Access Behavioral Health v. State, 48353

CourtUnited States State Supreme Court of Idaho
Writing for the CourtZAHN, JUSTICE.
PartiesACCESS BEHAVIORAL HEALTH, Petitioner-Appellant, v. STATE OF IDAHO, DEPARTMENT OF HEALTH AND WELFARE, Respondent.
Docket Number48353
Decision Date16 September 2022

ACCESS BEHAVIORAL HEALTH, Petitioner-Appellant,
v.

STATE OF IDAHO, DEPARTMENT OF HEALTH AND WELFARE, Respondent.

No. 48353

Supreme Court of Idaho, Boise

September 16, 2022


Appeal from the District Court of the Fourth Judicial District of the State of Idaho, Ada County. Michael J. Reardon, District Judge.

Cozakos & Centeno, PLLC, Boise, for Appellant. Shelly Cozakos argued.

Lawrence G. Wasden, Idaho Attorney General, Boise, for Respondent. Chelsea E. Kidney argued.

ZAHN, JUSTICE.

Access Behavioral Health appeals from the district court's judgment upholding an order of the Idaho Department of Health and Welfare that demanded recoupment of Medicaid payments made to Access. We affirm the district court's decision.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Factual Background

This case concerns the Department's efforts to recoup overpayments made to Access for mental health services provided to Medicaid participants in 2012 and 2013. The Department sought to recoup certain payments made to Access because it failed to meet the Department's documentation requirements.

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As an approved provider in the Idaho Medicaid Program, Access was required to sign an "Idaho Department of Health and Welfare Medicaid Provider Agreement." By signing the Agreement, Access acknowledged that it would "document each item or service for which Medicaid reimbursement is claimed, at the time it is provided, in compliance with documentation requirements of Idaho Code, § 56-209h(3), as amended, applicable rules, and this Agreement." The Agreement also required Access to comply with the April 2013 Ambulatory Health Care Facility Provider Handbook, which sets forth recordkeeping requirements and includes references to statutes and Idaho Administrative Procedure Act ("IDAPA") rules.

The Handbook requires the provider to record treatment notes identifying the services provided by using Current Procedural Terminology ("CPT") codes or Healthcare Common Procedure Coding System ("HCPCS") codes.[1] It also required mental health providers to "maintain medical records on all services provided to Medicaid participants," including recording the specific treatment provided, the duration of the treatment, the identity of the person providing the treatment, and the signatures of the medical professionals who provided the treatment. In 2012 and 2013, IDAPA Rule 16.03.09.716.05 required mental health providers to maintain specific records on all services provided to Medicaid participants. Further, IDAPA Rule 16.05.07.101.01 required providers to "generate documentation at the time of service sufficient to support each claim or service, and as required by rule, statute, or contract."

1. The November 8, 2018 administrative action notice.

On June 8, 2016, pursuant to its authority under Idaho Code section 56-209h to conduct audits of provider billings, the Department requested Access to provide billing records for psychotherapy and pharmacologic management services billed from January 1, 2013, through August 30, 2013. The Department reviewed 1607 line items submitted by Access for services billed under CPT code 90832 (psychotherapy) and HCPCS code H0034 (pharmacologic management). In each instance, Access billed Medicaid under both codes for services provided to the same patient on the same day. The audit lasted approximately two and a half years. During this time, the Department and Access repeatedly communicated about the audit and the Department sought additional information related to the audited records.

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On November 8, 2018, the Department issued an administrative action notice, which determined that while Access had submitted sufficient documentation to support its billings for pharmacologic management, it failed to provide sufficient documentation to support its psychotherapy billings for 1560 separate line items. The Department identified documentation deficiencies related to:

(1) Documentation requirements not met
(2) Documentation did not support services billed;
(3) Incomplete documentation;
(4) No documentation[.][2]

The Department concluded the documentation deficiencies violated IDAPA Rule 16.03.09.716 and the Handbook. The notice cited specific examples for each of the deficiencies and included a spreadsheet identifying the specific deficiencies associated with each line item at issue. For instance, six of the billed services included treatment plan reviews but did not mention medication management or psychotherapy. Additionally, in eighteen of the services billed for psychotherapy and pharmacological management, the medical provider failed to complete the entire required template form. Further, Access had not provided any documentation for twenty-six of the services billed under psychotherapy and pharmacological management. As a result of the deficiencies identified in the 1560 line items, the Department determined that it had overpaid Access in the amount of $66,257.65 and demanded recoupment of the funds.[3]

2. The November 21, 2018 administrative action notice.

On April 10, 2014, the Department requested documentation from Access to support billings for forty patients between January 1, 2012, through August 30, 2013. The Department focused on CPT billing codes 90885 (psychiatric evaluation of records) and 90889 (preparation of a report for others) and utilized probability sampling from all claims submitted during the identified timeframe to randomly select forty client treatment notes for review. The audit lasted approximately four and a half years. During this time, the Department and Access repeatedly communicated about the audit and the Department sought additional information related to the audited records.

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On November 21, 2018, the Department issued an administrative action notice, which found no issues with Access's billings for reviewing psychiatric records but identified eleven deficiencies with its billings seeking payment for preparation of a report for other individuals, agencies, or other insurance carriers. Specifically, Access failed to document that it prepared a report for other physicians, agencies, or insurance carriers on the service date. The Department concluded the deficient documentation violated IDAPA Rule 16.03.09.716 and the Handbook. The Department determined the noncompliant billings indicated an overpayment of $534.05 and extrapolated the findings from the sample to arrive at an overpayment of $18,467 for all billings that Access submitted for CPT code 90889 between January 1, 2012, and August 30, 2013. The Department demanded recoupment of the funds from Access.[4]

Access filed a petition with the Department to appeal both recoupment assessments.

B. Procedural History

Access's appeal proceeded before a hearing officer from the Fair Hearings Unit of the Idaho Attorney General's Office. Access had the burden of establishing, by a preponderance of the evidence, that it was entitled to the payments it received. IDAPA 16.05.03.133; IDAPA 16.05.03.134. Before the hearing officer, Access argued that the Department did not have legal authority to recoup the payments, that Access's documentation was sufficient, that the Department's recoupment demand failed to properly apply federal law, and that the doctrine of laches barred the Department's recoupment demand. On September 10, 2019, after a six-day hearing, the hearing officer issued a 30-page written preliminary order, which affirmed the Department's administrative actions and concluded that the Department was entitled to recoupment of the overpayments. Access did not request the Department to review the preliminary order and it became final on September 24, 2019. Access timely petitioned for judicial review pursuant to Idaho Code section 67-5273.

Access's petition for judicial review repeated many of the same issues and arguments that it raised before the hearing officer. On August 14, 2020, the district court issued a written order affirming the hearing officer's order. Access timely appealed from the district court's order.

II. ISSUES ON APPEAL

1. Whether the district court properly affirmed the hearing officer's determination that the Department had legal authority to issue a recoupment demand to Access?

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2. Whether the district court properly affirmed the hearing officer's determination that Access failed to establish an entitlement to payment?

3. Whether the district court properly affirmed the hearing officer's determination that the federal False Claims Act's materiality requirement did not apply to the Department's recoupment demand?

4. Whether the district court properly affirmed the hearing officer's determination that the doctrine of laches did not bar the Department's recoupment demands?

5. Whether Access is entitled to attorney fees and costs on appeal?

III. STANDARD OF REVIEW

When reviewing an appeal from a district court's decision acting in its appellate capacity under IDAPA, this Court reviews "the decision of the district court to determine whether it correctly decided the issues presented to it." Rangen, Inc. v. Idaho Dep't of Water Res., 160 Idaho 251, 255, 371 P.3d 305, 309 (2016) (citing Clear Springs Foods v. Spackman, 150 Idaho 790, 797, 252 P.3d 71, 78 (2011)). This Court reviews the agency record independent of the district court's decision and "defers to the agency's findings of fact unless they are clearly erroneous, and the agency's factual determinations are binding on the reviewing court, even when there is conflicting evidence before the agency, so long as the determinations are supported by substantial competent evidence in the record." Id. at 255, 371 P.3d at 309 (internal quotation marks omitted). "Statutory interpretation is a question of law over which this Court exercises free review." Estate of Stahl v. Idaho State Tax Comm'n, 162 Idaho 558, 562, 401 P.3d 136, 140 (2017) (citation omitted).

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