Kirchner v. State, Dphhs

• Decision Date: 16 August 2005
• Docket Number: No. 04-579.,04-579.
• Parties: Marsha KIRCHNER, Petitioner and Appellant, v. STATE of Montana, DEPARTMENT OF PUBLIC HEALTH AND HUMAN SERVICES, Division of Quality Assurance, Respondent and Respondent.
• Court: Montana Supreme Court

119 P.3d 82

2005 MT 202

Marsha KIRCHNER, Petitioner and Appellant, v. STATE of Montana, DEPARTMENT OF PUBLIC HEALTH AND HUMAN SERVICES, Division of Quality Assurance, Respondent and Respondent.

No. 04-579.

Supreme Court of Montana.

Submitted on Briefs May 31, 2005.

Decided August 16, 2005.

For Appellant: Christopher Daly, Missoula, Montana.

For Respondent: Kimberly A. Kradolfer, Special Assistant Attorney General, DPHHS, Helena, Montana.

Justice PATRICIA O. COTTER delivered the Opinion of the Court.

¶ 1 Marsha Kirchner (Kirchner) appeals the First Judicial District Court's decision upholding the Decision of the Board of Public Assistance and the Fair Hearings Decision. We affirm.

ISSUE

¶ 2 The restated issue on appeal is whether the District Court erred in upholding a final administrative decision which concluded that the Montana Department of Public Health and Human Services (DPHHS or Department) was entitled to repayment of $4,593.96 in fees that had been paid to Kirchner by the Montana Medicaid Program (Medicaid).

FACTUAL AND PROCEDURAL BACKGROUND

¶ 3 Kirchner is a licensed professional counselor who has been providing services for Medicaid clients since 1992. After providing such services, Kirchner seeks payment from the Montana Medicaid Program which is administered by the DPHHS. Medicaid providers must follow specific billing procedures when submitting claims to the Department for payment. Kirchner does not dispute that she is required to bill for her services in accordance with the specific billing procedures.

¶ 4 One element of the billing process requires providers to identify each medical procedure they perform for each patient by assigning a pre-determined "code" number to the procedure. For example, for the type of work Kirchner performs, there is a specific code number for individual therapy and a different code number for group therapy. Prior to July 1, 1999, Medicaid providers were required to bill using "local codes." Local codes were billed in 15-minute increments, meaning a provider could bill multiple units to a single patient in a given day depending upon the amount of time spent with the patient.

¶ 5 On July 1, 1999, new DPHHS rules were implemented. These rules required Medicaid providers seeking payment for services to begin using a national coding system. These national codes describing different kinds of medical procedures were published in a manual entitled Current Procedure Terminology, or CPT. All Medicaid providers were supplied with a Medicaid Provider Handbook that explained how to process a claim. Significantly, the new CPT codes relevant to Kirchner's practice were designated as "per visit" as opposed to per 15-minute intervals, as before. Thus the new codes categorized billing by the specific procedure performed, and not the amount of time spent performing it. The Department therefore maintains that under the new codes, only one unit of service could be billed per patient per day, regardless of the amount of time the provider spent with the patient.

¶ 6 Kirchner asserts that when the system changed, she did not understand how to bill under the CPT codes for sessions that ran more than one hour. She states that she called Consultec (later renamed ACS), the fiscal agent for DPHHS to whom she submitted her claims, and requested assistance. Kirchner maintains that a representative of Consultec instructed her to bill one unit for an hour-long session, and bill a second unit if the session lasted more than an hour, even if it did not run a full two hours. Subsequently, Kirchner billed the Medicaid Program in accordance with Consultec's instructions. At times she billed two units of service for the codes in questions, and at other times, as many as four and five units of service per patient per day, based on the amount of time she spent with the patient. In January 2001, Kirchner stopped billing for more than one unit of service per patient per day because she learned that the Department considered such multiple unit billing to be improper.

¶ 7 During the relevant time period, Kirchner submitted her claims and was paid by DPHHS. DPHHS typically pays claims on an "as submitted" basis and later audits those payments for correctness. See Juro's United Drug v. Public Health, 2004 MT 117, ¶ 20, 321 Mont. 167, ¶ 20, 90 P.3d 388, ¶ 20. Subsequently, during the Department's audit of Medicaid provider claims submitted between July 1, 1999, through June 30, 2002, the Department discovered Kirchner's improperly billed claims and notified her that she had erroneously overbilled the Montana Medicaid Program in the amount of $4,593.96.

¶ 8 Kirchner did not contest the Department's calculations, but rather disputed the DPHHS's position that her billing was wrong. She requested an Administrative Review which was held by telephone in mid-January 2003. The subsequent Administrative Determination upheld the DPHHS's demand for repayment. In accordance with applicable regulations, Kirchner then sought a Fair Hearing which was held on March 18, 2003. At the conclusion of the hearing and after reviewing the parties' proposed Findings of Fact and Conclusions of Law, the Hearings Officer upheld the Department's determination that Kirchner had overbilled the Medicaid Program. In his Decision, the Hearings Officer failed to make certain factual findings requested by Kirchner, leading Kirchner to request review with the Montana Board of Public Assistance (BPA). In August 2003, the BPA adopted the Hearings Officer's May 5, 2003, Decision. Kirchner then sought review of the decision by the District Court. On May 5, 2004, the District Court affirmed the BPA's Decision. Kirchner filed a timely notice of appeal.

STANDARD OF REVIEW

¶ 9 The relevant portion of the applicable standard of review is set forth in the Montana Administrative Procedure Act (MAPA) at § 2-4-704, MCA:

(2) The court may not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because:

(a) the administrative findings, inferences, conclusions, or decisions are:

. . .

(iv) affected by other error of law;

(v) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record;

. . .

(b) findings of fact, upon issues essential to the decision, were not made although requested.

¶ 10 This Court will review a state agency's conclusions of law to determine whether the agency's interpretation of law is correct. Seven Up Pete Venture v. Mont., 2005 MT 146, ¶ 58, 327 Mont. 306, ¶ 58, 114 P.3d 1009, ¶ 58 (internal citations omitted). Likewise, we review a district court's conclusions of law for correctness. State v. Tichenor, 2002 MT 311, ¶ 18, 313 Mont. 95, ¶ 18, 60 P.3d 454, ¶ 18.

¶ 11 Kirchner argues, pursuant to § 2-4-704(2)(b), MCA, that the District Court erred by not overturning the Hearings Officer's Decision for his failure to adopt certain of Kirchner's proposed findings. Additionally, she maintains that the District Court misapplied the holding in State v. Vainio, 2001 MT 220, 306 Mont. 439, 35 P.3d 948. Lastly, Kirchner avers that the District Court erred in upholding the Hearings Officer's admission of Consultec's telephone logs.

DISCUSSION

¶ 12 The crux of Kirchner's argument is that she should not be responsible for the overbilling because: 1) there was nothing in writing from the DPHHS or Consultec notifying her that billing more than one hour under the codes was not permitted; and 2) the Department should be estopped from seeking repayment because an employee of Consultec orally advised her she could bill more than one hour per patient per day and she received a letter from Randy Poulsen, Chief of the Department's Mental Health Services Bureau, stating that nothing expressly prohibited a therapist from spending more than one hour with a patient under the CPT codes.

¶ 13 At her Fair Hearing, Kirchner cross-examined three of the State's witnesses: one DPHHS employee and two Consultec employees. She elicited testimony that during the period in question, there was nothing in writing from the Department or its agent, Consultec, to state that billing more than one hour under these codes was impermissible. As a result of this testimony, Kirchner proposed the following Findings of Fact, among others, to the Hearings Officer:

¶ 14 5. On cross-examination, Ms. Higgins [Compliance Specialist for DPHHS], testified that for the period in question from July, 1999 through January, 2001, there was nothing in writing from the State or its agent, Consultec, to state that billing more than one hour under these codes was impermissible.

¶ 15 7. On cross-examination, Ms. Brandt [Registered Health Information Administrator for ACS] testified that for the period in question July, 1999 through January, 2001, there was nothing in writing from the State or its agent, Consultec, to state that billing more than one hour under these codes was impermissible.

¶ 16 12. On cross-examination, Ms. Hance [Deputy Accounts Manager for Consultec/ACS] testified that for the period in question July, 1999 through January, 2001, there was nothing in writing from the State or its agent, Consultec, to state that billing more than one hour under these circumstances was impermissible.

¶ 17 Kirchner maintains that because there was no evidence in the record to contradict the above-recited testimony of witnesses Higgins, Brandt and Hance, the Hearings Officer should have adopted these findings and failure to do so was reversible error.

¶ 18 The Hearings Officer, however, determined that the more relevant testimony presented by the Department's expert, Ms. Brandt, was the Department's interpretation of the relevant CPT codes. Brandt explained that, with the exception of one unrelated...