Jacobs v. Massachusetts Division of Medical Assistance ( 2020 )

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17-P-203 Appeals Court
WALTER H. JACOBS vs. MASSACHUSETTS DIVISION OF MEDICAL
ASSISTANCE.
No. 17-P-203.
Suffolk. November 1, 2019. - April 10, 2020.
Present: Agnes, Sullivan, & Blake, JJ.
MassHealth. Medicaid. Division of Medical Assistance.
Administrative Law, Hearing, Judicial review, Substantial
evidence, Evidence. Due Process of Law, Administrative
hearing.
Civil action commenced in the Superior Court Department on
September 30, 2009.
The case was heard by Paul D. Wilson, J., on a motion for
judgment on the pleadings.
Walter H. Jacobs, pro se.
Cassandra Bolanos, Assistant Attorney General, for the
defendant.
AGNES, J. This case concerns the treatment of patients who
receive medical benefits through the Massachusetts Medicaid
2
program known as MassHealth,1 and the requirements that
physicians must follow to be paid for services provided to those
patients. The plaintiff, Walter H. Jacobs, was a primary care
physician who billed MassHealth for services that he claimed to
have provided to MassHealth patients. MassHealth, after
conducting a required peer review of Jacobs's records, found
that he had repeatedly violated quality of care, record-keeping,
and billing standards. Jacobs unsuccessfully challenged those
findings during an administrative hearing and then sought review
of the administrative decision in the Superior Court. For the
reasons that follow, we affirm the judgment entered in the
Superior Court upholding the administrative decision.
Background. MassHealth, as a State Medicaid program,
covers medical expenses for certain individuals who would be
otherwise unable to afford necessary medical care. See Daley v.
Secretary of the Executive Office of Health & Human Servs., 477
Mass. 188, 189 (2017). While State Medicaid programs are run in
cooperation with the Federal government, MassHealth is a major
expenditure for Massachusetts, which finances a significant
portion of the benefits on its own. See id. at 189-190.
1 The defendant, the Massachusetts division of medical
assistance, which is part of the Executive Office of Health and
Human Services, administers MassHealth. See G. L. c. 118E, § 1.
We refer to both the division of medical assistance and the
program it administers as MassHealth.
3
Physicians who participate in the program and seek payment for
services provided to MassHealth patients therefore must comply
with a variety of billing regulations that require, among other
things, that physicians maintain "adequate documentation to
substantiate the provision of services payable under
MassHealth." 130 Code Mass. Regs. § 450.205(A) (2017).
On May 9, 2003, MassHealth notified Jacobs that, as
required by Federal and State law, it had contracted with an
entity referred to as MassPRO to conduct a "peer review of
services rendered by providers to MassHealth members."2 The
purpose of the review, as described by the notice sent to
Jacobs, was "to determine whether the services provided were
medically necessary, appropriate and of a quality that meets
professionally recognized standards of care." On May 14, 2003,
MassPRO contacted Jacobs and requested "copies of any and all
initial evaluations; history and physical exams; medical
records; appointment books; laboratory and diagnostic reports
and any and all other pertinent information for the [twenty-five
patients] listed on the attached listings for services provided
2 Federal regulations require any State that participates in
Medicaid to "implement a statewide surveillance and utilization
control program that . . . [s]afeguards against unnecessary or
inappropriate use of Medicaid services and against excess
payments." 42 C.F.R. § 456.3(a). State law requires MassHealth
to "verify the accuracy of bills submitted . . . through the
application of statistical sampling methods." G. L. c. 118E,
§ 38.
4
during the period of January 1, 2002 through December 31, 2002."
Upon receipt of Jacobs's records, MassPRO conducted its review
and then sent a draft report to MassHealth, which further
reviewed a random sample of eight MassHealth patients from
Jacobs's records.
Following the 2003-2004 review process, MassHealth sent an
initial notice to Jacobs citing more than 900 quality of care,
record-keeping, and billing violations across 371 office visits.
MassHealth suspended Jacobs from participating in MassHealth for
two years, effective immediately. Jacobs objected to the
initial notice. In 2005, after further review, MassHealth sent
two final notices to Jacobs. These notices confirmed the vast
majority of the violations that were identified in the initial
notice, while also citing additional violations.3 MassHealth
notified Jacobs of the violations and sought reimbursement in
the amount of $127,794.86.
A twenty-eight day administrative hearing followed in 2007
and 2008, during which MassHealth relied in large part on the
expert testimony of Jerome D. Siegel, a board-certified
physician who was also a MassPRO reviewer. Dr. George Abraham,
a board-certified physician, and Richard Hamilton, a managing
3 The initial final notice failed to address six violations
that Jacobs had appealed. The amended final notice addressed
the six additional violations.
5
partner at an accounting and auditing firm that specialized in
medical records review, testified for Jacobs. Jacobs also
testified on his own behalf. The hearing officer, who had also
reviewed the voluminous pages of exhibits, thereafter issued a
463-page decision containing specific findings with respect to
every office visit that served as the basis for one of the
violations listed in the amended final notice.
We summarize the facts as found by the hearing officer.4 As
to the quality of care violations, Jacobs's expert, Dr. Abraham,
testified that the primary determinant in assessing quality of
care was the result of that care, that is, whether the patient
died or suffered other detrimental effects. The hearing officer
did not credit this testimony and instead credited Dr. Siegel's
testimony that quality of care should be determined by the
information contained in Jacobs's records. Those records showed
Jacobs's consistent failure, among other concerning practices,
to document vital signs and the need for prescribed medications.
For example, regarding a woman who was seven months pregnant,
the hearing officer noted that "it is difficult to fathom a
definition of quality of care that does not include documenting
4 In his brief, Jacobs does not argue that any of the facts
found in that decision were not supported by substantial
evidence. While Jacobs suggested otherwise during oral
argument, the issue has been waived. See Santos v. U.S. Bank
Nat'l Ass'n, 89 Mass. App Ct. 687, 700 n.14 (2016).
6
blood pressure . . . to rule out pre-eclampsia." The hearing
officer noted, "The factual documentation . . . in every
[patient's] record and date of service voluminously supports the
violations alleged. Dr. Abraham's opinion and conclusions that
the documentation supports a finding that the standard of
medical care has been met because the [patient] either did not
die, or end up in the emergency room is silenced in the face of
the factual evidence which again irretrievably taints his
credibility . . . ."
The records also failed to demonstrate the need for certain
medications. The hearing officer found that Jacobs repeatedly
prescribed often high doses of opioids without a documented
basis, including to patients with known substance use problems
or to patients who exhibited "drug indiscretion and drug seeking
behavior."
As to the record-keeping violations, the hearing officer
credited Dr. Siegel's testimony that a patient's name and date
of birth should be on every page of their record, because
"[t]his requirement safeguards against the obvious risk of a
[patient's] file being compromised by error or if a page falls
from the file." The hearing officer found that Jacobs's records
did not satisfy this basic requirement and that, moreover,
Jacobs's records were "scant and nearly impossible to read."
7
In analyzing the billing violations, the hearing officer
first considered and rejected arguments made by Jacobs regarding
the applicable guidelines for making billing decisions. As
found by the hearing officer, physicians are required to bill
MassHealth for their services using numeric codes (CPT codes)
listed in the current procedural terminology manual published by
the American Medical Association (CPT manual), with the
different CPT codes reflecting different rates of reimbursement.
Jacobs argued that, contrary to MassHealth's practice of
interpreting the CPT codes using the CPT manual in and of
itself, the CPT codes had to be interpreted using two additional
guidelines published by the Centers for Medicare and Medicaid
Services5 in 1995 and 1997 (CMS guidelines). While the hearing
officer acknowledged that Medicare's practice is to interpret
the CPT codes using the CMS guidelines, the hearing officer
further noted that Medicare and Medicaid are distinct programs
with different "[f]unding sources, reimbursement rates, claims
processing, rate setting, . . . populations served, and
eligibility criteria." He thus concluded that, regardless of
Medicare's practice, a State Medicaid program such as MassHealth
was not required to interpret the CPT codes using the CMS
guidelines.
5 The Centers for Medicare and Medicaid Services is a
Federal agency that administers both of those programs.
8
Turning to the substance of the billing violations, the
hearing officer noted that Jacobs most often used CPT code
99214, reflecting the second highest relevant rate of
reimbursement. Use of CPT code 99214 requires at least two of
the following three components: a "detailed history," a
"detailed examination," and "medical decision-making of moderate
complexity." While Jacob's expert, Hamilton, opined that
Jacobs's use of CPT code 99214 was warranted one hundred percent
of the time, the hearing officer found this testimony to be
"spurious" in light of the scant and illegible nature of
Jacobs's records. The hearing officer instead credited Dr.
Siegel's testimony regarding the inadequacy of Jacobs's
documentation of his examination and treatment of his patients.
For example, with respect to one patient whose weekly office
visits Jacobs billed using that code, the hearing officer found
that "it [was not] clear why the [patient] [was] seen every week
for what [was] purportedly a detailed examination," especially
when "the visits [were] for refills of Ritalin" and "there [was]
no reason evident in the medical record why the [patient] could
not obtain renewal by mail or phone." The hearing officer found
that Jacobs's records did "not meet professionally recognized
standards of health care," and that the treatment was "not
substantiated by records including evidence of such medical
necessity and quality." Jacobs purported to perform
9
cardiovascular and respiratory examinations on other patients;
the hearing officer found that nothing in Jacobs's records
indicated that he took any vital signs such as blood pressure,
pulse, or respiratory rate.
After finding that charged violations occurred in all 371
office visits, the hearing officer authorized MassHealth to
proceed with recoupment of the overpayment.
Discussion. An appellate court reviewing the judgment of a
Superior Court judge that affirms the conclusion of an
administrative agency will uphold the administrative conclusion
unless, among other grounds, it is "[b]ased upon an error of
law," G. L. c. 30A, § 14 (7) (c), or "[a]rbitrary or capricious,
an abuse of discretion, or otherwise not in accordance with
law," G. L. c. 30A, § 14 (7) (g). See Rudow v. Commissioner of
the Div. of Med. Assistance, 429 Mass. 218, 223 (1999). In
making these determinations, we "give due weight to the
experience, technical competence, and specialized knowledge of
the agency, as well as to the discretionary authority conferred
upon it." G. L. c. 30A, § 14.
1. Billing violations. Jacobs's brief raises several
arguments with respect to the billing violations but does not
raise any arguments with respect to the quality of care or
10
record-keeping violations.6 This is noteworthy, as all but
twenty-five of the 371 office visits that formed the basis for
MassHealth's determination of overpayment involved quality of
care or record-keeping violations. A significant portion of the
determination of overpayment could thus be upheld on that basis.
See Barkan v. Zoning Bd. of Appeals of Truro, 95 Mass. App. Ct.
378, 391 (2019) (affirming on alternative ground on which
plaintiff's limited arguments were unpersuasive). Because
twenty-five of the office visits do turn on Jacobs's arguments
with respect to the billing violations, we address those
arguments.
Jacobs contends that the hearing officer erred in failing
to consider the manner in which CPT codes have been interpreted
by the CMS guidelines. Jacobs argues that MassHealth must
interpret the CPT codes using the CMS guidelines and that,
alternatively, the CPT codes and manual are inherently vague
when not interpreted using the CMS guidelines.7
6 At oral argument, Jacobs suggested that he was challenging
the quality of care and record-keeping violations. Because his
brief, however, does not raise any issues with respect to those
violations, the issues have been waived. See note 4, supra.
7 Jacobs also argues that Dr. Siegel's testimony as to why
Jacobs should not have used CPT code 99214 amounted to a new
standard that the Legislature must promulgate pursuant to the
Administrative Procedure Act, G. L. c. 30A. Where this argument
was not raised below, it has been waived. See Smith v. Sex
Offender Registry Bd., 65 Mass. App. Ct. 803, 810 (2006).
Regardless, the argument is without merit. Choice of CPT code
11
We first note that Jacobs has not offered any persuasive
support for the proposition that MassHealth must interpret the
CPT codes using the CMS guidelines. As the hearing officer
acknowledged, Medicare's practice is to interpret the CPT codes
using the CMS guidelines. As the hearing officer also noted,
however, Medicare and Medicaid are distinct programs, and
MassHealth, as a State Medicaid program, need not follow
Medicare's informal practices. See Rudow, 429 Mass. at 227-228.
Jacobs does not appear to contest this on appeal and instead
relies on a letter that MassHealth sent to physicians in 2002,
which directed physicians to use the CPT codes when billing
MassHealth and further stated that MassHealth "pays for most of
the Centers for Medicare and Medicaid Services [Healthcare]
Common Procedure Coding System (HCPCS) codes" (HCPCS codes).
HCPCS does not incorporate the CMS guidelines. Instead, the
HCPCS is comprised of the CPT codes that document physician
services along with another coding system used for products and
services not covered by the CPT manual. Jacobs argues that
MassHealth cannot purport to cover the HCPCS codes while
necessarily involves some degree of clinical judgment. This
clinical judgment must, however, meet "professionally recognized
standards of health care." 130 Code Mass. Regs. § 450.204(B)
(2017). Dr. Siegel did nothing more than offer his expert
opinion on the factual question whether Jacobs's clinical
judgment fell within professionally recognized standards of
care.
12
ignoring how those codes have been interpreted by the CMS
guidelines. We see no such logical inconsistency. As a
preliminary matter, Jacobs has not pointed to anything in the
record, nor do we see anything, that provides that the HCPCS
codes must be interpreted using the CMS guidelines. The
information in the record regarding the HCPCS codes instead
indicates that they incorporate the CPT codes while also
providing additional codes for medical equipment not addressed
in the CPT codes. The statement that MassHealth covers most of
the HCPCS codes is thus entirely consistent with MassHealth's
practice of interpreting the CPT codes using the CPT manual in
and of itself. In fact, the CMS guidelines refer readers to the
CPT manual for "complete descriptors . . . and instructions" for
selecting a CPT code.8
Jacobs also argues that the CPT codes and manual are
inherently vague unless interpreted using the CMS guidelines.
Because this case does not concern criminal activity or present
concerns involving the First Amendment to the United States
Constitution, our inquiry is limited to whether the CPT codes
8 Jacobs's reliance on G. L. c. 118E, § 62 (a), which
provides that "the executive office of health and human services
. . . shall, without local customization, accept and recognize
patient diagnostic information and patient care services and
procedure information submitted pursuant to, and consistent
with, . . . the Centers for Medicare and Medicaid Services
Healthcare Common Procedure Coding System," is unpersuasive for
the same reason.
13
and manual are vague as applied to Jacobs. See Daddario v. Cape
Cod Comm'n, 56 Mass. App. Ct. 764, 771 (2002). For Jacobs's
argument to succeed, the CPT codes and manual must be so vague
that people "of common intelligence must necessarily guess at
[their] meaning and differ as to [their] application," thereby
subjecting people to "untrammeled" discretion (quotations and
citation omitted). Id. at 770. See Caswell v. Licensing Comm'n
for Brockton, 387 Mass. 864, 873 (1983).
Applying these standards, we have no difficulty concluding
that Jacobs's argument regarding the vagueness of the CPT codes
and manual is without merit. As noted supra, use of CPT code
99214 requires two of the following three components: a
"detailed history," a "detailed examination," and "medical
decision-making of moderate complexity." The CPT manual
describes each of these components. A "detailed history" means
"chief complaint; extended history of present illness; problem
pertinent system review extended to include a review of a
limited number of additional systems; pertinent past, family,
and/or social history directly related to the patient's
problems."9 A "detailed examination" involves "an extended
examination of the affected body area(s) and other symptomatic
9 The CPT manual further describes what is meant by "chief
complaint," "history of present illness," "system review,"
"family history," "past history," and "social history."
14
or related organ system(s)." Lastly, the CPT manual provides
physicians with three different factors to use in determining
whether a medical decision is moderately complex: (1) the
"[n]umber of [d]iagnoses or [m]anagement [o]ptions," (2) the
"[a]mount and/or [c]omplexity of [d]ata to be [r]eviewed," and
(3) the "[r]isk of [c]omplications and/or [m]orbidity or
[m]ortality."
There is simply no objective standard by which the
examinations at issue satisfied these requirements for use of
CPT code 99214. As found by the hearing officer, there was
insufficient documentation of a detailed history including "past
history, family history, and/or social history" across office
visits, and Jacobs's examinations were "rote." Jacobs does not
challenge these findings, which are amply supported by the
record, on appeal. In particular, we note the record is replete
with examples of insufficient documentation to support that
Jacobs conducted any cardiovascular and respiratory examinations
and the frequency with which Jacobs billed using CPT code 99214
for the same "rote" examinations oriented around providing
prescription refills.
2. Due process. Jacobs also argues that his due process
rights were violated. In large part, this argument stems from a
limitation that the hearing officer placed on Jacobs's ability
15
to cross-examine Dr. Siegel.10 Jacobs points to two sections of
the transcript, one in which he sought to cross-examine Dr.
Siegel on the definitions of words used in the CPT manual and
another in which he sought to cross-examine Dr. Siegel regarding
office visits for which MassHealth agreed that Jacobs correctly
billed.
In addressing Jacobs's due process argument, we begin by
noting that administrative agencies have wide discretion in
ruling on evidence, Rate Setting Comm'n v. Baystate Med. Ctr.,
422 Mass. 744, 752 (1996), and the strict rules of evidence do
not apply in such proceedings unless otherwise provided by law
or unless an agency elects to follow such rules. See G. L.
c. 30A, § 11 (2);11 Mass. G. Evid. § 1101(c)(3) (2019). Even if
10Jacobs also asserts that his due process rights were
violated because the hearing officer purportedly showed bias in
favor of MassHealth by allowing counsel for MassHealth to pass
notes to Dr. Siegel while Dr. Siegel was testifying. The record
does not support this and instead reflects that the hearing
officer warned everyone about passing notes as follows: "So,
let me just establish one thing. Can you stop passing notes,
and we will just end that, since it is such a source of
consternation. Let the witness testify. Same on this side.
The witness testifies without coaching."
11General Laws c. 30A, § 11 (2), provides as follows:
"Unless otherwise provided by any law, agencies need not observe
the rules of evidence observed by courts, but shall observe the
rules of privilege recognized by law. Evidence may be admitted
and given probative effect only if it is the kind of evidence on
which reasonable persons are accustomed to rely in the conduct
of serious affairs. Agencies may exclude unduly repetitious
evidence, whether offered on direct examination or cross-
examination of witnesses."
16
the rules of evidence applied, however, we see no abuse of
discretion in the limitations that the hearing officer placed on
cross-examination here.
Regarding the words used in the CPT manual, as stated by
the hearing officer, the matter had been covered "ad nauseam."
See Clark v. Clark, 47 Mass. App. Ct. 737, 746 (1999) ("judge
has the ability to see that the cross-examination progresses
without repetitious and irrelevant inquiries"). Regarding the
office visits for which MassHealth agreed that Jacobs correctly
billed, Jacobs asserts that he should have been allowed to
question Dr. Siegel regarding his opinion as to those office
visits "to allow them to be used in contrast to or in comparison
with visit notes where [MassHealth] did not agree with the code
used." This argument fails because the hearing officer's
limitation was not on this type of comparison but instead with
the general nature of Jacobs's questions regarding office visits
that were not in dispute. As the hearing officer explicitly
told Jacobs, he could "ask other questions that may be relevant
to eliciting that information or offer it on direct" by
"offer[ing] a comparison of [the] dates of service." Especially
where Jacobs was given ample opportunity to cross-examine
MassHealth's witnesses and present his own case over twenty-
eight days of testimony, the two limitations on cross-
17
examination do not support his argument that his due process
rights were violated.
Judgment affirmed.