Enterprises v. Dep't of Med. Assistance Servs., Civil Docket No.: CL12-2742
| Decision Date | 13 September 2012 |
| Docket Number | Civil Docket No.: CL12-2742 |
| Court | Circuit Court of Virginia |
| Parties | SENTARA ENTERPRISES, d/b/a SENTARA MEDICAL EQUIPMENT, Plaintiff, v. DEPARTMENT OF MEDICAL ASSISTANCE SERVICES, Defendant. |
This matter comes before the Court on Sentara Enterprises' appeal of an adverse decision by the Virginia Department of Medical Assistance Services issued on February 6, 2012. For the reasons stated herein, the Court REVERSES the agency action at issue in this matter, specifically, the Department's retraction of $190,111.71 from Sentara.
FACTUAL BACKGROUND
This case is before the Court on Sentara's appeal of the decision by the Department of Medical Assistance Services to retract $190,111.71 paid to Sentara for the provision of enteral nutrition supplements to Virginia Medicaid beneficiaries. The Department docs not dispute that Sentara provided these services to individuals qualified for Medicaid, nor that the services were medically necessary. Instead, the Department based this retraction on the assertion that Sentara did not comply with state regulations governing supporting documentation for the provision of these services between March 1, 2008, and March 1, 2010. The Department claims two deficiencies in the documentation during this time period: (1) that all Nutritional Status Evaluation forms (known as DMAS-115) which were completed and signed by the registered dietitian who conducted the assessment were not also signed by a physician; and (2) that the assessor neglected to include the height of the patient on some of these forms as well. Because of these deficiencies, the Department asserts that it must retract all funds paid to Sentara for the nutritional supplements.
STANDARD OF REVIEW
The Virginia Administrative Process Act (VAPA), Va. Code § 2.2-4000, et seq., gives this Court jurisdiction to review the actions of administrative agencies. The burden is on the complaining party to prove that the agency committed error at law. Va. Code § 2.2-4027. Such errors exist when: (1) the agency did not act in accordance with law, (2) the agency made a procedural error which was not harmless error, or (3) the agency did not have sufficient evidential support for its findings of fact. Va. Bd. for Branch Pilots v. McCrory, 60 Va. App. 373, 378, 727 S.E.2d 795, 797 (Va. Ct. App. 2012). The reviewing court must limit its review to the agency record, and with respect to any issues of fact, the court is limited to ascertaining whether there is "substantial evidence in the agency record upon which the agency as the trier of the facts could reasonably find them to be as it did." Va. Code § 2.2-4027.
In reviewing decisions by the Department of Medical Assistance Services, the Court accords great deference to the agency's interpretation of the laws applicable to "the reimbursement due qualified providers for their reasonable costs incurred while delivering health care services." Dep't of Med. Assistance Servs. v. Beverly Healthcare, 41 Va. App. 468, 481, 585 S.E.2d 858, 865 (Va. Ct. App. 2003). The Court of Appeals has cautioned, however, that "deference is not abdication, and it requires [the Court] to accept only those principles of agency interpretations that are reasonable in light of the principles of construction courts normally employ." Avante at Roanoke v. Finnerty, 56 Va. App. 190, 197, 692 S.E.2d 277, 280 (Va. Ct. App. 2010) ). Accordingly, courts give no deference to an agency's interpretation of its regulations that is "arbitrary and capricious." Horne v. Commonwealth, 57 Va. App. 709, 718, 705 S.E.2d 535, 539 (Va. Ct. App. 2011). Thus, this Court will apply ordinary principles of statutory interpretation to determine whether the Department's interpretation of its regulations is arbitrary and capricious, meaning that it is "'unreasonable' or 'without determining principle.'" Id. (quoting Williams v. Commonwealth of Va. Real Estate Bd., 57 Va. App. 108, 135, 698 S.E.2d 917, 930 (Va. Ct. App. 2010)).
DISCUSSION AND FINDINGS
The Department requires Medicaid providers of durable medical equipment and supplies, which includes enteral nutrition supplements, to provide a Certificate of Medical Necessity, completed and signed by a physician, confirming the medical necessity of the equipment or supplies. See Agency Record ("A.R."), Binder 1, Tab 13, Provider's Exhibits (P.E.) 4. During the time relevant to this appeal, the Department also required providers to submit completed DMAS-115 forms, which record the nutritional status of a patient on a form created by the Department. See A.R., Binder 1, Tab 13, P.E. 3. Sentara concedes that these forms do not contain a physician's signature but asserts that the DMAS-115 form itself did not state that it required a physician's signature and that the regulations regarding this requirement are unclear. The Final Agency Decision adopted the Hearing Officer's finding that the Department's regulations, along with the Manual for Durable Medical Equipment providers, required Sentara to include a physician's signature on the DMAS-115 form. The Director ruled that Sentara was not entitled to be paid for the supplements that it provided to the Medicaid patients at issue.
The question is thus whether the regulations require a physician to add a signature to a DMAS-115 form that was completed and signed by a registered dietitian. The DMAS-115 form itself states at the top of the page, "Instructions for completion are on the reverse side of the form." Those instructions, as relating to Section G, "Assessor Information," state:
The forms must be completed by a physician, registered nurse, or dietitian. The person completing the form must sign and date the form here. The DMAS-115 must be signed and dated by the assessor (physician, registered nurse, or dietitian) within sixty days of the DMAS-115 begin service date; otherwise, the DMAS-115 will become valid an [sic] the date that the form is signed by the assessor.
A.R., Binder 1, Tab 13, P.E. 3.
Thus, the form tells the provider that it must follow the instructions appearing on the reverse side; it does not refer to or incorporate instructions that may appear anywhere else, including in any relevant regulation, and the very instructions that the provider is directed to follow contain no reference whatever to a requirement that a physician must also sign a form that has been completed and signed by a registered nurse or dietitian. The only direction provided regarding signature is that "the person completing the form must sign and date the form."
Contrasting the instructions on the DMAS-115 with those that appear on the required companion form Certificate of Medical Necessity (also known as DMAS-352) reveals key differences. The DMAS-352 form states on the bottom in Section IV: "PHYSICIAN CERTIFICATION (MUST BE SIGNED AND DATED BY PHYSICIAN)." The instructions on the reverse of the form state:
Section IV PHYSICIAN CERTIFICATION ... Must be signed and fully dated by physician (NOTE: Attached physician prescription will not be accepted in lieu of physician signature/date on this form); IF ORDERS FOR DME SERVICE ARE WRITTEN ON BOTH SIDES OF FORMS, PHYSICIAN MUST SIGN/DATE BOTH SIDES OF FORM.
A.R., Binder 1, Tab 13, P.E. 4 ().
Obviously the Department knows how to direct its providers to secure physician signatures on documents that require them. Nobody reviewing a blank DMAS-352 (Certificate of Medical Necessity) would harbor any doubt about that requirement. The DMAS-115, which must be submitted as supporting documentation for the DMAS-352 and would thus be expected to be completed contemporaneously by the provider, is silent as to the very requirement that inspired bold type, italics, capital letters, and multiple underscored words in the DMAS-352. Nonetheless, the Department takes the position that it may generate a form, direct the provider to comply with detailed instructions on the reverse of the form, and thereafter retract payment from one who complied with those instructions but not with an additional requirement that is nowhere mentioned in those instructions.
Two Department regulations address this issue. 12 VAC 30-50-165 covers reimbursement for durable medical equipment and supplies suitable for use in the home, including the nutritional supplements in this case, and requires that all such equipment and supplies be obtained pursuant to a proper Certificate of Medical Necessity. The regulation states that the "CMN and any supporting verifiable documentation must be complete (signed and dated by the physician)..." 12 VAC 30-50-165(A)(5) (2002)1; see 18 Va. Reg. Regs. at 1313 (January 28, 2002), A.R., Binder 1, Tab 13, P.E. 2, Subtab 4. Although Sentara suggests that the parenthetical phrase could refer back only to the Certificate of Medical Necessity and not to the "supporting verifiable documentation" (which would include a DMAS-115), the plainer interpretation supports that all documents must be physician-signed.
In contrast, 12 VAC 30-60-75 which governs reimbursement for durable medical equipment in general states:
Supporting documentation is allowed to justify the medical need for durable medical equipment and supplies. Supporting documentation does not replace the requirement for a properly completed [Certificate of Medical Necessity].... and the medical practitioner providing the supporting documentation must be identified by name and title.
12 VAC 30-60-75(A) (2002) (emphasis added); see 18 Va. Reg. Regs. at 1317 (January 28, 2002), A.R., Binder 1, Tab 13, P.E. 2, Subtab 4. Addressing the very documentation discussed in 12 VAC 30-50-165, this regulation requires the...
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