Court Opinion

ID: 4524712
Source: CourtListenerOpinion
Date Created: 2020-04-13 12:05:38.516827+00
Date Added: 2024-06-11T12:12:15.709564
License: Public Domain

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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.