respondent takes exception to Paragraph 40 of the

Recommended Order, arguing: 1) the ALJ' s use of the terms "collected" and "Medicaid funds"

is "vague and erroneous"; 2) "a determination of when an EMC is alleviated is not a basis to

determine an overpayment"; 3) the ALJ's statement that "the disputed charges referenced herein

were not properly billed to Medicaid and are overpayments" is a finding of fact that is contrary

to the record evidence and clearly erroneous; and 4) "AHCA is barred from retrospectively

reviewing these claims and/or recouping the alleged overpayments." Respondent's first

exception does not constitute a valid basis for overturning a conclusion of law. The Agency also

rejects Respondent's second, third and fourth arguments for the reasons set forth in its ruling on

Respondent's sixth and fourteenth exceptions supra, which are hereby incorporated by reference.

Therefore, the Agency denies Respondent's fifteenth exception.

In its sixteenth exception, Respondent takes exception to Paragraph 41 of the

Recommended Order, "in that as set forth in 1-167, which are incorporated herein by

reference, and as set forth herein, Respondent's [sic] assert far more than what the RO states."

Taking exception to a conclusion of law because a party asserted more than what the

recommended order states is not a valid basis for rejecting or modifying findings of fact or

conclusions of law. See § 120.57(1)(1), Fla. Stat. Furthermore, the ALJ stated that the

Respondent's "variety of reasons [were] fully presented in the record and in the Respondent's

Proposed Recommended Order," so the Agency is unclear as to why Respondent is taking

exception to Paragraph 41 of the Recommended Order. Regardless, since Respondent has failed

to "identify the legal basis for the exception" as required by section 120.57(1 )(k), Florida

Statutes, the Agency need not address it.

In its seventeenth exception, Respondent takes exception to Paragraph 42 of the

Recommended Order, in which the ALJ concluded that "the same assertions [raised in

Respondent's Proposed Recommended Order in this case] were previously litigated and

ultimately rejected in AHCA v. Lee Memorial Health System Gulf Coast Medical Center, Case

. No. 15-3876MPI (Fla. DOAH January 26, 2016), rejected (Fla. AHCA April 4, 2016),

hereinafter "Gulf Coast." Respondent contends "neither the Recommended Order nor the Final

Order ruled on all of the argument litigated in Gulf Coast and addressed in the PRO," and, more

specifically, that its arguments "regarding the applicability of the statute of limitations, AHCA's

lack of compliance with Bayfront I and Bayfront IL the rule applied is an unadapted and invalid

· rule, and the peer reviewer's lack of authority to make the determination of whether an

[undocumented alien] has an EMC and its duration" were not previously raised in the Gulf Coast

case. Respondent argument is meritless. As the ALJ correctly concluded, the same arguments

were raised in both cases. Compare Respondent's Proposed Recommended Order in 15-

3876MPI at Pages 26-39 with Respondent's Proposed Recommended Order in 14-3606MPI at

Pages 33-49. Therefore, the Agency denies Respondent's seventeenth exception.

In its eighteenth exception, Respondent takes exception to Paragraph 44 of the

Recommended Order, arguing the Gulf Coast Final Order is not binding on this case because this

case involves a different Respondent. The Agency disagrees. The Gulf Coast Final Order,

unless overturned on appeal, is considered prior Agency precedent. Accordingly, the Agency

should follow Gulf Coast's precedent, unless it can offer a valid explanation for departing from

it. Bethesda Healthcare System, Inc. v. Agency for Health Care Administration, 945

So. 2d 574, 576 (Fla. 4th DCA 2006). The Agency cannot offer any explanation for why it

would rule in a manner inconsistent with the Gulf Coast Final Order with regard to its legal

authority to recover overpayments or otherwise; indeed, AHCA agrees with the ALJ's

conclusions of law in Paragraph 44 of the Recommended Order. Thus, while it has substantive

jurisdiction over the conclusions of law in Paragraph 44 of the Recommended Order because it is

the single state agency in charge of administering Florida's Medicaid program, it cannot

substitute conclusions of law that are as or more reasonable than those of the ALJ. Therefore,

the Agency denies Respondent's eighteenth exception.

In its nineteenth exception, Respondent takes exception to Paragraph 45 of the

Recommended Order, arguing: I) the case of Bayfront Medical Center et al. v. Agency for

Health Care Administration ("Bayfront II"), DOAH Case No. 14-4758RU (Fla. Div. Admin.

1Hrgs. Apr. 20, 2015); per curium affirmed Bayfront Medical Center et al. v. Agency for Health

Care Administration, 2016 WL 3523316 (Fla. 1st DCA 2016), has no precedential value because

it was a per curiam affirmed opinion; and 2) if it has precedential value, that the Agency has

failed to apply its Rules in in accordance with that Final Order. The Agency is only permitted to

reject or modify an ALJ's conclusions oflaw concerning whether it relied on an unadopted rule

(which is essentially Respondent's argument in this case) unless "the agency first determines

from a review of the complete record, and states with particularity in the order, that such

determination is clearly erroneous or does not comply with essential requirements of law." §

120.57(1)(e)4, Fla. Stat. Nothing Respondent pointed to in the record of this case demonstrates

the ALJ's conclusion of law was clearly erroneous or departed from the essential requirements of

law in reaching the conclusions of law in Paragraph 45 of the Recommended Order. Therefore,

the Agency must deny Respondent's nineteenth exception.

FINDINGS OF FACT

The Agency adopts the findings of fact set forth in the Recommended Order, except

where noted supra.

CONCLUSIONS OF LAW

The Agency adopts the conclusions of law set forth in the Recommended Order.

IT IS THEREFORE ADJUDGED THAT:

Respondent is hereby required to repay $57,350.67 in overpayments, plus interest at a

rate often (10) percent per annum as required by Section 409.913(25)(c), Florida Statutes, to the

Agency. The parties shall govern themselves accordingly.

Unless payment has already been made, Respondent shall make full payment of the

overpayments, costs and fine to the Agency for Health Care Administration within 30 days of the

rendition date of this Final Order unless other payment arrangements have been agreed to by the

parties. Respondent shall pay by check payable to the Agency for Health Care Administration

and mailed to the Agency for Health Care Administration, Office of Finance and Accounting,

2727 Mahan Drive, Mail Stop 14, Tallahassee, Florida 32308.

Additionally, since the Agency has prevailed in this matter, it is entitled to recover the

investigative, legal and expert witness costs it incurred in this matter. § 409.913(23), F.S. The

parties shall attempt to agree to amount of investigative, legal, and expert witness costs for this

matter. If the parties are unable to reach such agreement, either party may file a request for

hearing with the Division of Administrative Hearings under this case style within 30 days of the

date of rendition of this Final Order, and the Administrative Law Judge who presided over this

matter shall determine the amount of such costs.

DONE and ORDERED this J!l.!i day of Ocfob{!f , 2016, in Tallahassee,

Florida.

JUSTIN NIOR, RI ... SECRETARY

AGENCY FOR HEALTH CARE ADMINISTRATION

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO

JUDICIAL REVIEW, WHICH SHALL BE INSTITUTED BY FILING THE ORIGINAL

NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A COPY ALONG

WITH THE FILING FEE PRESCRIBED BY LAW WITH THE DISTRICT COURT OF

APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS

HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL

BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE

NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF THE RENDITION OF THE

ORDER TO BE REVIEWED.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing Final Order has

been furnished by U.S. or interoffice mail to the persons named below on

RICHARD J. SHOOP, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, MS #3

Tallahassee, Florida 32308

[phone]

COPIES FURNISHED TO:

Honorable William F. Quattlebaum

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(via electronic filing)

Andrew E. Schwartz, Esquire

Jacqueline F. Howe, Esquire

Shutts and Bowen LLP

200 East Broward Boulevard, Suite 2100

Fort Lauderdale, Florida 33301

(via U.S. Mail)

Daniel Elden Nordby, Esquire

Shutts and Bowen LLP

215 South Monroe Street, Suite 804

Tallahassee, Florida 32301

(via U.S. Mail)

Joanne Barbara Erde, Esquire

Duane Morris LLP

200 South Biscayne Boulevard, Suite 3400

Miami, Florida 33131

(via U.S. Mail)

Medicaid Program Integrity

Office of the Inspector General

(via electronic mail)

Medicaid Accounts Receivable

Finance & Accounting

(via electronic mail)