Key Personnel, Inc. v. Department of Social Services
| Decision Date | 25 April 2017 |
| Docket Number | HHBCV166031927S |
| Court | Connecticut Superior Court |
| Parties | Key Personnel, Inc. v. Department of Social Services |
UNPUBLISHED OPINION
The plaintiff, Key Personnel, Inc., appeals from the final decision of the defendants, the Commissioner and the Department of Social Services (department), substantially upholding the findings of a Medicaid audit that concluded that the plaintiff had received overpayments of $167, 404 as a result of clerical errors. As discussed below, the court affirms the department's decision and dismisses the appeal.
The plaintiff is a Connecticut business that provides skilled nursing and home care services to the state's elderly and disabled population. The department administers the Connecticut Home Care Program for Elders (program) pursuant to General Statutes § 17b-342. The program is designed to help elderly persons who are at risk of institutionalization receive the support they need to age in place at home. The program provides a wide range of medical and non-medical services, including, for purposes of this appeal, homemaker, companion, and chore services. It is funded in part by the state and in part by a federal Medicaid waiver.[1] The department administers the program through contracts with " access agencies" that coordinate the delivery of program services.[2] The access agencies in turn contract with providers such as the plaintiff to provide services to clients of the program. The plaintiff has a provider contract with an access agency, the Agency on Aging of South Central Connecticut (AASCC). The department's office of quality assurance is responsible for auditing payments to providers for services rendered under the program. Record (R.), p. 424.
The department audits providers to determine, among other things whether the billings properly reflected the type and amount of services rendered; whether proper documentation was maintained to evidence the services provided and the medical necessity for them; and whether the provider adhered to all the terms and conditions of its provider service agreement with AASCC. R., p. 424.
The department previously audited the plaintiff in 2004 for claims paid in 2002 and 2003. During that period, the department had paid the plaintiff $94, 176. The department examined 100 out of 596 claims and found four clerical errors in the plaintiff's billing or documentation of services for which it recouped $342.04. It took one audit exception for failing to get a client's signature on a " per visit" basis. It did not make a financial adjustment for that error, but expected the plaintiff to rectify it. R., p 425.
On September 4, 2013, the department notified the plaintiff that it would conduct another audit. On October 21 and 22, 2013 [3] the department was at the plaintiff's offices, collecting copies of documents and speaking with the plaintiff's officers and employees. Approximately eight months later, on June 4, 2014, the department provided the plaintiff with its preliminary audit report. R., p. 392.
The plaintiff, through counsel, objected to the preliminary report because it had not been provided within sixty days of the audit's conclusion, as provided by General Statutes § 17b-99(d)(5). The plaintiff denied that the department retained jurisdiction over the audit, but attended an exit conference on October 29, 2014, to preserve its rights. On December 17, 2014, the department issued its final audit report. It found that the program had paid the plaintiff $1, 686, 807 over the three years subject to audit, and that the plaintiff had been overpaid by $167, 710 as a result of errors in documentation. R., pp. 3-16. This was based on an audit of 100 sample claims out of a " paid claims universe" of 7, 650 claims. The department found seventeen documentation errors in the 100 claims, at an average of $21.92 per selected claim. Applying an extrapolation methodology, it multiplied that error amount over the paid claim universe to calculate the audit adjustment. R., p. 16. A cover letter with the final report indicated that the department would deduct the disallowed payments over twenty-four cycles of future payments. R., p. 2.
On January 16, 2015, the plaintiff filed a request for review of items of aggrievement with the department, as permitted by General Statutes (Rev. to 2013) § 17b-99(d)(8). It raised five " general audit issues" and contested certain specific audit findings. It challenged, as general issues, the department's loss of jurisdiction when it failed to produce a preliminary audit report within sixty days; the department's failure to publish audit regulations pursuant to General § 17b-99(d)(11); lack of transparency in the audit; an incorrect " audit universe size"; and the assessment of an excessive financial penalty for minor clerical errors. R., pp. 17-22. It submitted numerous documents with its request for review, including a list of the sample claims reviewed by the department. R., pp. 23-178.
Pursuant to General Statutes § 17b-99(d)(8), the commissioner of social services designated a department attorney to serve as the review officer for the audit report. R., p. 182. The department filed a response to the plaintiff's items of aggrievement; R., pp. 201-90; to which the plaintiff filed a reply. R., pp. 293-303. The department requested and received permission to reply to the plaintiff's reply. R., p. 304. After receiving the department's reply, on May 1, 2015, the review officer deemed the record closed. R., p. 309.
On June 8, 2015, however, the review officer issued an order opening the record for further review. R., p. 313. In that order, the review officer stated that in Walgreen Co. v. Dept. of Social Services, Superior Court, judicial district of New Britain, CV 14-6027264-S, (May 8, 2015, Schuman, J.) (60 Conn.L.Rptr. 356), the court had ordered the department to disclose documents concerning the extrapolation method used in a departmental audit. Because the plaintiff in this case had identified the " audit universe size" as one of its items of aggrievement and had attempted without success to obtain information from the department about its sampling and extrapolation methodology, the review officer ordered the department to provide the documents that the plaintiff had previously requested. He further ordered that, after reviewing the documents, the plaintiff could submit additional evidence and arguments in support of its claim that the audit universe size was incorrect. R., p. 313. The department complied with that order. R., pp. 316-63. The plaintiff subsequently submitted an additional brief, arguing that the methodology revealed in the documents was not published, was not based on valid statistical sampling, and did not comply with federal audit guidelines for the Medicare program. R., pp. 366-70. The plaintiff did not submit additional evidence. The department replied to the plaintiff's brief and submitted an opinion from the department's director of quality assurance, John F. McCormick, who represented that the department's extrapolation method complied with governmental auditing standards and was statistically valid and reliable. R., pp. 379-86. The department also produced screen shots of the 100 sample claims used in the audit, taken on September 4, 2013, the date on which the list was randomly generated. R., pp. 388-90.
The review officer issued his final decision on November 30, 2015. R., pp. 391-413. Except for an error with respect to the amount of one sample claim, the review officer upheld the department's audit report. He declined to review any arguments made for the first time in the brief filed by the plaintiff after the disclosure of the department's sampling methodology on the ground that they were not within the original items of aggrievement. R., p. 398. He directed the department to issue a revised final audit report consistent with his findings. On December 11, 2015, the plaintiff moved for reconsideration and requested a stay of any recoupment until the issues were fully resolved. R., pp. 414-20. On December 15, 2015, however, the department issued the revised final report. After making the adjustment directed by the review officer, the revised final report stated an overpayment of $167, 404. The department indicated that within thirty days, it would instruct its claims processor to deduct the overpayment from future payments to the plaintiff. R., p. 421. On December 18, 2015, the review officer denied the motion for reconsideration and the motion for a stay, stating that because the final decision was not a contested case subject to the provisions of the Uniform Administrative Procedure Act, there was no right to reconsideration of the final decision and the department lacked authority to issue a stay. R., p. 438. The plaintiff filed a timely appeal in this court and moved for a stay, which was denied by Judge Schuman on February 16, 2016.
This appeal is brought pursuant to the Uniform Administrative Procedure Act (UAPA), General Statutes § § 4-166 et seq., and in particular, General Statutes § 4-183.[4] At the outset, it is important to recognize the standard of review that constrains the court. The scope of judicial review under the UAPA is very restricted. " With regard to questions of fact, it is [not] the function of the trial court . . . to retry the case or to substitute its judgment for that of the administrative agency." (Citations omitted; internal quotation marks omitted.) Goldstar Medical Services, Inc. v. Dept. of Social Services, 288 Conn. 790, 800, 955 A.2d 15 (2008). " [A] plaintiff who challenges an agency...
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