15-004728MPI Agency For Health Care Administration vs. Richard W. Blake, Dds Status: Closed Recommended Order on Thursday, March 10, 2016.

Summary: Agency proved by clear and convincing evidence that an administrative fine should be imposed on Respondent based on overpayment of certain Medicaid claims.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Petitioner,

vs. Case No. 15 - 4728MPI

RICHARD W. BLAKE, DDS,

Respondent.

_______________________________/

RECOMMENDED ORDER

The final heari ng in this matter was conducted before

J. Bruce Culpepper, Administrative Law Judge of the Division of

Administrative Hearings, pursuant to sections 120.569 and

120.57(1), Florida Statutes (2014), 1/ on January 14, 2016, in

Tallahassee, Florida.

APPEARANCES

For Petitioner: Ephraim D urand Livingston, Esquire

James Zubko Ross , Esquire

Agency for Health Care Administration

2727 Mahan Drive , Mail Stop 3

Tallahassee, F lorida 32308

For Respon dent: Frank P. Rainer, Esquire

Broad and Cassel

Suite 400

215 South Monroe Street

Tallahassee, F lorida 32301

STATEMENT OF THE ISSUE

The issue in this matter concerns the amount of monet ary

sanctions that the Agency for Health Care Administration may

impose on Respondent pursuant to section 409.913, Florida

Statutes, and Florida Administrative Code Rule 59G - 9.070(7)(e)

based on the overpayment of Medicaid reimbursements made to

Respondent .

PRELIMINARY STATEMENT

Petitioner Agency for Health Care Administration (ÐAHCAÑ)

conducted a Medicaid audit of Respondent, Richard W. Blake, DDS,

a Medicaid provider. The Medicaid audit reviewed RespondentÓs

dates of service from April 1, 2011, through O ctober 31, 2013.

On April 8, 2015, AHCA issued a Final Audit Report (ÐFARÑ) in

which it asserted that Respondent had been overpaid by the amount

of $177,717.69 for paid claims that, in whole or in part, the

Medicaid program did not cover.

AHCA initiated t his action to recover the amount of the

overpayment. AHCA also sought to sanction Respondent in the form

of an administrative fine , as well as recover investigative,

legal, and expert witness costs for conducting the Medicaid

audit. By the time of the fi nal hearing, t he parties reached a

settlement as to the overpayment portion of this case wherein

Respondent agreed to pay AHCA the total amount of the

overpayment , as well as AHCAÓs investigative , legal , and expert

costs. Accordingly, this matter only foc uses on the amount of

the fine that AHCA seeks to impose on Respondent.

Respondent filed a request for administrative hearing on

April 22, 2015. On August 21, 2015, AHCA referred the matter to

the Division of Administrative Hearings (ÐDOAHÑ) to conduct a

hearing pursuant to sections 120.569 and 120.57(1). Respondent

moved to amend his Petition for Formal Administrative Hearing on

August 31, 2015 , which was granted.

The final hearing was held on January 14, 2016. AHCA

presented the testimony of Robi Olmst ead from AHCA's Bureau of

Medicaid Program Integrity. AHCAÓs Exhibits 1 through 15, 17,

19 through 21, and 23 were admitted into evidence. Respondent

testified on his own behalf and presented the testimony of

Sabrina Blake, the office manager for his de ntal practice.

Respondent did not offer exhibits at the final hearing.

The one - volume T ranscript of the final hearing was filed on

February 5, 2016. At the close of the hearing, the parties were

advised of the 10 - day timeframe following receipt of the h earing

transcript to file post - hearing submittals. Both parties filed

proposed recommended orders which were duly considered in

preparing this Recommended Order.

FINDING S OF FACT

1. AHCA is designated as the single state agency authorized

to make payme nts for medical assistance and related services

under Title XIX of the Social Security Act, otherwise known as

the Medicaid program. See § 409.902(1), Fla. Stat. AHCA is

responsible for administering and overseeing the Medicaid program

in the State of Fl orida. See § 409.913, Fla. Stat.

2. AHCA's Bureau of Medicaid Program Integrity (ÐMPIÑ) is

the unit within AHCA that oversees the activities of Florida

Medicaid providers and recipients. MPI ensures that providers

abide by Medicaid laws, policies, and r ules. MPI is responsible

for conducting audits, investigations, and reviews to determine

possible fraud, abuse, overpayment, or neglect in the Medicaid

program. See §409.913, Fla. Stat.

3. At all times relevant to this proceeding, Respondent was

an enro lled Medicaid provider authorized to receive reimbursement

for covered services rendered to Medicaid recipients. Respondent

had a valid Medicaid provider agreement with AHCA, Medicaid

Provider No. 0742236 - 00. The Medicaid provider agreement is a

voluntar y contract between AHCA and the provider. As an enrolled

Medicaid provider, Respondent was subject to the duly - enacted

federal and state statutes, regulations, rules, policy

guidelines, and Medicaid handbooks incorporated by reference into

rule, which wer e in effect during the audit period.

4. Pursuant to its statutory authority to oversee the

integrity of the Medicaid program, MPI conducted an audit of

Respondent's paid claims for Medicaid reimbursement for the

period from April 1, 2011, through October 31, 2013. The auditÓs

purpose was to verify that claims AHCA paid to Respondent under

the Medicaid program did not exceed the amount authorized by

Medicaid law s , policies, and applicable rules.

5. As a result of the audit, AHCA determined that

Respondent was overpaid in the amount of $177,717.69 for services

that, in whole or in part, were not covered under the Medicaid

program. AHCA also sought to impose sanctions upon Respondent

consisting of an administrative fine of $34,192.30 , 2 / as well as

investiga tive, legal, and expert witness costs of $1,127.66.

6. Respondent is a dentist specializing in pediatric

dentistry. He has practiced for over 43 years. He maintains

offices in both Clearwater and Jacksonville, Florida.

7. RespondentÓs dental practice s erves almost exclusively

developmentally disabled children. Many of his patients suffer

from severe behavior al , emotional, mental, physical, or social

handicaps or other medical issues. RespondentÓs practice is

primarily based on referrals of special nee ds patients who other

pediatric and general dentists send to him for treatment.

Approximately, 95 percent of RespondentÓs patients are Medicaid

recipients.

8. At the final hearing, AHCA presented the testimony of

Robi Olmstead, an AHCA administrator with MPI. Ms. Olmstead's

responsibilities include overseeing MPI investigations and

supervising AHCA staffÓs performance of Medicaid audits. With

over 10 years of experience in her position, Ms. Olmstead is very

familiar with and knowledgeable about how MPI conducts Medicaid

audits. Specifically related to this matter, Ms. Olmstead, in

her official capacity with AHCA, signed the FAR that MPI

presented to Respondent on April 8, 2015.

9. Ms. Olmstead described MPIÓs Medicaid audit of

RespondentÓs Medicaid cla ims. 3 / Using AHCA's data support system,

MPI investigators accessed the complete universe of RespondentÓs

Medicaid claims. MPI selected the period from April 1, 2011,

through October 31, 2013, as the audit period. MPI calculated

the amount of overpaymen t based on its review of a random sample

of 35 recipients for whom Respondent submitted 507 claims during

the audit period. AHCA then contacted Respondent and requested

that he submit documents to substantiate his Medicaid claims for

the 35 recipients.

10 . In response to AHCAÓs request for documents, Respondent

provided his records of service and billing for each of the 507

claims for the 35 recipients. AHCA, upon receiving RespondentÓs

records, forwarded them for a peer review. The peer reviewer

evalua ted the records and prepared worksheets reflecting a

determination regarding the nature of the dental services

rendered for each claim, and whether such claim was eligible for

payment under the Medicaid program. Based on the peer reviewerÓs

determination, MPI calculated that Respondent had been overpaid

for all claims he presented within the audit period by a total of

$177,717.69.

11. After determining that Respondent had been overpaid,

AHCA prepared and sent to Respondent a Preliminary Audit Report

(ÐPAR Ñ), dated February 12, 2015. The PAR notified Respondent

that the audit revealed that he had been overpaid by $177,717.69.

12. On April 8, 2015, AHCA issued the FAR. The FAR served

as AHCAÓs final determination that Medicaid had overpaid

Respondent.

1 3. The FAR set forth the following bases for AHCAÓs

determination that Respondent was overpaid:

a. Documentation Supported a Lower Level of

Service (ÐLLÑ) : The peer review of RespondentÓs records revealed

that the documentation Respondent submitted for payment did not

support level of service for some claims. These claims may

involve an established patient that Respondent coded as a new

patient (which is billed at a higher level). AHCA believed that

Respondent should have used a different code for the service he

provided. AHCA considered the Medicaid payments made to

Respondent for these services in excess of the appropriate amount

an overpayment. 4 /

b. No Documentation (ÐNo DocÑ) : RespondentÓs records

revealed that some medical services for which Respondent billed

and received payment were incomplete or lacked sufficient

documentation. AHCA considered the Medicaid payments for these

services an overpayment. 5 /

c. Not Medically Necessary (ÐNMNÑ) : The peer review

of RespondentÓs claims revealed th at the documentation did not

support the medical necessity of some of the claims Respondent

presented for payment. (Respondent explained that this category

of claims related to occlusal x - rays he obtained from dental

patients for whom he also had taken pa norex x - rays. The peer

review considered these charges duplicative.) Therefore, AHCA

considered the Medicaid payments made to Respondent for these

claims an overpayment. 6 /

d. Erroneous Coding (ÐECÑ) : The peer review of

RespondentÓs claims revealed that some services rendered were

erroneously coded on the submitted claim. These services

documented one activity, but another billing code was identified.

Consequently, AHCA considered Medicaid payments made to

Respondent for claims in excess of the appropr iate service an

overpayment. 7 /

e. Behavioral Management (ÐBMÑ) Services Not

Reimbursable : The peer review of RespondentÓs claims revealed

that Respondent did not adequately explain his claims for BM

services. Respondent should not have requested paymen t for BM

without explaining why BM was used or the specific type of BM

techniques utilized for treatment. Furthermore, the peer review

determined that Respondent should not have included BM in his

claim if he also billed for either sedation or analgesia o n the

same date of service. AHCA considered Medicaid payments made to

Respondent for these BM claims an overpayment. 8 /

14. The FAR also notified Respondent that AHCA had

calculated and was seeking to assess a fine of $35,543.54 (since

lowered to $34,192. 30). Ms. Olmstead explained that, in

accordance with section 409.913(15), (16), and (17) and r ule 59G -

9.070, AHCA must apply sanctions for violations of federal and

state laws, including Medicaid policy. AHCA determined to

sanction Respondent in the form of an administrative fine.

15. After determining that Respondent had been overpaid for

Medicaid claims, AHCA prepared a Documentation Worksheet for

Imposing Administrative Sanctions (ÐWorksheetÑ). The Worksheet

was signed on April 7, 2015 , by an AHCA in vestigator.

Ms. Olmstead also signed the Worksheet after she reviewed and

approved the form.

16. The Worksheet specifie d how AHCA calculated the fine it

s ought to impose on Respondent for the Medicaid claims violations

listed above. As noted on the Wor ksheet, AHCA found a total of

58 claims violated Medicaid laws, policies, and rules. The

specific number of claims in violation were : lower level of

service 38 ; no documentation , 9 ; not medically necessary , 8 ;

error in coding , 2 ; and behavior management/ illegal

documentation , 1.

17. The Worksheet also contained a section that read:

Confirm that you have considered the

following via checking the box:

I have considered the serious & extent of the

violation.

I have considered whether there is evidence

tha t the violation is continuing after

written notice.

I have considered whether the violation

impacted the quality of medical care provided

to Medicaid recipients.

I have considered whether the licensing

agency in any state in which the provider

operates o r has operated has taken any action

against the provider.

If the sanction to be imposed is suspension

or termination, I have considered whether the

sanction will impact access by recipients to

Medicaid services.

The AHCA investigator placed a checkmark b y e ach consideration.

AHCA did not use any additional forms or method s to document its

consideration of these factors.

18. AHCA did not provide the Worksheet to Respondent with

the FAR. The Worksheet is an internal AHCA document the

investigator and adm inistrator use to calculate the amount of a

fine. However, AHCA did include in the FAR the final monetary

sanction which AHCA calculated on the Worksheet ($35,543.54).

19. Ms. Olmstead stated that AHCA considered RespondentÓs

failure to comply with M edicaid laws a Ðfirst offense.Ñ Pursuant

to r ule 59G - 9.070(7)(e), AHCA shall impose a $1,000 fine per

claim found to be in violation for a first offense. Accordingly,

based on the 58 claims reviewed for the audit, AHCA calculated a

fine of $58,000.00. T hereafter, rule 59G - 9.070(4)(a) instructs

AHCA to limit the monetary sanction for a Ðfirst offenseÑ

violation of Medicaid laws under rule 59G - 9.070(7)(e) to twenty

percent of the amount of the overpayment. Thus, AHCA reduced the

amount of the fine it seek s to impose on Respondent to

$34,192.30.

20. Finally, Ms. Olmstead testified that the FAR cited to

several documents that AHCA distributes to guide and inform

providers of the types of services that the Medicaid program

covers and how to correctly bill Me dicaid for these services.

The documents applicable to this matter are : the 2007 Florida

Medicaid Dental Services Coverages and Limitations Handbook; the

2008 Florida Medicaid Provider General Handbook; the 2011 Florida

Medicaid Dental Services Coverages and Limitations Handbook; and

the 2012 Florida Medicaid Provider General Handbook.

21. Respondent testified on his own behalf. Respondent

testified that this Medicaid audit was the first he has

experienced. Prior to this matter, he has never been fined or

sanctioned for any violations of the Medicaid program.

Respondent also emphasized that this Medicaid audit did not show

that he ever rendered sub - quality dental care to any of his

patients.

22. Respondent acknowledged that he currently receives the

M edicaid Handbooks electronically. Respondent conceded that he

is bound to adhere to the Medicaid guidelines in the Handbooks.

23. Respondent offered the following explanations for the

claims he submitted which resulted in the overpayments:

a. Not Medic ally Necessary: Respondent understood

that AHCA determined that his claims for occlusal x - rays were

considered duplicative. Respondent explained that the occlusal

x - rays reveal tooth decay and disease that panorex x - rays do not.

Furthermore, RespondentÓ s use of the occlusal x - rays did not

result in any harm to his patients. On the contrary, Respondent

expressed that these x - rays only enhanced the services and

treatment he provided to his patients.

b. Behavioral Management (ÐBMÑ) Services: The BM fe e

compensates the provider for the effort and time it takes to

prepare a patient for dental treatment or control the patient

during treatment. In many cases, if Respondent cannot employ BM

techniques, he cannot render effective dental treatment.

Responde nt charges approximately $35 for BM services.

c. Insufficient Records: Respondent stated that the

medical notes and records that his office maintains meet or

exceed Florida standards. However, certain of his records

apparently did not comply with Med icaid program requirements.

Respondent further asserted that AHCA never alleged that he

sought payment for services he never delivered or were not

completed.

24. Sabrina Blake is the office manager for RespondentÓs

dental practice. As part of her respon sibilities, she handles

billing practice inquiries. Regarding AHCAÓs claim of

insufficient records to support the BM charges, Ms. Blake

explained that Respondent marked ÐBMÑ on the patientsÓ records to

indicate that a behavior management technique was use d. The

error was that Respondent did not write out exactly what behavior

management technique was used during the treatment. Medicaid

rules required additional information or documentation.

Therefore, while RespondentÓs practice did not provide the

requ isite notation to support a Medicaid payment for BM charges,

Respondent did actually provide the service claimed.

25. Respondent stated that AHCA never provided him the

opportunity to correct any alleged violations or billing errors.

Respondent claims t hat none of the disallowed charges or medical

services were submitted to intentionally obtain an unauthorized

payment from the Medicaid program. AHCA did not produce evidence

to contradict RespondentÓs assertion.

26. Prior to the final hearing, the parti es entered into an

agreement wherein Respondent agreed to repay to AHCA the full

amount of the overpayment Respondent received from the Medicaid

program. 9 / Based on the overpayment, AHCA seeks to impose on

Respondent an administrative fine of $34,192.30. Accordingly ,

the primary issue for the undersigned to consider is whether AHCA

is authorized under the applicable law to impose on Respondent an

administrative sanction in the form of a fine as a result of his

violation of Medicaid laws, rules, or policy.

27. Based on the evidence presented at the final hearing,

AHCA proved by clear and convincing evidence that Respondent

failed to comply with provisions of the Medicaid laws. 10 / As

detailed below, section 409.913 and rule 59G - 9.070 authorize AHCA

to im pose a fine on Respondent in the amount of $34,192.30 based

on his violations of the Medicaid program. Consequently, a fine

of $34,192.30 should be assessed against Respondent.

CONCLUSIONS OF LAW

28. DOAH has personal and subject matter jurisdiction in

t his proceeding pursuant to sections 120.569 and 120.57(1),

Florida Statutes (2015) .

29. Pursuant to section 409.902(1), AHCA shall make

Medicaid payments only for services included in the Medicaid

p rogram. Payments shall only be made on behalf of eligibl e

individuals and shall be made only to qualified providers in

accordance with federal requirements for Title XIX of the Social

Security Act and provisions of state law.

30. AHCA alleges that Respondent was overpaid in the amount

of $177,717.69 for medica l services not covered by Medicaid. As

stated above, Respondent does not contest AHCAÓs allegations that

he received overpayments from the Medicaid program. Furthermore,

the FAR and its supporting work papers constitute conclusive

evidence of the overpay ment to Respondent. See §409.913(22),

Fla. Stat. Accordingly, the material facts in this matter

establish that Respondent, from April 1, 2011 , through

October 31, 2013, violated Medicaid laws, policies, and rules as

incorporated in the Medicaid handbook s.

31. AHCA is authorized to recover Medicaid overpayments

pursuant to section 409.913(15), (16), and (17) . An

ÐoverpaymentÑ includes Ðany amount that is not authorized to be

paid by the Medicaid program whether paid as a result of

inaccurate or improper cost reporting, improper claiming,

unacceptable practices, fraud, abuse, or mistake.Ñ

§ 409.913(1)(e), Fla. Stat.

32. AHCA is further instructed to Ðrequire repayment for

inappropriate, medically unnecessary, or excessive goods or

services from the p erson furnishing them, the person under whose

supervision they were furnished, or the person causing them to be

furnished.Ñ £ 409.913(11), Fla. Stat. ÐMedically necessaryÑ

goods or services are:

[A] ny goods or services necessary to palliate

the effects o f a terminal condition, or to

prevent, diagnose, correct, cure, alleviate,

or preclude deterioration of a condition that

threatens life, causes pain or suffering, or

results in illness or infirmity, which goods

and services are provided in accordance with

generally accepted standards of medical

practice. For purposes of determining

Medicaid reimbursement, the agency is the

final arbiter of medical necessity.

Determinations of medical necessity must be

made by a licensed physician employed by or

under contr act with the agency and must be

based upon information available at the time

the goods or services are provided.

§ 403.913(1)(d), Fla. Stat.

33. In addition to recoupment of the overpayment, AHCA

seeks to impose administrative sanctions on Respondent in the

form of a fine of $34,192.30. An action to impose an

administrative fine is penal in nature. Accordingly, AHCA bears

the burden of proof to demonstrate the grounds for doing so by

clear and convincing evidence. Dep't of Banking & Fin., Div. of

Sec. & Investor Prot. v. Osborne Stern & Co. , 670 So. 2d 932, 935

(Fla. 1996); see also Fla. Dep't of Child . & Fams . v. Davis Fam .

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

34. Clear and convincing evidence is a heightened standard

that requires more proof than a mere preponderance of the

evidence. Clear and convincing evidence requires that the

evidence Ðmust be found to be credible; the facts to which the

witnesses testify must be distinctly remembered; the testimony

must be precise and explicit and the w itnesses must be lacking in

confusion as to the facts at issue. The evidence must be of such

weight that it produces in the mind of the trier of fact a firm

belief or conviction, without hesitancy, as to the truth of the

allegations sought to be establish ed.Ñ In re: Davey , 645 So. 2d

398, 404 (Fla. 1994); Slomowitz v. Walker , 429 So. 2d 797, 800

(Fla. 4th DCA 1983).

35. As stated in the FAR, AHCA seeks to impose the fine

pursuant to sections 409.913(15), (16), and (17) and rule 59G -

9.070(7)(e). Section 409.913(15) states in pertinent part:

(15) The agency shall seek a remedy provided

by law, including, but not limited to, any

remedy provided in subsections (13) and (16)

and s. 812.035, if:

* * *

(e) The provider is not in compliance with

provisi ons of Medicaid provider publications

that have been adopted by reference as rules

in the Florida Administrative Code; with

provisions of state or federal laws, rules,

or regulations; with provisions of the

provider agreement between the agency and the

pro vider; or with certifications found on

claim forms or on transmittal forms for

electronically submitted claims that are

submitted by the provider or authorized

representative, as such provisions apply to

the Medicaid program;

36. Section 409.913(16) stat es in pertinent part:

(16) The agency shall impose any of the

following sanctions or disincentives on a

provider or a person for any of the acts

described in subsection (15):

* * *

(c) Imposition of a fine of up to $5,000 for

each violation . . . . Each instance of

improper billing of a Medicaid recipient;

. . . each instance of furnishing a Medicaid

recipient goods or professional services that

are inappropriate or of inferior quality as

determined by competent peer judgment; . . .

and each false or erroneous Medicaid claim

leading to an overpayment to a provider is

considered a separate violation.

37. Section 409.913(17) states:

(17) In determining the appropriate

administrative sanction to be applied, or the

duration of any suspension or termi nation,

the agency shall consider:

(a) The seriousness and extent of the

violation or violations.

(b) Any prior history of violations by the

provider relating to the delivery of health

care programs which resulted in either a

criminal conviction or in administrative

sanction or penalty.

(c) Evidence of continued violation within

the providerÓs management control of Medicaid

statutes, rules, regulations, or policies

after written notification to the provider of

improper practice or instance of violatio n.

(d) The effect, if any, on the quality of

medical care provided to Medicaid recipients

as a result of the acts of the provider.

(e) Any action by a licensing agency

respecting the provider in any state in which

the provider operates or has operated.

(f) The apparent impact on access by

recipients to Medicaid services if the

provider is suspended or terminated, in the

best judgment of the agency.

The agency shall document the basis for all

sanctioning actions and recommendations.

38. Rule 59G - 9.0 70 states in pertinent part:

(1) Purpose: This rule provides notice of

administrative sanctions imposed upon a

provider, entity, or person for each

violation of any Medicaid - related law.

(2) Applying and reporting sanctions:

Notice of the application of sanctions will

be by way of written correspondence and the

final notice shall be the point of entry for

administrative proceedings pursuant to

Chapter 120, F.S. Satisfaction of an

overpayment following a preliminary audit

report will not avoid the appl ication of

sanctions at a final audit report unless the

Agency offers amnesty pursuant to Section

409.913(25)(e), F.S. The Agency shall report

all sanctions imposed upon any provider,

entity, or person, or any principal, officer,

director, agent, managing employee, or

affiliated person of a provider who is

regulated by another state entity, regardless

of whether enrolled in the Medicaid program,

to that other state entity. Sanctions are

imposed upon the Final Order being filed with

the Agency Clerk.

(3) Definitions:

(a) ÐAudit reportÑ is the written notice of

determination that a violation of Medicaid

laws has occurred, and where the violation

results in an overpayment, it also shows the

calculation of overpayments.

(b) ÐClaimÑ is as defined in Sectio n

409.901(6), F.S., and includes the total

monthly payment to a provider for per diem

payments and the payment of a capitation rate

for a Medicaid recipient.

* * *

(e) An Ðerroneous claimÑ is an application

for payment from the Medicaid program or i ts

fiscal agent that contains an inaccuracy.

(f) ÐFineÑ is a monetary sanction. The

amount of a fine shall be as set forth within

this rule.

* * *

(h) ÐOffenseÑ means the occurrence of one or

more violations as set forth in a final audit

report. For purposes of the progressive

nature of sanctions under this rule, offenses

are characterized as ÐfirstÑ, ÐsecondÑ,

ÐthirdÑ, or ÐsubsequentÑ offenses; subsequent

offenses are any occurrences after a third

offense.

* * *

(n) ÐSanctionÑ shall be an y monetary or non -

monetary disincentive imposed pursuant to

this rule; a monetary sanction may be

referred to as a Ðfine.Ñ

* * *

(q) ÐViolationÑ means any omission or act

performed by a provider, entity, or person

that is contrary to Medicaid laws, the laws

that govern the providerÓs profession, or the

Medicaid provider agreement.

1. For purposes of this rule, each day that

an ongoing violation continues and each

instance of an act or omission contrary to a

Medicaid law, a law that governs the

prov iderÓs profession or the Medicaid

provider agreement shall be considered a

Ðseparate violationÑ.

2. For purposes of determining first,

second, third or subsequent offenses under

this rule, prior Agency actions during the

preceding five years will be coun ted where

the provider, entity, or person was deemed to

have committed the same violation.

(4) Limits on sanctions.

(a) Where a sanction is applied for

violations of Medicaid laws (under paragraph

(7)(e) of this rule), for a pattern of

erroneous claims (under paragraph (7)(h) of

this rule), or shortages of goods (under

paragraph (7)(n) of this rule) and the

violations are a Ðfirst offenseÑ as set forth

in this rule, if the cumulative amount of the

fine to be imposed as a result of the

violations giving rise to that overpayment

exceeds twenty - percent of the amount of the

overpayment, the fine shall be adjusted to

twenty - percent of the amount of the

overpayment.

* * *

(7) Sanctions: In addition to the

recoupment of the overpayment, if any, the

Agen cy will impose sanctions as outlined in

this subsection. Except when the Secretary

of the Agency determines not to impose a

sanction, pursuant to Section 409.913(16)(j),

F.S., sanctions shall be imposed as follows:

* * *

(e) For failure to comply w ith the

provisions of the Medicaid laws: For a first

offense, $1,000 fine per claim found to be in

violation. For a second offense, $2,500 fine

per claim found to be in violation. For a

third or subsequent offense, $5,000 fine per

claim found to be in v iolation (Section

409.913(15)(e), F.S.);

39. Section 409.913(15) and (16) and rule 59G - 9.070(7)(e)

plainly authorize AHCA to impose a sanction in the form of a fine

on Respondent for his violation of Medicaid laws, rules, and

policies. Reading the statut e and rule together, section

409.913(15)(e) instructs that AHCA ÐshallÑ seek a remedy provided

by law, including, but not limited to any remedy provided in

409.913(16), if a provider fails to comply with either the

provisions of Medicaid provider publicati ons adopted by AHCA

rules, Florida or federal laws or regulations governing the

Medicaid program, or the providerÓs Medicaid agreement with AHCA.

Section 409.913(16) details the sanctions AHCA ÐshallÑ impose for

any violation listed in 409.913(15). Secti on 409.913(16)(c)

includes the Ð[i]mposition of a fine of up to $5,000 for each

violation.Ñ Rule 59G - 9.070(7), which implements section 409.913,

provides that, Ð[i]n addition to the recoupment of the

overpayment . . . [AHCA] will impose sanctions as outli ned in

this subsection.Ñ Rule 59G - 9.070(7)(e) stat es: ÐFor failure to

comply with the provisions of the Medicaid laws: For a first

offense, $1,000 fine per claim found to be in violation.Ñ

40. Based on the above statutory authority, AHCA was

legally au thorized to impose a monetary sanction based on

RespondentÓs failure to comply with provisions of Medicaid

provider publications, Florida or federal laws, rules, or

regulations, or RespondentÓs provider agreement with AHCA.

Accordingly, AHCA acted within its statutory authority to impose

on Respondent a fine of $34,192.30.

41. Respondent raises several objections to AHCAÓs

imposition of the sanction of an administrative fine.

RespondentÓs arguments, however, fail to persuade that AHCA

lacked the statutor y authority to impose a fine on Respondent or

that AHCA failed to follow the governing Medicaid laws, rules, or

policies.

42. First, Respondent asserts that AHCA did not follow

proper statutory procedure before deciding to impose the monetary

sanction for his violations of the Medicaid program. Respondent

argues that, instead of a fine, AHCA should have issued him a

notice of noncompliance pursuant to section 120.695(1).

Respondent contends that a notice of noncompliance is a more

appropriate penalty for his violations and would better achieve

the regulatory objectives of the governing statute.

43. Section 120.695 in relevant part provides as follows:

(1) It is the policy of the state that the

purpose of regulation is to protect the

public by attainin g compliance with the

policies established by the Legislature.

Fines and other penalties may be provided in

order to assure compliance; however, the

collection of fines and the imposition of

penalties are intended to be secondary to the

primary goal of att aining compliance with an

agency's rules. It is the intent of the

Legislature that an agency charged with

enforcing rules shall issue a notice of

noncompliance as its first response to a

minor violation of a rule in any instance in

which it is reasonable to assume that the

violator was unaware of the rule or unclear

as to how to comply with it.

(2)(a) Each agency shall issue a notice of

noncompliance as a first response to a minor

violation of a rule. A "notice of

noncompliance" is a notification by the

agency charged with enforcing the rule issued

to the person or business subject to the

rule. A notice of noncompliance may not be

accompanied with a fine or other disciplinary

penalty. It must identify the specific rule

that is being violated, provide i nformation

on how to comply with the rule, and specify a

reasonable time for the violator to comply

with the rule. A rule is agency action that

regulates a business, occupation, or

profession, or regulates a person operating a

business, occupation, or pro fession, and

that, if not complied with, may result in a

disciplinary penalty.

(b) A violation of a rule is a minor

violation if it does not result in economic

or physical harm to a person or adversely

affect the public health, safety, or welfare

or crea te a significant threat of such harm.

If an agency under the direction of a cabinet

officer mails to each licensee a notice of

the designated rules at the time of licensure

and at least annually thereafter, the

provisions of paragraph (a) may be exercised

at the discretion of the agency. Such notice

shall include a subject - matter index of the

rules and information on how the rules may be

obtained. (emphasis added) .

44. Despite RespondentÓs plea for AHCA to consider the

fundamental fairness of imposing a fine under the circumstances

of RespondentÓs violations, section 120.695 does not appear to

apply in this matter. AHCA initiated this action to recover

Medicaid overpayments pursuant to section 409.913. AHCA charges

Respondent with failing to comply wit h Medicaid laws, rules, or

publications under section 409.913(15)(e), not just agency rule

59G - 9.070. In addition, it is not reasonable to assume that

Respondent was unaware that the Medicaid program necessitates

certain documentary requirements in order to be paid for dental

services. The evidence establishes that Respondent either

received or had reasonable access to all the pertinent Medicaid

Handbooks and claims filing guidelines.

45. Further, AHCA did not treat RespondentÓs actions as a

minor rule v iolation under section 120.695 (2) (b). The facts in

this matter involve economic harm to the Medicaid program in that

Respondent was overpaid by $177,717.69 for dental services that ,

in whole or in part , the Medicaid program did not cover. Section

120.695 does not compel AHCA to issue a notice of noncompliance

for a minor rule violation instead of imposing a fine for

violating Medicaid laws under section 409.913(16). Therefore,

while this action may be the first time AHCA has sought to

sanction Respondent and even if RespondentÓs actions were

inadvertent or unintentional, the provisions of section 409.913

authorize AHCA to impose a fine based on his violations of

Medicaid laws.

46. Next, Respondent asserts that AHCA did not properly

consider the factors listed in section 409.913(17) before

determining that a fine was the appropriate administrative

sanction for RespondentÓs violations. Respondent correctly reads

that section 409.913(17) sets forth six ÐconsiderationsÑ that

AHCA must apply in determining t he appropriate sanction (such as

a fine) under section 409.913(16). The statute also directs AHCA

to document the basis for the sanction imposed.

47. Based on the information included on the Worksheet AHCA

used to calculate the fine, AHCA satisfied secti on 409.913(17).

The Worksheet, on its face, provides AHCA the means to account

for the statutorily mandated considerations. The Worksheet

explicitly required the AHCA investigator and administrator to

assess the following factors before reaching the fina l sanction

amount: the seriousness and extent of RespondentÓs violation

(section 409.913(17)(a)) ; evidence that the violation continued

after AHCAÓs written notice (section 409.913(17)(c)) ; whether the

violation impacted the quality of medical care provid ed to

Medicaid recipients (section 409.913(17)(d)) ; and whether the

licensing agency in any state in which the provider operates or

has operated has taken any action against the provider (section

409.913(17)(e)). 11 / By placing a checkmark next to each fac tor,

the investigator ÐdocumentedÑ her consideration. Ms. Olmstead

then signed the Worksheet acknowledging that she had reviewed and

approved the investigatorÓs final calculation.

48. AHCA does not document its review of section

409.913(17) factors othe r than on the Worksheet. Section

409.913(17), however, does not place upon AHCA any responsibility

other than the general requirement that it Ðshall document the

basis for all sanctioning actions and recommendations.Ñ The

Worksheet, together with the FAR and its supporting documents,

satisfies section 409.913(17). 12 /

49. Respondent also argues that AHCA had the discretion not

to impose a monetary sanction under r ule 59G - 9.070(7)(e).

Respondent correctly reads that section 409.913(16) authorizes

AHCA the option to impose a range of administrative sanctions

based on a violation of section 409.913(15) , including suspension

or termination from participation in the Medicaid program, a fine

of up to $5,000, comprehensive followup reviews, or a corrective

actio n plan. Section 409.913(16), however, mandates that AHCA

Ðshall imposeÑ at least one of these sanctions on a provider.

Any discretion that section 409.913(16) allows AHCA pertains only

to the type of sanction it chooses to impose. One sanction

clearly a vailable was the Ð[i]mposition of a fine of up to $5,000

for each violation.Ñ Therefore, by selecting the fine described

in rule 59G - 9.070(7)(e) as the sanction for RespondentÓs failure

to comply with the provision of the Medicaid laws, AHCA complied

with statutory requirements under section 409.913(16). No

provision in section 409.913 prevented AHCA from selecting a fine

from the available sanctions to impose upon Respondent for his

violations of Medicaid laws. 13 /

50. Thirdly, Respondent argues that AHC AÓs actions violate

due process and impose an unconstitutionally excessive penalty.

However, raising the issue of the constitutionality of the

sanctions authorized in section 409.913(16) is inappropriate in

this forum. DOAH lacks jurisdiction to declare a statute

unconstitutional. See Key Haven Associated Enter s . v. Bd of Tr s.

of the Int . Imp . Trust Fund , 427 So. 2d 153, 157 (Fla. 1982);

Sch. Bd. v. Tampa Sch. Dev. Corp. , 113 So. 3d 919 (Fla. 2d

DCA 2013) .

51. Finally, RespondentÓs argument that the cl aims he

submitted to the Medicaid program which led to the overpayment

were not ÐerroneousÑ as the term is used in section

409.913(16)(c) is not persuasive. Section 409.913(16)(c) states

that Ðeach false or erroneous Medicaid claim leading to an

overpayme nt to a provider is considered a separate violation.Ñ

The statute does not define the term Ðerroneous.Ñ ÐErroneous,Ñ

however, is a commonly understood word that is defined to mean

Ðcontaining or characterized by error.Ñ MERRIAM - WEBSTER

DICTIONARY, at ht tp://www.merriam - webster.com. See Seagrave v.

State , 802 So. 2d 281, 286 (Fla. 2001) (ÐWhen necessary, the

plain and ordinary meaning of words [in a statute] can be

ascertained by reference to a dictionary.Ñ); see also Raymond

James Fin. Servs. v. Phillip s , 110 So. 3d 908, 910 (Fla. 2d DCA

2011) (ÐIt is appropriate to refer to dictionary definitions when

construing statutes or rules.Ñ); and Verizon Bus. Purchasing, LLC

v. State , 164 So. 3d 806, 810 (Fla 1st DCA 2015). AHCA

establish ed by clear and convinc ing evidence that RespondentÓs

claims for which AHCA seeks to impose a fine contained errors.

52. Furthermore, section 409.913(16)(c) authorizes AHCA to

impose a fine for Ð[e]ach instance of improper billing of a

Medicaid recipientÑ and Ðeach instance o f furnishing a Medicaid

recipient goods or professional services that are inappropriate

. . . as determined by competent peer judgment.Ñ In addition,

section 409.913(1)(e) defines ÐoverpaymentÑ to include Ðany

amount that is not authorized to be paid by the Medicaid program

whether paid as a result of inaccurate or improper cost

reporting, improper claiming, unacceptable practices, fraud,

abuse, or mistake.Ñ The 58 claims that AHCA found in violation

of the Medicaid laws fit into one of these categories.

Therefore, although RespondentÓs Medicaid claims may have been

inadvertent or a mistake as he argues, the claims still contained

inaccuracies which directly led to the overpayment. Accordingly,

pursuant to section 409.913, AHCA must impose a fine for ea ch

claim in violation.

53. Based on the facts established in this matter, AHCA has

proven by clear and convincing evidence that Respondent failed to

comply with the provisions of the applicable Medicaid laws,

policies, and rules. Accordingly, as detaile d above, section

409.913 and rule 59G - 9.070(7)(e) allow AHCA to impose an

administrative sanction on Respondent in the form of a monetary

fine. AHCA further established that the amount of the fine it

seeks to impose was properly calculated and authorized under the

governing statute and rule. Therefore, it is determined that

AHCA should fine Respondent in the amount of $34,192.30.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that AHCA issue a final order imposing an

administrative fine of $34,192.30 for RespondentÓs first offense

of violating provisions of Medicaid provider publications adopted

by AHCA rules, Florida or federal laws or regulations governing

the Medicaid program, or the providerÓs Medicaid agreement with

AHCA.

DONE AND ENTERED this 10 th day of March , 2016 , in

Tallahassee, Leon County, Florida.

S

J. BRUCE CULPEPPER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalac hee 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 10 th day of March , 2016 .

ENDNOTE S

1/ All Statutory references are to the 20 14 Florida Statutes,

unless otherwise noted.

2 / After AHCA served the FAR, but before the final hearing, AHCA

revised the amount of sanctions sought from $35,543.54 down to

$34,192.30.

3/ AHCA is authorized to initiate audits without stating its

basis for doing so. It is required to conduct at least five

percent of its audits on a random basis. See § 409.913(2), Fla.

Stat.

4/ See 2007 Dental Services Coverage and Limitations Handbooks,

page 2 - 2, and the 2011 Dental Services Coverage and Limitations

Handbooks, page 2 - 2.

5/ See 2008 Florida Medicaid Provider General Handbook, pages

5 - 8 and 2 - 57, and the 2012 Florida Medicaid Provider General

Handbook, pages 5 - 9 and 2 - 60.

6/ See 2008 Florida Medicaid Provider General Handbook, pages

5 - 4, and the 2012 Florida Medicaid Provider General Handbook,

pages 5 - 4.

7/ See 2008 Florida Medicaid Provider General Handbook,

pages 5 - 4, and the 2012 Florida Medicaid Provider General

Handbook, pages 5 - 4.

8/ See 2007 Dental Services Coverage and Limitations Ha ndbooks,

page 2 - 5, and the 2011 Dental Services Coverage and Limitations

Handbooks, page 2 - 6.

9/ Per the partiesÓ settlement of the overpayment amount prior to

the final hearing, Respondent agreed not to require AHCA to

present further evidence regarding the alleged overpayment.

10/ Respondent contends that, while Respondent agreed to pay back

to AHCA the full amount of the alleged overpayment, this

settlement Ðdoes not constitute an admission of wrongdoing or

error by any of the parties with respect to this case or any

other matter.Ñ However, while Respondent does not want the

settlement to be considered an admission of guilt, the settlement

does not prevent a finding that the documents and testimony AHCA

presented at the final hearing establish, by cl ear and convincing

evidence, that the overpayment resulted from RespondentÓs failure

to comply with Medicaid laws.

11/ Section 409.913(17)(b) required AHCA to consider any prior

violations by Respondent. The fact that AHCA classified

RespondentÓs viola tions as a Ðfirst offenseÑ establishes that AHCA

determined that Respondent had no prior history of violations or

administrative sanctions. Accordingly, AHCA also complied with

section 409.913(17)(b).

12/ In addition, the fact that AHCA entitles its wor ksheet

Ð DOCUMENTATION WORKSHEET FOR IMPOSING ADMINISTRATIVE SANCTIONSÑ

(emphasis added) bolsters its position that it complies with the

documentation requirement of section 409.913(17).

13/ Furthermore, the fact that the fine under rule 59G - 9.070(7)(e)

m ay be levied for a Ðfirst offenseÑ indicates that AHCA may fine

Respondent in this action despite the fact that his offenses are

his first.

COPIES FURNISHED :

Ephraim Durand Livingston, Esquire

Agency for Health Care Administration

2727 Mahan Drive , M ail Stop 3

Tallahassee, Florida 32308

(eServed)

Frank P. Rainer, Esquire

Broad and Cassel

215 South Monroe Street , Suite 400

Tallahassee, Florida 32301

(eServed)

James Zubko Ross, Esquire

Agency for Health Care Administration

2727 Mahan Drive , Mail Sto p 3

Tallahassee, Florida 32308

(eServed)

John F. Loar, Esquire

Broad and Cassel

215 South Monroe Street , Suite 400

Tallahassee, Florida 32301

(eServed)

Elizabeth Dudek, Secretary

Agency for Health Care Administration

Mail Stop 1

2727 Mahan Drive , Mail Stop 1

Tallahassee, Florida 32308

(eServed)

Stuart Williams, General Counsel

Agency for Health Care Administration

2727 Mahan Drive , Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2 727 Mahan Drive , Mail Stop 3

Tallahassee, Florida 32308

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any

exceptions to this Recommended Order should be filed with the

agency that will issue the Final Order in this case.