Lee Mem'l Health Sys. Gulf Coast Med. Ctr. v. Agency for Health Care Administration
| Decision Date | 27 February 2019 |
| Docket Number | No. 1D16-1969,1D16-1969 |
| Citation | 272 So.3d 431 |
| Parties | LEE MEMORIAL HEALTH SYSTEM GULF COAST MEDICAL CENTER, Appellant, v. State of Florida, AGENCY FOR HEALTH CARE ADMINISTRATION, Appellee. |
| Court | Florida District Court of Appeals |
Joanne B. Erde and Donna Holshouser Stinson of Duane Morris LLP, Miami, for Appellant.
Tracy Cooper George of the Agency for Health Care Administration, Tallahassee, for Appellee.
Lee Memorial Health System Gulf Coast Medical Center ("Gulf Coast") challenges a final order of the Agency for Health Care Administration ("the Agency"), which found it was overpaid with Medicaid funds for in-patient emergency services rendered to Medicaid eligible undocumented aliens. Gulf Coast argues the Agency was without authority to order reimbursement as it was barred from conducting retrospective audits on claims for emergency in-patient services that were pre-authorized and paid. We agree and reverse.
In 2002, exercising authority under section 409.905(5)(a), Florida Statutes, the Agency implemented a mandatory pre-authorization program regarding Medicaid hospital in-patient services, including emergency services provided to undocumented alien recipients. The new program required medical providers to acquire authorization either during or before provision of the emergency medical services. Only those claims for hospital inpatient services that had received pre-authorization with a pre-authorization verification number could be submitted to the Agency for payment.1
In 2006, Gulf Coast entered into a Medicaid Provider Agreement ("the Agreement") with the Agency to participate in the Florida Medicaid program. Gulf Coast billed Medicaid in 2007 for emergency in-patient services provided to undocumented aliens. Gulf Coast followed the required procedures, inclusive of acquisition of pre-authorization for the medical services subsequently provided and billed to Medicaid. As part of the pre-authorization process, the Department of Children and Families ("DCF") provided Gulf Coast with a pre-authorization number signifying each undocumented alien was qualified and eligible for Medicaid, suffered from an emergency medical condition, and approved the estimated duration of emergent care. The Agency reviewed the claims submitted by Gulf Coast and issued payment.
In 2009, under its compliance and monitoring authority, the Centers for Medicare and Medicaid Services ("CMS"), a federal agency within the Department of Health and Human Services ("HHS"), conducted a review of Florida's Medicaid expense reports. CMS concluded Florida was claiming federal funding for emergency medical services "beyond what federal regulations defined to be an emergency." Specifically, the standard utilized by the federal government to determine what constitutes an "emergency medical condition" requiring "emergency medical services" was more restrictive than that used by DCF. CMS recommended the Agency review and re-determine the allowability of claims for all emergency services for undocumented aliens during fiscal years 2005, 2006, and 2007. Further, based on this review and redetermination, CMS recommended the Agency revise previous amounts claimed to reflect only emergency services to undocumented aliens "to the point of stabilization."
In response to the CMS federal audit, the Agency initiated the Undocumented Alien Project ("the Project"). Under the flag of the Project, the Agency began audits of all paid in-patient hospital claims for emergency services provided to alien recipients in Florida between July 2005 and June 2010.
In 2011, Gulf Coast received notice from the Agency, through its Bureau of Medicaid Program Integrity ("MPI"), it would audited regarding claims for in-patient hospital services provided to undocumented aliens and billed to Medicaid in 2007. The purpose of the audit, according to the Agency, was to determine whether the claims were billed and paid in accordance "with Medicaid policy." Following review of the claims, the Agency issued a Final Audit Report holding Gulf Coast was overpaid by $ 46,901.85 for in-patient services rendered to Medicaid eligible undocumented aliens post alleviation of an emergency medical condition and found the overpayment to be subject to recoupment.2
In response, Gulf Coast filed a petition for formal administrative hearing to challenge the finding of overpayment. Following the hearing, the administrative law judge ("ALJ") determined the Agency had exceeded the scope of its authority as there was no provision in chapter 409, Florida Statutes, granting the Agency the authority to decide whether the recipient had an emergency medical condition – a decision exclusively within the authority of DCF and which had been previously reviewed and authorized. However, the Agency rejected the findings and conclusions of the ALJ. The Agency held that overpayments in the audit report, which were based on its determination of the existence and duration of an emergency medical condition, were recoverable pursuant to its Coverage and Limitations Handbook, which limited eligibility to only duration of the emergency until it was "alleviated." The Agency ordered reimbursement by Gulf Coast, plus interest. Gulf Coast appealed.
"Medicaid is a jointly financed federal-state cooperative program ... States devise and fund their own medical assistance programs, subject to the requirements of the Medicaid Act, and the federal government provides partial reimbursement." Moore ex rel. Moore v. Reese , 637 F.3d 1220, 1232 (11th Cir. 2011) (citing 42 U.S.C. §§ 1396b(a), 1396d(b) ). CMS is responsible for administering the Medicaid Act, including setting state guidelines and monitoring state compliance. Moore , 637 F.3d at 1235-36 (citing 42 U.S.C. § 1396a(b), 42 C.F.R. §§ 430.10, 430.15 ). CMS may recoup from the state any overpayments that were made, even if the state is unable to recover that amount from the provider. 42 C.F.R. § 433.300.
The U.S. government pays federal financial participation ("FFP") to participating states on a quarterly basis. For their part, the states must submit quarterly expense reports to the U.S. government, in effect claiming FFP or, more loosely, "billing" the federal government for Medicaid costs. If the federal government believes it has overpaid a state, it may disallow claims for FFP and recover the amount of overpayment from the state. The state is entitled to pursue an administrative appeal, before the appropriate federal agency, of any disallowance it disputes. See 42 U.S.C. § 1316(e). Florida receives FFP funding to cover a percentage of its Medicaid program expenditures.
Federal law broadly prohibits compensating a state through FFP under the Medicaid program "for medical assistance furnished to an alien who is not lawfully admitted for permanent residence or otherwise permanently residing in the United States under color of law." 42 U.S.C. § 1396b(v)(1). However, it permits FFP for services provided undocumented aliens that "are necessary to treat an emergency medical condition" if the individual otherwise meets the conditions for participation in the Medicaid program. 42 C.F.R. § 40.255(a); see also 42 U.S.C. § 1396b(v)(2). In fact, federal law mandates that state Medicaid programs provide services necessary to treat an undocumented alien's emergency medical condition. 42 U.S.C. § 1396(b) v.
Florida enacted legislation consistent with federal law. See §§ 409.902(2)(b), 409.904(4), Fla. Stat. Florida statutes and rules, with minor variations, incorporate the federal standards limiting the eligibility of undocumented aliens to treatment for emergency medical conditions. Florida law sets forth "Provider Requirements" and establishes that all Medicaid providers enrolled in the Medicaid program and billing agents who submit claims to Medicaid on behalf of an enrolled Medicaid provider must comply with the provisions of the Florida Medicaid Provider General Handbook. Fla. Admin. Code R. 59G-4.150. The "Handbook" contains a section entitled "Emergencies: Medicaid for Aliens," also known as the "Statement on the Eligibility of Aliens for Services" or "SEAS," which provides, in pertinent part:
The Medicaid Hospital Services Program reimburses for emergency services provided to aliens who meet all Medicaid eligibility requirements except for citizenship or alien status. Eligibility can be authorized only for the duration of the emergency. Medicaid will not pay for continuous or episodic services after the emergency has been alleviated . (emphasis added).
Florida law designates DCF as responsible for determining eligibility for Medicaid. § 409.902(1), Fla. Stat. The Agency "is designated as the single state agency authorized to make payments" under Medicaid. § 409.902(1), Fla. Stat. Participating medical providers seek reimbursement from the Agency for services provided to Medicaid eligible patients. Id. Florida law permits the Agency to review these claims two ways: by conducting pre-payment reviews of provider claims before paying the provider; and/or, by conducting post-payment reviews/audits to identify any overpayments. § 409.13(3), (5), Fla. Stat. The latter method is routinely referred to as the "pay and chase" method in which the Agency reviews claims after payment using "peer reviews" by medical professionals to determine whether the services provided were medically necessary and otherwise permitted by Medicaid. §§ 409.913(1)(d)-(e), (2), (5), (7); 409.9131(2)(b), (2)(d), Fla. Stat. As a result of this pay and chase option, medical providers must maintain records for a period of five years for the Agency to audit for overpayment and seek reimbursement from medical providers. § 409.913(9), Fla. Stat.
Before and after the prior authorization program was implemented in 2002, DCF has been responsible for making Medicaid eligibility determinations based on information submitted by...
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Lee Mem'l Health Sys. v. State, 1D16-3975
...Order is reversed and no overpayment is owed by Appellant. Lee Mem'l Health Sys. Gulf Coast Med. Ctr. v. State of Fla., Agency for Health Care Admin. , 1D16-1969, 272 So.3d 431, 2019 WL 942995 (Fla. 1st DCA Feb. 27, 2019). REVERSED and REMANDED for entry of an order consistent with this opi......