15-003877MPI Agency For Health Care Administration vs. Vyasa Ramcharan, Dmd Status: Closed Recommended Order on Wednesday, March 30, 2016.

Summary: AHCA proved that claims submitted by Respondent were not medically necessary. Reimbursement and recoupment of costs were appropriate.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Petitioner,

Case No. 1 5 - 3877MPI

vs.

VYASA RAMCHARAN, DMD,

Respondent.

_______________________________/

RECOMMENDED ORDER

D. R. Alexander, Administrative Law Judge of the Division

of Administrative Hearings (DOAH) , conducted the final hearing

in this matter on February 9 and 10, 201 6 , in Tallahassee,

Florida.

APPEARANCES

For Petitioner : Ephraim D. Livingston, Esquire

Joseph G. Hern, Jr., Esquire

Agency for Health Care Administration

2727 Mahan Drive, M ail Stop 3

Ta llahassee, Florida 32308 - 5407

For Respondent : Bruce D. Lamb, Esquire

The Gunster Firm

Suite 2500

401 East Jackson Street

Tampa , Florida 33602 - 5236

STATEMENT OF THE ISSUE S

The issue s are whether the Agency for Health Care

Administration (A HCA ) is entitled to repayment of $1,152,237.19

in Medicaid reimbursements that it made to Respondent pursuant

to section 409.913(11), Florida Statutes; the amount of

sanctions , if any, that should be imposed pursuant to

sections 409.913(15) through ( 17); and the amount of any

investigative, legal, and expert witness costs that AHCA is

entitled to recoup pursuant to section 409.913(23).

PRELIMINARY STATEMENT

On April 24, 2015, AHCA issued a Final Audit Report (FAR)

in which it asserted that Respondent, Vyasa Ramcharan, a

Medicaid provider, had been overpaid $1,152,237.19 for services

performed from January 1, 2011, through June 30, 2013, that in

whole or in part are not covered by Medicaid. The FAR also

sought to impose an administrative fine of $88,00 0.00 as a

sanction for violating Florida Administrative Code Rule 59G -

9.070 (7) (e) and to recoup investigative, legal, and expert

witness costs. Respondent timely requested a hearing and the

matter was referred by AHCA to DOAH to resolve the dispute.

At he aring, AHCA presented the testimony of three

witnesses . AHCA Exhibits 1 through 1 6 were accepted in

evidence. Respondent testified on h is own behalf and presented

the testimony of t wo witnesses . Respondent's Exhibits 1 through

8 were accepted in evidenc e. A ruling on Exhibits 13 and 1 4 was

reserved. The objection is sustained. See § 409. 9 13(22), Fla.

Stat.

A three - volume T ra nscript of the hearing has been prepared.

P roposed r ecommended o rders (PROs) were filed by the parties ,

and they have been consi dered in the preparation of this

Recommended Order.

FINDINGS OF FACT

A. Background

1. AHCA is designated as the state agency authorized to

make payments for medical assistance and related services under

Title XIX of the Social Security Act. Th is program is

designated as the Medicaid Program. See § 409.902 (1) , Fla.

Stat.

2. Respondent is a dentist licensed to practice dentistry

in the State of Florida. His specialty is oral surgery.

3 . This case involves a Medicaid audit of Respondent,

which relates to dates of service from January 1, 2011, through

June 30, 2013 (the audit period).

4 . During the audit period, Respondent was enrolled as a

Medicaid provider and had a valid Medicaid provider agreement

with AHCA . He provide d services in a seven - county area in

Central Florida , with the vast majority of patients being

referred from general practice dentists .

5 . As an enrolled Medicaid provider, Respondent was

subject to federal and state statutes, regulations, rules,

policy guidelines, and Medicaid handb ooks incorporated by

reference into rule, which were in effect during the audit

period.

6 . Pursuant to section 409.913, AHCA's Bureau of Medicaid

Program Integrity conducted an audit of Respondent's paid

Medicaid claims for medical goods and services to Medicaid

recipients. The audit was performed after a dental peer in

another case identified errors in coding and billing for

medically unnecessary bone grafting. AHCA then ran a report of

all providers billing those codes and determined that Respondent

w as one of the five highest utilizers of the bone grafting codes

in the State of Florida. In fact, his use of the codes was

significantly higher than the Department of Oral and

Maxillofacial Surgery at the University of Miami.

7 . After a review of Resp ondent's records was completed,

o n April 24, 2015, AHCA issued a FAR , alleging that Respondent

was overpaid $1,152,237.19 for certain services that in whole or

part are not covered by Medicaid. In addition, the FAR informed

Respondent that AHCA was seekin g to impose a fin e of $176,000.00

as a sanction for violation of rule 59G - 9.070(7)(e) and to

recover its costs pursuant to section 409.913(23). Due to a

calculation error, t he sanction amount was later reduced to

$88,000.00. The claims which make up the overpayment of

$1,152,237.19 were filed and paid to Respondent prior to the

institution of this action. The auditor who conducted the

investigation and prepared the FAR is no longer employed by AHCA

and did not testify . However, his supervisor , Robi Olms tead,

who oversees all comprehensive audits such as this, testified at

hearing and confirmed that except for an error in calculating

the penalty, the investigator followed all required procedures.

The audit was properly conducted.

8. I n the section of th e FAR entitled "Findings," AHCA

set s forth the bases for the overpayment determinations. AHCA

concluded that "medical necessity for some claims submitted was

not supported by the documentation" and payments made to

Respondent for these services are consid ered an overpayment.

Pet'r Ex. 4, p. 87. It also concluded that "some services

rendered were erroneously coded on the submitted claim , " and

that after the "appropriate dental code was applied [ , ] [t]hese

dental services are not reimburseable by Medicaid." Id. , p. 88.

9 . Respondent then requested an administrati ve hearing to

contest the overpayment determination , imposition of sanctions ,

and recovery of costs .

B. The Sample Program Used by AHCA

10. AHCA has established a process in Medicaid audit case s

to review a statistically valid sample of the claims submitted

to the Medicaid program. The claims sample program is a random

sample program developed for this type of audit. The evidence

supports a finding that the program is statistically valid.

11. Using its data support system, AHCA assessed the

complete universe of Medicaid claims paid to Respondent and

selected the period from January 1, 2011, through June 30, 2013,

as the audit period. The program then selec t ed a random sample

of the universe o f claims , consisting of 35 recipients for whom

332 claims were filed during the audit period. All recipients

were under 2 6 years of age.

12. The sample program was reviewed, tested, and validated

by Dr. Huffer, a professor of statistics at Florida Sta te

University. His analysis demonstrated that the random sample is

appropriate, and the calculation and amount of the overpayment

are correct.

1 3 . After Respondent produced documents to substantiate

those claims, they were forwarded to the peer for rev iew. The

peer is a Florida licensed physician who is of the same

specialty or subspecialty and licensed under the same chapter as

Respondent . In this case, the peer reviewer was Dr. James A.

Davis, Jr., a board - certified oral surgeon in Tallahassee who i s

licensed under the same chapter and is the same specialty ( oral

surgeon ) as Respondent. Dr. Davis has c ertificates of r esidency

in both anesthesiology and oral maxillofacial surgery from the

University of Miami School of Medicine. His practice includes

complicated surgery, trauma surgery, corrective jaw surgery,

facial surgery, pathology, and reconstruction of the face. He

also has extensive experience with the routine surgeries at

issue in this case, including the extraction of third molar s

(wisdom te eth) , bone grafts, and excision of cysts . Al l of his

patients are private pay ; however, he has occasionally provided

free service s to Medicaid - eligible patient s .

14. After the records of the 35 recipients were reviewed

by Dr. Davis , AHCA determined that an overpayment of $53,469.99

was made. The program then applied that overpayment to all

claims in the universe , resulting in a total overpayment of

$1,152,257.19.

C. Medical Necessity and Other Relevant Requirements

1 5 . To be eligible for coverage by M edicaid, a service

mu st be "medically necessary," which is defined in section

409.13 (1)(d) a s follows:

"Medical necessity" or "medically necessary"

means any goods or services necessary to

palliate the effects of a terminal

condition, or to prevent, diagno se, correct,

cure, alleviate, or preclude deterioration

of a condition that threatens life, causes

pain or suffering, or results in illness or

infirmity, which goods or services are

provided in accordance with generally

accepted standards of medical practi ce.

1 6 . AHCA is the final arbiter of medical necessity for

purposes of determining Medicaid reimbursement. Id.

1 7 . The statute requires that determinations of medical

necessity be made by a licensed physician employed by or under

contract with AHCA, al so known as a peer reviewer, based on

information available at the time the goods and services are

provided. Id. Respondent contends that Dr. Davis is not a

qualified peer reviewer within the meaning of the law because he

is not a "licensed physician , " i .e., a medical doctor . However,

Dr. Davis has the same license and specialty as Respondent, he

is board - certified, and he has additional certifications from a

medical school . Dr. Davis is a qualified peer reviewer for

Respondent's oral surgery practice.

18. Respondent's expert on medical necessity and coding,

Dr. Lehrer, is an associate professor at Nova Southeastern

University Dental School. He is not an oral surgeon but has

been teaching in the oral surgery department of the school since

2015. He doe s not teach how to perform a bone graft , and he has

performed fewer than 25 bone grafts in his 30 - year career, none

since 2010. His primary teaching responsibilities relate to

prosthetics (crowns and bridges) and restorative dentistry

(fillings and caviti es), procedures not at issue in this

proceeding.

1 9 . Rule 59G - 1.010(59) refers to CPT codes, which are

Current Procedural Terminology codes developed by the American

Medical Association. The codes identify specific services

rendered by providers for pu rposes of determining whether the

service is covered by Medicaid. The American Dental Association

has also published dental procedure codes that describe various

services . See Pet'r Ex. 12. However , the dental codes have not

been expressly adopted by AH CA, and there is no requirement that

they be used when billing Medicaid . In fact , the Medicaid

program will not pay for claims submitted using these codes.

20 . To ensure that services rendered by the provider are

correctly billed to and paid by Medicai d, the provider must

identify the services by referring to the specific CPT codes

corresponding to the specific procedure or service rendered. If

services rendered are incorrectly coded on a provider's billing

submittals, they may be determined ineligible for payment by

Medicaid.

D . Were the Services Medically Necessary?

2 1 . After extracting the wisdom teeth of 32 recipients ,

Respondent billed Medicaid for performing bone grafts on the

sockets of each recipien t . A bone graft entails the placement

of bon y material (real or synthetic) on the site of the wound

(socket) to facilitate bone regeneration. During the audit

period, an oral surgeon was generally reimbursed less than

$100.00 for the simple extraction of a wisdom tooth, but was

reimbursed as much a s $1,150.00 if bone graft s were performed.

For 14 recipients, Respondent also billed Medicaid for removal

of benign tumors or cysts after the teeth were extracted . The

FAR alleges that th ese procedure s were not medically ne cessary.

Given the magnitude o f the alleged overcharges, it is not

surprising that the testimony on this issue is sharply in

dispute.

2 2 . In reviewing the claims, Dr. Davis did not use the

definition of medical necessity set forth in section s 409.913(1)

and 409.9131(2). See Finding of Fact 15. Instead, he relied

upon the definition of medical necessity published by the

American Association of Oral and Maxillofacial Surgeons (AAOMS) .

It reads in pertinent part as follows:

. . . the need for an item or service or

services for the dia gnosis, prevention

and/or treatment and follow up care of the

diseases, injuries and congenital

developmental defects that affect the hard

and soft tissues of the oral and

maxillofacial complex.

2 3 . Dr. Davis testified that he is familiar with the

statut ory definition of medical necessity and characterized it

as be ing "very similar" to the definition he used , with only

"slight variations." He testified that his definition is

consistent with the medical standards used by oral surgeons over

the last 30 yea rs . Respondent contends the statutory definition

is broader and include s services t hat " correct, cure, alleviate,

or preclude deterioration of a condition that . . . causes pain

or suffering , or results in illness or infirmity ," and these are

not encompas sed within Dr. Davis' definition. While the two

definitions are not identical, services for the "diagnosis,

prevent ion and/or treatment and follow up care" of a recipient

would logically include those that correct, cur e, alleviat e , or

preclud e deteriorati on of a condition for which the recipient is

being treated. The use of the AAOMS definition , rather than the

statutory definition, did not affect Dr. Davis' analysis of the

claims in any significant way.

i. Bone Grafts

2 4 . Bone grafting is performed af ter the extraction of a

wisdom tooth when it is necessary to preserve the bone volume ,

architecture (structure) , or integrity at the extraction site.

At issue here are two types of procedures: (1) bone grafts of

the nasal, maxillary, or malar areas , and (2) bone grafts of the

mandible. Through its peer, AHCA contends that the procedures

were not medically necessary, and the procedure Respondent

performed consisted only of placing collagen , a "foundation"

material, in the socket, which do es not constitute a bone graft

"in the strictest sense . "

2 5 . Dr. Davis found no fault regarding the removal of

teeth. However, he opined that it is " very unusual and

unnecessary to graft a third molar socket on a routine basis, "

as Respondent did for every patient whose teeth were extracted.

He stated that most sockets will regenerate on their own ,

especially in patients less than 2 6 years of age , who have more

regenerative capacity . Here, every recipient in the sample was

less than 2 6 years old. He added that post - ope rative issues

" rarely " occur when molars are extracted , but if they do, the

surgeon can easily perform a graft at a later time. Dr. Davis

explained that if the surgeon is concerned about the healing

status of the recipient , follow - up care can be given to the

patient t o ensure the long - term healing process. Except for one

or two cases where a patient had immediate post - operative

problems, Dr. Davi s found no instance in Respondent's records

where long - term follow - up care was provided.

2 6 . Based on almost 40 years of experience in performing

bone grafts , Dr. Davis opined that a n immediate graft at the

time of extraction normally occurs only on functional teeth, not

molars, or when a patient has a high likelihood of a periodontal

defect in the area where he just operated. Patients with minor

periodontal problems before the surgery frequently improve just

by taking out the molars. In sum, Dr. Davis found no evidence

in the patient records to support the bone grafts.

2 7 . Dr. Davi s admi tted , however, that in a few cases, i t

can sometimes take as long as three or four years for an

extraction site to improve to a normal state, and that it is

much more difficult to provide follow - up care to Medicaid

patients because of their transient nature . Even so, these

c onsiderations do not justify a bone graft on a routine basis.

2 8 . Besides recapping each patient's records, in which he

reaffirmed his treatment of the patients, Respondent explained

tha t " if appropriate, " he routinely perform s bone grafts at the

time of extraction for several reasons. First, in "many " cases,

patients experience cold sensitivity after an extraction due to

"short term exposure of the tooth roots , " and a bone graft will

prevent patients from "having the three or four months of cold

sensiti vity." Second, a bone graft assists " the patient [in]

return [ing] to a healthy state or achiev [ing] a healthy state

sooner , " especially if there are periodontal issues. Finally,

Respondent testified that "some of the [current] research"

dispels the notio n that younger patients "return to normal"

within a year or two . He pointed out that research also

demonstrates that young er patients are prone to developing

periodontal issues and that grafting of molar sites is now

routine . Given these considerations, he concluded that oral

surgeons "have a duty" to perform a bo ne graft after the

extractio n.

29. According to Dr. Lehrer, bone grafting is appropriate

after the extraction of a wisdom tooth in order to maintain the

level of the bone, reduce sensitivity, and eliminate pocket

depths. He opined that based on his review of the records, all

bone grafts were appropriate and medically necessary. However,

the testimony of Dr. Davis has been credited as being the most

persuasive on this issue.

30 . The prepo nderance of the evidence supports a finding

that it is not medically necessary to perform a bone graft to

a lleviate a patient's cold sensitivity for a few months, to

speed up a recovery process for a young patient that normally

takes only a short period of time, or to address periodontal

problems that may or may not occur in the future . Stated

differently, under the circumstances presented here , a bone

graft after every molar extraction is not medically necessary to

prevent, cure, or alleviate a condition "that threatens life,

causes pain or suffering, or results in injury or illness" of

the patient.

3 1 . On the second issue concerning the graft, Dr. Davis

opined that Respondent did not perform a bone graft because he

simply placed collagen, a foundation m aterial, in the socket,

which he characterized as "a mere dressing" on the wound. In

Dr. Davis' practice, and based upon his experience as an oral

surgeon , he does not use foundation materials or consider them

to be a graft material . He agrees, however, that synthetic

materials that are mineralized or ceramic can also be used as an

artificial bone substitute to facilitate the healing of bone.

3 2 . Respondent testified that while he used foundation

collagen material as the base material in all of his gra fts , in

some patients he was able to harvest leftover bony material ,

which was added to the foundation material. Dr. Lehrer also

opined that using a collagen - based grafting material enhances

bone growth and is an appropriate material for bone grafts.

Whi le t he use of collagen as a base material presents a close

question, the undersigned is persuaded that there is less than a

preponderance of the evidence to support a finding that

Respondent's use of collagen, when intermixed with harvested

boney material , was inappropriate. The use of collagen only as

a base material was not appropriate.

ii. Excision of Cy sts or L esions

3 3 . The FAR also contends there was insufficient

documentation to show that cysts were present in any of the

14 recipients , or to de monstrate that their removal was

medically necessary. A cyst is an epithelial sac usually

containing fluid that is normally covered or wrapped in a

connective tissue layer. If a cyst exist s , it is present when a

molar extraction occurs. While m ost appea r radiographically ,

some do not show up on typical X - rays, such as Panorex film , but

clearly appear on a CT scan. In this case, Respondent performed

Panorex radiographs on each recipient . Evidence of cysts

appeared on none of his X - rays.

3 4 . Based on hi s experience, the lack of radiographic

evidence, and the fact that the tissue removed was not submitted

for biopsy, Dr. Davis saw no evidence that cysts were present in

the recipients. He characterized the number of cysts removed by

Respondent as "incredu lous , " and pointed out that they numbered

more than he had observed in his practice over the past 30 - plus

years.

3 5 . Although Respondent's records included a note in the

operating report describing the removal of a cystic structure,

Dr. Davis stated that a normal follic ular sac (the connective

tissue surrounding the tooth) appear s to be a cystic structure,

but this does not mean that a cyst is present. If a follicle is

thick, red, infused with blood , contains puss , or is otherwise

unusual , th e follicle ra ises a red flag that Dr. Davis

automatically has biopsied. Otherwise, further surgical steps

are not taken. I f a biopsy is indicated in the case of an

indigent patient, or a private pay patient does not w ish to

incur a biopsy charge, Dr. Davis will have the patient return in

three months for follow - up.

3 6 . Respondent testified that when he extracts a wisdom

tooth, the follicle is removed and then examined. He lays it on

a gau ze pad for examination. Based on his experience, he

determines if there is a ny likelihood of malignant tissue. In

every case, he concluded that because the cystic tissue or

inflamed lesion was already removed, the problem was cured, and

there was no need to send it to a pathologist and incur

additional expense. He also pointed o ut that Medicaid

discourages oral surgeons from biopsy, presumably because of the

cost.

37. While financial concern s for the patients are real,

they do not justify removal of a follicle based on the belief

that it may be a cyst. There is a preponderance of the evidence

to support a finding that , for the 14 recipients in question ,

the excision of benign tissue was not medically necessary.

E . Coding of Services

3 8 . The FAR alleges that :

some services rendered were erroneously

coded on the submitted cla im. The

appropriate dental code was applied. These

dental services are not reimbursable by

Medicaid. Payments made to you for these

services are considered an overpayment.

Pet'r Ex. 4, p. 88.

3 9 . Respondent submitted claims for bone grafts under C PT

codes 21210 and 21215, which relate to "[g]raft, bone; nasal,

maxillary or malar areas (includes obtaining graft," and

"[m]andible (includes obtaining graft)," respectively. Pet'r

Ex. 14, p. 263. He also submitted claims for removal of cysts

under CPT codes 21030 and 21040, which are "[ e ] xcision of benign

tumor or cyst of maxilla or zygoma by enucleation and

curettage, " and "[e]xcision of benign tumor or cyst of mandible,

by enucleation and/or curettage," respectively. Id. at p. 264.

40 . Dr. Davis co nsidered the coding issue to be "the least

of [his] concerns" in this case. He admitted that "I am not an

expert on codes," he is only "vaguely familiar with the coding,"

and in his practice someone else in the office normally coded

his services. He also acknowledged the codes used by Respondent

were correct "in the broadest sense , " but opined that the dental

codes "would be more appropriate" and "the better codes" because

they describe "exac tly what is being done," and "they are dental

procedures that he is performing."

41 . As to the removal of cysts, Dr. Davis opined that

dental codes D7450 and D7451 would be more appropriate, as they

relate to the excision of a benign lesion of the upper and lower

jaw. As to bone grafts, he opined that dental code D 7953 would

be more appropriate, as it applies specifically to socket

reconstruction of a dental extraction.

42 . Dr. Davis agreed, however, that oral surgeons are

permitted to bill Medicaid using CPT codes, and there is no

directive, guidance, or mandate t hat instructs oral surgeons to

use the dental codes rather than the CPT codes. In this case,

Dr. Davis used dental codes because the nurses at ACHA provided

him with those codes to use during his review. While Dr. Davis

correctly noted that dental codes more accurately describe the

services being performed by oral surgeons , Medicaid guidelines

and AHCA regulations , as now written, do not bar Respondent from

using the CPT codes .

4 3 . Mr. Dicksen, Respondent's expert in billing and

coding , established tha t the billing for the procedures in

question was adequate to support the billing and the use of the

billing codes was appropriate. He also verified that the

Medicaid program in Florida does not pay for claims submitted

using the dental codes.

4 4 . Petit ioner did not establish by a preponderance of the

evidence that the claims submitted by Respondent were

erroneously coded.

F . Administrative Sanctions

4 5 . Administrative s anctions (fines) shall be imposed for

failure to comply with the provisions of Medi caid law. For the

first offense, rule 59G - 9.070(7)(e) authorizes AHCA to impose a

penalty in the amount of $1,000.00 per violation. AHCA seeks to

impose a fine of $88,000.00 for 88 separate violations

identified in the FAR . While repayment for inappropr iate claims

should be made, the undersigned is persuaded that the factual

grounds for imposing a sanction for each claim are not present.

G . Investigative , Legal, and Expert Witness Costs

4 6 . Section 409.913(23) provides that AHCA is entitled to

recover all investigative, legal, and expert witness costs if

the agency ultimately prevails. At this time, t he total costs

are unknown.

H . The Prior Audit

4 7 . In 2005, AHCA performed an overpayment review of

Respondent for services provided from January 1, 2002, through

December 31, 2004. The audit was triggered due to a high volume

of bone grafts and excision of cysts performed by Respondent

during that audit period . He also used the same billing codes

as were used in this audit period. The peer ultimate ly

determined that all payments were appropriate, and it was

recommended that t he matter be closed. This was confirmed i n a

letter to Respondent dated October 7, 2005, in which AHCA stated

as follows:

In his report, the Medicaid dental

consultant stated, "I found the records to

be complete, very well presented, with

detail. All radiographs were excellent

quality and all treatments were very

explicit and identified on the radiographs."

No overpayment was determined in the peer

review.

Resp. Ex. 8.

4 8 . H owever, AHCA did not use a qualified peer reviewer in

that case, as it contracted with a pediatric dentist in

Jacksonville to review the records , rather than someone of the

same specialty, i.e., an oral surgeon . This was because most of

the recipients wer e pediatric patients and AHCA 's practice at

that time was to use general practitioners as peers , no matter

what the specialty . AHCA took the position at hearing that due

to this mistake, the results of that audit are not binding on

the current audit.

4 9 . Respondent contends, however, that he relied on the

results of the 2005 audit in continuing his practice of

routinely performing bone grafts on every molar extraction,

performing excision of cysts without a biopsy on a routine

basis , and using the same billing codes for those procedures.

He testified that had AHCA informed him that he was performing

medically unnecessary procedures, or using the incorrect billing

codes, he would have made changes as requested. Based upon his

reliance on those represent ations to his detriment, Respondent

contends that AHCA is n ow estopped from attempting to recoup the

Medicaid payments. AHCA did not address this issue at hearing

or in its PRO.

CONCLUSIONS OF LAW

50 . AHCA has the burden of establishing an alleged

Medic aid overpayment by a p reponderance of the evidence . See,

e.g. , S. Med . Servs., Inc. v. Ag. for Health Care Admin. ,

653 So. 2d 440, 441 (Fla. 3 d DCA 199 5 ) ; Southpointe Pharm . v.

Dep't of HRS , 596 So. 2d 106, 109 (Fla. 1st DCA 1992).

51 . Although AH CA bears the ultimate burden of persuasion,

section 409.913(22) provides that "[t]he audit report, supported

by agency papers, showing an overpayment to the provider

constitutes evidence of the overpayment." Thus, AHCA can make a

prima facie case by proff ering a properly supported audit

report, which must be received in evidence. See Ma z Pharm. ,

Inc. v. Ag. for Health Care Admin. , Case No. 97 - 3791 (Fla. DOAH

Mar. 20, 1998; Fla. AHCA June 26, 1998).

52 . AHCA is authorized to impose sanctions on a provider ,

including administrative fines. § 409.913(16), Fla. Stat. To

impose an administrative fine, AHCA must establish by clear and

convincing evidence the factual grounds for doing so. Dep't of

Banking & Fin., Div. of Sec. & Investor Prot. v. Osborne Stern &

Co. , 670 So. 2d 932, 935 (Fla. 1996) ; Dep't of Child. & Fams. v.

Davis Fam. Day Care Home , 160 So. 3d 854 , 857 (Fla. 2015).

5 3 . AHCA is authorized to "require repayment for

inappropriate, medically unnecessary, or excessive goods or

services from the person furnishing them, the person under whose

supervision they were furnished, or the person causing them to

be furnished. " § 409.913(11), Fla. Stat.

5 4 . AHCA established a prima facie case, and proved by a

preponderance of the evidence, that Respondent should not have

been paid for any bone graft or cyst removal claims . Thus, AHCA

is entitled to reimbursement from Respondent for the claims he

billed for these services.

5 5 . There is less than a preponderance of evidence to

support the allegation that R espondent improperly coded his

claims filed with AHCA.

56. AHCA may impose an administrative fine on Respondent

for each violation of any Medicaid - related law. See Fla. Admin.

Code R. 59G - 9.070(7)(e). In this case, a fine is not warranted.

5 7 . AHCA i s entitled to recoup its investigative, legal,

and expert witness costs. See § 409.913(22), Fla. Stat.

5 8 . Respondent contends that , based on the findings in the

2005 audit upon which he relied , the doctrine of equitable

estoppel bars AHCA from asserting its claims. The theory of

estoppel is an application of the rules of fair play. Estoppel

is established by proving: (1) a representation as to a

material fact that is contrary to a later asserted position;

(2) reliance on that representation; and (3) a change in

position detrimental to the party claiming estoppel caused by

the representation and reliance thereon. Kuge v. State, Dep't

of Admin. , 449 So. 2d 389 (Fla. 3d DCA 1984). Against a state

agency, however, equitable estoppel will be applied only under

exceptional and rare circumstances. N. Am . Co . v. Green ,

120 So. 2d 603 (Fla. 1950). The doctrine is not applicable in

transactions which are forbidden by statute or which are

contrary to public policy. See, e.g. , Dade Cnty . v. Bengis

Assoc., Inc. , 257 So. 2d 291 (Fla. 3d DCA 1972) ; Salz v. Dep't

of Admin. , 432 So. 2d 1376 (Fla. 3d DCA 1983) . And the courts

have consistently refused to apply estoppel against the state on

the basis of unauthorized or mistaken acts or representations of

state o fficers or employees. See, e.g. , Austin v. Austin ,

350 So. 2d 102 (Fla. 1st DCA 1977) .

5 9 . Even if the 2005 audit , conducted by a general

practitioner and not an oral surgeon , is not a mistake n act on

the part of ACHA, allowing payment of Medicaid cl aims in this

case would be contrary to , and forbidden by, se ction 409.913.

That provision provides, in part, that AHCA has a statutory

obligation to "recover overpayments and impose sanctions, as

appropriate," ensure "that billing by a provider to the age ncy

is in accordance with applicable provisions of all Medicaid

rules, regulations, handbooks, and policies and in accordance

with federal, state, and local law," and "require repayment for

inappropriate, medically unnecessary, or excessive goods or

servic es from the person furnishing them." At the same time, it

would be contrary to public policy , i.e., the integrity of the

Medicaid program . In sum, b ecause the transactions in question

are forbidden by statute and contrary to public policy, the

doctrine o f equitable estoppel does not apply. 1/

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Agency for Health Care Administration

enter a final order finding that Respondent was overpaid, and is

liable f or reimbursement to AHCA , for claims submitted for bone

grafts and excision of cysts during the audit period; finding

that an administrative fine should not be imposed; and remanding

the matter to DOAH for an evidentiary hearing on the recovery of

AHCA's c osts, if necessary.

DONE AND ENTERED this 30th day of March , 201 6 , in

Talla hassee, Leon County, Florida.

S

D . R. ALEXANDER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 30th day of March , 201 6 .

ENDNOTE

1/ Respondent's reliance on the case of Johnson Professional

Nursing Home, Inc. v. Department of Health and Rehabilitative

Services , Case No. 82 - 278 (Fla. DOAH Aug. 19, 1982, Fla. HRS

Sept. 17, 1982) , in which, coincidentally , the Recommended Order

was authored by the undersigned, is misplaced. There, HRS

determined in its Final Order that there were no exceptional

circumstances that would justify the invocation of the doctrine

in favor of the nursing home . Th at Order was not appealed.

COPIES FURNISHED:

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee , F lorida 32308 - 5407

(eServed)

Ephraim D. Livingston, Esquire

Agency for Health Care Administration

2727 Mahan Drive, M ail Stop 3

Ta llahassee, Florida 32308 - 5407

(eServed)

Bruce D. Lamb, Esquire

The Gunster Firm

Suite 250 0

401 East Jackson Street

Tampa , Florida 33602 - 5236

(eServed)

Stuart Williams, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee , Florida 3 2308 - 5407

(eServed)

Elizabeth Dudek, Secretary

Agency for Health Ca re Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 323 08 - 5407

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days of the date of this Recommended Order. Any exception s to

this Recommended Order should be filed with the agency that will

render a final order in this matter.