17-000130MPI Agency For Health Care Administration vs. Octavio J. Carreno, M.D. Status: Closed Recommended Order on Monday, May 22, 2017.

Summary: Based on the FAR and evidence presented at the hearing, AHCA proved, for some claims, that Respondent was obligated to reimburse the agency for Medicaid overpayments made during the audit period. For other claims, no reimbursement was due.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Petitioner,

vs. Case No. 17 - 0130MPI

OCTAVIO J. CARRENO, M.D.,

Respondent.

_______________________________/

RECOMMENDED ORDER

Pursuant to notice, this cause was heard on April 5, 2017 ,

by video teleconference in Tallahassee and Miami, Florida , by

Robert L. Kilbride, the assigned Administrative Law Judge of the

Division of Administrative Hearings ( " DOAH " ) .

APPEARANCES

For Petitioner: Joseph G. Hern, Esquire

James B. Countess, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

For Respondent: Michael Paul Gennett, Esquire

Akerman LLP

Las Olas Center II, Suite 1600

350 East Las Olas Boulevard

Fort Lauderdale, Florida 33301 - 2999

STATEMENT OF THE ISSUE S

Whether Octavio J. Carreno, M.D. ( " Respondent " or

" Dr. Carreno " ) , is liable to the Agency for Health Care

Administration ( " AHCA , " " Agency , " or " Petitioner " ) for an

overpayment in the amount of $ 121,641.42 for certain claims for

services during the audit period of January 1, 2012, through

December 31, 2014, tha t in whole or in part were not covered by

Medicaid.

Whether Respondent is liable to Petitioner for a sanction in

the amount of $24,328.28 pursuant to Florida Administrative Code

Rule 59G - 9.070(7)(e) .

Whether Respondent is liable to Petitioner for Petitione r ' s

incurred investigative, legal, and expert witness costs, which

Petitioner contends it is entitled to recover pursuant to

section 409.913(23)(a ) , Florida Statutes (2014).

PRELIMINARY STATEMENT

Petitioner performed an audit of Respondent ' s Medicaid

billi ng and payment records for the period January 1, 2012 ,

through December 31, 2014, and determined that Respondent had

received an overpayment of Medicaid funds in the amount of

$139,250.66.

The Agency issued its Final Audit Report ( " FAR " ) on

March 15, 2016, notifying Respondent of the audit findings and

conclusions. It imposed a sanction for failure to comply with

the Medicaid rules in the amount of $27,850.13 pursuant to

r ule 59G - 9.070(7)(e) and sought costs incurred as a result of the

audit.

The amounts o f the overpayment and sanction were revised and

reduced , after the FAR was issued, to $121,641.42 and $24,328.28,

respectively.

Respondent disputed the Agency determination described in

the FAR by timely filing a Petition for Formal Administrative

Hearing . Thereafter, the Agency referred the case to DOAH , and

the matter was assigned DOAH Case No. 16 - 4669MPI.

At the parties ' request, an Order Closing File and

Relinquishing Jurisdiction was entered on November 22, 2016.

Upon motion by the parties, the case was later re - opened at DOAH

and reassigned as DOAH Case No. 17 - 0130MPI.

On January 23, 2017, a Notice of Hearing by Video

Teleconference was filed , setting the hearing for April 5, 2017 .

On April 5 , 2017, the parties filed an Amended Joint Prehearing

Sti pulation ("JPS") .

At the final hearing, Petitioner offered Exhibits 1

through 19, a voluminous collection of medical and audit

documents, all of which were admitted into evidence. Respondent

offered Exhibits 1 through 3 , which were admitted into evidence

as well.

Petitioner called as witnesses Ms. Robi Olmstead, AHCA

a dministrator, and Ellen D. Silkes, M.D. Respondent testified on

his own behalf and called Yusleidys Couret and Lorraine Molinari

as witnesses.

A T ranscript of the final hearing was filed on April 21,

2017. Post - hearing proposed recommended orders were timely

submitted by the parties. Each w as carefully reviewed and given

due consideration in the preparation of this Recommended Order.

References to Florida Statutes are to the 2014 version,

u nless otherwise indicated.

FINDING S OF FACT

Based on the evidence presented at the hearing, and the

record as a whole, the undersigned makes the following findings

of material and relevant facts:

Agreed Facts in Parties ' Amended Joint Prehearing Stipulatio n

1. Petitioner is designated as the single state agency

authorized to make payments for medical assistance and related

services under Title XIX of the Social Security Act. This

program of medical assistance is referred to as the " Medicaid

p rogram. " See § 409.902, Fla . Stat . ; JPS ¶ E12 .

2. Petitioner has the responsibility for overseeing and

administering the Medi caid p rogram for the s tate of Florida,

pursuant to s ection 409.913 . JPS ¶ E13 .

3. The Medicaid provider agreement is a voluntary contract

be tween AHCA and Respondent. An enrolled Medicaid provider must

comply fully with all state and federal l aws pertaining to the

Medicaid p rogram, including Medicaid provider h andbooks

incorporated by reference into rule, as well as all federal,

state, and lo cal laws pertaining to licensure to receive payment

from the Medicaid p rogram. JPS ¶ E14 .

4. During the audit period, Respondent was an enrolled

Medicaid provider and had a valid Medicaid provider agreement

with AHCA, Medicaid Provider No. 002993600. JP S ¶ E2 ; P et .

Ex. 1 .

5. AHCA 's Bureau of Medicaid Program Integrity ( " MPI " ),

pursuant to its statutory authority, conducted an audit of

Respondent for Medicaid claims it paid to him for medical

services he provided to Medicaid recipients, occurring during the

time period from January 1, 2012 , through December 31, 2014.

JPS ¶¶ E1 and E 4 .

6. AHCA issued a FAR dated March 15, 2016, MPI Case ID

No. 2015 - 0003243, alleging that Respondent was overpaid

$139,250.66 for certain services that are not covered by

Med icaid. In addition, the FAR informed Respondent that AHCA was

seeking to impose a fine of $27,850.13 as a sanction for

violation of r ule 59G - 9.070(7)(e) and seeking costs pursuant to

s ection 409.913(23). The amounts of the overpayment and the

sanction we re revised , after the FAR was issued , to $121,641.42

and $24,328.28, respectively. JPS ¶ E5 .

7. The FAR, supported by the Agency work papers,

constitutes evidence of the overpayment to Respondent pursuant to

s ection 409.913(22). JPS ¶ E15 .

8. In the FA R section entitled " Findings , " AHCA set forth

the bases for the overpayment determinations. JPS ¶ E6 .

9. T he claims which make up the overpayment alleged by AHCA

were filed by and paid to Respondent prior to the initiation of

this action. JPS ¶ E7 .

10. There is no dispute from Respondent as to the process

of the statistical sampling or the statistical methods utilized

to establish the validity of the overpayment calculation utilized

by AHCA. JPS ¶ E16 .

Additional Facts Adduced at the Hearing

11. Ms. R obi Olmstead, an a dministrator of the Practitioner

Unit at AHCA, under the Offices of the Inspector General, MPI,

testified regarding her experience and role in the audit of

Respondent.

12. MPI is required by f ederal and Florida law to

investigate medical providers for fraud, abuse, or overpayments.

13. Olmstead cited s ection 409.913 as the authority to

investigate Medicaid providers, including Respondent. The

instant case against Respondent was opened based on a referral

from one of the investigators wh o noticed " a significant portion

of Dr. Carreno ' s office visits " (evaluation and management or

" E&M " codes) were billed at high levels. Olmstead also

independently confirmed this in her review of the data.

14. Olmstead opened the audit, set the coverage dates of

the audit period, and assigned the matter to an AHCA

investigator. The investigator obtained a list of claims for

40 random recipients from the Agency ' s cluster sample program.

15. After the sample was obtained, Petitioner then

requested the med ical records of the sample recipients from

Respondent. P et . Ex. 2 .

16. Petitioner utilized the services of a peer consultant,

Ellen D. Silkes, M.D. Dr. Si l kes meets the requirements and

qualifications of a " peer " as defined in s ectio n 409.9131 . JPS

¶ E 17 . Dr. Silkes practices the same specialty or sub - specialty

as Respondent and is licensed under the same chapter. Pet.

Ex. 6, p. 147 . Both Dr. Silkes and Dr. Carreno are

otolaryngologists, commonly referred to as ear, nose, and throat

( " ENT " ) doctors.

17. The medical records received from Respondent were

reviewed by the AHCA investigator and by an AHCA r egistered n urse

c onsultant and then sent to the peer reviewer, Dr. Silkes, along

with other relevant documents, including the worksheets generated

by t he claims sample process.

18. When the medical records were returned to the Agency

with the peer ' s comments, the Agency calculated the amount of the

overpayments.

19. The peer reviewer ' s role is to make determinations of

medical necessity and levels of s ervice. Decisions as to the

lack of documentation are made by a combination of the peer

reviewer and the Agency nurse consultant.

20. After the agency and peer review were completed, a

Preliminary Audit Report ( " PAR " )(P et . Ex. 4) was sent to

Respondent o n December 14, 2015.

21. After the receipt of the PAR, Respondent had the

opportunity to submit additional medical records to the Agency

for consideration. This was done by Respondent.

22. The F AR (P et . Ex. 5) was then issued on March 15, 2016.

23. The FAR made multiple findings delineating the reasons

for the overpayments, including improper " consult " claims,

reductions for levels of service, insufficient or no

documentation to support claims, improper claims for global

procedures, errors in coding, an d lack of medical necessity for

certain procedures. P et . Ex. 5 , p p . 88 - 90.

24. Subsequent to the FAR and prior to the final hearing,

the review of additional information provided to the Agency by

Respondent resulted in a reduction of the alleged overpaym ent to

$121,641.42. JPS ¶ A ; P et . Ex. 19 .

25. Rule 59G - 9.070(7)(e) addresses sanctions for failure to

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

offense, there is a $1,000 .00 fine per claim found to be in

violation. AHCA initially fou nd 86 violations. P et . Ex. 6 .

After the state mandated cap of 20 percent was applied, the

initial fine was set by the Agency at $27,850.13. Subsequently,

based on the allowance of some claims submitted by Respondent

with additional documents or clarific ation, the fine amount was

reduced to $24,328.28. P et . Ex. 19 .

26. The Agency considered all of the statutory factors when

assessing the sanction. Olmstead considered the violations in

this case to be " typical " and " nothing extraordinary " and did not

en hance or reduce the sanctions.

27. The Agency incurred costs in its investigation of this

matter. However, costs have not yet been fully determined. P et .

Ex. 5, p . 150B.

28. Based on Olmstead ' s experience, the audit was conducted

in a routine and accep t able manner.

Identification of the Disputed Claims

29. Notably, in the JPS and again at hearing, the parties

agreed that only the following " Disputed Claims " required factual

findings and conclusions of law by the undersigned:

Recipient #2 Claims 1, 2 a nd 3

Recipient #3 Claims 5, 11, 12,

13, 17, 18, 20, 21,

22, 24, 26, 28, 35

Recipient #25 Claim 11

Recipient #29 Claim 6

Recipient #30 Claims 1, 2, 4

None of the other audit determinations made by AHCA were

challenged by Respondent at the hearing. 1/

3 0. The parties agreed at the start of the hearing that the

downward adjustments made by AHCA to Recipient #2, Claims 1 and

2, were agreed to and would not be disputed. The worksheets , as

revised , now showed the peer ' s determination of those claims as

pro perly payable at C urrent Procedural Terminology ("C PT ") Code

99213. P et . Ex. 19 .

Evaluation and Management Claims

31. Many of the " Disputed Claims " are for E&M services,

which are office visits, and specifically in this audit, office

visits for establish ed patients of Respondent.

32. In order to properly code and bill the appropriate

level of E&M services for an encounter with an established

patient, the medical records must establish that two of the three

key components (i.e., history, examination, and medical decision -

making) meet or exceed the stated requirements of that level of

service. In some cases, time spent with the patient is

considered a key factor as well. P et . Ex. 13, p . 271 .

33. For encounters with established patients, the CPT Code

(201 2) provides in pertinent part, as follows:

99212 - Office or other outpatient visit for

the evaluation and management of an

established patient, which requires at least

2 of these three key components:

• A problem focused history;

• A problem focused exam ination;

• A problem focused examination .

99213 - Office or other outpatient visit for

the evaluation and management of an

established patient, which requires at least

2 of these three key components:

• An expanded problem focused history;

• An expanded problem focused examination;

• Medical decision making of low complexity.

99214 - Office or other outpatient visit for

the evaluation and management of an

established patient, which requires at least

2 of these three key components:

• A detailed history;

• A detailed examination;

• Medical decision making of moderate

complexity.

P et . Ex. 13, p. 273 .

34. There was no evidence to suggest that the CPT c odes for

these procedures changed at any time during the audit period

between 2012 and 2014. As a result , the CPT c odes admitted were

properly relied upon by the parties. P et . Ex. 13 .

35. As mentioned, the key components of coding an E&M

encounter are the examination, the history, and the medical

decision - making required of the physician. P et . Ex. 13 .

36. The CPT c odes from 99211 to 99215 are also referenced

as Levels 1 through 5 with the main difference being the

complexity and extent of the visit and examination.

37. Counseling and/or coordination of care with the patient

and/or family can be a control ling factor in coding the proper

level. However, the CPT c ode notes provide that the " extent of

counseling and/or coordination of care must be documented in the

medical record . " P et . Ex. 13, p. 271.

38. The Florida Medicaid Provider General Handbook pro vides

that " [m]edical goods or services are excessive or not medically

necessary unless both the medical basis and the specific need for

them are fully and properly documented in the recipient ' s medical

records . " P et . Ex. 9, p p . 169 - 173. 2/

39. The unders igned undertook a careful and meticulous

review of the record. This included reading T ranscript

testimony, reviewing manuals and handbooks provided , and

comparing and cross - referencing the hearing testimony to the

worksheets and handwritten medical notes and other records

prepared by Respondent.

Findings of Fact on Disputed Claims

40. Recipient #2, Claim 3. Respondent submitted this claim

using CPT Code 69200. P et . Ex. 15 - 2, p. 376 - A .

41. Dr. Silkes testified that there was a myringotomy tube

that was placed in the ear by Respondent. The tube is not

considered a foreign body , and Medicaid does not pay for its

removal when inserted by the original doctor. She concluded that

r emoval of the tubes is not properly billed as CPT Code 69200.

42. This conclu sion is also supported by provisions of the

Physicians Services Handbook ( P et . Ex. 13, p . 199 ), which does

not permit additional billing under global surgery packages for

the removal of " items such as tubes, drains . . . . " ( see bullet

point 6 entitled " Mi scellaneous Services and Supplies ) .

43. This restriction does not place any time limit when the

non - reimbursable " miscellaneous service " is performed, even

outside the normal 90 - or ten - day time period.

44. The undersigned credits and finds more persuasi ve the

evidence and conclusions from Dr. Silkes and AHCA. The removal

of the tubes fell under the exclusion of miscellaneous services

or did not otherwise qualify for reimbursement ( P et . Ex. 13,

p . 199 ) . The claim was properly denied.

45. Recipient #3, Claim 5. Respondent submitted a claim

using CPT Code 31237 for services on January 30 , 2012,

Nasal/Sinus Endoscopy Surgery. Pet . Ex . 15, p p. 376 (worksheet)

and 387 (medical record).

46. Dr. Silkes denied this claim because she could not find

documentat ion to support the procedure. However, there is

documentation at Petitioner's Exhibit 15, page 387, included in a

contemporaneous office note for January 30, 2012. It indicates

on the fif th line that R espondent performed a nasal endoscopy

( " n asal endo " ) and that he did bilateral debridement of the

sinuses. He found crusting on the right , and the right sphenoid

sinus was narrow.

47. Dr. Silkes testified that she may have misread the

n asal endo reference and that Dr. Carreno may be corre ct on that

point.

48. The undersigned credits and finds more persuasive

Respondent ' s evidence and finds that the claim should have been

paid as requested and coded.

49. Recipient #3, Claim 11. Respondent submitted a claim

using CPT Code 31231 for services on June 13 , 201 2, n asal e ndo.

Pet . Ex . 15, p p. 377 (worksheet) and 388 (medical record).

Dr. Silkes denied this claim because she did not find anything in

the medical record to support billing for this service.

50. The supporting medical note documents a nasal endo in

the middle of the notes. Respondent wrote in the assessment and

plan ( " A/P " ) " looks good but mucocele of right sphenoid . " Also,

he testified that if he did n o t do the endoscopy, he could n o t

have seen the right sphenoid.

51. The undersigned credits and finds more persuasive

Respondent ' s evidence and finds that the claim should have been

paid as requested and coded.

52. Recipient #3, Claim 12. This claim was adjusted from

CPT Code 99214 to 99212 by Dr. Silkes. She concluded that the

medical records fa iled to properly document an examination and

the medical decision - making was straightforward. P et . Ex. 15 - 3,

p. 377.

53. The undersigned credits and finds more persuasive

AHCA ' s evidence and finds that the c ode should be reduced to CPT

Code 99212.

54. R ecipient #3, Claim 13. This claim was denied by AHCA

on the basis that the examination of July 30, 2012 , was included

within a global surgical fee package. The surgery was performed

on August 13, 2012, after the decision to perform the surgery was

made o n July 16, 2012. P et . Ex. 15 - 3, p p . 378 and 389 .

55. The Physicians Services Coverage and Limitations

Handbook (P et . Ex. 11, p. 199) provides as follows:

Evaluation and management services,

subsequent to a decision for surgery visit,

that are limited and focused to determine the

health of the individual prior to surgery are

included in the global surgery package and

may not be billed separately.

56. The primary purpose of the visit on July 30, 2012 , was

an examination to determine the health of the indi vidual. The

patient visit was limited in scope and should be included in the

global surgical package. The surgical decision was made prior to

this encounter , and the surgery occurred after it.

57. The undersigned credits and finds more persuasive

ACHA ' s evidence and finds that the claim was properly denied.

58. Recipient # 3, Claim 17. Respondent submitted a claim

for services performed on January 14 , 2013, o ffice outpatient

visit. Pet . Ex . 15, p p. 378 (worksheet) and 392 (medical

record).

59. Dr. Sil kes down - coded this from CPT Code 99214 to

99212 , because " only nasal examination was performed with

cultures and he [ the patient ] was told to return for a full

examination . " She said the history was problem focused, the exam

was problem focused , and the decision - making was straight

forward.

60. Both Dr. Carreno and his coding witness , Lorraine

Molinari , pointed out that the record says that the visit lasted

" 30 minutes . " This factor justifies a claim under CPT

Code 99214. Also, the visit involved a mor e detailed and

extensive examination of the nasal areas by Respondent.

61. The undersigned credits and finds more persuasive the

evidence presented by Respondent, particularly due to the amount

of time devoted to this visit. It was properly coded as CPT

Code 99214.

62. Recipient # 3, Claim 18. Respondent submitted a claim

using CPT Code 99214 for an office outpatient visit on

February 13 , 2013. Pet . Ex . 15, p p. 378 (worksheet) and 392

(medical record).

63. Dr. Silkes down - coded this to CPT Code 99213 , opining

that Dr. Carreno only performed an expanded problem focused

history, expanded problem focused examination , and the decision -

making was of low complexity.

64. Dr. Carreno characterized this patient as one of the

most complicated medical cases he ha s handled. The patient had a

myriad of medical problems related to his ENT systems.

65. Dr. Carreno and Molinari stated that the visit included

an extensive conversation with the patient and his mother, and he

also had to review and consider information from Dr. Ramos

(immunologist ' s) notes.

66. Dr. Carreno documented a left maxillary sinus suctioned

under endoscopy. The extent of his note and documentation is

reflective of a more extensive and complex examination and visit.

Molinari opined that it sho uld be CPT Code 99214.

67. The undersigned credits and finds more persuasive the

evidence presented by Respondent, particularly due to the

complexity of the examination. It was properly coded as CPT

Code 99214.

68. Recipient #3, Claim 20. This claim w as adjusted from

CPT Code 99214 to 99213 by Dr. Silkes. She opined that the

examination was only problem focused ( " nasal exam only " ) and that

there were no other records that would support the higher level

of services claimed. P et . Ex. 15 - 3, p p . 379 and 393 .

69. Additionally, there was no documentation to support a

higher level claim under CPT Code 99214, nor was the use of an

endoscope documented.

70. The undersigned credits and finds more persuasive the

evidence and conclusions from Dr. Silkes and ACH A. The claim was

properly reduced to CPT Code 99213.

71. Recipient #3, Claim 21. Respondent submitted this

claim using CPT Code 31231, a nasal endo code. P et . Ex. 15 - 3,

p p . 379 and 393.

72. Dr. Silkes testified she did not find any documentation

in th e record that would show that an endoscopy was performed

on that date, but did allow an office visit for the same date

where a nasal exam was performed (Claim 20, adjusted from CPT

Code 99214 to 99213).

73. The undersigned credits and finds more persuasiv e the

evidence and conclusions from Dr. Silkes and AHCA. The claim was

properly reduced to CPT Code 99213 primarily for failure to

properly document that an endoscopy was performed.

74. Recipient # 3, Claim 22. Respondent submitted a claim

using CPT Code 99214 for services on June 17 , 2013, o ffice

outpatient visit. Pet . Ex . 15, p p. 379 (worksheet) and 393

(medical record).

75. Dr. Silkes testified that she reduced this to CPT

Code 99213 because only a nasal examination was done which is a

problem focuse d examination. She concluded that the ear, nose ,

and throat were not examined.

76. Dr. Carreno testified that it was n o t only a nasal

exam. His contemporaneous notes reference an " endoscopic

debridement " on the third line, which means he used an endosco pe

to see in the nose and clean fungal content out with suction and

graspers.

77. Molinari opined that the visit should remain CPT

Code 99214 because the medical decision - making reflected in the

note was at least moderate complexity.

78. The undersigned credits and finds more persuasive the

evidence presented by Respondent. The use of an endoscope and

performing the debridement procedure were sufficiently

documented. The services performed supported coding as CPT

Code 99214.

79. Recipient #3, Claim 24. This claim by Respondent was

adjusted from CPT Code 99214 to 99213 by Dr. Silkes. She opined

that " only a nasal examination was done " and that the examination

and history were both either problem focused or expanded problem

focused. P et . Ex. 15 - 3, p p . 379 and 394.

80. Respondent ' s witness, Molinari, agreed with Dr. Silkes '

adjustment.

81. The undersigned credits and finds more persuasive the

evidence and conclusions from Dr. Silkes and AHCA. The claim was

properly reduced to CPT Code 99213 primarily because the visit

only involved a less complicated nasal examination.

82. Recipient # 3, Claim 26. Respondent submitted a claim

using CPT Code 99214 for service s on January 8 , 2014, o ffice

outpatient visit. Pet . Ex . 15, p p. 380 (worksheet) and 395

(medic al record). Dr. Silkes down - coded it to CPT Code 99213

because " only the nose was examined . "

83. However, Dr. Carreno testified that he performed a

fiberoptic laryngoscopy, using an endoscope, to inspect for any

fungal debris. This was sufficiently docu mented in his

contemporaneous office notes. He also used the scope to view the

nasopharynx. His notes also reflect that a physical exam (PE)

was performed.

84. Molinari felt the claim should remain CPT Code 99214

because the medical decision - mak ing was of moderate complexity.

85. The undersigned credits and finds more persuasive the

evidence presented by Respondent. The use of a scope to inspect

the nasal passages and nasopharynx were sufficiently documented.

The services performed supported his codin g as CPT Code 99214.

86. Recipient #3, Claim 28. The claim submitted was

adjusted from CPT Code 99214 to 99213 by Dr. Silkes. She opined

that " only the nose was examined " and that there were no other

records that would support the higher level. P et . Ex . 15 - 3,

p p . 380 and 395. Further, there was no documentation that an

endoscope was used.

87. The undersigned credits and finds more persuasive the

evidence from Dr. Silkes and AHCA. The claim was properly

reduced to CPT Code 99213 , primarily because the visit involved a

less complicated nasal examination.

88. Recipient # 3, Claim 35. R espondent submitted a claim

under CPT Code 31237 for services on April 30 , 2014, N asal/ S inus

E ndoscopy S urgery. Pet . Ex . 15, p p. 381 (worksheet) and 395

(medical record).

89. Dr. Silkes denied this claim because she felt that this

was included in the global surgery package for the septoplasty

that was performed on April 21 , 2014. A " septoplasty " is where

you move the septum in the nose if it i s causing problems with

sinu ses or breathing. In her view, C laim 35 was a normal post -

operative visit, namely, to remove the splint.

90. Dr. Carreno testified and conceded that " yes, I did

remove the splints, but I also needed to place the endoscope to

assess the sinus surgical sit e. And not only did I assess it,

but I cleaned it and debrided it, and it clearly said cleaned,

debrided, endo shows. "

91. Dr. Carreno acknowledged that a septoplasty procedure

has a 90 - day global period, but testified that a global surgery

package does n o t apply to a sinus endoscopy and debridement

following the sinus surgery.

92. The undersigned credits and finds more persuasive the

evidence presented by Respondent. It was medically prudent and

necessary to use an endoscope post - operatively for inspec tion and

debridement, and this was sufficiently documented. The services

performed supported coding as CPT Code 31237.

93. Recipient #25, Claim 11. Respondent submitted this

claim using CPT Code 69200. P et . Ex. 15 - 25, p. 782 .

94. Dr. Silkes testified that there was a myringotomy tube

that was placed in the ear by Respondent. The tube is not

considered a " foreign body , " and Medicaid does not pay for its

removal when inserted by the original doctor. She concluded that

removal of the tubes is not proper ly billed as CP T Code 69200.

95. This conclusion is supported by provisions of the

Physicians Services Handbook ( P et . Ex. 13, p . 199 ), which does

not permit additional billing under global surgery packages for

the removal of " items such as tubes, drains . . . . " This is

found under bullet point 6 entitled " Miscellaneous Services and

Supplies . "

96. This restriction does not place any time limit on when

the non - reimbursable " miscellaneous service " is performed, even

outside the normal 90 - day time period.

9 7. The undersigned credits and finds more persuasive the

evidence and conclusions from Dr. Silkes and AHCA. The removal

of the tubes fell under the exclusion for miscellaneous services

or did not otherwise qualify for reimbursement . P et . Ex. 13,

p . 199. The claim was properly denied.

98. Recipient #29, Claim 6. Respondent submitted this

claim using CPT Code 69200. P et . Ex. 15 - 2 9 , p. 8 30 .

99. Dr. Silkes testified that there was a myringotomy tube

that was placed in the ear by Respondent. The tube is not

considered a " foreign body , " and Medicaid does not pay for its

removal when inserted by the original doctor. She concluded that

removal of the tubes is not properly billed as CPT Code 69200.

100. This conclusion is supported by provisions of the

P hysicians Services Handbook ( P et . Ex. 13, p . 199 ), which does

not permit additional billing under global surgery packages for

the removal of " items such as tubes, drains. . . . " ( see bullet

point 6 entitled " Miscellaneous Services and Supplies " ) .

101. Thi s restriction does not place any time limit on when

the non - reimbursable " miscellaneous service " is performed, even

outside the normal 90 - day time period.

102. The undersigned credits and finds more persuasive the

evidence and conclusions from Dr. Silkes and AHCA. The removal

of the tubes fell under the exclusion for miscellaneous services

or did not otherwise qualify for reimbursement . P et . Ex. 13,

p . 199. The claim was properly denied.

103. Recipient #30, Claim 1. This claim was adjusted down

from C PT Code 99214 to 99213 by Dr. Silkes. She opined that both

the history and examination were problem focused and that the

decision - making was straightforward. P et . Ex. 15 - 30, p p . 856

and 861.

104. The undersigned credits and finds more persuasive the

ev idence and conclusions from Dr. Silkes and AHCA. The claim was

properly adjusted to CPT Code 99213.

105. Recipient #30, Claim 2. This was submitted under CPT

Code 69210. Dr. Silkes denied the claim citing a lack of

documentation to show that any cerume n or ear wax was actually

removed.

10 6 . The undersigned credits and finds more persuasive the

evidence and conclusions from Dr. Silkes and AHCA. The removal

of cerumen was not properly documented , and the claim should be

denied.

107. Recipient # 30, Cla im 4. Respondent submitted a claim

for services using CPT Code 99214 for services on May 16 , 2012,

Office/ O utpatient V isit. Pet . Ex . 19 (no B ates stamp numbers , as

this was a late submission). After reviewing several late - filed

documents from Respondent , Dr. Silkes down - coded this to CPT

Code 99213 because there was an expanded problem focused history,

there was a problem focused examination , and medical decision -

making was of low complexity.

108. Dr. Carreno explained that the claim should be allowed

a s CPT Code 99214 because he examined four separate body systems

or areas. He examined the throat due to enlarged tonsils and

enlarged adenoids, he examined the ear for infection, he took the

patient ' s temperature and weight in connection with sleep apnea,

and he examined the nose. He also rescheduled the patient for

surgery and discussed the risks and benefits of surgery with the

parents .

109. Molinari testified that it should be allowed as a CPT

Code 99214 because the decision - making was, at least, of m oderate

complexity, including a detailed examination of pallet, tonsils ,

and sinuses, as well as explaining the risk and benefits of

surgery to the parents.

110. The undersigned credits and finds more persuasive the

evidence presented by Respondent. This visit involved a more

detailed and extensive examination of the patient and justified a

claim using CPT Code 99214.

CONCLUSIONS OF LAW

111. In Florida, administrative hearings held pursuant to

chapter 120 , Florida Statutes (2016), are " de novo " in nature .

§ 120.571(1)(k), Fla. Stat. In simple terms, the decision of the

agency being challenged is reviewed again by the administrative

law judge, and there is no " presumption of correctness " that

attaches to the preliminary decision of the Agency. See

gener ally Fla. Dep ' t of Transp. v. J.W.C. Co. , 396 So. 2d 778

(Fla. 1 st DCA 1981) ; and Boca Raton Artificial Kidney Ctr . , Inc.

v. Fla . Dep ' t of H RS , 475 So. 2d 260 (Fla. 1 st DCA 1985).

112. A c hapter 120 hearing also permits the affected

parties an opportunity to change the agency ' s mind. Lawnwood

Med . Ctr. v. Agy . for Health Care Admin. , 678 So. 2d 421 (Fla.

1 st DCA 1996); Couch Const. Co. v. Dep ' t of Transp. , 361 So. 2d

172 (Fla. 1st DCA 1978) ; and Beverly Enters. v. Dep ' t of HRS , 573

So. 2d 19, 23 (Fla. 1st DCA 1990)( " [R] equest for a formal

administrative hearing commences a de novo proceeding intended to

formulate agency action. " ).

113 . In short, it is the facts and observations found at

the final hearing by the administrative law judge which carry the

day , and upon which any preliminary a ction by the agency is

measured .

114 . Likewise, in a c hapter 120 proceeding , an

administrative law judge is afforded broad discretion in

determining the facts, so long as his or her findings are

supported by competent and substantial evidence. Goin v. Comm ' n

on Ethics , 658 So. 2d 1131 (Fla. 1st DCA 1995)( " Florida ' s

Administrative Procedures Act relies upon a hearing officer to

consider all the evidence presented, resolve conflicts, judge

credibility of witnesses, draw per missible inferences from the

evidence, and reach ultimate findings of fact based on competent,

substantial evidence . " ).

115. Notably, the determination of whether certain facts

constitute a statutory violation are ultimate factual findings

within a hearin g officer ' s discretion. J.J. Taylor Cos. v. Dep ' t

of Bus. & Prof ' l Reg . , Div. of Alcoholic Bev erage s & Tobacco , 724

So. 2d 192 (Fla. 1 st DCA 1999). See also Heifetz v. Dep ' t of

Bus . Reg . , Div. of Alcoholic Bev erage s & Tobacco , 475 So. 2d 1277

(Fla 1 st DC A 1985) .

116. Turning to laws more distinctive to th is case, AHCA

has the burden of establishing an alleged Medicaid overpayment by

a preponderance of the evidence. Southpointe Pharmacy v. Dep ' t

of HRS , 596 So. 2d 106, 109 (Fla. 1st DCA 1992).

117. Alth ough AHCA bears the ultimate burden of persuasion,

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

by agency papers, showing an overpayment to the Respondent

constitutes evidence of the overpayment . " Thus, AHCA made out a

prima facie case by proffering its properly - supported FAR or

audit report, which was received into evidence in this case,

without objection.

118. AHCA is also authorized to " require repayment for

inappropriate, medically unnecessary, or excessive goods or

services from t he person furnishing them, the person under whose

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

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

119. To be eligible for coverage by Medicaid, a service

must be " medically necessary , " which is defi ned in s ection

409.913(1)(d) as follows:

(d) " Medical necessity " or " medically

necessary " means any goods or services

necessary to palliate the effects of a

terminal condition, or to prevent, diagnose,

correct, cure, alleviate, or preclude

deterioration o f 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 practice.

120. For the purposes of determining Medicaid

reimb ursement, AHCA is the final arbiter of medical necessity.

I d .

121. The statute also requires that determinations of

medical necessity be made by a licensed physician employed by or

under contract with AHCA, also known as a peer reviewer, based on

informa tion available at the time the goods and services are

provided. Id .

122 . The parties stipulated, and the undersigned conclude s ,

that Dr. Silkes was qualified and properly credentialed as a

licensed physician in Florida to perform the peer review in this

case.

123. The following " Disputed Claims " are resolved in favor

of AHCA: Recipient #2, Claims 1 and 2 (by oral stipulation);

Recipient #2, Claim 3; Recipient #3, Claims 12, 13, 20, 21, 24,

and 28; Recipient # 25, Claim 11; Recipient # 29, Claim 6 ; and

Rec ipient #30, Claims 1 and 2. AHCA is entitled to use these

findings to re calculate reimbursement from Respondent for these

particular claims.

124. AHCA has not proven by a preponderance of the evidence

that Respondent improperly billed for the following " Disputed

Claims " : Recipient #3, Claim s 5, 11, 17, 18, 22, 26 , and 35 ; and

Recipient #30, Claim 4. These claims are resolved in favor of

Respondent, and AHCA is not entitled to reimbursement from

Respondent for these claims, or to utilize them in its

reim bursement calculations.

1 25 . It was Respondent ' s responsibility to properly code

the individual services billed to Medicaid; to properly document

the services and the medical necessity for the services in the

medical records; and to present claims that ar e true and

accurate.

1 26 . Rule 59G - 9.070(7)(e) addresses the failure to comply

with the provisions of the Medicaid laws and authorizes AHCA to

impose an administrative fine. It states in pertinent part:

(7) Sanctions: In addition to the

recoupment of t he overpayment, if any, the

Agency 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 mph asis added ) .

1 27 . The rule provides that for a first offense, there is a

$1,000.00 fine per claim found to be in violation. Accordingly,

AHCA ' s fine should be adjusted using only the listed violations

found herein. The undersigned finds no factual basi s for an

enhancement of the fine amount. 3/

1 28 . The authority under r ule 59G - 9.070 to impose sanctions

on r espondents who violate Medicaid - related laws is clear, and

the meaning of the phrases " will impose " and " shall be imposed "

are unambiguous and direc tory in nature. Carmack v. State , 31

So. 3d 798, 800 (Fla. 1st DCA 2009)(holding that the terms of a

law or regulation should be given their plain meaning).

1 29 . To impose an administrative fine, which is punitive in

nature, AHCA must establish the factu al grounds for doing so by

clear and convincing evidence. Dep ' t of Child. & Fams. v. Davis

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

presented clear and convincing evidence that Respondent failed to

comply with state and federal law , rules, regulations , and

policies of the Medicaid p rogram for the listed violations found

herein. The evidence revealed that in those instances,

Respondent billed at higher levels of service without supporting

documentation; filed claims for some service s that were

specifically precluded by Medicaid rules and policies; and for

some services that were determined by credible evidence to not be

medically necessary as defined by Florida law, rules , and

Medicaid h andbooks.

13 0 . The Agency is seeking costs exp ended by it in the

investigation of Respondent and the litigation of the audit

findings, including the services rendered by the investigators

involved in the audit, as well as the expert consulted to assist

the Agency. § 409.913(23), Fla . Stat . The amoun t expended pre -

hearing was $2,921.23 ( Pet. Ex. 6, p. 150 - B). Additional costs

have been incurred in preparing for and attending the final

hearing.

13 1 . Upon proper application and proof, the Agency will be

awarded appropriate and reasonable costs. 4/

RECO MMENDATION

Based on the evidence covering the Disputed Claims during

the audit period of January 1, 2012, through December 31, 2014,

it has been established by a preponderance of the evidence that

Respondent was overpaid for certain services not covered by

Medicaid. Those overpayments are listed in paragraph 123 in the

Conclusions of Law section. The undersigned recommends that the

Agency for Health Care Administration enter a final order

ordering Respondent to repay the recalculated amount.

Considering the facts proven at the hearing, the Agency has

established by clear and convincing evidence that Respondent

failed to comply with the provisions of the Medicaid law for

certain claims. Those overpayments are also listed in

paragraph 123 in the Conclusion s of Law section. It is

recommended that the Agency recalculate and impose a sanction

commensurately lower than the previous sanction, pursuant to

r ule 59G - 9.070(7)(e).

Pursuant to s ection 409.913(23)(a), the Agency ' s request of

an award of reasonable in vestigative, legal, and expert witness

costs as the prevailing party is granted, in part, based on a

limited number of violations outlined in paragraph 123 . If the

amount of the costs cannot be agreed to, then the Agency may

request a hearing for the esta blishment of the costs.

DONE AND ENTERED this 22nd day of May , 2017 , in Tallahassee,

Leon County, Florida.

S

ROBERT L. KILBRIDE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalach ee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 22nd day of May , 2017 .

ENDNOTE S

1/ The hearing , and evidence presented at t he hearing, was

limited to the parties challenging or supporting only these

"Disputed Claims . "

2/ This " documentation " requirement forms the crux of many of

AHCA ' s disputes with claims filed by Respondent.

3/ The "Disputed Claims" involved close or dif ficult calls

involving matters of professional medical discretion and

decision - making. As Olmstead testified, the issues and claims in

this case were "typical." As a result, no fine enhancer would be

appropriate.

4/ The parties should discuss the findi ngs and conclusions of law

in this Recommended Order, and are strongly encouraged to settle

the cost issue to avoid further time and expense. If this cannot

be done, a separate evidentiary hearing will be convened by the

undersigned to consider the matter upon motion by either party.

COPIES FURNISHED:

Joseph G. Hern, Esquire

James B. Countess, Esquire

Agency for Health Care Administration

2727 Mahan Drive , Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Martin R. Dix, Esquire

Akerman LLP

Las Olas Cen tre II, Suite 1600

350 East Las Olas Boulevard

Fort Lauderdale, Florida 33301 - 2999

(eServed)

Michael Paul Gennett, Esquire

Akerman LLP

Las Olas Center II, Suite 1600

350 East Las Olas Boulevard

Fort Lauderdale, Florida 33301 - 2999

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Stuart Williams, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32 308

(eServed)

Justin Senior, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

(eServed)

Shena L. Grantham, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, F lorida 32308

(eServed)

Thomas M. Hoeler, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed

Kim A. Kellum, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahas see, 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 th at

will issue the Final Order in this case.