Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BS096758, David P. Yaffe, Judge.
Law Offices of Greer & Associates and C. Keith Greer for Plaintiff and Appellant.
Edmund G. Brown, Jr., Attorney General, Douglas M. Press, Assistant Attorney General, Richard T. Waldow and Kyungah Suk, Deputy Attorneys General, for Defendant and Respondent.
KLEIN, P. J.
Plaintiff and appellant Simi Soltani, D.P.M., a podiatrist and Medi-Cal provider, appeals a judgment denying her petition for writ of administrative mandate (Code Civ. Proc., § 1094.5), wherein Soltani sought to overturn a decision by defendant and respondent California Department of Health Services (Department) determining that Soltani owed the Department $179,229 for overpaid claims.
We conclude Soltani has failed to show any error in the disallowance of her claims. Therefore, the judgment denying the petition for writ of mandate is affirmed.
FACTUAL AND PROCEDURAL BACKGROUND
The Department conducted an audit of Soltani for the period of January 7, 1999 through November 16, 2001. On August 29, 2003, the Department issued a summary of findings. The Department determined that of the $521,048 claimed and paid to Soltani for the fiscal period, there had been a Medi-Cal overpayment of $284,335 and the Department sought recovery of that sum.
In response to the repayment demand, Soltani filed an administrative appeal and statement of disputed issues.
On March 18, 2004, the matter came on for hearing before an administrative law judge (ALJ). The Department’s final decision denied the appeal in part and granted it in part. As a result, the initial overpayment amount of $284,335 was reduced to $179,229.
On May 10, 2005, Soltani filed a petition for writ of administrative mandate challenging the adverse parts of the Department’s decision.
The specific issues raised in Soltani’s petition, as well as the trial court’s ruling thereon, will be discussed in the Discussion section of the opinion.
On April 26, 2006, the matter came on for hearing. The trial court denied the petition. Soltani filed a timely notice of appeal from the judgment.
CONTENTIONS
Soltani contends: the ALJ erred in sustaining the overpayment under Reason Code B because the ALJ erroneously analyzed and supported his finding on an incorrect issue; Soltani should be reimbursed for extraordinary surgical supplies she used in providing covered services; and she should be paid for all dispensed shoe inserts.
DISCUSSION
1. Standard of review.
In the case before us, the Department was dealing with Soltani’s billings as a Med-Cal provider. Although the Department’s determination had an economic impact, Soltani had no vested right to payment. Therefore, the determination with respect to Soltani’s claims “is the type of decision as to which courts have traditionally deferred to the administrative agency’s expertise by applying the substantial evidence test on review.” (Pacific Coast Medical Enterprises v. Department of Benefit Payments (1983) 140 Cal.App.3d 197, 208 (Pacific Coast).)
Where the substantial evidence test applies at the trial court level, the same scope of review applies at the appellate court level. Therefore, the appellate court determines whether the agency’s findings are supported by substantial evidence. (Bixby v. Pierno (1971) 4 Cal.3d 130, 149; Pacific Coast, supra, 140 Cal.App.3d at pp. 208-209.)
In the instant case, Soltani asserts the focus of her appeal is that “the trial court made substantial mistakes of law.” Where no challenge “to the factual findings is made, the appellate court need only determine whether the Department’s ruling was so arbitrary and capricious as to amount to an abuse of discretion. [Citation.]” (Intercommunity Medical Center v. Belshé (1995) 32 Cal.App.4th 1708, 1711.)
To the extent the case involves the interpretation of a statute, which is a question of law, we engage in a de novo review of the trial court’s determination. (Silver v. Los Angeles County Metropolitan Transportation Authority (2000) 79 Cal.App.4th 338, 348.)
However, an agency’s interpretation of its own regulations is given great weight (Intercommunity Medical Center v. Belshé, supra, 32 Cal.App.4th at p. 1711) and an administrative ruling comes before the court with a presumption of correctness and regularity, which places the burden of demonstrating invalidity upon the appellant. (California Assn. of Nursing Homes etc., Inc. v. Williams (1970) 4 Cal.App.3d 800, 810; O’Connor v. State Teachers’ Retirement System (1996) 43 Cal.App.4th 1610, 1620.)
2. Trial court properly found the Department’s decision to deny Soltani’s Medi-Cal claims based on Reason Code B was not arbitrary or capricious; a prescription, without evidence that it was dispensed or fitted, is insufficient to support a claim.
The administrative record contains an exhibit which lists the auditor’s Schedule of Reason Codes for denying Soltani’s Medi-Cal claims. Reason Code B provides: “The medical records contained no evidence that the orthotic or appliance was prescribed, dispensed or fitted. (22 CCR 51476(a).)” (Italics added.)
The cited regulation, California Code of Regulations, title 22, section 51476(a) provides:
The parties stipulated to extrapolation methodology and that for Reason Code B, one chart would be presented for analysis. With respect to said chart, the parties stipulated that there was a “lack of documentation of dispensing and fitting” (italics added), although there was evidence of a prescription supporting the claim.
Soltani contends that because the chart contained a prescription, and the only issue was whether the medical records contained evidence that the orthotic or appliance was either prescribed, dispensed or fitted, the ALJ should have found in Soltani’s favor on this issue. The trial court found this contention lacks merit and we agree.
A prescription, standing alone, is insufficient to entitle a provider to reimbursement. The Department’s Reason Code B refers to California Code of Regulations, title 22, section 51476(a), which states in relevant part: “(a) Each provider shall keep, maintain, and have readily retrievable, such records as are necessary to fully disclose the type and extent of services provided to a Medi-Cal beneficiary. Required records shall be made at or near the time at which the service is rendered. Such records shall include, but not be limited to the following: [¶] . . . [¶] (4) Records of medications, drugs, assistive devices, or appliances prescribed, ordered for, or furnished to beneficiaries.” (Italics added.) Therefore, a prescription, without more, is insufficient to establish the services which were actually rendered to a Medi-Cal beneficiary.
In view of Soltani’s stipulation that the chart in issue lacked “documentation of dispensing and fitting, ” the Department properly disallowed the claim based on Reason Code B.
In a related contention, Soltani asserts a review of the ALJ’s analysis “clearly indicates that the ALJ intended to grant [Soltani’s] appeal under Reason Code B.” In support, Soltani cites a finding by the ALJ that “this tribunal finds that the record was sufficient to meet the ‘prescription’ requirement of [California Code of Regulations, title 22, ] section 51315(a).” Soltani emphasizes “[t]he only requirement under the law was that there must be a prescription.”
The argument fails. To reiterate, in addition to evidence of a prescription, the provider is required to furnish documentation “necessary to fully disclose the type and extent of services provided to a Medi-Cal beneficiary.” (Cal. Code Regs., tit. 22, § 51476(a), italics added.) Therefore, we reject Soltani’s contention the ALJ intended to find for her on this issue.
Soltani also contends the ALJ erroneously reviewed the chart produced under Reason Code B for an issue that was to be addressed under Reason Code F. The argument fails.
Reason Code F states: “The provider billed for dates of service not supported by the medical charts. The medical charts contained no evidence that a service was performed on or around the dates claimed.”
In reviewing the subject chart, the ALJ found the date of service could not be established from the patient record because the first page of the chart indicated a date of service of January 13, 1999, but the patient’s signature was dated December 13, 1999 and the provider’s billing reflected a service date of December 26, 1999.
Although the issue at that juncture was Reason Code B (evidence that orthotic or appliance was prescribed, dispensed or fitted) and not Reason Code F (provider billed for dates of service not supported by the medical charts), Soltani’s failure to establish what, if anything, was actually dispensed or fitted on the subject chart implicated both Reason Code B and Reason Code F.
Moreover, irrespective of the sample chart’s date of service (Reason Code F), Soltani’s attorney conceded at the hearing before the ALJ that the sample chart lacked “written confirmation of dispensing or fitting.”
Said deficiency in the sample chart was sufficient for the Department to disallow the claim pursuant to Reason Code B [no evidence that orthotic or appliance was prescribed/dispensed/fitted].
3. Failure to obtain preauthorization for surgery precludes recovery for surgical supplies used in said surgeries.
The issue here is Soltani’s claim she is entitled to reimbursement for surgical supplies she used in performing certain surgeries, which surgeries were performed without preauthorization.
The pertinent Reason Code is Reason Code E, namely, “The provider did not obtain prior authorization for using podiatry surgical supplies.”
With respect to Reason Code E, the parties stipulated: “[Soltani] did not bill for surgery but rather for evaluation and management, but that surgical supplies were used. [Soltani] did not submit a Treatment Authorization Request (TAR) related to the surgical supplies for which [she] billed. It was further stipulated that the Department’s position is that TAR for surgery must be approved before a claim for surgical supplies may be submitted and paid.”
Soltani asserts she is entitled to reimbursement for surgical supplies she used in performing nail debridement, a minor surgical procedure, irrespective of the fact that she did not obtain preapproval for the surgery itself. Soltani explained she did not submit a TAR in certain cases because it takes one or two months for the TAR to be processed and meanwhile “the patient is suffering from pain. So I prefer to lose the money and not get paid, but the patient gets the comfort.” Therefore, she went ahead and performed the surgery without obtaining a TAR and she did not bill Medi-Cal for the surgery. However, she was seeking reimbursement for the surgical supplies that she used in performing said surgery.
The Department responds that even thought Soltani’s action of not charging for the surgery “may be commendable, ” there is no authority under which a provider can be reimbursed for supplies used in performing a surgery which was performed without preauthorization.
In ruling on this issue, the trial court stated: “[Soltani’s] contention, that the supplies used in the procedure are reimbursable although the procedure is not, is without merit so long as the supplies would not have been furnished if the procedure had not been performed. It makes no sense to allow reimbursement for the sponges, bandages, and anesthetic used in the surgery, if the surgery itself was not eligible for reimbursement, and it was not an abuse of discretion for the ALJ to so hold.”
We agree. The Department did not act arbitrarily or capriciously in disallowing payment for the subject surgical supplies. Allowing a provider to receive reimbursement for surgical supplies utilized in the course of an unauthorized surgery would be inconsistent with the requirement that a provider obtain approval prior to performing surgery. Soltani’s failure to secure authorization in advance of the surgeries precludes reimbursement for surgical supplies she used in performing said surgeries.
4. Denial of claim for orthotic appliances.
a. Administrative proceedings.
Soltani made numerous billings under procedure codes L3040 (Foot Inserts: Removable, premolded, longitudinal, each) and L3060 (Foot Inserts: Removable, premolded, longitudinal/metatarsal, each). In support, Soltani introduced evidence of invoices reflecting her purchase of hundreds of items of “RCO 700 PRE-FAB Spenco-cov” and “PRE-FAB SPENCO COVER.”
At the administrative hearing, Dr. Cynthia Ann Smith, a podiatric consultant, testified for the Department as an expert witness. With respect to the items described on the invoices, Dr. Smith stated: “Sounds like a prefabricated device with a Spenco cover.” Dr. Smith then was asked: “Could it possibly be an L3040 or an L3060?” She responded: “I can’t tell you that.”
The Department’s counsel then asked: “If I were to tell you that these items on a particular invoice were six dollars each, . . . does the dollar amount help you at all?” Dr. Smith replied: “It tells me that it’s a Spenco insole. It’s just the insole. It’s not . . . an insert. It’s not an orthotic device. It’s just an insole that you would put over the top of something to give some cushioning.” (Italics added.) Therefore, according to Dr. Smith, the invoiced items did not fit within procedure codes L3040 or L3060.
b. Trial court’s ruling.
In this regard, the trial court ruled: “[Soltani] contends that she is wrongly required by the administrative decision to reimburse Medi-Cal for $107,544.00 that she billed to and collected from the state for providing orthotic shoe inserts to several hundred patients during the test period for which petitioner’s claims for reimbursement were audited. The items were billed to Medi-Cal under two billing codes which are used to describe an orthotic device called a ‘foot insert: removable, pre-molded, longitudinal.’ [Soltani] supported the charges by producing invoices that showed that she purchased several items described as a ‘prefabbed orthotic spenco cover.’ The auditor rejected all claims for reimbursement for such device on the ground that it could not be determined from [Soltani’s] invoices that the document furnished to Medi-Cal patients was a removable, pre-molded, longitudinal foot insert. [The Department] produced expert testimony at the administrative hearing that the items described in petitioner’s invoices, for which petitioner paid $6.00 each, are not the removable, pre-molded, longitudinal foot inserts for which [Soltani] was reimbursed in the sum of either $38.64, or $42.00, each. Such expert testimony constitutes substantial evidence to support the administrative decision. [Soltani] has the burden of proving otherwise in this proceeding, and has failed to do so. The burden placed upon [Soltani] could easily have been met by supplying the ALJ with either the device itself or a photograph of it so there would be some evidence in the administrative record to support [Soltani’s] position. [Soltani] cites to no such evidence.”
c. Substantial evidence supports the administrative decision denying reimbursement for the alleged orthotic inserts.
Soltani contends the Department acted arbitrarily and capriciously in disallowing reimbursement for the orthotic inserts because there is no requirement that the invoices use any particular wording. Soltani also argues she had no control over the wording on the invoices, which were prepared by the vendor or supplier. The arguments are unavailing.
It was Soltani’s obligation to maintain “such records as are necessary to fully disclose the type and extent of services provided to a Medi-Cal beneficiary.” (Cal. Code Regs., tit. 22, § 51476(a).) The Department did not act arbitrarily or capriciously in finding the invoices were insufficient. As indicated, Dr. Smith testified the items described on the invoices were merely insoles and not orthotic inserts and did not qualify under procedure codes L3040 or L3060. Said expert testimony constitutes substantial evidence to support the Department’s decision disallowing payment to Soltani for those items.
DISPOSITION
The judgment is affirmed. The Department shall recover its costs on appeal.
We concur: CROSKEY, J. KITCHING, J.
“(a) Each provider shall keep, maintain, and have readily retrievable, such records as are necessary to fully disclose the type and extent of services provided to a Medi-Cal beneficiary. Required records shall be made at or near the time at which the service is rendered. Such records shall include, but not be limited to the following:
(1) Billings.
(2) Treatment authorization requests.
(3) All medical records, service reports, and orders prescribing treatment plans.
(4) Records of medications, drugs, assistive devices, or appliances prescribed, ordered for, or furnished to beneficiaries.
(5) Copies of original purchase invoices for medication, appliances, assistive devices, written requests for laboratory testing and all reports of test results, and drugs ordered for or supplied to beneficiaries.
(6) Copies of all remittance advices which accompany reimbursement to providers for services or supplies provided to beneficiaries.
(7) Identification of the person rendering services. Records of each service rendered by nonphysician medical practitioners (as defined in Title 22, CAC, Section 51170) shall include the signature of the nonphysician medical practitioner and the countersignature of the supervising physician.”