Viera Hospital, Inc. v. Agency For Health Care Administration

IN THE DISTRICT COURT OF APPEAL
FIRST DISTRICT, STATE OF FLORIDA
NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
SARASOTA COUNTY PUBLIC CASE NO.: 1D16-5013
HOSPITAL DISTRICT d/b/a
SARASOTA MEMORIAL
HOSPITAL and SARASOTA
MEMORIAL HEALTH CARE
SYSTEM,
and
LEE MEMORIAL HEALTH CASE NO.: 1D16-5014
SYSTEM and CAPE MEMORIAL
HOSPITAL, INC.,
Appellants,
v.
FLORIDA AGENCY FOR
HEALTH CARE
ADMINISTRATION,
Appellee.
____________________________/
Lawrence J. Hamilton II, Jacksonville, and Tiffany A. Roddenberry, Tallahassee,
of Holland & Knight LLP, for Appellants.
Joseph M. Goldstein and Dan P. Daley, Fort Lauderdale, Stephen T. Maher,
Miami, Daniel E. Nordby and Amber Stoner, Tallahassee, of Shutts & Bowen
LLP; Stefan R. Grow, General Counsel, and Tracy Cooper George, Chief
Appellate Counsel for Florida Agency for Health Care Administration,
Tallahassee, for Appellee.
__________________________________________________________________
THE PUBLIC HEALTH TRUST CASE NO.: 1D16-5070
OF MIAMI-DADE COUNTY,
FLORIDA,
Appellant,
v.
AGENCY FOR HEALTH
CARE ADMINISTRATION,
Appellee.
____________________________/
Christopher Charles Kokoruda, Laura E. Wade, and Abigail Price-Williams,
Miami-Dade County Attorneys, Miami, for Appellant.
Joseph M. Goldstein and Dan P. Daley, Fort Lauderdale, Stephen T. Maher,
Miami, Daniel E. Nordby and Amber Stoner, Tallahassee, of Shutts & Bowen
LLP; Stefan R. Grow, General Counsel, and Tracy Cooper George, Chief
Appellate Counsel for Agency for Health Care Administration, Tallahassee, for
Appellee.
__________________________________________________________________
MOUNT SINAI MEDICAL CASE NO.: 1D16-5077
CENTER OF FLORIDA, INC.,
and
SHANDS JACKSONVILLE CASE NO.: 1D16-5078
MEDICAL CENTER, INC., d/b/a
UF HEALTH JACKSONVILLE,
and
BAPTIST HOSPITAL, INC., CASE NO.: 1D16-5082
2
and
INDIAN RIVER MEMORIAL CASE NO.: 1D16-5083
HOSPITAL, INC., d/b/a INDIAN
RIVER MEDICAL CENTER,
and
LAKELAND REGIONAL CASE NO.: 1D16-5084
MEDICAL CENTER, INC.,
and
SHANDS TEACHING HOSPITAL CASE NO.: 1D16-5086
AND CLINICS, INC., d/b/a UF HEALTH
SHANDS HOSPITAL,
Appellants,
v.
STATE OF FLORIDA,
AGENCY FOR HEALTH
CARE ADMINISTRATION,
Appellee.
____________________________/
Seann M. Frazier and Marc Ito, Tallahassee, and Jonathan L. Rue, Atlanta,
Georgia, of Parker, Hudson, Ranier & Dobbs, for Appellants.
Joseph M. Goldstein and Dan P. Daley, Fort Lauderdale, Stephen T. Maher,
Miami, Daniel E. Nordby and Amber Stoner, Tallahassee, of Shutts & Bowen
LLP; Stefan R. Grow, General Counsel, and Tracy Cooper George, Chief
Appellate Counsel for State of Florida, Agency for Health Care Administration,
Tallahassee, for Appellee.
__________________________________________________________________
MIAMI BEACH HEALTHCARE CASE NO.: 1D16-5092
GROUP, LTD., d/b/a AVENTURA
3
HOSPITAL AND MEDICAL
CENTER; HCA HEALTH SERVICES
OF FLORIDA, INC., d/b/a BLAKE
MEDICAL CENTER; GALENCARE,
INC., d/b/a BRANDON REGIONAL
HOSPITAL; TALLAHASSEE MEDICAL
CENTER, INC., d/b/a CAPITAL
REGIONAL MEDICAL CENTER;
CENTRAL FLORIDA REGIONAL
HOSPITAL, INC., d/b/a CENTRAL
FLORIDA REGIONAL HOSPITAL;
CITRUS MEMORIAL HOSPITAL,
INC., d/b/a CITRUS MEMORIAL
HOSPITAL; SARASOTA DOCTORS
HOSPITAL, INC., d/b/a DOCTORS
HOSPITAL OF SARASOTA;
ENGLEWOOD COMMUNITY
HOSPITAL, INC., d/b/a ENGLEWOOD
COMMUNITY HOSPITAL; FAWCETT
MEMORIAL HOSPITAL, INC., d/b/a
FAWCETT MEMORIAL HOSPITAL;
FORT WALTON BEACH MEDICAL
CENTER, INC., d/b/a FORT WALTON
BEACH MEDICAL CENTER; BAY
HOSPITAL, INC., d/b/a GULF COAST
MEDICAL CENTER; JFK MEDICAL
CENTER LIMITED PARTNERSHIP,
d/b/a JFK MEDICAL CENTER; JFK
MEDICAL CENTER LIMITED
PARTNERSHIP, d/b/a JFK MEDICAL
CENTER-NORTH CAMPUS; KENDALL
HEALTHCARE GROUP, LTD., d/b/a
KENDALL REGIONAL MEDICAL
CENTER; NOTAMI HOSPITALS OF
FLORIDA, INC., d/b/a LAKE CITY
MEDICAL CENTER; LARGO MEDICAL
CENTER, INC., d/b/a LARGO MEDICAL
CENTER; LARGO MEDICAL CENTER,
INC., d/b/a LARGO MEDICAL
CENTER-INDIAN ROCKS; LAWNWOOD
4
MEDICAL CENTER, INC., d/b/a
LAWNWOOD REGIONAL MEDICAL
CENTER & HEART INSTITUTE; NEW
PORT RICHEY HOSPITAL, INC., d/b/a
MEDICAL CENTER OF TRINITY; NEW
PORT RICHEY HOSPITAL, INC., d/b/a
MEDICAL CENTER OF TRINITY
WEST PASCO CAMPUS; MEMORIAL
HEALTHCARE GROUP, INC., d/b/a
MEMORIAL HOSPITAL JACKSONVILLE;
WEST FLORIDA - MHT, LLC, d/b/a
MEMORIAL HOSPITAL OF TAMPA;
PLANTATION GENERAL HOSPITAL
LIMITED PARTNERSHIP, d/b/a MERCY
HOSPITAL, A CAMPUS OF PLANTATION
GENERAL HOSPITAL; NORTH
FLORIDA REGIONAL MEDICAL CENTER,
INC., d/b/a NORTH FLORIDA REGIONAL
MEDICAL CENTER; GALENCARE, INC.,
d/b/a NORTHSIDE HOSPITAL; NORTHWEST
MEDICAL CENTER, INC., d/b/a
NORTHWEST MEDICAL CENTER;
HCA HEALTH SERVICES OF FLORIDA,
INC., d/b/a OAK HILL HOSPITAL;
MARION COMMUNITY HOSPITAL,
INC., d/b/a OCALA REGIONAL MEDICAL
CENTER; MARION COMMUNITY
HOSPITAL, INC., d/b/a WEST MARION
COMMUNITY HOSPITAL; ORANGE PARK
MEDICAL CENTER, INC., d/b/a ORANGE
PARK MEDICAL CENTER; OSCEOLA
REGIONAL HOSPITAL, INC., d/b/a
OSCEOLA REGIONAL MEDICAL CENTER;
WEST FLORIDA - PPH, LLC, d/b/a PALMS
OF PASADENA HOSPITAL; PALMS WEST
HOSPITAL LIMITED PARTNERSHIP, d/b/a
PALMS WEST HOSPITAL; PLANTATION
GENERAL HOSPITAL LIMITED
PARTNERSHIP, d/b/a PLANTATION
GENERAL HOSPITAL; POINCIANA
5
MEDICAL CENTER, INC., d/b/a POINCIANA
MEDICAL CENTER; PUTNAM
COMMUNITY MEDICAL CENTER OF
NORTH FLORIDA, LLC, d/b/a PUTNAM
COMMUNITY MEDICAL CENTER;
OKEECHOBEE HOSPITAL, INC., d/b/a
RAULERSON HOSPITAL; HCA HEALTH
SERVICES OF FLORIDA, INC., d/b/a
REGIONAL MEDICAL CENTER BAYONET
POINT; HCA LONG TERM HEALTH
SERVICES OF MIAMI, INC., d/b/a SISTER
EMMANUEL HOSPITAL; SUN CITY
HOSPITAL, INC., d/b/a SOUTH BAY
HOSPITAL; MEMORIAL HEALTHCARE
GROUP, INC., d/b/a SPECIALTY HOSPITAL
JACKSONVILLE; HCA HEALTH SERVICES
OF FLORIDA, INC., d/b/a ST. LUCIE
MEDICAL CENTER; GALEN OF FLORIDA,
INC., d/b/a ST. PETERSBURG GENERAL
HOSPITAL; WEST FLORIDA - TCH, LLC,
d/b/a TAMPA COMMUNITY HOSPITAL;
OKALOOSA HOSPITAL, INC., d/b/a
TWIN CITIES HOSPITAL; UNIVERSITY
HOSPITAL, LTD., d/b/a UNIVERSITY
HOSPITAL AND MEDICAL CENTER;
WEST FLORIDA REGIONAL MEDICAL
CENTER, INC., d/b/a WEST FLORIDA
HOSPITAL; and COLUMBIA HOSPITAL
CORPORATION OF SOUTH BROWARD,
d/b/a WESTSIDE REGIONAL MEDICAL
CENTER,
Appellants,
v.
AGENCY FOR HEALTH
CARE ADMINISTRATION,
Appellee.
6
____________________________/
Stephen A. Ecenia, David M. Maloney, J. Stephen Menton, and Gabriel F. V.
Warren of Rutledge Ecenia, Tallahassee, for Appellants.
Joseph M. Goldstein and Dan P. Daley, Fort Lauderdale, Stephen T. Maher,
Miami, Daniel E. Nordby and Amber Stoner, Tallahassee, of Shutts & Bowen
LLP; Stefan R. Grow, General Counsel, and Tracy Cooper George, Chief
Appellate Counsel for State of Florida, Agency for Health Care Administration,
Tallahassee, for Appellee.
__________________________________________________________________
ST. VINCENT’S MEDICAL CASE NO.: 1D16-5135
CENTER, INC. d/b/a ST.
VINCENT’S MEDICAL CENTER
RIVERSIDE, ST LUKE’S-ST.
VINCENT’S HEALTHCARE,
INC. d/b/a ST. VINCENT’S
MEDICAL CENTER
SOUTHSIDE and ST.
VINCENT’S MEDICAL CENTER-
CLAY COUNTY, INC. d/b/a
ST. VINCENT’S MEDICAL
CENTER-CLAY COUNTY,
and
SACRED HEART HEALTH CASE NO.: 1D16-5136
SYSTEM, INC. d/b/a SACRED
HEART HOSPITAL OF
PENSACOLA, SACRED HEART
HOSPITAL ON THE EMERALD
COAST and SACRED HEART
HOSPITAL ON THE GULF,
and
CGH HOSPITAL, LTD d/b/a CASE NO.: 1D16-5258
CORAL GABLES HOSPITAL,
DELRAY MEDICAL CENTER,
7
INC. d/b/a DELRAY MEDICAL
CENTER, GOOD SAMARITAN
MEDICAL CENTER, INC. d/b/a
GOOD SAMARITAN MEDICAL
CENTER, HIALEAH HOSPITAL,
INC. d/b/a HIALEAH HOSPITAL,
NORTH SHORE MEDICAL
CENTER, INC. d/b/a NORTH
SHORE MEDICAL CENTER,
NORTH SHORE MEDICAL
CENTER, INC. d/b/a FLORIDA
MEDICAL CENTER- A CAMPUS
OF NORTH SHORE, PALM
BEACH GARDENS COMMUNITY
HOSPITAL, INC. d/b/a PALM
BEACH GARDENS MEDICAL
CENTER, LIFEMARK HOSPITALS
OF FLORIDA, INC. d/b/a
PALMETTO GENERAL HOSPITAL,
ST. MARY'S MEDICAL CENTER,
INC. d/b/a ST. MARY'S MEDICAL
CENTER and WEST BOCA MEDICAL
CENTER, INC. d/b/a WEST BOCA
MEDICAL CENTER,
Appellants,
v.
AGENCY FOR HEALTH
CARE ADMINISTRATION,
Appellee.
____________________________/
Michael J. Glazer and E. Dylan Rivers of Ausley McMullen, Tallahassee, for
Appellants.
Joseph M. Goldstein and Dan P. Daley, Fort Lauderdale, Stephen T. Maher,
Miami, Daniel E. Nordby and Amber Stoner, Tallahassee, of Shutts & Bowen
8
LLP; Stefan R. Grow, General Counsel, and Tracy Cooper George, Chief
Appellate Counsel for State of Florida, Agency for Health Care Administration,
Tallahassee, for Appellee.
__________________________________________________________________
HOLMES REGIONAL CASE NO.: 1D16-5274
MEDICAL CENTER, INC.,
and
HOLMES REGIONAL MEDICAL CASE NO.: 1D16-5275
CENTER, INC. d/b/a PALM BAY
HOSPITAL,
and
VIERA HOSPITAL, INC., CASE NO.: 1D16-5276
and
CAPE CANAVERAL CASE NO.: 1D16-5277
HOSPITAL, INC.,
and
HERNANDO HMA, LLC, CASE NO.: 1D16-5366
and
PASCO REGIONAL MEDICAL CASE NO.: 1D16-5367
CENTER, LLC d/b/a BAYFRONT
HEALTH DADE CITY,
and
PORT CHARLOTTE HMA, LLC CASE NO.: 1D16-5368
d/b/a BAYFRONT HEALTH-
PORT CHARLOTTE,
and
9
PUNTA GORDA HMA, LLC CASE NO.: 1D16-5369
d/b/a BAYFRONT HEALTH-
PUNTA GORDA,
and
BAYFRONT HMA MEDICAL CASE NO.: 1D16-5370
CENTER, LLC d/b/a BAYFRONT
HEALTH-ST. PETERSBURG,
and
HAINES CITY HMA, LLC CASE NO.: 1D16-5371
d/b/a HEART OF FLORIDA
REGIONAL MEDICAL
CENTER,
and
SEBRING HOSPITAL CASE NO.: 1D16-5372
MANAGEMENT ASSOCIATES
LLC, d/b/a HIGHLANDS
REGIONAL MEDICAL
CENTER,
and
LAKE WALES HOSPITAL CASE NO.: 1D16-5373
CORPORATION d/b/a
LAKE WALES MEDICAL
CENTER,
and
KEY WEST HMA, LLC CASE NO.: 1D16-5374
d/b/a LOWER KEYS
MEDICAL CENTER,
and
10
MUNROE HMA HOSPITAL, CASE NO.: 1D16-5375
LLC d/b/a MUNROE
REGIONAL MEDICAL
CENTER,
and
NAPLES HMA, LLC, CASE NO.: 1D16-5376
and
CRESTVIEW HOSPITAL CASE NO.: 1D16-5377
CORPORATION d/b/a
NORTH OKALOOSA
MEDICAL CENTER,
and
HMA SANTA ROSA CASE NO.: 1D16-5378
MEDICAL CENTER, LLC,
and
SEBASTIAN HOSPITAL, CASE NO.: 1D16-5380
LLC d/b/a SEBASTIAN
RIVER MEDICAL
CENTER,
and
CITRUS HMA, LLC d/b/a CASE NO.: 1D16-5381
SEVEN RIVERS REGIONAL
MEDICAL CENTER,
and
LIVE OAK HMA, LLC d/b/a CASE NO.: 1D16-5382
SHANDS LIVE OAK
REGIONAL MEDICAL
11
CENTER,
and
LAKE SHORE HMA, LLC CASE NO.: 1D16-5383
d/b/a SHANDS LAKE
SHORE REGIONAL
MEDICAL CENTER,
and
STARKE HMA, LLC d/b/a CASE NO.: 1D16-5384
SHANDS STARKE
REGIONAL MEDICAL
CENTER,
and
OSCEOLA SC, LLC d/b/a CASE NO.: 1D16-5385
SAINT CLOUD REGIONAL
MEDICAL CENTER,
and
VENICE HMA, LLC d/b/a CASE NO.: 1D16-5386
VENICE REGIONAL
BAYFRONT HEALTH,
and
MELBOURNE HMA, LLC, CASE NO.: 1D16-5387
and
ROCKLEDGE HMA, LLC, CASE NO.: 1D16-5388
and
UNIVERSITY COMMUNITY CASE NOS.: 1D16-5427 &
HOSPITAL, INC., 1D16-5429
12
and
MEMORIAL HOSPITAL- CASE NO.: 1D16-5432
WEST VOLUSIA, INC.,
and
SOUTHWEST VOLUSIA CASE NO.: 1D16-5433
HEALTHCARE CORPORATION,
and
MEMORIAL HOSPITAL CASE NO.: 1D16-5434
FLAGLER, INC.,
and
ADVENTIST HEALTH CASE NOS.: 1D16-5435,
SYSTEM/SUNBELT, INC., 1D16-5439 & 1D16-5442
and
MEMORIAL HEALTH CASE NO.: 1D16-5436
SYSTEMS, INC.,
and
SOUTHEAST VOLUSIA CASE NO.: 1D16-5437
HEALTHCARE CORPORATION,
and
TARPON SPRINGS HOSPITAL CASE NO.: 1D16-5438
FOUNDATION, INC.,
and
UNIVERSITY COMMUNITY CASE NO.: 1D16-5440
HOSPITAL, INC.,
13
and
FLORIDA HOSPITAL CASE NO.: 1D16-5441
WATERMAN, INC.,
and
PASCO-PINELLAS CASE NO.: 1D16-5443
HILLSBOROUGH COMMUNITY
HEALTH SYSTEM, INC.,
and
FLORIDA HOSPITAL CASE NO.: 1D16-5444
ZEPHYRHILLS, INC.,
and
GENESIS REHABILITATION CASE NO.: 1D16-5453
HOSPITAL, INC. d/b/a
BROOKS REHABILITATION
HOSPITAL, INC.,
and
THE VILLAGES TRI-COUNTY CASE NO.: 1D16-5454
MEDICAL CENTER, INC.
d/b/a THE VILLAGES
REGIONAL HOSPITAL,
and
LEESBURG REGIONAL CASE NO.: 1D16-5455
MEDICAL CENTER, INC.,
Appellants,
v.
14
AGENCY FOR HEALTH
CARE ADMINISTRATION,
Appellee.
____________________________/
Kyle L. Kemper and Steven Mindlin of Sunstrom & Mindlin, LLP, Tallahassee,
for Appellants.
Joseph M. Goldstein and Dan P. Daley, Fort Lauderdale, Stephen T. Maher,
Miami, Daniel E. Nordby and Amber Stoner, Tallahassee, of Shutts & Bowen
LLP; Stefan R. Grow, General Counsel, and Tracy Cooper George, Chief
Appellate Counsel for Florida Agency for Health Care Administration,
Tallahassee, for Appellee.
__________________________________________________________________
LARKIN COMMUNITY CASE NO.: 1D16-5469
HOSPITAL,
and
MARTIN MEMORIAL CASE NO.: 1D16-5470
MEDICAL CENTER,
and
NAPLES COMMUNITY CASE NO.: 1D16-5471
HOSPITAL, INC.,
and
SOUTH LAKE HOSPITAL, CASE NO.: 1D16-5472
and
LARKIN COMMUNITY CASE NO.: 1D16-5473
HOSPITAL PALM
SPRINGS CAMPUS,
and
15
ORLANDO HEALTH, INC., CASE NO.: 1D16-5474
d/b/a ORLANDO HEALTH,
and
SOUTHERN BAPTIST CASE NO.: 1D16-5475
HOSPITAL OF FLORIDA
d/b/a BAPTIST MEDICAL
CENTER OF THE BEACHES,
and
SOUTHERN BAPTIST CASE NO.: 1D16-5476
HOSPITAL OF FLORIDA
d/b/a BAPTIST MEDICAL
CENTER,
ORLANDO HEALTH CENTRAL, CASE NO.: 1D16-5477
INC. d/b/a HEALTH CENTRAL,
and
SOUTHERN BAPTIST CASE NO.: 1D16-5478
HOSPITAL OF FLORIDA
d/b/a BAPTIST MEDICAL
CENTER NASSAU,
Appellants,
v.
AGENCY FOR HEALTH
CARE ADMINISTRATION,
Appellee.
____________________________/
16
Joanne B. Erde and Donna Holshouser Stinson of Duane Morris LLP, Miami, for
Appellants.
Joseph M. Goldstein and Dan P. Daley, Fort Lauderdale, Stephen T. Maher,
Miami, Daniel E. Nordby and Amber Stoner, Tallahassee, of Shutts & Bowen
LLP; Stefan R. Grow, General Counsel, and Tracy Cooper George, Chief
Appellate Counsel for Florida Agency for Health Care Administration,
Tallahassee, for Appellee.
__________________________________________________________________
Opinion filed November 30, 2017.
A consolidated appeal from orders of the Agency for Health Care Administration.
BILBREY, J.
Sixty-seven Petitioners sought administrative hearings pursuant to section
120.57(1), Florida Statutes (2016), after the Agency for Health Care
Administration (AHCA) announced its rates of reimbursement of Medicaid funds
for services provided by hospitals for outpatient services for the 2016-2017 fiscal
year. ACHA initially sought to dismiss the petitions as premature. Thereafter,
AHCA argued the petitions were moot, for reasons which will be more fully set
forth below. Eventually, the petitions were dismissed by identical orders. This
consolidated appeal follows. We reverse and remand.
As this is an appeal of an order of dismissal, we must accept as true the
allegations made in the petitions filed below. See Herbits v. Bd. of Trs. of Internal
Improvement Trust Fund, 195 So. 3d 1149, 1153 (Fla. 1st DCA 2016). The
17
Amended Petition for Sarasota County Hospital District, the lead Appellant in this
consolidated appeal, alleged in pertinent part:
7. For Fiscal Year 2016-17, the Legislature passed zero
outpatient rate reductions and appropriated sufficient
funds to reimburse Sarasota Memorial at a rate that is
substantially higher than [AHCA’s] posted
reimbursement rates. The level of funding made
available by the Legislature meant that AHCA was not
required to make any outpatient reimbursement rate
reductions beyond certain standing rate cuts. However,
on its own initiative, AHCA elected to implement drastic
rate reductions for Fiscal Year 2016-17 far beyond those
authorized by the Legislature, resulting in a significant
reduction of funding to Sarasota Memorial for Medicaid
outpatient services.
8. [In the] rate letter applicable to Sarasota Memorial . . .
though the Fiscal Year 2016-17 rates were not posted by
AHCA until July 11, 2016 and then again revised and
republished on August 10, 2016, AHCA has indicated
that they took effect for all Medicaid outpatient hospital
service providers on July 1, 2016. The hospital
reimbursement rates released by AHCA reflect a
significantly higher rate cut from previous years.
10. By way of background, as part of a recent overhaul
of the state’s Medicaid program, the Legislature
mandated that AHCA implement a new statewide
program to enroll the majority of Florida’s Medicaid
beneficiaries in Medicaid managed care plans. See §
409.971, Fla. Stat. Implementation of this Medicaid
managed care program resulted in a dramatic shift of
Florida’s Medicaid beneficiaries—as well as state
funding—from [fee for services programs or “FFS”] to
managed care. Consequently, there has been a
substantial reduction in the number of Medicaid FFS
claims.
18
Sarasota County further alleged that as a Medicaid provider of outpatient
services, it will be paid using the challenged rates and that these rates are severely
reduced from those of previous years; thus, its substantial interests are affected, it
has alleged. The rates “took effect for all Medicaid outpatient hospital service
providers on July 1, 2016,” it also alleged. The arguments made by the other
Petitioners in their respective petitions are substantially the same as those made by
Sarasota County Hospital District.
AHCA moved to dismiss the petitions on the ground that the rates of
reimbursement were not “final agency action,” and thus, the requested
administrative proceeding was premature. ACHA asserted that only after it had
audited the requested reimbursements, which would be filed in the future, would
final agency action have occurred. As authority for this argument, AHCA cited
section 409.908(1)(f)1., Florida Statutes (2016). AHCA argued below and
continues to argue here that this statute gives a meaningful point of entry upon the
release of audited rates and to allow an earlier point of entry would render the
statute meaningless.
The Petitioners opposed dismissal by AHCA arguing that section
409.908(1)(f)1. did not preclude a challenge on the rates prior to auditing. The
Petitioners claimed AHCA’s position could result in a denial of a meaningful point
of entry to challenge the rates established. Petitioners maintain that argument here.
19
AHCA filed a Suggestion of Mootness on Nov. 3, 2016, arguing that per
section 409.905(6)(b)1., Florida Statutes (2016), the pending petitions were moot.
This statute provides that “[a]djustments may not be made [to unaudited
reimbursement] rates after October 31 of the state fiscal year in which the rates
take effect. . . .” In its Suggestion of Mootness, AHCA added, without citing
specific authority, that “this is the last year that [it] will issue preliminary rates,
AHCA [thus] has lost authority under the statute to make further adjustments going
forward.”
By Final Order dated Nov. 4, 2016, ACHA dismissed the amended petitions
with prejudice. AHCA held in pertinent part:
[S]ection 409.908(1)(f)1, Florida Statutes, gives a
provider a point of entry “to correct or adjust the
calculation of the audited hospital cost-based per diem
reimbursement rate for inpatient and outpatient care.”
(Emphasis added). Section 409.908(1), Florida Statutes,
does not allow a provider like Petitioner[s] to challenge
unaudited rates. This is because unaudited rates are
preliminary in nature, and subject to change once the
Agency has audited Petitioner[s’] cost report.
* * *
Furthermore, even assuming arguendo Petitioners
are entitled to challenge the unaudited rates as a
substantially affected party under chapter 120, Florida
Statutes, the Agency lacks the jurisdiction and authority
to grant Petitioners the relief they seek, i.e. the
adjustment of their rates. Section 409.905(6)(b)1.,
Florida Statutes, prohibits the Agency from making any
adjustments to Petitioners’ rates “after October 31 of the
20
state fiscal year in which the rates take effect....” For the
rates at issue, this date has already passed. Accordingly,
the Agency must dismiss the Amended Petition because
Petitioners are not entitled to an administrative hearing to
dispute the unaudited rates and, even if they were, the
Agency lacks the jurisdiction and authority to grant
Petitioners the relief they seek.
(Footnotes omitted; emphasis in original).
As indicated, following the dismissal of a petition for an administrative
hearing, a reviewing court must accept the allegations of the petition as true. See
Herbits. Moreover, questions of statutory interpretation are reviewed by the
appellate court de novo. See Raymond James Fin. Servs., Inc. v. Phillips, 126 So.
3d 186 (Fla. 2013); Maggio v. Fla. Dep't of Labor & Emp't Sec., 899 So. 2d 1074
(Fla. 2005).
As this court explained almost 30 years ago, a party has standing to initiate a
formal administrative hearing pursuant to section 120.57 when it has a “substantial
interest that is directly affected by proposed agency action. . . .” Florida Soc’y of
Ophthalmology v. State Bd. of Optometry, 532 So. 2d 1279, 1284 (Fla. 1st DCA
1988). But, as this court later made clear, “[t]o be entitled to a section 120.57
hearing, there must be final agency action affecting the petitioner’s substantial
interests, coupled with a disputed issue of material fact.” Friends of the
Hatchineha, Inc. v. State, Dep’t of Envtl. Reg., 580 So. 2d 267, 269 (Fla. 1st DCA
1991) (quoting General Dev. Utils., Inc. v. Florida Dep't of Envtl. Reg., 417 So. 2d
21
1068, 1070 (Fla. 1st DCA 1982)).
As noted, AHCA has claimed that final agency action has not occurred
simply by the posting of the unaudited rates. It does not argue that the substantial
interests of the various petitioners have not been affected. Nor has the agency
claimed that there are no disputed issues of material fact, a prerequisite for a
hearing under section 120.57(1). 1
Section 409.908(1)(f)1., the statute on which AHCA principally relies,
provides:
Pursuant to chapter 120, the agency shall furnish to
providers written notice of the audited hospital cost-
based per diem reimbursement rate for inpatient and
outpatient care established by the agency. The written
notice constitutes final agency action. A substantially
affected provider seeking to correct or adjust the
calculation of the audited hospital cost-based per diem
reimbursement rate for inpatient and outpatient care,
other than a challenge to the methodologies set forth
in the rules of the agency and in reimbursement plans
incorporated by reference therein used to calculate
the reimbursement rate for inpatient and outpatient
care, may request an administrative hearing to challenge
the final agency action by filing a petition with the
agency within 180 days after receipt of the written notice
by the provider. . . .
1
“As a general principle of administrative law, a person is entitled to a section
120.57 hearing when an agency takes a final action affecting that person’s interests
and there is a disputed issue of material fact related to that action.” Save Our
Creeks v. State of Fla. Fish and Wildlife Conservation Comm’n, 112 So. 3d 128,
130 (Fla. 1st DCA 2013) (citing Friends of the Hatchineha, Inc. v. Dep’t of Envtl.
Reg., 580 So. 2d 267, 269 (Fla. 1st DCA 1991)).
22
(Emphasis added).
Given the passages emphasized above, the statute does not pertain to — and
hence exempts from the declaration of what final agency action is — the
“methodologies” used in determining the reimbursement amount. In other words,
section 409.908(1)(f)1 authorizes formal administrative challenges “to correct or
adjust” any “calculation[s]” made in audited reimbursement requests. By its plain
terms then, the statute does not authorize formal administrative challenges to the
“methodologies . . . used to calculate the reimbursement rate.” It was the
methodology employed by AHCA (which treated the “Medicaid Trend
Adjustment” or MTA differently than in years past) which resulted in the
challenged reimbursement rates for FY 2016-2017. At the same time, the statute
does not preclude, either explicitly or implicitly, formal administrative challenge to
the Medicaid reimbursement rates set by AHCA prior to agency auditing. The
statute simply does not speak to pre-audit period.
AHCA has argued that section 409.905(6)(b)1, provides that AHCA cannot
change its reimbursement rate after October 31 of the fiscal year in which the rates
take effect. It was on the basis of this statute that AHCA argued below that the
petitions were moot after Oct. 31, 2016, even though the petitions were filed
several months before that date and were still pending as of that date through no
fault of the Petitioners. This statute was cited in the Final Order as an alternative
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basis for denying the hearings sought by Petitioners. In part, the Final Order
states:
Even assuming arguendo Petitioners are entitled to
challenge the unaudited rates as a substantially affected
party under chapter 120, Florida Statutes, the Agency
lacks the jurisdiction and authority to grant Petitioners
the relief they seek, i.e., the adjustment of their rates.
Section 409.905(6)(b)1., Florida Statutes, prohibits the
Agency from making any adjustments to Petitioners’
rates ‘after October 31 of the state fiscal year in which
the rates take effect . . . [.]’ For the rates at issue, this
date has already passed. Accordingly, the Agency must
determine the Amended Petition because the Petitioners
are not entitled to an administrative hearing to dispute the
unaudited rates and, even if they were, the Agency lacks
the jurisdiction and authority to grant Petitioners the
relief they seek.
An audit is unlikely to have been completed before October 31st of the fiscal
year which commences July 1st. Therefore, any rate challenge made before
October 31st, is necessarily a challenge of unaudited rates. Thus, in the Final
Order, AHCA appears to take two incompatible positions with regard to the 2016
legislative scheme: (i) rates can only be challenged after an audit, and (ii) rate
challenges can only occur before October 31st. Obviously, such contrary
arguments are untenable, and result from a misreading of the statute.
Section 409.905(6)(b)1. provides in pertinent part:
(6) HOSPITAL OUTPATIENT SERVICES. –
(b) The agency shall implement a methodology for
establishing base reimbursement rates for outpatient
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services for each hospital based on allowable costs, as
defined by the agency. Rates shall be calculated annually
and take effect July 1 of each year based on the most
recent complete and accurate cost report submitted by
each hospital.
1. Adjustments may not be made to the rates after
October 31 of the state fiscal year in which the rates
take effect, except for cases of insufficient collections of
intergovernmental transfers authorized under s.
409.908(1) or the General Appropriations Act. In such
cases, the agency shall submit a budget amendment or
amendments under chapter 216 requesting approval of
rate reductions by amounts necessary for the aggregate
reduction to equal the dollar amount of
intergovernmental transfers not collected and the
corresponding federal match. Notwithstanding the $1
million limitation on increases to an approved operating
budget under ss. 216.181(11) and 216.292(3), a budget
amendment exceeding that dollar amount is subject to
notice and objection procedures set forth in s. 216.177.
2. Errors in source data or calculations discovered
after October 31 must be reconciled in a subsequent
rate period.
(Emphasis added).
A plain reading of subsections 1 and 2 means that the correction of an error
is to be made in the next fiscal year when that error is discovered after October
31st; it does not mean — nor could it fairly so provide — that no correction is ever
to be made if an error is discovered after Oct. 31st.
Where possible, a court must give full effect to all statutory provisions and
construe related statutory provisions in harmony with one another. Heart of
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Adoptions, Inc. v. J.A., 963 So. 2d 189, 199 (Fla. 2007); Woodham v. Blue Cross &
Blue Shield of Fla., Inc., 829 So. 2d 891, 898 (Fla. 2002). Also, a court must
consider the purpose behind a statute. Raymond James, 126 So. 3d at 192 (citing
W. Fla. Reg'l Med. Ctr., Inc. v. See, 79 So. 3d 1, 9 (Fla. 2012)). Further, it is true
that an agency’s interpretation of a statute it is charged with “enforcing is entitled
to great deference.” Verizon Florida, Inc. v. Jacobs, 810 So. 2d 906, 908 (Fla.
2002) (citing BellSouth Telecommunications, Inc. v. Johnson, 708 So. 2d 594, 596
(Fla. 1998)). But, it is also true that a reviewing court will not depart from “the
contemporaneous construction of a statute by a state agency charged with its
enforcement unless the construction is ‘clearly erroneous.’” Id. (quoting PW
Ventures, Inc. v. Nichols, 533 So. 2d 281, 283 (Fla. 1988)). AHCA’s interpretation
of section 409.905(6)(b)1. is clearly erroneous. 2
In sum, the substantial interest of a party entitled to a Medicaid
reimbursement is affected at the time an unsatisfactory rate is announced as that
rate takes effect immediately and reimbursements which are made prior to auditing
are based on that rate. The Petitioners have alleged, and we must accept as fact per
Herbits, that the methodologies used to set the reimbursement rates are not subject
to change during the auditing process, and thus the rate becomes “final” at the time
it is announced. Therefore, with regard to the amount of the reimbursement rates,
2
The 2016 version of the statute has been amended. See Ch. 16-65, Laws of Fla.
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the agency’s action has become final. Accordingly, we reverse the orders of
dismissal and remand for the grant of formal hearings pursuant to section
120.57(1), Florida Statutes.
REVERSED and REMANDED.
ROBERTS and M.K. THOMAS, JJ., CONCUR.
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