19-006585F Agency For Health Care Administration vs. Allen A. Lenoir, M.D. Status: Closed Recommended Order on Thursday, December 3, 2020.

Summary: Respondent is liable for $45,101.42 in reasonable and necessary investigative, legal, and expert witness costs following AHCA's establishing liability for over $210,000 in overpayments and fine in the underlying Medicaid Program Integrity case.

P RELIMINARY S TATEMENT

By Petition for Recovery of Petitioner's Fees and Costs filed December 10,

2019 (Petition), Petitioner sought to recover $159,711.62 in investigative,

legal, and expert witness costs in connection with its prosecution of DOAH Case 17 - 0598MPI against Respondent for the rec overy of Medicaid

overpayments.

Respondent disputed the material allegations of the Petition, so Petitioner

transmitted the file to DOAH to conduct a formal hearing.

Respondent sought to stay the proceeding pending the disposition of his

appeal of the fi nal order in DOAH Case 17 - 0598MPI. The First District Court

of Appeal entered a temporary stay by order filed with DOAH on January 21, 2020, but entered an order denying a permanent stay and lifting the

temporary stay by order filed with DOAH on February 3 , 2020. By order

entered February 4, 2020, the administrative law judge denied Respondent's

request for a stay. By Notice of Hearing issued on February 27, 2020, the

administrative law judge set the final hearing for April 6 and 7, 2020.

Respondent is a n infectious disease physician at Nicklaus Children's

Hospital. The emergence of the Covid - 19 pandemic following the issuance of

the Notice of Hearing necessitated several continuances, at Respondent's request, until, after a warning in the preceding order granting a continuance,

the administrative law judge entered an order on October 12, 2020, denying

Respondent's motion for a continuance.

At the hearing, Petitioner called f ive witnesses and offered into evidence

seven exhibits: Petitioner Exhibits 1 thr ough 7 . Respondent called two

witness es and offered into evidence no exhibits. All exhibits were admitted.

The court report er filed the transcript on November 5, 2020. Petitioner

filed a proposed recommended order on November 16 , 2020.

F INDINGS OF F ACT

1. Following an evidentiary hearing that spanned all or part of

24 hearing dates from January 2018 through May 2019, the administrative

law judge issued a 357 - page recommended order on September 24, 2019,

containing 1996 findings of fact and conclusions of la w identifying the proper

code of the Current Procedural Terminology (CPT) applicable to each of

hundreds of specific patient encounter s , recommending that Petitioner enter

a final order using these CPT codes to recalculat e the total overpayments

owed by Re spondent by applying Petitioner's statistical formula for

extending overpayments from the sampled recipients to the universe of

recipients during the audit period, and reserving jurisdiction to enter

another recommended order, if the parties were unable to settle Petitioner's

claim for investigation, legal, and expert witness costs.

2. By final order entered on November 13, 2019, Petitioner substantially

adopted the recommended order, determined total overpayments of $176,144.40, imposed a fine of $35,228.88, and reserved jurisdiction to

transmit the file to DOAH, if either party requested it to do so, for a

determination of Respondent's liability for investigative, legal, and expert

witness costs.

3. Petitioner issued three "final" audit reports (FARs) prior to

t ransmitting to DOAH the file that was designated as DOAH

Case 17 - 0598MPI. In the first FAR, which was issued on January 28,

2014, Petitioner determined a total overpayment of about $235,000, a fine

of about $47,000, and costs of about $5000. In the second F AR, which

represented the work of the second peer reviewer, Dr. Rathore, Petitioner

determined that the total overpayment was about $100,000 greater. In the third F AR, which was dated December 15, 2017, and represented the work of

the third peer reviewer, Dr. Stovall, who testified at length at the hearing,

Petitioner determined a total overpayment of $177,578.68, a fine of

$35,515.74, and costs of $11,114.61.

4. From one perspective, Respondent's challenge to the third FAR

produced a very modest victory. A comparison of the third FAR to the final

order reveals that the final overpayment and fine amount s are about $1700

lower than the amount s stated in the third FAR . From another perspective,

Respondent's challenge to the third FAR produced unalloyed defeat. At the conclusion of the litigation, he (still) owed Petitioner over $2 10 ,000 , or about

99.2% of the overpayment and fine claim s in the third FAR .

5. The Office of the Attorney General incurred $27,717.08 in costs, which

excludes any amount representing fees for its attorneys , as discussed in the

Conclusions of Law . Although the administrative law judge never left

Tallahassee for any of the hearing sessions, one of Petitioner's two attorneys

had to travel to Fort Myers, where Dr. Stovall practices, in order to assist

her with accessing specific information in the voluminous medical records

that occupied center stage in the underlying case. This travel was reasonable and necessary.

6. According to their timesheets , two attorneys made t he trip on three

occasions: for the second attorney, the dates were February 1 t hrough 2,

2018; November 9, 2018; and December 17 t hrough 19, 2018 . The second

attorney's participation in the underlying case was very helpful. At times, his availability perm itted the scheduling of hearing dates in order to move

the case along, even at the slow pace that it took. However, the second

attorney's participation did not require that he accompany the first attorney

on two trips to F or t Myers to assist Dr. Stovall an d one trip to Miami to

attend Respondent's testimony.

7. For some reason, Petitioner's cost documents include only two travel

events for the second attorney -- evidently a round trip. Bearing the dates of

December 27 and 28, 2018, these expenses omit a rental car or other ground

transportation at the remote site, so as to suggest that the first and second

attorneys shared such transportation. For these two dates, the total

expenses for the second attorney are $1786.52 , and Petitioner's claim must

be reduced by this amount.

8. Except for some minor expenses, the vast majority of the remaining

costs of the Office of the Attorney General are for court reporting services

and were reasonable and necessary. As reduced by the amount noted in the preceding paragraph, the a djusted costs of the Office of Attorney General

were $25,930.56 and were reasonable and necessary.

9. Petitioner incurred $19,170 . 86 in costs , exclusive of any amount paid

Dr. Rathore . Petitioner did not claim entitlement to reimbursement for any

payment to the first peer reviewer. Petitioner initially claimed entitlement

to reimbursement for $3225 paid Dr. Rathore , but wisely withdrew that

claim during the hearing because Dr. Rathore's upcodings were largely

useless. By contrast, the $15,912. 50 paid Dr. Stovall was entirely reasonable

and necessary due to her impressive facility with coding, knowledge of pediatric infectious diseases, and communication skills. Costs of under $750 each for investigative and nursing services were reasonable and necessary ;

contrary to Respondent's strenuous and repeated objections , nurse Kinser

dutifully discharged her responsibilities without usurping the authority

reserved for the peer reviewer.

10. The $1781.25 paid Dr. Huffer, the statistician, bears special

comme nt. Respondent did not concede the accuracy of Petitioner's statistical

formula for extending overpayments from those determined with regard to a

small subset of the recipients audited. Prior to the testimony of Dr. Huffer,

the administrative law judge war ned that, barring an exceptionally effective

cross - examination, Dr. Huffer's testimony would be superfluous, unless

Respondent intended to call an expert statistician to explain the flaws of the

formula. Nevertheless, Respondent maintained his objection to the formula,

and Dr. Huffer testified for over three hours -- testimony that was very

helpful, but somewhat dry, except for the memorable moment that he

disclosed that he had to adjust the confidence interval for the fact that the

sampling of recipients hap pened to miss two or three mega - recipients, whose

inclusion would have doubled or tripled the number of patient encounters in

this case .

11. The costs of Petitioner of $19,170.86 were reasonable and necessary .

12. The total costs are thus $45,101.42 .

13. Respondent produced no evidence of his financial resources, earning

ability, and needs .

C ONCLUSIONS OF L AW

14. DOAH has jurisdiction. §§ 120.569 and 120.57(1) .

15. Petitioner must prove the material allegations by a preponderance of

the evidence. § 120.57(1)(j).

16. Section 409.913(23) provides:

(a) In an audit or investigation of a violation

committed by a provider which is conducted

pursuant to this section, the agency is entitled to

recover all investigative, legal, and expert witness

costs if the agency’s findings were not contested by

the provider or, if contested, the agency ultimately prevailed.

(b) The agency has the burden of documenting the

costs, which include salaries and employee benefits

and out - of - pocket expenses. The amount of costs

that may be recovered must be reasonable in

relation to the seriousness of the violation and must be set taking into consideration the financial resources, earning ability, and needs of the provider, who has the burden of demonstrating such factors.

17. Petitioner preva iled in the underlying case, even though its

recovery of total overpayments and a fine was about $1700 less than the

corresponding amounts in the third FAR. It is the responsibility of the trial

judge to determine if a litigant prevailed "on the significan t issues" that

were tried. Moritz v. Hoyt Enters., Inc. , 604 So. 2d 807, 810 (Fla. 1992). In

Port - a - Weld, Inc. v. Padula & Wadsworth Constr., Inc. , 984 So. 2d 564

(Fla. 4th DCA 2008), the parties customized a prevailing - party provision in

their constructio n contract by requiring that, to qualify for its attorney's

fees, a party must prevail on at least 75% of its claim. The trial court

enforced the provision and declined to award attorney's fees against the

general contractor. The appellate court reversed, holding that the

"significant issues" test cannot be contractually modified. After analyzing the claims and counterclaims, the appellate court determined that the

subcontractor had prevailed on 60 - 80% of its claim, which clearly satisfied

the " significant issues" test.

18. Undoubtedly, Petitioner's prevailing on 99% of its demand in the

third FAR constitutes prevailing on the significant issues in the underlying

case.

19. Section 409.913(23) has been amended, so as now to describe

recoverable costs to " include costs related to the time spent by an attorney

and other personnel working on the case, and any other expenses incurred by the agency or contractor that are associated with the case, including

any attorney fees incurred on behalf of the agency or contrac tor ."

Ch. 2020 - 156, § 42, Laws of Fla. This provision took effect July 1, 2020.

Ch. 2020 - 156, § 61, Laws of Fl a . However, d uring the hearing, Petitioner

correctly advised the administrative law judge that this new language does

not apply to the present pro ceeding. See, e.g. , Antunez v. Whitfield , 980 So .

2d 1175 (Fla. 4th DCA 2008) (statutory change to attorney's fee provision

substantive, so applies prospectively).

20. As noted above, Respondent failed to present evidence in mitigation.

R ECOMMENDATION

It is

R ECOMMENDED that Petitioner enter a final order determining that

Respondent owes $4 5,101.42 in investigative, legal, and expert witness costs.

D ONE A ND E NTERED this 3r d day of December , 2020, in Tallahassee, Leon

County, Florida.

R OBERT E. M EALE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 3r d day of December , 2020.

C OPIES F URNISHED :

Allen A. Lenoir

Post Office Box 561823

Miami, Florida 33256

(eServed)

Robert A . Milne, Esquire

Office of the Attorney General

The Capitol , Plaza Level 01

Tallahassee, Florida 32399 - 1050

(eServed)

Shena L. Grantham, Esquire

Agency for Health Care Administration

Building 3, Room 3407B

2727 Mahan Drive

Tallahassee, Florida 32308

(eServed)

Thomas M. Hoeler, Esquire

Agency for Health Care Administration

2727 Mahan Drive , Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Bill Roberts , Acting General Counsel

Agency for Health Care Administration

2727 Mahan Drive , Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Shevaun L. Harris , Acting Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

N OTICE OF R IGHT T O S UBMIT E XCEPTIONS

All parties have the right to submit written exceptions within 15 days from

the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this

case.