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MPS Healthcare, Inc. v. Department of Medical Assistance Services

Court of Appeals of Virginia

April 9, 2019

MPS HEALTHCARE, INC., d/b/a CONTINUUM PEDIATRIC NURSING SERVICES
v.
DEPARTMENT OF MEDICAL ASSISTANCE SERVICES/COMMONWEALTH OF VIRGINIA

          FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND Daniel T. Balfour, Judge Designate

          Belinda Jones (Jonathan M. Joseph; Harrison M. Gates; Christian & Barton, L.L.P., on briefs), for appellant.

          Usha Koduru, Assistant Attorney General (Mark R. Herring, Attorney General; Cynthia V. Bailey, Deputy Attorney General; Kim F. Piner, Senior Assistant Attorney General, on brief), for appellee.

          Present: Judges Humphreys, Petty and Chafin

          OPINION

          TERESA M. CHAFIN JUDGE.

         The Director of the Department of Medical Assistance Services ("DMAS") issued a final agency decision ("FAD") requiring that MPS Healthcare, Inc., doing business as Continuum Pediatric Nursing Services ("MPS"), reimburse DMAS for an overpayment of $63, 972.15. The decision was based on a failure to maintain adequate documentation of criminal background checks. MPS appealed to the Circuit Court for the City of Richmond, which affirmed the Department's decision. MPS now appeals to this Court, assigning error to the circuit court in (1) affirming DMAS's FAD, which rejected the hearing officer's recommendation in favor of MPS concerning the criminal background checks; (2) finding that MPS violated Code § 32.1-162.9:1(A) and 12 VAC 30-120-1730(A)(5); and (3) determining that an overpayment amount of $63, 972.15 related to Error Code 913 should be returned to DMAS. For the reasons that follow, we affirm the decision of the circuit court.

         I. BACKGROUND

         DMAS is the state agency authorized to administer the medical assistance program known as Medicaid, which is a federally and state funded program providing medical assistance to the eligible and medically indigent citizens of Virginia. The Social Security Act requires the state to establish a medical assistance plan setting forth state regulations governing Virginia's Medicaid program. 42 U.S.C. § 1396(a). DMAS is empowered to exercise administrative discretion and to issue rules, regulations, and policies on Department matters. 42 C.F.R. § 431.10(c)(1)(i) and (ii).

         The Technology Assisted Waiver Program ("Tech Waiver") is a Medicaid program that provides services to persons dependent on a medical device, and therefore, requiring ongoing nursing care for the management of the device and for everyday activities.[1] Under such a waiver program, qualifying individuals are enabled "to remain in their homes or communities instead of residing in a nursing home." 1st Stop Health Servs. v. Dep't of Med. Assistance Servs., 63 Va.App. 266, 270 (2014).

         MPS is an enrolled provider of private duty nursing services under the Medicaid program. In the Provider Participation Agreement, MPS contracted "to provide services in accordance with the Provider Participation Standards published periodically by DMAS in the appropriate Provider Manual(s) . . . ." In the same agreement, MPS agreed to "keep such records as DMAS determines necessary," and "to comply with all applicable state and federal laws, as well as administrative policies and procedures of [DMAS] as from time to time amended." Pursuant to 12 VAC 30-120-1730(A)(5), providers are required to perform criminal background checks on all employees who may have contact or provide services to the waiver individual. These background checks must be performed by the Virginia State Police.

         DMAS regulations require that providers maintain sufficient records documenting fully and accurately the nature, scope, and details of the services provided. 12 VAC 30-120-930(A)(12). "To ensure accountability, the state conducts after-the-fact audits. In order for these audits to function efficiently, uniformity and clarity of documentation is essential." 1st Stop Health Services, 63 Va.App. at 277.

         Through its internal auditors, DMAS conducted a "desk audit" of MPS's services provided to twenty-five Medicaid recipients from October 1, 2014, through December 31, 2014.[2]On August 18, 2015, the auditors requested information on MPS staff who provided care, including criminal background checks performed by the Virginia State Police. On September 9, 2015, MPS responded with invoices and proof of payment to the Virginia State Police for all but four nurses. The invoices disclosed the names of the MPS employees, the month in which the request for a background check was made, and the dates of the completed searches.

         Pat Kaufman, a DMAS Healthcare Compliance specialist, conducted the audit of MPS. On July 13, 2016, she wrote a file memorandum stating that criminal background checks were missing for a number of employees and a few supervisory employees for whom MPS had not submitted personnel files. On August 5, 2016, Kaufman sent a preliminary findings report to MPS advising it of the preliminary review and requested the submission of additional documentation regarding certain claims within thirty days of the receipt of the letter. An attached report and spreadsheet stated that certain criminal background check information was missing. The missing documentation indicated three error codes. Error Code 101 pertained to requirements for written documentation to support claims billed. Error Code 913 pertained to the requirement that a Medicaid provider perform criminal background checks and verify personal references of prospective employees. Under this error code, the auditors identified a lack of documentation for criminal record checks for three nurses. Error Code 915 pertained to the lack of personnel files, including criminal background checks, for staff.

         Pamela Hubbard, the MPS Director of Nursing, testified that MPS did not receive the August 5, 2016 letter, and thus, MPS did not send the documentation within the thirty days. On September 20, 2016, DMAS allotted five additional days for MPS to submit the missing documentation.

         On September 21, 2016, MPS sent additional documentation to DMAS excluding criminal background checks, stating that the criminal background checks were in the personnel files but could not be provided due to Virginia State Police dissemination policies. MPS stated that "[f]or each employee and registered nurse providing the supervisory visits for the recipients in question we have submitted, paid for and received back the information from the Virginia police and are maintained in a file."

         On November 14, 2016, Kaufman issued a notification and collection letter to MPS indicating that MPS was responsible for an overpayment of $74, 894.25 for services rendered in the audited time frame. The letter indicated that no documentation was submitted showing the completion of a criminal background check for three nurses. Although personnel files were submitted for five registered nurses, the files did not contain a criminal background check, nor were their names noted in the invoices submitted on September 9, 2015. These deficiencies were identified under Error Code 913. Further, the ...


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