Court sides with state and against Florida Hospital Orlando in Medicaid overpayment case

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A Tallahassee appellate court on Thursday affirmed an order requiring Florida Hospital Orlando to repay $22,138.34 to the state for unnecessary medical services for 14 Medicaid patients.

In reaching its unanimous opinion a three-member panel of the First District Court of Appeal rejected the hospital’s argument that the state reviewed Medicaid patient files to determine whether the admissions at the hospital were medically necessary and did not rely upon the same information that was available to the hospital and its doctors at the time of care.

“The hospital has not shown that AHCA and its auditors relied on hindsight information in penalizing the hospital’s admission decisions,”the court wrote in its ruling.

Florida Hospital Orlando did not immediately respond to a request for comment.

The decision lets stand  a final order from the Agency for Health Care Administration demanding that the hospital pay $22,138.34 as well as pay a $500 administrative fine and $7635.27 in legal and research fees.

The discrepancy was discovered through a Medicaid Program Integrity Audit for patients treated at the hospital between 2005 and 2006.

On appeal the hospital argued that the state improperly used information that was in the patient’s file  and did not limit the audit to information that was available at the time to the hospital when the patient was admitted.

While the court acknowledged that the law gives the state no authority “for evaluating medical necessity determinations post hoc,using later-available information from a post-discharge standpoint,” the justices said the hospital did not show that AHCA and its auditors relied on hindsight.

Agency for Health Care Administration Secretary Liz Dudek signed a final order last December adopting the recommendations and findings of an administrative law judge, who heard two days of oral arguments on the billing discrepancies.

The administrative law judge lowered the amount the state initially sought to recoup and also slashed the amount of sanctions it tried to impose against the hospital from $2,000 to $500. The administrative law judge did allow the state to recover $7635.27 in legal and research fees.

The First District Court of Appeal ruling came just weeks after the court heard the case but years after initial findings contained in a Medicaid Program Integrity audit.