94-000096
Medilab vs.
Agency For Health Care Administration
Status: Closed
Recommended Order on Wednesday, March 1, 1995.
Recommended Order on Wednesday, March 1, 1995.
1STATE OF FLORIDA
4DIVISION OF ADMINISTRATIVE HEARINGS
8MEDILAB, )
10)
11Petitioner, )
13)
14vs. ) CASE NO. 94-0096
19)
20AGENCY FOR HEALTH CARE )
25ADMINISTRATION, )
27)
28Respondent. )
30_________________________________)
31RECOMMENDED ORDER
33Pursuant to notice, the Division of Administrative Hearings, by its
43designated Hearing Officer, Joyous D. Parrish, held a formal hearing in the
55above-styled case on November 16-17, 1994, in Miami, Florida.
64APPEARANCES
65For Petitioner: Heidi E. Garwood
70Agency for Health Care
74Administration
751317 Winewood Boulevard
78Building B, Room 271
82Tallahassee, Florida 32399-0700
85For Respondent: Monte K. Rassner
90Rassner, Rassner, Kramer & Gold, P.A.
967000 Southwest 62nd Avenue, Suite PH-B
102South Miami, Florida 33143
106STATEMENT OF THE ISSUES
110The central issue in this case is whether the provider, Medilab, was
122overpaid for medicaid claims as alleged in the letter dated November 3, 1993.
135PRELIMINARY STATEMENT
137This case began on November 3, 1993, when the Agency for Health Care
150Administration, Medicaid Program Integrity Office (Agency), issued a letter
159relying upon its audit and alleging that, Petitioner, Medilab, had been overpaid
171for claims that, in whole or in part, are not covered by Medicaid. More
185specifically, the letter alleged that a random sample of forty-three recipients
196representing three hundred and thirty-six claims had been audited and that, for
208the period October 2, 1991 through August 31, 1992, an overpayment of $19,799.00
222or $58.92559433 per claim was found. Applying that amount to the total number
235of claims for the audit period resulted in a calculated overpayment of
247$217,775.90 for which the Agency sought reimbursement. Additionally, the Agency
258sought to impose a fine in the amount of $5,000.00. Thus the total claimed by
274the Agency at that time was $222,775.90.
282Medilab disputed the issues of material fact and requested a formal
293hearing. The matter was forwarded to the Division of Administrative Hearings
304for formal proceedings on January 4, 1994. The case was initially scheduled for
317hearing for June 9-10, 1994, as Respondent's counsel was not available until
329May, 1994. Thereafter, on an unopposed motion the matter was continued and
341rescheduled for November 16-17, 1994.
346The Agency's request for leave to file an amended final agency audit report
359was granted. As Petitioner stipulated to the validity of the statistical
370formulas used to calculate Medilab's overpayment, to the sample size used by the
383Agency to determine the overpayment, and to the methodology used to generate the
396random sample, no conclusion is reached as to the total amount of the alleged
410overpayment. The issue resolved by this order is whether the sample records
422demonstrate an inappropriate payment or not. Petitioner argues that it operated
433as a diagnostic center and conducted all testing based upon a physician order;
446therefore, it claims, Medilab was entitled to all payments.
455At the hearing the Agency presented the testimony of the following
466witnesses: William K. Allen, a medical health care program analyst employed by
478the Agency; and Dr. John Sullenberger, chief medical consultant for the Medicaid
490program. Its exhibits numbered 1 through 11 were admitted into evidence.
501Roberto Jesus Rodriguez, president and administrator of Medilab, testified on
511behalf of Petitioner.
514Joint exhibits numbered 1 through 6 were admitted into evidence. The
525parties' joint prehearing statement was filed on November 4, 1994. Pertinent
536facts from that document are incorporated below.
543The transcript of the proceedings was filed on January 11, 1995. The
555parties waived the requirements of Rule 28-5.402 Florida Administrative Code;
565and, by stipulation, agreed to submit their proposed recommended orders within
576twenty days of the filing of the transcript. Specific rulings on the parties'
589proposed findings of fact are included in the appendix at the conclusion of this
603order.
604FINDINGS OF FACT
6071. The Agency is the state agency responsible for administering the
618Florida Medicaid program.
6212. At all times material to this case, Medilab was a medicaid provider.
6343. Medilab enrolled as a physician group provider on or about October 2,
6471991. Medilab was not enrolled with the Florida Medicaid program as a
659diagnostic lab.
6614. At all times material to this case, Medilab was owned and operated by
675Roberto Rodriguez and Jorge Nunez.
6805. Mr. Rodriguez handled the administrative duties for Medilab while Mr.
691Nunez operated the diagnostic portion of the business.
6996. Medilab operated several machines for diagnostic evaluations as ordered
709by a physician. Such machines produced documentation which was then evaluated
720by another physician. Dr. Carmouze did not perform the service nor interpret
732the diagnostic results.
7357. When Medilab applied for a provider number to enroll in the Medicaid
748program it represented that services were to be provided by Dr. Arnoldo
760Carmouze. It was further represented that Dr. Carmouze would treat or supervise
772treatment of patients on behalf of the Medilab "group."
7818. On or about January 11, 1992, Medilab received its group provider
793number along with a copy of the Medicaid Physician Provider Handbook. Medilab
805was notified that it could begin billing for services beginning October 2, 1991.
8189. Subsequently, the Agency performed an audit of Medilab for the period
830October 2, 1991 through August 31, 1992.
83710. Li-Hsiang Wu, a computer systems project analyst employed by the
848Agency, generated a random sample of Medicaid recipients by using a computer
860program to calculate the total number of Medicaid recipients for which claims
872were submitted during the audit period. Then Medilab's provider number and the
884dates of the audit were used to generate the total number of Medicaid recipients
898for whom claims were submitted by Medilab for the audit period.
90911. Once the total number of recipients was identified, Ms. Wu generated a
922list of forty-three recipient numbers which were selected by the computer from
934the total number claimed by Medilab for the period searched.
94412. Mr. Allen then requested and obtained from Medilab the medical records
956for the same forty-three randomly selected Medicaid recipients.
96413. The medical records were first reviewed by Phyllis Stiver, the
975Agency's registered nurse consultant.
97914. Once Ms. Stiver completed her initial review, Mr. Allen requested
990additional records from Medilab. Specifically, documentation for the office
999visit and records that established the necessity for the tests performed by
1011Medilab were requested for each of the forty-three recipients.
102015. Medilab subsequently submitted additional records to the Agency which
1030were also reviewed by Ms. Stiver.
103616. Ms. Stiver determined that based upon her review of the forty-three
1048records, Medilab had violated Medicaid rules and policy as follows:
1058A. Medilab failed to have all of the
1066medical records signed by a physician
1072and dated; and
1075B. Medilab failed to document in the medical
1083records to show that certain diagnostic
1089tests were performed.
109217. After Ms. Stiver completed her review of the records, Dr. Sullenberger
1104reviewed each of Medilab's medical records for the forty-three patients.
111418. Dr. Sullenberger determined, and it is found, that the majority of the
1127tests performed by Medilab were not medically necessary based upon the symptoms
1139documented for each patient, the prior patient histories established by the
1150records, and the absence of other, less expensive testing that would normally be
1163utilized to determine a medical condition.
116919. Virtually all of the patient records reviewed recited the same medical
1181complaints: chest pain, shortness of breath, palpitation, numbness or tingling
1191in extremities, and dizziness.
119520. Only five of the forty-three patients were over 49 years of age. The
1209ages of the majority of the forty-three were under 50. That age group is rarely
1224afflicted by the types of medical conditions which the Medilab equipment was
1236used to detect.
123921. The symptoms and medical histories recited in the medical records did
1251not justify the tests performed by Medilab for the following patients
1262(recipients identified in this record as numbers 1 through 43): 1, 2, 17, 18,
127621, 22, 24, 25, 32, 34, 35, 37, 38, and 41.
128722. With the exception of the electrocardiogram, the symptoms and medical
1298histories recited in the medical records did not justify the tests performed by
1311Medilab for the following patients (recipients identified in this record as
1322numbers 1 through 43): 3, 4, 5, 6, 7, 9, 11, 12, 13, 15, 16, 19, 20, 23, 26,
134127, 29, 30, 31, 33, 36, 39, 40, 42, and 43.
135223. With regard to recipient 8, except for the electrocardiogram and the
1364abdominal ultrasound, the tests performed by Medilab were medically unnecessary.
137424. With regard to recipient 10, except for the electrocardiogram and the
1386Doppler echocardiogram, the tests performed by Medilab were medically
1395unnecessary.
139625. With regard to recipient 14, except for the electrocardiogram and the
1408echocardiogram, the tests performed by Medilab were medically unnecessary.
141726. With regard to recipient 28, except for the mammogram, the tests
1429performed by Medilab were medically unnecessary.
143527. None of the services or testing performed by Medilab were supervised
1447by a physician. Two physicians, Dr. Pozo and Dr. Pereira, radiologists, read
1459the diagnostic results but were not on site to perform or supervise the tests on
1474a daily basis.
147728. Dr. Pozo did not supervise the services that were provided at Medilab.
149029. Dr. Pereira, who is deceased and whose testimony was not available,
1502did not supervise the services that were provided at Medilab. According to Mr.
1515Nunez, Dr. Pereira had someone from his office courier the tests results and his
1529interpretations to and from the Medilab facility. Dr. Pereira may have visited
1541the facility on occasion but was not there during its full hours of operation.
155530. Dr. Carmouze, the treating physician and representative for Medilab's
1565physician group, did not supervise the services at Medilab. Dr. Carmouze
1576treated over 95 percent of the total patients referred to Medilab yet Dr.
1589Carmouze never billed the Medicaid program for the patients' office visits.
160031. For the audit period, of the 493 different patients Medilab billed
1612Medicaid for, Dr. Carmouze is the only treating physician identified by the
1624records.
162532. The Medicaid Physician's Handbook, supplied to Medilab at the time of
1637its enrollment, specified that to be reimbursable the services performed by a
1649physician group provider had to be medically necessary and supervised by a
1661physician.
166233. The Medicaid Provider Agreement required Medilab to keep complete and
1673accurate medical and fiscal records that fully justify and disclose the extent
1685of the services rendered for five years.
169234. All tests performed by Medilab were documented with a physician's
1703order for same.
170635. Medilab submitted for review all medical and fiscal records it
1717maintained in its attempt to fully justify and disclose the extent of the
1730services it rendered.
1733CONCLUSIONS OF LAW
173636. The Division of Administrative Hearings has jurisdiction over the
1746parties to, and the subject matter of, these proceedings.
175537. The Agency has the burden of proof to establish whether an overpayment
1768was made to Medilab. It has met that burden.
177738. Section 409.907, Florida Statutes, provides, in pertinent part:
1786The department may make payments for medical
1793assistance and related services rendered to
1799Medicaid recipients only to a person or entity
1807who has a provider agreement in effect with
1815the department, who is performing services or
1822supplying goods in accordance with federal,
1828state, and local law . . .
1835(1) Each provider agreement shall require
1841the provider to comply fully with all state and
1850federal laws pertaining to the Medicaid program
1857. . .
1860(2) Each provider agreement shall be a
1867voluntary contract between the department and
1873the provider, in which the provider agrees to
1881comply with all laws and rules pertaining to
1889the Medicaid program when furnishing a service
1896or goods to a Medicaid recipient . . .
1905(3) The provider agreement developed by
1911the department, in addition to the requirements
1918specified in subsections (1) and (2), shall
1925require the provider to:
1929* * *
1932(b) Maintain in a systematic and orderly
1939manner all medical and Medicaid-related records
1945as the department may require and as it determines
1954necessary for the services or goods being provided.
1962(c) Retain all medical and Medicaid-related
1968records for a period of 5 years to satisfy all
1978necessary inquiries by the department.
198339. Rule 59G-1.002, Florida Administrative Code (formerly Rule 10C-7.030,
1992Florida Administrative Code), provides, in pertinent part:
1999(2) Definitions of common terms appearing
2005in Chapter 59G, F.A.C.:
2009(a) "Provider" is any group, individual or
2016organization enrolled in or under contract
2022pursuant to 59G-5, F.A.C., Medicaid Contracts
2028for Prepaid Health Care Plans, with the
2035Medicaid program and eligible to provide
2041Medicaid compensable services.
2044* * *
2047(7) Services or goods billed to the Medicaid
2055program must be necessary, Medicaid compensable
2061and of a quality comparable [to] those furnished
2069by the provider's peers, and the services or goods
2078must have been actually provided to eligible
2085Medicaid recipients by providers prior to sub-
2092mitting a claim. Any payment made by Medicaid
2100for services or goods not furnished in accordance
2108with these provisions is subject to recoupment
2115and the Agency reserves the right in such
2123instances to initiate other appropriate
2128administrative or legal action.
213240. At all times material to this case, "Medicaid services" or "Medicaid
2144care" has meant medically necessary medical care or services eligible for
2155payment by the Medicaid program. "Medically necessary" requires that the
2165service be consistent with symptoms or be consistent with generally accepted
2176professional medical standards. See Rule 59G-4.230, Florida Administrative Code
2185(formerly Rule 10C-7.038, Florida Administrative Code). See also Rule 59G-
21951.010, Florida Administrative Code.
219941. Further, such services are to be provided by or under the personal
2212supervision of a doctor. "Personal supervision" is defined as:
2221Services provided while the physician is in
2228the building and for which the physician assumes
2236responsibility and signs and dates the chart on
2244the same date the service is provided. If the
2253physician's signature cannot be obtained on the
2260date of service due to time constraints, the
2268signature must be obtained within 24 hours of
2276the service.
2278See former Rule 10C-7.038, Florida Administrative Code.
228542. Section 409.913, Florida Statutes, authorizes the Agency to impose an
2296administrative sanction when a provider fails to comply with its provider
2307agreement or provisions of law.
231243. As the Agency has established that the claims submitted by Medilab
2324were not "physician services," it is entitled to recover the full amounts paid
2337for the audit period. Additionally, it is entitled to impose an administrative
2349fine due to the failure of Medilab to comply with provisions of law.
2362RECOMMENDATION
2363Based on the foregoing, it is, hereby,
2370RECOMMENDED:
2371That the Agency for Health Care Administration, Medicaid Program Integrity
2381Office, issue a final order charging Medilab for the full amounts paid for the
2395audit period as the services rendered were not supervised by a physician and
2408were, therefore, not "physician services." Additionally, the Agency should
2417impose an administrative fine in an amount not to exceed $5,000.00.
2429DONE AND RECOMMENDED this 1st day of March, 1995, in Tallahassee, Leon
2441County, Florida.
2443___________________________________
2444JOYOUS D. PARRISH
2447Hearing Officer
2449Division of Administrative Hearings
2453The DeSoto Building
24561230 Apalachee Parkway
2459Tallahassee, Florida 32399-1550
2462(904) 488-9675
2464Filed with the Clerk of the
2470Division of Administrative Hearings
2474this 1st day of March 1995.
2480APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-0096
2487Rulings on the proposed findings of fact submitted by the Petitioner:
24981. Paragraphs 1, 2, 4, 6, and 12 are accepted.
25082. Paragraph 3 is rejected as not supported by the weight of credible
2521evidence.
25223. Paragraph 5 is rejected as irrelevant.
25294. Paragraph 7 is accepted as to the general statement but is rejected as
2543to the amount claimed.
25475. Paragraph 8 is rejected as a mischaracterization of testimony; it is
2559accepted Dr. Sullenberger, on further reflection and in an effort to be
2571consistent, gave Medilab the benefit of doubt and modified disallowed items.
25826. Paragraph 9 is rejected as irrelevant.
25897. Paragraph 10 is rejected as irrelevant.
25968. Paragraph 11 is rejected as contrary to weight of credible evidence.
26089. Paragraph 13 is rejected as irrelevant or argument.
261710. Paragraph 14 is rejected as irrelevant. That Dr. Carmouze never
2628charged for the alleged office visits that generated the referral for tests was
2641the relevant fact.
264411. Paragraph 15 is accurate but is irrelevant in light of the
2656stipulation.
2657Rulings on the proposed findings of fact submitted by the Respondent:
26681. Paragraphs 1 through 36, 39, 41, 43, 46, 48, 49, 50, 52, and 53 are
2684accepted.
26852. Paragraphs 37, 38, 40, 42, and 47 are rejected as argument.
26973. Paragraph 44 is rejected as hearsay not supported by direct evidence.
27094. Paragraph 45 is rejected as not supported by the weight of credible
2722evidence.
27235. With regard to paragraph 51, the first sentence is accepted; the
2735remainder rejected as not supported by the weight of credible evidence.
2746COPIES FURNISHED:
2748Heidi E. Garwood
2751Agency for Health Care
2755Administration
27561317 Winewood Boulevard
2759Building B, Room 271
2763Tallahassee, Florida 32399-0700
2766Monte K. Rassner
2769Rassner, Rassner, Kramer & Gold, P.A.
27757000 Southwest 62nd Avenue, Suite PH-B
2781South Miami, Florida 33143
2785Sam Power, Agency Clerk
2789Agency for Health Care Administration
2794The Atrium, Suite 301
2798325 John Knox Road
2802Tallahassee, Florida 32303
2805Tom Wallace, Assistant Director
2809Agency for Health Care Administration
2814The Atrium, Suite 301
2818325 John Knox Road
2822Tallahassee, Florida 32303
2825NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
2831All parties have the right to submit written exceptions to this Recommended
2843Order. All agencies allow each party at least 10 days in which to submit
2857written exceptions. Some agencies allow a larger period within which to submit
2869written exceptions. You should contact the agency that will issue the final
2881order in this case concerning agency rules on the deadline for filing exceptions
2894to this Recommended Order. Any exceptions to this Recommended Order should be
2906filed with the agency that will issue the final order in this case.
- Date
- Proceedings
- Date: 04/06/1995
- Proceedings: Final Order filed.
- PDF:
- Date: 03/01/1995
- Proceedings: Recommended Order sent out. CASE CLOSED. Hearing held 11/16-17/94.
- Date: 01/31/1995
- Proceedings: (Monte K. Rassner) Recommended Order (for Hearing Officer Signature) w/cover letter filed.
- Date: 01/30/1995
- Proceedings: Respondent`s Proposed Recommended Order filed.
- Date: 01/11/1995
- Proceedings: (Respondent) Notice of Filing Final Hearing Transcript; Transcripts (Volumes I, II, tagged) filed.
- Date: 11/16/1994
- Proceedings: CASE STATUS: Hearing Held.
- Date: 11/09/1994
- Proceedings: Notice of Taking Deposition filed.
- Date: 11/04/1994
- Proceedings: Joint Prehearing Statement; Second Amended Notice of Taking Depositions filed.
- Date: 11/03/1994
- Proceedings: (Respondent) Amended Motion to Amend Agency Action Letter filed.
- Date: 11/02/1994
- Proceedings: (Respondent) Notice of Hearing filed.
- Date: 11/02/1994
- Proceedings: (Respondent) Motion to Amend Agency Action Letter; Agency Action Letter filed.
- Date: 10/31/1994
- Proceedings: Petitioner`s Motion for Protective Order filed.
- Date: 10/28/1994
- Proceedings: (Respondent) Amended Notice of Taking Deposition filed.
- Date: 10/26/1994
- Proceedings: (Respondent) Notice of Taking Depositions filed.
- Date: 08/29/1994
- Proceedings: (Respondent) Notice of Taking Deposition filed.
- Date: 07/08/1994
- Proceedings: Amended Notice of Hearing sent out. (hearing set for Nov. 16-18, 1994; 11:00am; Miami)
- Date: 07/08/1994
- Proceedings: Order for Prehearing Statement sent out.
- Date: 07/07/1994
- Proceedings: (Respondent) Response to May 31, 1994 Order filed.
- Date: 07/05/1994
- Proceedings: Notice of Hearing sent out. (hearing set for 11/16/94; 11:00am; Miami)
- Date: 06/20/1994
- Proceedings: (Respondent) Notice of Taking Deposition filed.
- Date: 06/07/1994
- Proceedings: Respondent`s Second Request for Production filed.
- Date: 05/31/1994
- Proceedings: Order Granting Continuance sent out. (hearing date to be rescheduled at a later date; parties to file status report by 7/1/94)
- Date: 05/24/1994
- Proceedings: (Respondent) Motion for Continuance filed.
- Date: 05/09/1994
- Proceedings: (Petitioner) Notice of Filing Answers to Interrogatories filed.
- Date: 04/28/1994
- Proceedings: (Respondent) Notice of Taking Depositions filed.
- Date: 04/25/1994
- Proceedings: (Medilab) Notice of Filing Response to Request for Production filed.
- Date: 03/24/1994
- Proceedings: Order Granting Continuance and Rescheduling Hearing sent out. (hearing reset for June 9-10, 1994; 9:00am; Miami)
- Date: 03/15/1994
- Proceedings: (Respondent) Motion for Continuance filed.
- Date: 03/07/1994
- Proceedings: Notice of Propounding Respondent`s First Set of Interrogatories; Request to Produce filed.
- Date: 02/01/1994
- Proceedings: Notice of Hearing sent out. (hearing set for May 3-4, 1994; 11:00am; Miami)
- Date: 01/25/1994
- Proceedings: Joint Response to Initial Order filed.
- Date: 01/13/1994
- Proceedings: Initial Order issued.
- Date: 01/04/1994
- Proceedings: Notice; Petition to Initiate Formal Proceedings; Agency Action letter. filed.
Case Information
- Judge:
- J. D. PARRISH
- Date Filed:
- 01/04/1994
- Date Assignment:
- 01/13/1994
- Last Docket Entry:
- 04/06/1995
- Location:
- Miami, Florida
- District:
- Southern
- Agency:
- ADOPTED IN TOTO