Third District Court of Appeal
State of Florida
Opinion filed August 31, 2016.
Not final until disposition of timely filed motion for rehearing.
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No. 3D15-2092
Lower Tribunal No. 13-0795 MPI
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Alfred Ivan Murciano, M.D.,
Appellant,
vs.
State of Florida, Agency for Health Care Administration,
Appellee.
An Administrative Appeal from the State of Florida, Agency for Health
Care Administration.
Akerman LLP and Katherine E. Giddings and Michael J. Larson
(Tallahassee); Holland & Knight and Rodolfo Sorondo, Jr., for appellant.
Tracy Cooper George (Tallahassee), Chief Appellate Counsel, for appellee.
Before LAGOA, EMAS and LOGUE, JJ.
EMAS, J.
Alfred Ivan Murciano, M.D. (“Dr. Murciano”) appeals an amended order of
the Agency for Health Care Administration (“AHCA”), requiring him to repay
AHCA $1,265,741.45 for Medicaid overpayments, following a peer review audit.
We affirm, and hold, on the central issue raised, that AHCA correctly construed
the statutory definition of “peer” under section 409.9131(2)(c), Florida Statutes
(2013).
BACKGROUND
Dr. Murciano is a physician, licensed to practice medicine in Florida. He
specializes in pediatrics, has a subspecialty in infectious diseases, and is an
authorized Medicaid provider. Dr. Murciano does not have an office practice, and
provides services solely in a hospital setting, specifically in neonatal and pediatric
intensive care units in hospitals in Miami-Dade, Broward and Palm Beach
Counties.
Prior to January 2013, AHCA conducted an audit of Dr. Murciano’s claims
for Medicaid reimbursement for the period of September 1, 2008 through August
31, 2010. As part of the audit process, Dr. Murciano was required to submit
documentation in support of the services he had provided and billed for during the
relevant time period. That documentation was then reviewed preliminarily by a
reviewing nurse. Thereafter, AHCA’s peer review coordinator assigned, from a
list of physician peer reviewers who contract with AHCA for this purpose, Dr.
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Keith O’Hern to conduct a “peer review”1 of Dr. Murciano’s documentation. At
the conclusion of the peer review and audit, AHCA determined Dr. Murciano had
been overpaid by Medicaid for his services in the amount of $1,051,992.99.2
AHCA sought repayment of this amount, along with a fine of $210,398.60 and the
audit costs of $3,349.86, for a total of $1,265,741.45.
Following AHCA’s determination, Dr. Murciano requested a formal
administrative hearing pursuant to section 120.569, Florida Statutes (2013).
AHCA referred the matter to the Division of Administrative Hearings (“DOAH”),
which was assigned to Administrative Law Judge Todd P. Resavage (“the ALJ”).
The formal hearing took place on January 21, 2014, and May 22, 2014.
1 Under section 409.9131(5)(b), Florida Statutes (2013), in determining that a
Medicaid overpayment has been made to a physician, AHCA must “[r]efer all
physician service claims for peer review when the agency’s preliminary analysis
indicates that an evaluation of the medical necessity, appropriateness, and quality
of care needs to be undertaken to determine a potential overpayment, and before
any formal proceedings are initiated against the physician, except as required by s.
409.913.”
Pursuant to section 409.9131(2)(b), a “peer” is defined as follows:
“Peer” means a Florida licensed physician who is, to the maximum
extent possible, of the same specialty or subspecialty, licensed under
the same chapter, and in active practice.
2 AHCA’s Final Audit Report indicated one portion of this amount was due to the
fact that Dr. Murciano’s documentation supported a “lower level of office visit
than the one for which [he] billed and received payment,” and the other portion
was due to the fact that Dr. Murciano failed to submit any documentation for
certain services for which he billed and received payment from Medicaid.
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Thereafter, the ALJ issued its Recommended Order, recommending AHCA
dismiss its Final Audit Report. Specifically, and of significance, the ALJ found, in
its “Conclusions of Law,” that Dr. Murciano’s peer review was conducted by a
physician (Dr. O’Hern) who did not meet the statutory definition of “peer” as
required by Florida law for a determination of overpayment, and that therefore,
AHCA’s case must be dismissed.
AHCA filed timely exceptions to the ALJ’s Recommended Order, asserting
that Dr. O’Hern was a peer of Dr. Murciano as defined by section 409.9131 and
further, that the ALJ was required to defer to AHCA’s interpretation of the term
“peer” as this was a conclusion of law. AHCA also asserted it was reversible error
to dismiss the entire case because a portion of the overpayment determination
(forty-four per cent, according to AHCA) was based upon Dr. Murciano’s failure
to provide any supporting documentation for certain claims, which, under the
statutory framework, requires no peer review at all. AHCA requested that the
Recommended Order be set aside and that the matter be remanded to DOAH for a
de novo hearing.
Thereafter, AHCA’s agency clerk remanded the matter back to the ALJ,
finding the ALJ departed from the essential requirements of the law by concluding
Dr. O’Hern did not meet the definition of a peer under section 409.9131; by failing
to give deference to AHCA’s interpretation of the statute; and by failing to make
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specific factual findings on the claims at issue. The agency clerk also issued a
“partial final order,” specifically finding that Dr. O’Hern was Dr. Murciano’s
“peer” as defined by Florida law “because he too has a Florida medical license, is a
pediatrician and had an active practice at the time he reviewed [Dr. Murciano’s]
records.”
On July 24, 2014, and again on August 18, 2014, the ALJ declined the
remand, finding that there were no “exceptional circumstances” for remand, and
reaffirmed his previous recommendation that AHCA issue a final order dismissing
the Final Audit Report.
In response, AHCA filed a petition for writ of mandamus in the First District
Court of Appeal (Case No. 1D14-3836), asserting there were exceptional
circumstances for AHCA’s remand because the ALJ refused to make necessary
factual findings based solely on his erroneous conclusion that Dr. O’Hern did not
meet the definition of “peer” under section 409.9131(2)(c). Further, AHCA argued
that its interpretation of the term “peer” was reasonable and should have been
given deference. AHCA requested the First District to order the ALJ to perform
his legal duty on remand to make the requested findings of fact and conclusions of
law.
The First District, treating the petition as one for review of non-final agency
action pursuant to section 120.68(1), Florida Statutes (2014), agreed with AHCA
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that the ALJ departed from the essential requirements of law by failing to make
factual findings on all of the contested Medicaid claims, but declined to reach the
substantive question of whether the ALJ should have deferred to AHCA’s
interpretation of the word “peer,” and whether the determination that some of the
Medicaid claims were not supported by sufficient documentation must be made by
a “peer.” State v. Murciano, 163 So. 3d 662 (Fla. 1st DCA 2015).
On remand, the ALJ again found that Dr. O’Hern was not a “peer” of Dr.
Murciano (this time, the ALJ’s finding was located under “Findings of Fact” rather
than under “Conclusions of Law,” where it had been located in its previous order),
and accordingly, the ALJ found that an appropriate peer review was not conducted
before formal proceedings were initiated, as required by section 409.9131(5)(b).
However, recognizing the directives set forth in the First District’s opinion, the
ALJ nevertheless made findings of fact as to the claims of overpayment. In doing
so, the ALJ determined that AHCA “established a prima facie case of overpayment
and proved, by a preponderance of the evidence, that [Dr. Murciano] was overpaid
in the amount claimed in the Final Audit Report [$1,051,992.99].” The ALJ
further determined that AHCA was entitled to costs and to impose an
administrative fine of $6,000. The ALJ’s ultimate recommendation was that
AHCA issue a final order finding Dr. Murciano was overpaid, and therefore that he
is liable for reimbursement to AHCA.
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After exceptions to the Recommended Order on Remand were filed, AHCA
issued its Amended Final Order, requiring Dr. Murciano to repay $1,051,992.99
plus interest, a fine and costs. AHCA found that the issue of whether O’Hern was
a statutorily-defined peer was a conclusion of law over which AHCA has
substantive jurisdiction, and that therefore AHCA could reject the ALJ’s
determination on that issue. AHCA again determined that Dr. O’Hern was a peer
of Dr. Murciano as defined by statute. AHCA also rejected the other exceptions
raised by Dr. Murciano.3
This appeal followed. Dr. Murciano contends that AHCA erred in finding
that Dr. O’Hern was Dr. Murciano’s peer, as statutorily defined, and that AHCA
erred in reversing the ALJ’s contrary determination. Dr. Murciano asserts that
because this was a question of fact, it was within the sole province of the ALJ.
Further, Dr. Murciano argues because the required peer review was not performed
by a statutorily-qualified peer, he should not be required to pay the overpayment
3 AHCA also determined that “the First District Court of Appeal supported the
Agency’s conclusions on this issue by finding that ‘the ALJ departed from the
essential requirements of law in declining AHCA’s second request to make factual
findings on all of the contested claims in light of AHCA’s legal conclusion that Dr.
O’Hern met the statutory definition of ‘peer.’’” We reject this contention. The
issue of whether Dr. O’Hern was a statutorily-qualified peer was not reached by
the First District, which determined only that the ALJ had a non-discretionary,
ministerial duty to make findings of fact given AHCA’s determination that Dr.
O’Hern was a statutorily-qualified peer. See State v. Murciano, 163 So. 3d at 665.
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and this court should reverse with directions to AHCA to enter an order dismissing
AHCA’s Amended Final Order.
AHCA argues that the question of whether Dr. O’Hern was a peer, as
statutorily defined, is a question of law and one within its purview as the agency
administering the law, and therefore, that it is not required to give any deference to
the ALJ’s determination on this issue. Further AHCA argues that the plain
language of the statute supports its reasonable interpretation, and that based on this
and the ALJ’s other factual findings, this court should affirm the Amended Final
Order.
ANALYSIS
The central question raised by this appeal is whether AHCA erred in
determining that Dr. O’Hern met the statutory requirements of a “peer” under
section 409.9131(2)(b). To the extent that this involves questions of fact, this court
must “review[] the agency’s findings of fact to determine whether they are
supported by competent, substantial evidence in the record.” United States Blood
Bank, Inc. v. Agency for Workforce Innovation, 85 So. 3d 1139, 1142 (Fla. 3d
DCA 2012) (citing section 120.68(7)(b), Fla. Stat. (2011)). However, to the extent
this involves a question of law, we review the issue de novo but, in doing so, this
court must give “great deference to the agency’s interpretation of the statutory
policy it is to administer . . . [and] be moved to intervene only by clearly erroneous
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interpretations of a statute or findings of fact not supported by competent
substantial evidence.” Bethesda Healthcare Sys., Inc. v. Agency for Health Care
Admin., 945 So. 2d 574, 576 (Fla. 4th DCA 2006). See also Brennan v. City of
Miami, 146 So. 3d 119, 123 (Fla. 3d DCA 2014) (holding that “[i]f the agency’s
interpretation is ‘within the range of possible and reasonable’ interpretations, it is
not clearly erroneous and should be affirmed”); C.D. v. Agency for Persons with
Disabilities, 95 So. 3d 383, 384 (Fla. 3d DCA 2012) (holding that “[a]n agency’s
conclusions of law are reviewed de novo, however, ‘an agency’s interpretation of a
statute it is charged with enforcing is entitled to great deference’”) (internal
quotations omitted).
Under section 120.57(1)(l), Florida Statutes (2015), after the ALJ has
submitted a recommended order, AHCA “may reject or modify the conclusions of
law over which it has substantive jurisdiction.” When doing so, “the agency must
state with particularity its reasons for rejecting or modifying such conclusion of
law . . . and must make a finding that its substituted conclusion of law . . . is as or
more reasonable than that which was rejected or modified.” Id. However, as to
the ALJ’s findings of fact, AHCA may not reject or modify those findings “unless
the agency first determines from a review of the entire record, and states with
particularity in the order, that the findings of fact were not based upon competent
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substantial evidence or that the proceedings on which the findings were based did
not comply with essential requirements of law.” Id.
We conclude that the question presented—whether Dr. O’Hern is a “peer”
of Dr. Murciano—as statutorily defined, is ultimately a legal question. While this
ultimate legal determination is informed by underlying facts (which the ALJ would
be in the best position to adjudicate), the facts material to the resolution of this
issue are not in dispute. It is undisputed that Dr. O’Hern was:
- Of the same specialty (board certified in pediatrics);
- Licensed under the same chapter; and
- In active practice.
It is further undisputed that Dr. O’Hern was not of the same subspecialty as
Dr. Murciano: while Dr. Murciano was board certified in the subspecialty of
pediatric infectious diseases, Dr. O’Hern was not.4 Dr. O’Hern had no board
certification in infectious diseases, although he did complete a one-year fellowship
in infectious disease in 1978, during his training at the University of Florida. Dr.
O’Hern also treated a number of pediatric patients for infectious diseases during
his thirty-seven-year medical career.
4 According to the American Board of Medical Specialties, pediatrics is a specialty
for which a medical doctor may become board certified; pediatric infectious
diseases is a subspecialty for which one may also become board certified. See
ABMS Guide to Medical Specialties, available at http://www.abms.org/member-
boards/specialty-subspecialty-certificates/ (last visited August 8, 2016).
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Therefore, in construing the statutory provision in question, and the
application of that statute to the undisputed facts, all that remains is the legal
determination of whether, under the statute and these undisputed facts, Dr. O’Hern
is, “to the maximum extent possible, of the same specialty or subspecialty.”
As stated above, section 409.9131(2)(b) defines a “peer” as follows:
“Peer” means a Florida licensed physician who is, to the maximum
extent possible, of the same specialty or subspecialty, licensed under
the same chapter, and in active practice.
Dr. Murciano contends, in effect, that the only reasonable interpretation of
the statute requires a conclusion that Dr. O’Hern is not a “peer” because he is not
of the same specialty and subspecialty as Dr. Murciano. We do not agree. To
adopt the statutory construction urged by Dr. Murciano would ignore the plain
language of the statute, and violate a fundamental principle of statutory
construction:
It is a fundamental principle of statutory interpretation that legislative
intent is the “polestar” that guides this Court's interpretation. We
endeavor to construe statutes to effectuate the intent of the
Legislature. To discern legislative intent, we look “primarily” to the
actual language used in the statute. Further, “[w]hen the statute is
clear and unambiguous, courts will not look behind the statute's plain
language for legislative intent or resort to rules of statutory
construction to ascertain intent.” Daniels v. Fla. Dep't of Health, 898
So.2d 61, 64 (Fla.2005).
Borden v. East-European Ins. Co., 921 So. 2d 587, 595 (Fla. 2006) (internal
citations omitted).
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We find no ambiguity in the statutory language employed by the Florida
Legislature. We conclude that the statutory language “of the same specialty or
subspecialty” denotes a disjunctive application. The use of the word “or” in a
statute is generally construed in the disjunctive, and normally indicates that
alternatives were intended. Sparkman v. McClure, 498 So. 2d 892, 895 (Fla.
1986); Piper Aircraft Corp. v. Schwendemann, 564 So. 2d 546, 548 (Fla. 3d DCA
1990). Applying this general rule to the plain language of section 409.9131(2)(b),
we hold that Dr. O’Hern was a “peer,” as he was, to the maximum extent possible,
of the same specialty or subspecialty as Dr. Murciano.
We do not ignore Dr. Murciano’s argument that a peer who is both a board
certified specialist in pediatrics and a board certified subspecialist in infectious
diseases might be more desirable as a peer reviewer for Dr. Murciano. And while
the statute would permit the use of a peer reviewer who is of the same specialty
and subspecialty, the statute does not require it. If such were a requirement, the
Legislature would have utilized different statutory language; for example, it might
have provided:
“Peer” means a Florida licensed physician who is, to the maximum
extent possible, of the same specialty and, if applicable, of the same
subspecialty, licensed under the same chapter, and in active practice.
Given the plain and unambiguous statutory language used, we must presume
that the Legislature said what it meant and meant what it said, and conclude that
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AHCA’s interpretation of the statute, and its application to the undisputed material
facts in this case, was “within the range of possible and reasonable interpretations.”
Brennan, 146 So. 3d at 123.5
CONCLUSION
In light of our holding that the determination below was a legal one, and our
further holding that the statutory construction was reasonable, ACHA was
authorized to reject the ALJ’s legal conclusion that Dr. O’Hern was not a peer
under the statute. See § 120.57(1)(l) (providing that AHCA may “reject or modify
the conclusions of law over which it has substantive jurisdiction.”); Pub.
Employees Relations Comm’n v. Dade Cnty. Police Benevolent Ass’n, 467 So. 2d
987, 989 (Fla. 1985) (holding Public Employees Relations Commission, and not
the hearing officer, has ultimate authority to administratively interpret applicable
5 For example, AHCA might determine that under the circumstances of a particular
audit, it might be more appropriate for the peer reviewer and doctor to be of the
same specialty, rather than of the same subspecialty. Further, the statutory
language “to the maximum extent possible” provides some deference to AHCA to
implement its peer review process and exercise its discretion, given that it must
select its peer reviewer from a finite list of medical professionals who contract with
AHCA to perform peer reviews. See § 409.9131(5)(b), Fla. Stat. (2013) (requiring
AHCA to refer all physician service claims for peer review before any formal
proceedings may be initiated against the physician). See also McKenzie Check
Advance of Fla., LLC v. Betts, 928 So. 2d 1204, 1215-16 (Fla. 2006) (observing
that, although the courts are the final authority on the interpretation of a statute,
courts “can benefit from an agency’s unique combination of technical knowledge
and practical experience,” which is why “deference usually will be accorded an
administrative agency’s interpretation of matters entrusted by statute to its
discretion or expertise”)(additional citations omitted).
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statute, and that the Commission has the authority to overrule a statutory
interpretation made by one of its hearing officers).
Affirmed.
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