17-004641MPI Agency For Health Care Administration vs. Covenant Hospice, Inc. Status: Closed Recommended Order on Wednesday, August 15, 2018.

Summary: Petitioner proved that Respondent must repay medicaid for certain claims. Petitioner proved that Respondent must pay a fine.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Petitioner,

vs. Case No . 17 - 4641MPI

COVENANT HOSPICE, INC.,

Respondent.

_______________________________/

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in t his matter

on March 19 through 23, 2018 , in Tallahassee, Florida, before

Administrative Law Judge Yolonda Y. Green of the Division o f

Administrative Hearings (ÐDivision Ñ).

APPEARANCES

For Petitioner: Bryan K. Nowicki, Esquire

Reinhart Boerner Van Deuren S . C .

22 East Mifflin Street , Suite 600

Madison, Wisconsin 53701 - 2018

For Respondent: Rex D. Ware, Esquire

M arion Drew Parker , Esquire

Radey Law Firm

301 South Bronough Street , Suite 200

Tallahassee, Florida 32301

STATEMENT OF THE ISSUE S

The issues are whether Petitioner , Agency for Health Care

Administration ( ÐPetitionerÑ or ÐAHCAÑ) is entitled to r ecover

Medicaid funds paid to Respondent , Covenant Hospice , Inc.

( ÐRespondentÑ or ÐCovenantÑ), pursuant to section 409.913(1),

Florida Statutes , for hospice services Respondent provided

during the audit period between J anuary 1, 2011 , through

December 31, 2012 ; and the amount of sanctions, if any, that

should be imposed pursuant to sec tion 409.913(15) and (17).

PRELIMINARY STATEMENT

Respondent , an authorized provider of Medicaid ser vices,

was audited by Petitioner Ós Office of Medicaid Program Integrity

(ÐM PIÑ) for the claims period January 1, 2011 , through

December 31, 2012 (ÐAudit PeriodÑ) , and found to be in violation

of certain Medicai d provider policies. Petitioner prepared a

Final Audit Letter on August 9, 2016, informing Petitioner that

it was overpa id $714,518.14 fo r services provided during the

Audit P eriod and imposing fines in the amount of $142,903.63 and

costs in the amount of $131.38, as a sanction in accordance with

section 409.913(15), (16), (17) and to recoup investigative,

legal, and expert witness costs.

On August 29, 201 7 , Respondent timely requested an

administrativ e hearing challenging Petitioner Ós determination of

overpayments and imposition of fines and costs. The undersigned

scheduled this matter for a fina l hearing on October 23

through 25, 2017. On October 5, 2017, the parties filed a Joint

Motion for Continuance and the hearing was rescheduled for

February 5 through 9, 2018.

On December 18, 201 7 , Respondent filed its Petition for

Formal Hearing to Challenge Agency Statements Defined as Rules

(ÐRule ChallengeÑ). On December 20, 20 1 7 , the undersigned

entered an O rder consolidating the Rule Challenge with the

instant case .

The parties t wice filed a Motion for Continu a n ce , which the

undersigned granted. This matter was resche duled for hearing on

March 19 through 23, 2018.

The parties filed a Joint Pre - hearing Stipulation, which

contains facts that have been incorporated into the Findings of

Fact below, to the extent relevant.

On March 19 , 2018, the final h earing convened a s scheduled

and concluded on March 23, 2018 . At the final hearing, Joint

Exhibits 1 through 121, 124 through 167, and 169 were admitted

into evidence.

AHCA prese nted the live testimony of four witnesses:

Robert Reifinger, FCCM, a program administrator of AHCA Ós MPI;

Mike Armstrong, the auditor in charge for Health Integrity, LLC

(ÐHealth IntegrityÑ) ; Nada Boskovic, M.D., AHCAÓs expert in

hospice a nd palliative care; and Charles D. Talakkottur, M.D.,

AHCAÓs expert in internal medicine. AHCA also presen ted by

deposition Dr. Todd Eisner, AHCAÓs expert in internal medicine

and g astroenterology. Covenant presented live testimony of

David McGrew, M . D . , FAAHPM, HMFC, CovenantÓs expert in hospice

and palliative care; and James Smith, DO, CovenantÓs i n terim

ch ief medical o fficer and corporate medical d irector for

Covenant.

The parties ordered a copy of the hearing tran script.

The seven - volume T ranscript of the final hearing was f iled with

the Division on April 6, 2018, after which the parties filed a

Joint Motion Regarding Deadlines and Page Limits for Proposed

Orders. The undersigned granted the motion, thereby increasing

the page limit for the proposed recommended orders (ÐPR OsÑ) to

50 pages and extending the deadline for submittal of the PR Os to

May 18, 2018. The parties timely filed PR Os, which have been

considered in preparation of this Recommended Order.

Except as otherwise indicated, citations to Florida

Statutes or rules of the Florida Administrative Code refer to

the versions in effect during the time the alleged overpayments

were made.

FINDING S OF FACT

Based on the evidence presented at the final hearing and

the record in this matter , the following Findings of Fact are

made.

Parties

1. Covenant is a provider of hospice and end - of - life

services and at all times relevant to this matter, the program

was an authorized provider of Medicaid services pursuant to a

valid Medicaid provider agreement with AHCA.

2 . AHCA is the state agency responsible for administering

the Florida Medicaid Program. Me dicaid is a joint federal/state

program to provide health care and related services to qualified

individuals, including hospice services.

3 . AHCA is authorized to recover Medicaid overpayments, as

deemed appropriate. § 409.913, Fla. Stat.

Medicaid Audi t Process

4. The U.S. Department of Health & Human Services, Centers

for Medicare and Medicaid Services (ÐCMSÑ) , contracte d with

Health Integrity , a private vendor, to perform an audit of

Covenant. Health Integrity retained a company called Advanced

Med ical Reviews (ÐAMRÑ) to provide peer physician reviews of

claims to determine whether an overpayment occurred.

5. O n or about December 3, 2013 , Health Integrity

commenced the audit of Covenant . The scope of the audit was

limited to Medicaid recipients that receive d hospice services

from Covenant during the period of January 1, 2011, through

December 31, 2012 . Generally speaking, the files were

identified for review using the following criteria: a) the

recipient was not dually eligible (eligible for bo th Medicaid

and Medicare); and b) Covenant pr ovided hospice services for

182 days or longer, based on the recipientÓs first and last day

of service within the Audit Period. Thus, the objective of the

audit was to determine whether certain Medicaid patient s were

eligible for hospi ce benefits provided by Covenant .

6. When Health Integrity applied the audit criteria to the

Medicaid claims paid by AHCA to Covenant, Health Integrity

determined that Covenant had provided hosp ice services to

62 Medicaid recipi ents for 182 days o r longer during the Audit

P eriod .

7. Covenant provided Health Integrity with medical and

rela ted financial records (ÐCovenant Ós RecordsÑ) in order to

support the eligibility of these 62 patients for Me dicaid

benefits paid by AHCA.

8 . To qualify for the Medicaid hospice program, all

recipients must, among other things: a) b e certified by a

physician as terminally ill with a life expectancy of six months

or less if the diseas e runs its normal course; and

b) v oluntarily elect hospice care for the terminal illness.

See Florida Medicaid Hospice Services Coverage and Limitations

Handbook, January 2007 ed . (ÐHandbookÑ) at page 2 - 3, as adopted

by Fla. Admin. Code R. 59G - 4.140 (effective Dec. 24, 2007) ;

see also § 400.6095(2), Fla. Stat. (2 010 - 2012 ).

9. Health Integrity employs claims a nalysts who perform ed

an initial review of Covenant Ós medical records to determine if

the recipients were eligible for Medicaid hospice benefits.

All Health Integrity claims a nalysts are registered nurses.

10. If the Health Integrity claims a nalyst is able to

assess that the patientÓs file contains sufficient documentation

to justify eligibility for h ospice benefits for the entire

length of stay under review in the audit, there was no

imposition of an ov erpaymen t for that file and , thus , the claim

is not evaluated further.

11. If the Health Integrity claims a nalyst is unable to

assess whether the patientÓs file contains sufficient

documentatio n to determine eligibility for h ospice benefits , or

if only a portion of the patientÓs stay could be justified by

the H ealth I ntegrity claims a nalyst, the file is then forwarded

to an AMR physician to make the ultimate determination as to

eligibility for Medicaid hospice benefits and whether an

overpayment is due t he Florida Medicaid program.

12. With respect to the Covenant audit, the Health

Integrity claims a nalysts reviewed Covenant Ós medical files for

the 62 initially identified recipients and determined that no

further action was warranted with respect to 10 recipients. As

a result, 52 files were referred for p hysician peer review by

AMR.

13. AMR maintains a secure portal (ÐAMR PortalÑ) that

H ealth I ntegrity personnel access to transmit all received

provider files to AMR. AMRÓs peer review physicians, in turn,

use the AMR Portal to review the totality of the providerÓs

submitted documentation, including all medical case records, and

provide their comments.

14 . As re quired by section 409.9131, AHCA referred

PetitionerÓs records for peer review to deter mine whether there

was a medical necessity for a hospice program.

15 . Sectio n 409.9131(2) sets forth the following

definitions:

(b) ÐMedical necessityÑ or Ðmedically

necessaryÑ means any goods or services

necessary to palliate the effects of a

termina l 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 or

services are provided in accordance with

generally acc epted standards of medical

practice. For purposes of determining

Medicaid reimbursement, the agency is the

fina l arbiter of medical necessity. In

making determinations of medical necessity,

the agency must, to the maximum extent

possible, use a physician in active

practice, either employed by or under

contract with the agency, of the same

specialty or subspecialty as the physician

under review. Such determination must be

based upon the information available at the

time the goods or services were provided .

(c) ÐPeerÑ means a Florida licensed

physician who is, to the maximum extent

possible, of the same specialty or

subspecialty, licensed under the same

chapter, and in active practice.

(d) ÐPeer reviewÑ means an evaluation of

the professional practice s of a Medicaid

physician provider by a peer or peers in

order to assess the medical necessity,

appropriateness, and quality of care

provided, as such care is compared to that

customarily furnished by the physicianÓs

peers and to recognized health care

sta ndards, and, in cases involving

determination of medical necessity, to

determine whether the documentation in the

physicianÓs records is adequate.

Peer Review

16 . Each AMR peer reviewer retained to review the

respective recipientÓs patient records prepared a written

report, which was based on the reviewerÓs opinion regarding

whether the patient had a terminal diagnosis , with a life

expectancy of six months or less to live if the recipientÓs

terminal illness followed its natural course.

17 . The pee r reviewers formulated their opinion s based on

their own training, experience, and the generally accepted

standards in the medical community w ithin the respective

specialty. After the AMR peer review physicians reviewed the

52 Covenant recipient files loa ded into the AMR Portal, the AMR

physician s determined that 25 recipients were eligible for

Medicaid ho spice services and 29 patients were ineligible. The

peer review physicia ns determined that 29 patients were

ineligible for Medicaid hospice services.

18 . On February 12, 2016, Health Integrity presented the

Draft Audit Report (Ð DAR Ñ) to Covenant for comment and response.

Covenant provided a response to the DAR and contested the

overpaym ents for each of the 29 recipients. CovenantÓs response

was prov ided to the AMR peer physicians, who, after reviewing

the response, rev ised their opinions for four recipients.

Therefore, the number of recipients in disp ute was reduced to

25 patients.

19 . Health Integrity then prepared a Revised Draft Audit

Report ( ÐRDARÑ), which assessed an overpayment amount of

$714,518.1 4, relating to 25 recipients. Health Integrity

presented the RDAR to CMS and AHCA for approval.

20 . Once the RDAR was approved by CMS and AHCA, Health

Integrity then prepared and issued the Fin al Audit Report

(ÐFARÑ), upholding the overpayments identified in the RDAR and

submitted it to CMS. CMS provided the FAR to AHCA with

instructions for AHCA to initiate the state recovery process and

to furn ish the FAR to Covenant.

21 . The FAR determine d that Petitioner was overpaid

$714,518.14 fo r services provided to the 25 recipients during

the Audit P eriod . The FAR also imposed a fine of $142,903.63

and assessed costs of $131.38 . Prior to the final hearing, the

parties reduced the number of ineligi ble patients from 2 9 t o

17 patients. As a result, AHCA is seeking a revised amount of

overpayment in the total amount of $677,023.44, with a

corresponding revised fine amount of $135 ,404.68, for the

remaining patients in dispute.

22 . To be eligible for Florida Medicaid hospice services, a

recipient must be certified by a physician as terminally ill with

a life expectancy of six months or less , if the disease runs its

normal course. T he Handbook also requires:

Documentation to support the terminal

p rognosis must accompany the initial

certification of terminal illness. This

documentation must be on file in the

recipientÓs hospice record. The

documentation must include, where applicable,

the following:

¤ Term inal diagnosis with life expect -

a ncy o f six months or less if the terminal

illness progresses at its normal course;

¤ Serial physician assessments, laboratory,

radiological, or other studies;

¤ Clinical progression of the terminal

disease;

¤ Recent impaired nutritional status related

to the terminal process;

¤ Recent decline in functional status; and

¤ Specific documentation that indicates that

the recipient has entered an endstage of a

chronic disease.

Experts

AHCA Peer Reviewers

23 . The four peer review physicians a ssigned to review

claims in this matter were Florida - licensed physicians, who were

matched by specialty or subspecialty to the claims they were

reviewing. Each physician testified as to his or her medical

education, background , and training. Petitioner o ffered each

physician as an expert, and the undersigned accepted each expert

in their field of specialty .

24 . Todd Eisner, M.D. , is an expert in Internal Medicine

and Gastroenterology. He is a physician licensed in Florida and

maintains an active pract ice . He has been activel y practicing

in Florida for more than 22 years and treats patients with liver

disease daily as part of his practice. He has seen thousands of

patients with liver disease over his career and, based upon his

experience, Dr. Eisner u nderstands what factors are properly

considered when estimatin g a patientÓs life expectancy . Dr.

Eisner reviewed and rendered his opinion as to th e hospice

eligibility of two patients remaining at issue.

25 . Charles Talakkottur, M.D. , practices in the ar ea of

internal m edicine. He is a physician licensed in Florida , who

is board - certifi ed in Internal Medicine, and maintains an active

practice in internal m edicine . Dr. Talakkottur has more than

13 years of practice , where he evaluates and treats patients

with a variety of illnesses including : leukemia, cancer, heart

disease, lung disease, chronic liver disease , and respiratory

disease. In addition, Dr. Talakkottur routinely makes prognoses

related to whether a p atient has a terminal disease.

D r. Talakk ottur rendered his opinion as to the hospice

eligibility of 11 patients remaining at issue.

26 . Nada Boskovic, M.D. , is an expert in internal medicine

and hospice and palliative c are. She is licensed in Florida and

maintains an active practice. She is currently a hospice

medical director for VITAS, a large hospice provider in Florida.

Dr. Boskovic has certified or recertified approximately

1 , 000 patients in a hospice setting throughout her career.

Dr. Boskovic reviewed and rend ered her opinion regardi ng three

of the patients remaining at issue.

27 . Finally, Kelly Komatz , M.D. , is an expert in hospice

and palliative c are. She is a physician licensed in Florida and

maintains an active practice. Dr. Komatz has been an associate

medical director of a Florida hospice and has evaluated patients

for hospice initial certification and recertification.

Dr. Komatz reviewed one patient Ós claim in dispute.

28 . The AHCA peer reviewers use d their clinical

experience, generally accepted medical sta ndards, and the

eligibility standards set forth in the Handbook.

Covenant Expert

29 . Covenant offered one expert at hearing, David

McGrew, M.D. Dr. McGrew reviewed the medical records and

provided reports for each of the 17 patients at issue. Like the

AHCA peer reviewers, Dr. McGrew did not examine or provide

certification for the 17 patients at issue.

30 . Dr. McGrew has been a hospice medical director since

1985. Dr. McGrew has practiced in the hospi ce and palliative

medicine for approximately 23 years and has experience with

overse e ing over 5,000 hospice certifications. Dr. McGrew is a

certified hospice medical director who trains other physicians

in hospice care . Dr. McGrew Ós distinguished career in

palliative medicine is highlighted by his membership on the

board for the American Academy of Hospice and Palliative

Phy sicians for 12 years , where he served as president in 2013.

Specific Patient Review

31 . At the time of the hearing, the hospice service claims

related to 17 patients remained at issue. T he F indings of F act

regarding eligibility of each patient for hospice services are

set forth below in the following order: 1, 2, 3 , 5, 7, 8, 9,

10, 12, 13, 14, 15, 16, 17, 20, 22, and 23 . 1/

Patient 1 ( C.S. )

32 . Patient C . S . , a then 53 - year - old female, was admitted

with a terminal diagnosis of lung cancer with suspected

metastasis to the liver. The audit period dates reviewed were

January 1, 2011, through August 29, 2011. The dates in dispute

are January 1, 2011, through April 5, 2011.

33 . Patient C.S . had an abnormal palliative performance

scale (Ð PPS Ñ) score of 30 percent, had severe ascites,

experienced significant fatigue, required oxygen, had possible

low levels of encephalopathy, had a significant edema, low

appetite, and shortness of breath. Dr . McGrew opined that the

Patient C.S. had a life expectancy of six months or less , if the

disease ran its normal course based on his determination that

the symptoms did not show improvement, stability, or a reason

for discharge. However, there was no evid ence of decline in her

condition.

34 . The preponderance of evidence demonstrates that

Patient C . S . was not eligible for hospice services for the

period of January 1, 2011, through April 5, 2011. Thus ,

Petitioner is entitled to recover an overpayment of $ 12,692.00

for hospice services rendered during the disputed period.

Patient 2 ( J.R. )

35 . Patient J. R., a 55 - year - old female at the time she was

admitted to hospice on September 14, 2011, had a terminal

diagnosis of end - stage leukemia and pulmonary hyper tension. The

disputed period for Patient J.R. is September 14, 2011 ,

through December 12, 2011.

36 . Dr. McGrew opined that Patient J.R. had both a

terminal illness and a terminal prognosis based on records

showing a gastrointestinal bleed, an anemia from the l eukemia, a

very low white blood cell count, a depressed platelet count,

ongoing chest pain, and need for substantial oxygen during her

hospitalization.

37 . Dr. Talakkottur, on the other hand, focused on the

combination of pulmo nary hypertension a nd leukemia and noted

that the condition of the combination of leukemia and pulmonary

hypertension demonstrated improvement of her condition.

38 . The undersigned finds Dr. McGrew more persuasive and

finds that t he preponderance of the evidence supports that

Patient J.R. was eligible for hospice during the disputed period

of September 14, 2011 , through December 12, 2011. Thus, AHCA is

not entitled to repayment of $12,206.50 for hospice service s

rendered to Patient J.R.

Patient 3 ( D.M. )

39 . Patient D.M ., a 45 - year - old fema le, was admitted to

Covenant on December 20, 2011. Patient D.M. was admitted to

hospice with a diagnosis of HIV/ AIDS with Kaposi's sarcoma,

coupled with complications of psychosocial issues and addiction

problems. The disputed period for D.M. is June 17, 2012 ,

through December 31, 2012.

40 . Dr. McGrew opined that Patient D.M. had a low CD 4 cell

count, was suffering from Kaposi's sarcoma, and was experiencing

continued infections. Dr. Fitzgerald, the referring oncologist

for Patient D.M. , noted that she was appropriate for hospice

based on her condition.

41 . While there was no documented confirmation of the

Kaposi Ós sarcoma in the record by la b results , such as a biopsy,

the patientÓs records reflect that Dr. Fitzgerald , an

oncolo gist , confirmed the diagnosis. Furthermore, Patient

D.M.Ós treating nurse at Cove nant noted that the patient had

multiple lesions on her face and extremities. While Kaposi Ós

sarcoma is more common in certain aged males, it is a common

condition for patie nts who suffer from HIV/AIDS.

Dr. Talakko ttur testified that a simple biopsy could have been

completed to confirm the diagnosis, but the patient did not

submit to the biopsy. Although the diagnosis of KaposiÓs

sarcoma was not confirmed by a biopsy, a pre ponderance of the

evidence support s a finding that the patient suffered from the

condition. The HIV/AIDS terminal diagnosis , coupled with

KaposiÓs sarcoma , supports a finding that Patient D.M. had a

documented terminal illness with a life expectancy of si x months

or less, if the disease ran its normal course during the

disputed period.

42 . Thus, the undersigned finds that AHCA is not entitled

to repayment of $26,843.84 for hospice services rendered to

Patient D.M. during t he disputed period of June 17, 20 12,

through December 31, 2012.

Patient 5 ( P.W. )

43 . Patient P.W., a 54 - year - old male upon admission to

Covena nt , was admitted on October 24, 2011. The patient

presented to hospice with a diagnosis of metastatic squamous

cell cancer of the pharynx. Th e disputed period for Patient

P.W. is October 24, 2011 , through January 21, 2012. Dr. McGrew

opined that if a patient was diagnosed with squamous cell cancer

of the pharynx and was not being treated, hospice would be

appropriate for that patient.

44 . D r. Talakkottur testified as follows: (a) the patient

was highly functional, ambulatory, and not using any assistive

devices; (b) the patient only used oxygen as needed, and not

continuous; and (c) the patient had no nutritional impairment.

T he more tellin g picture of the p atientÓs condition was that the

patient had no reported or demonstrated mass presence or growth ,

and there were no medical records to support the patientÓs claim

that his cancer had metastasized.

45 . The preponderance of the evidence d emonstrates that

Patient P.W. was not eligible for hospice services during the

disputed period of October 24, 2011 , through January 21, 2012.

Thus, AHCA is entitled to repayment of $ 12,249.00 for hospice

service s rendered to Patient P.W .

Patient 7 ( J.B . )

46 . Patient J.B. , a 62 - year - old male at the t ime of his

admission to hospice, was admitted with a diagnosis of end - stage

liver disease with a medical histo ry of hepatitis C and ascites.

The disputed recertification period is January 1, 2011 , through

Jun e 3, 2011. Based on the records, the patient had stabilized

du ring the recertification period. H e was independent with

self - care and activities of daily living. O ne of the physician

assessments reflected that the patient had shown slow, steady

improveme nt to the point of riding his bicycle. In addition,

the records reflect that during the disputed period, nursing

documentation indicated that the patient was able to ambulate

independently, without shortness of breath, and had no residual

apparent ascites . While Dr. McGrew noted that Patient J.B.

experienced multiple urinary tract infections, reported

dizziness and fatigue, and had very poorly controlled blood

sug ars during the disputed period , the records consistently

reflect that Patient J.B.Ós conditio n had improved during the

disputed period.

47 . The records presented at hearing did not support a

finding that Patient J.B. was eligible for hospice services

during the disputed period of January 1, 2011 , through June 3,

2011. Thus, AHCA is entitled to repayment of $20,574.40 for

hospice service s rendered to Patient J.B.

Patient 8 ( E.H. )

48 . Patient E.H., a 59 - year - old male at the time of his

admission , was admitted to Covenant on January 27, 2011.

Patient E.H. was admitted to hospice with a diagnosis of adult

failure to thrive and a medical history of schizophrenia and

bipolar disorder. The disputed period for E.H. is January 22,

2 012 , through March 21, 2012. Dr. McGrew opined that Patient

E.H. was eligible for hospic e services on the basis that the

patient prese nted to Covenant with history of significant we ight

l oss and a PPS score of 30 percent, which was complicated by

underlying conditions , including schizophrenia and bipolar

disorder. Dr. Talakkottur opined that the patient gained

weight, was ambulatory, was oriented to self, had no recurrent

or retractable infections, and had normal vital signs . In

addition, the patient had gained 18 pounds since his original

admission in hospice and had a body mass index (ÐBMIÑ) of 21.

49 . T he greater wei ght of the evidence demonstrates that

Patient E.H. was not eligible for hospice services during the

disput ed period of January 22, 2012, through March 21, 2012.

Thus, AHCA is entitled to repayment of $ 6,029.66 for hospice

service s rendered to Patient E.H.

Patient 9 ( K.W. )

50 . K.W., a 53 - year - old male at the time of his admission

to hospice, was admitted with a terminal diagnosis of heart

disease. The disp uted period for K.W. is October 31, 2011 ,

through June 26, 2012. The patient records reflect that Patient

K.W. was still smoking, taking drugs, breathing room air, only

had shortness of breath with exertion, was highly functional and

ambulatory, could perform most of his activities of daily

living , and travel ed regularly. K.W. reported nine previous

m yocardial infarctions in the past 11 months; ejection fractions

measured at six percent on one occasion and under 20 percent on

a separate occasion, was hypotensive, short of breath, had a low

heart rate and sodium level, and had elevated liver function

te sts consi stent with hepatic stasis. Dr. Talakk o t ur noted that

the patientÓs nine alleged heart attacks were self - reported by

the patient.

51 . Based on the evidence presented at hearing,

Dr. Talakko t ur credibly opined that Patient K.W. was not

eligible for hospice treatment during the disputed period of

October 31, 2011 , through June 26, 2012. Thus, AHCA is entitled

to repayment of $32,664 .00 for hospice s ervices rendered to

Patient K.W . during the disputed period.

Patient 10 ( K.H. )

52 . Patient K.H. was a 58 - year - old male when he was

admitted to Covenant on October 15, 2010, with a terminal

diagnosis of chronic airway pulmonary obs truction disease

(Ð COPD. Ñ) The disputed period is August 11, 2011 , through

De cember 9, 2011. The patient was involved in a car accident in

2008 , which caused signific ant injuries. He also suffered a

closed - brain injury and COPD. Dr. Talakkottur opined that the

records contained no evidence of progression of the dia gnosed

terminal condition. Dr. Talakkottur testified that t he medical

records reflected that Patient K.H. was improving during the

disputed period. Additionally, the patient was receiving

physical therapy and occupational therapy.

53 . Dr. Talakkottur credibly testified that Patient K.H.

was not eligible for hospice services during the disputed period

of August 11, 2011 , through December 9, 2011. Thus , AHCA is

entitled to recover overpayment of $16,240.60 for the hospice

service s rendered to Patient K.H. during the disputed period.

Patient 1 2 ( T.O. )

54 . Pat ient T.O., a 57 - year - old male , was admitted to

hospice on September 9, 2011, w ith a terminal diagnosis of end -

sta ge chronic heart failure. The p atientÓs diagnosis was based

on two separate echocardiograms reflecting a 53 - percent and

55 - percent ejection f raction.

55 . Dr. Talakkottur opined that the echocardiogram

readings would be considered normal. At one point during the

dispute d period, Edward Fletcher, M . D . , a Covenant physician,

changed Patient T.O . Ós hospice diagnosis from end - stage ch ronic

heart f ailure to debility. In addition , Dr. Fletcher noted that

the patient had no heart palpitations or chest pain and had a

good appetite and normal respiratory exam. The greater weight

of the evidence demonstrates that Patient T.O. was not eligible

for hospi ce during t he disputed period of September 9, 2011 ,

through November 14, 2011. Thus, AHCA is entit led to recover

overpayment of $9,063.70 for the hospice service s rendered to

Patient T.O. during the disputed period.

Patient 1 3 ( M.L. )

56 . Patient M .L., a then 39 - year - old female , had a

diagnosis of end - stage liver disease. The patient also had a

medical history of esophageal varices, ascites, and

paracentesis. However, Dr. Talakko ttur credibly testified that

Patient M.L. was not eligible for hospice serv ices. Patient

M.L. had no recurrent or intractable infections nor any

encephalopathy or peritonitis, and showed no progression of her

disease. Patient M.L. was also highly functioning and

ambulatory. The greater weight of the evidence demonstrates

that Patient M.L. was not eligible for hospice services during

the disputed period of January 1, 2011 , through January 11,

2011. Thus , AHCA is entitled to recover an overpayment of

$1,469.60 for the hospice service s rendered to Patient M.L.

during the disputed period.

Patient 1 4 ( D.K. )

57 . Patient D.K. was a 59 - year - old man when admitted to

Covenant with a terminal diagnosis of end - stage liver disease on

August 6, 2010. The disputed period is January 1, 2011, through

April 2, 2011. The patient had a fair to good appetite,

exhibited no real pain or discomfort, and showed no signs of a

significant decline. Dr. Boskovic further indicated that

although the patient had some ascites, the condition was being

well managed, and the patient showed no signs of encepha lopathy

because he remained alert and oriented. Finally, Dr. Boskovic

opined, and the records support, the patient generally had a

good nutritional status with no sign of the patientÓs disease

progressing.

58 . Respondent contends that Dr. Boskovic's te stimony

supported Covenant's position because she admitted that the

hospice physician could reasonably disagree with her conclusion

regarding D.K. and neither physician would be wrong. Here,

however, the undersigned finds that Dr. BoskovicÓs opinion is

mo re persuasive and demonstrates that Patient D.K. was not

eligible for hospice services during the disputed period of

January 1, 2011, through April 2, 2011.

59 . Thus , AHCA is entitled to recover an overpayment of

$ 12,291.20 for hospice services rendered during the disputed

period.

Patient 1 5 ( S.S. )

60 . Patient S.S. was a 52 - year - old female at the time of

her readmission to Covenant . On December 26, 2009, Patient S.S.

was admitted with a terminal diagnosis of COPD . Dr. Komatz

opined that Patient S.S. w as not eligible for hospice services

during the denied period on the basis that the patientÓs illness

was not progressing, she was stable and did not demonstrate

decline, and she had experienced weight gain over the period in

dispute. She also noted that the patient remained ambulatory

and took outings with her family.

61 . To the contrary , Dr. McG rew contended that the patient

was eligible for hospice due to the progression of her illness

that led to hospitalization during her hospice admis sion. The

mo st telling of the p atientÓs condition was that the physician

who treated the patient during a hos pital admission noted that

P atient S.S. did not suffer from end - stage COPD.

62 . Based on the foregoing, the greater weight of the

evidence demonstrates that Patient S.S. was not eligible for

hospice services during the disputed period of February 19,

2011 , through December 15, 2011. Thus , AHCA is entitled to

recover an overpayment of $40,270 .00 for hospice services

rendered during the disputed period.

Pat ient 1 6 ( R.W. )

63 . Patient R.W., a 53 - year - old male at the time of his

admission to Coven ant Hospice , had an initial terminal diagnosis

of adult failure to thrive. The patientÓs diagnosis was changed

to HIV/AIDS in May 2012. The disputed period for R.W . is

April 29 , 2012, through June 27, 2012. Dr. Talakkottur opined

that Patient R.W. was not eligible for hospice and relied upon

medical records that showed the patient was not losing weight,

he was ambulatory, had adequate nutrition , and did not show any

infections that would demonstrate terminal progression of his

disease. Dr . McGrew noted that the patient suffered from an

episode of toxoplasmosis, and experienced weight loss and lack

of appetite. However, he also noted that, during the disputed

period , the patient was getting better and gaining weight.

64 . The preponderance of the evidence supports a finding

that Patient R.W. was not eligible f or hospice services during

the disputed period. Thus , AHCA is entitled to rec over an

overpayment of $8,166 .00 for hospice service s rendered during

the disputed period .

Patient 1 7 ( E.M. )

65 . Patient E.M. was a 60 - year - old female at the time of

h er admission to Covenant on April 28, 2010, with a terminal

diagnosis of debility. The disputed period was Janu ary 1, 2011,

through February 21, 2011. Dr. Boskovic opined that the patient

did not have refractory edema, her chest pain was well managed,

there was no evidence of impaired nutritional status (no weight

loss or low BMI), her albumin level was good, she ambulated with

a walker or wheelchair, and her overall condition was stable.

Dr. McGrew opined that the patient was eligible for hospice

services and noted that the patient was taking a high daily

dosage of Lasix . The undersigned finds Dr. BoskovicÓs tes timony

more persuasive regarding whether Patient E.M. was eligible for

hospice services during the disputed period.

66 . Dr. Boskovic credibly testified that Patient E.M. was

not eligible for hospice serv ices during the disputed period.

Thus , AHCA is enti tled to recover an overpayment of $6 , 947.20

for hospice services rendered during the disputed period.

Patient 20 ( P.G. )

67 . Patient P.G. was a 53 - year - old female at the time of

her admission to Covenant on June 8, 2010. Patient P.G. had a

terminal diag nosis o f end - stage liver disease. The denied dates

at issue are January 1, 2011 , through February 2, 2011.

Dr. Eisne r, a gastroenterologist for more than 20 years,

testified that Patient P.G. had measured albumin and INR scores

within the normal range fo r liver function. During the denied

period, the patient also maintained a stable weight and her

ascites w ere controlled. Dr. Eisner also noted that the

patientÓs nutritional status remained stable.

68 . The greater weight of the evidence establishes t hat

the patient was not eligible for hospice serv ices during the

disputed period. Thus , AHCA is entitled to reco ver an

overpayment of $4,408.80 for hospice services rendered during

the disputed period.

Patient 22 ( C.D. )

69 . Patient C.D. was an 8 - year - old male when he was

admitted to hospice following a hospitalization for respiratory

distress with an underlying diagnosis of spina bifida. The

disputed period of hospice servi ces was April 25, 2011,

through November 25, 2011.

70 . Dr. Talakko ttur, who is board - certified in pediatrics ,

opined that Patient C.D. had a chronic condition but was not

terminal. He noted that the patientÓs weigh t had increased, his

PPS was 50 percent , and he was playing ball with his siblings.

In addition, the patient was re ceiving physical therapy and

active rehabilitation, both of which are inconsistent with

hospice palliative care. The patient did not show any signs of

being at the end - stage of his chronic disease. Finally, Patient

C.D. remained oriented to self and had no

recurr ent or intractable infections. Although Patient C.D. was

at risk for pneu monia or sepsis as noted by Dr. McGrew, he did

not show any symptoms of the two conditions.

71 . T he greater weight of the evidence establishes that

Patient C.D. was not eligible or hospice treatment during the

disputed period of April 25, 2011, through November 25, 2011.

Thus, AHCA is entitled to recov er an overpayment of $30,827.69

for hospice services rendered during the disputed period.

Patient 23 ( C.M. )

72 . Patient C.M. , a 59 - year - old female , was admitted to

Covenant on November 15, 2010. The patient was admitted with a

terminal diagnosis of malignant neoplasm of the liver. The

period in dispute is January 1, 2 011 , through April 1, 2011.

Dr. Talakkottur opined tha t Patient C.M. was not eligible for

hospice service because there was no progression of her disease.

Dr. Talakkottur noted that the patient had cancer, but she was

functioning well, was ambulatory, and stab le enough to take a

long - distance trip with her f amily. Dr. Talakkottur also noted

that the patient had a PPS of 60 - 70 percent at times, and her

vital signs remained stable.

73 . The greater weight of the evidence establishes that

the patient was not eligible for hospice serv ices during the

disputed p eriod. Thus , AHCA is entitled to recov er an

overpayment of $12,157.60 for hospice services rendered during

the disputed period.

Summary of Findings of Fact Regarding Overpayment

74 . At the time of the hearing, the parties had stipulat e d

that AHCA was entitled to overpayment of $411,571.65. The

F indings of F act above upheld AHCA's entitlement to additional

overpayment of hospice services as indicated. Respondent

rebutted the evidence r egarding eligibility of Patients 2 and 3 .

Therefore, in additi on to the amount the parties agreed upon ,

AHCA is entitled to r ecover an additional overpayment of

$ 226,060.50 for services rendered to patients who were not

eligible for hospice services during the A udit P eriod . Thus ,

AHCA is entitled to recover a total overpay ment of $ 637,632.15 .

75 . As indicated in the Findings of Fact above, each

expert provided the requisite support to both the R DAR and FAR

for the patients where there was a finding of ineligibility for

hospice services.

Fine Calculation

76 . Whe n calculating the appropriate fine to impose

against a provider, MPI uses a formula based on the number of

claims that are in violation of Florida Administrative Code

R ule 59G - 9.070(7)(e). T he formula involves multiplying the

number of claims in violation of the rule by $1,000 to calculate

the total fine . 2/ The final total may not exceed 20 percent of

the t otal overpayment, which results in a fine of $ 127,526.43 .

CONCLUSIONS OF LAW

77 . The Division of Administrative Hearings has

jurisdiction over the pa rties and subject matter of this

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

409.913(31), Florida Statutes (2016) .

78 . The burden of proof is on AHCA to prove the material

allegations by a preponderance of the evidence. S. Med. Servs.,

Inc. v. Ag. for Health Care Admin . , 653 So. 2d 440 (Fla. 3d DCA

1995); Southpoint Pharmacy v. DepÓt of HRS , 596 So. 2d 106, 109

(Fla. 1st DCA 1992). The sole exception regarding the standard

of proof is that clear and convincing evidence is required for

fines. DepÓt of Banking & Fin. v. Osborne Stern & Co. , 670 So.

2d 932, 935 (Fla. 1996).

79 . Section 409.902 provides , in pertinent part:

(1) The Agency for Health Care

Administration is designated as the single

state agency authorized to make payments for

m edical assistance and related services

under Title XIX of the Social Security Act.

These payments shall be made, subject to any

limitations or directions provided for in

the General Appropriations Act, only for

services included in the program, shall be

m ade only on behalf of eligible individuals,

and shall be made only to qualified

providers in accordance with federal

requirements for Title XIX of the Social

Security Act and the provisions of state

law. This program of medical assistance is

designated th e ÐMedicaid program.Ñ

80 . To meet its burden of proof, AHCA may rely on the

audit records and report. Section 409.913(21) and (22) provide:

(21) When making a determination that an

overpayment has occurred, the agency shall

prepare and issue an audit report to the

provider showing the calculation of

overpayments. The agencyÓs determination

must be based solely upon information

available to it before issuance of the audit

report and, in the case of documentation

obtained to substantiate claims for Med icaid

reimbursement, based solely upon

contemporaneous records. The agency may

consider addenda or modifications to a note

that was made contemporaneously with the

patient care episode if the addenda or

modifications are germane to the note.

(22) The a udit report, supported by agency

work papers, showing an overpayment to a

provider constitutes evidence of the

overpayment. A provider may not present or

elicit testimony on direct examination or

cross - examination in any court or

administrative proceeding , regarding the

purchase or acquisition by any means of

drugs, goods, or supplies; sales or

divestment by any means of drugs, goods, or

supplies; or inventory of drugs, goods, or

supplies, unless such acquisition, sales,

divestment, or inventory is documen ted by

written invoices, written inventory records,

or other competent written documentary

evidence maintained in the normal course of

the providerÓs business. A provider may not

present records to contest an overpayment or

sanction unless such records ar e

contemporaneous and, if requested during the

audit process, were furnished to the agency

or its agent upon request. This limitation

does not apply to Medicaid cost report

audits. This limitation does not preclude

consideration by the agency of addenda or

modifications to a note if the addenda or

modifications are made before notification of

the audit, the addenda or modifications are

germane to the note, and the note was made

contemporaneously with a patient care

episode. Notwithstanding the applicable

rules of discovery, all documentation to be

offered as evidence at an administrative

hearing on a Medicaid overpayment or an

administrative sanction must be exchanged by

all parties at least 14 days before the

administrative hearing or be excluded from

co nsideration.

81 . The term ÐoverpaymentÑ is defined as 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

mi stake.Ñ £ 409.913(1)(e), Fla. Stat.

82 . A claim presented under the Medicaid program imposes

on the provider an affirmative duty to be responsible for and to

assure that each claim is true and accurate and that the service

for which payment is claimed has been provided to the Medicaid

recipient prior to the submission of the claim. § 409.913(7),

Fla. Stat.

83 . In this case, AHCA seeks reimbursement of overpayments

based upon the lack of eligibility, in w hole or in part, of the

17 patients at issue. In this proceeding, eligibility is based

in part on medical necessity as determined by peer review of the

patient records.

8 4 . Section 409.9131(2) provides, in pertinent part:

(a) " Active practice " means " a physician

must have regularly provided medica l care

and treatment to patients within the past

two years. "

( b) Ð Medical necessity Ñ or Ð medically

necessaryÑ means any goods or services

necessary to palliate the effects of a

terminal condition or to prevent, diagnose,

correct, cure, alleviate, or prec lude

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

practice. For purposes of determining

Medi caid reimbursement, the agency is the

final arbiter of medical necessity. In

making determinations of medical necessity,

the agency must, to the maximum extent

possible, use a physician in active

practice, either employed by or under

contract with the age ncy, of the same

specialty or subspecialty as the physician

under review. Such determination must be

based upon the information available at the

time the goods or services were provided.

(c) Ð Peer Ñ means a Florida licensed

physician who is, to the maxim um extent

possible, of the same specialty or

subspecialty, licensed under the same

chapter, and in active practice.

(d) Ð Peer review Ñ means an evaluation of

the professional practices of a Medicaid

physician provider by a peer or peers in

order to assess the medical necessity,

appropriateness, and quality of care

provided, as such care is compared to that

cu stomarily furnished by the physicianÓs

peers and to recognized health care

standards, and, in cases involving

determination of medical nece ssity, to

determine whether the documentation in the

physicianÓs records is adequate.

85 . Respondent alleged in a separate Petition that AHCA

applied unadopted rules in the audit process, which was

addressed in the Rule Challenge case.

86 . Responde nt also argued in its Proposed Recommended

Order that the peer review physicians retained by AHCA were not

qualified to perform the reviews and render their respective

opinions on th e eligibility of the 17 patients at issue.

87 . The primary medical dec isions in this matter concerned

whether each patient was eligible for Medicaid hospice services

at initial certification and each recertification with a

terminal diagnosis with a life expectancy of six or less months

to live if their terminal disease follo wed its normal course.

The undersigned finds that each expert was qualified to perform

r eview of the patient claims for the respective patients .

88 . In light of the totality of all the evidence presented

in this case, AHCA should recover the overpaymen t as modified

herein based upon the Findings of F act above.

89 . Rule 59G - 9.070(7)(e) provides that:

SANCTIONS: 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

impo sed for the following:

* * *

(e) Failure to comply with the provisions

of the Medicaid provider publications that

have been adopted by reference as rules,

Medicaid laws, the requirements and

provisions in the providerÓs Medicaid

provider agreement, or t he certification

found on claim forms or transmittal forms

for electronically submitted claims by the

provider or authorized representative.

§ 409.913(15)(e), Fla. Stat.

90 . Each monthly period that Covenant bil led for services

for these 17 patients th at were determined to be ineligible for

Medicaid reimbursement, Covenant is liable for a $1 , 000 fine,

which is capped at 20 percent of the overpayment. The fine of

$ 135,404.68 , per the revised fine worksheet , should be

recalculated to impose a fine of $12 7,526.43 in this case.

91 . The F AR should be revised consistent wit h the findings

herein, to reflect a final o verpayment amount of $ 637,632.15 and

fine of $ 127,526.43 .

92 . AHCA reserved its right to amend its cost worksheet i n

this matter and, pursuant to section 409.913(23), to file a

request with the undersigned to seek all investigative and legal

costs, if it prevailed.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that that the Agency for Health Care

Administration enter a final order directing Covenant to pay

$ 637,632.15 for the claims found to be overpayments and a fine

of $ 127,526.43 . The undersigned reserves jurisdiction to award

costs to the prevailing party.

DONE AND ENTERED this 15th day of August , 2018 , in

Tallahassee, Leon County, Florida.

S

YOLONDA Y. GREEN

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

ww w.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 15th day of August , 2018 .

ENDNOTE S

1/ For confidentiality reasons, including the requirements of

HIPPA, the patients in dispute are referenced in the Findings of

F act by number and by the first letter of the first and last

name of the patient.

2/ Under rule 59G - 9.070, AHCA may impose a fine of $1,000 per

claim for a first offense.

COPIES FURNISHED :

Steven Alfons Grigas, Esquire

Akerman, LLP

Suite 1200

106 East College Avenue

Tallahassee, Florida 32301

(eServed)

Rex D. Ware, Esquire

Radey Law Firm

Suite 200

301 South Bronough Street

Tallahassee, Florida 32301

(eServed)

Thomas A. Range, Esquire

Akerman LLP

Suite 1200

106 East College Avenue

Tallahassee, Flori da 32301

(eServed)

Bryan K. Nowicki, Esquire

Reinhart Boener Van Deuren S.C.

Suite 600

22 East Mifflin Street

Madison, Wisconsin 53701 - 2018

(eServed)

Marion Drew Parker, Esquire

Radey Law Firm

Suite 200

301 South Bronough Street

Tallahassee, Florida 3 2301

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Stefan Grow, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tal lahassee, Florida 32308

(eServed )

Jus tin Senior, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

(eServed)

Shena Grantham, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail St op 3

Tallahassee, Florida 32308

(eServed)

Thomas M. Hoeler, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit wri tten 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.