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,
AGENCY FOR HEALTH CARE ADMINISTRATION,
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.,
SHANDS JACKSONVILLE CASE NO.: 1D16-5078 MEDICAL CENTER, INC., d/b/a UF HEALTH JACKSONVILLE,
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,
LAKELAND REGIONAL CASE NO.: 1D16-5084 MEDICAL CENTER, INC.,
SHANDS TEACHING HOSPITAL CASE NO.: 1D16-5086 AND CLINICS, INC., d/b/a UF HEALTH SHANDS HOSPITAL,
STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION,
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,
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,
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,
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,
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.,
HOLMES REGIONAL MEDICAL CASE NO.: 1D16-5275 CENTER, INC. d/b/a PALM BAY HOSPITAL,
VIERA HOSPITAL, INC., CASE NO.: 1D16-5276
CAPE CANAVERAL CASE NO.: 1D16-5277 HOSPITAL, INC.,
HERNANDO HMA, LLC, CASE NO.: 1D16-5366
PASCO REGIONAL MEDICAL CASE NO.: 1D16-5367 CENTER, LLC d/b/a BAYFRONT HEALTH DADE CITY,
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,
BAYFRONT HMA MEDICAL CASE NO.: 1D16-5370 CENTER, LLC d/b/a BAYFRONT HEALTH-ST. PETERSBURG,
HAINES CITY HMA, LLC CASE NO.: 1D16-5371 d/b/a HEART OF FLORIDA REGIONAL MEDICAL CENTER,
SEBRING HOSPITAL CASE NO.: 1D16-5372 MANAGEMENT ASSOCIATES LLC, d/b/a HIGHLANDS REGIONAL MEDICAL CENTER,
LAKE WALES HOSPITAL CASE NO.: 1D16-5373 CORPORATION d/b/a LAKE WALES MEDICAL CENTER,
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,
NAPLES HMA, LLC, CASE NO.: 1D16-5376
CRESTVIEW HOSPITAL CASE NO.: 1D16-5377 CORPORATION d/b/a NORTH OKALOOSA MEDICAL CENTER,
HMA SANTA ROSA CASE NO.: 1D16-5378 MEDICAL CENTER, LLC,
SEBASTIAN HOSPITAL, CASE NO.: 1D16-5380 LLC d/b/a SEBASTIAN RIVER MEDICAL CENTER,
CITRUS HMA, LLC d/b/a CASE NO.: 1D16-5381 SEVEN RIVERS REGIONAL MEDICAL CENTER,
LIVE OAK HMA, LLC d/b/a CASE NO.: 1D16-5382 SHANDS LIVE OAK REGIONAL MEDICAL 11 CENTER,
LAKE SHORE HMA, LLC CASE NO.: 1D16-5383 d/b/a SHANDS LAKE SHORE REGIONAL MEDICAL CENTER,
STARKE HMA, LLC d/b/a CASE NO.: 1D16-5384 SHANDS STARKE REGIONAL MEDICAL CENTER,
OSCEOLA SC, LLC d/b/a CASE NO.: 1D16-5385 SAINT CLOUD REGIONAL MEDICAL CENTER,
VENICE HMA, LLC d/b/a CASE NO.: 1D16-5386 VENICE REGIONAL BAYFRONT HEALTH,
MELBOURNE HMA, LLC, CASE NO.: 1D16-5387
ROCKLEDGE HMA, LLC, CASE NO.: 1D16-5388
UNIVERSITY COMMUNITY CASE NOS.: 1D16-5427 & HOSPITAL, INC., 1D16-5429 12 and
MEMORIAL HOSPITAL- CASE NO.: 1D16-5432 WEST VOLUSIA, INC.,
SOUTHWEST VOLUSIA CASE NO.: 1D16-5433 HEALTHCARE CORPORATION,
MEMORIAL HOSPITAL CASE NO.: 1D16-5434 FLAGLER, INC.,
ADVENTIST HEALTH CASE NOS.: 1D16-5435, SYSTEM/SUNBELT, INC., 1D16-5439 & 1D16-5442
MEMORIAL HEALTH CASE NO.: 1D16-5436 SYSTEMS, INC.,
SOUTHEAST VOLUSIA CASE NO.: 1D16-5437 HEALTHCARE CORPORATION,
TARPON SPRINGS HOSPITAL CASE NO.: 1D16-5438 FOUNDATION, INC.,
UNIVERSITY COMMUNITY CASE NO.: 1D16-5440 HOSPITAL, INC., 13 and
FLORIDA HOSPITAL CASE NO.: 1D16-5441 WATERMAN, INC.,
PASCO-PINELLAS CASE NO.: 1D16-5443 HILLSBOROUGH COMMUNITY HEALTH SYSTEM, INC.,
FLORIDA HOSPITAL CASE NO.: 1D16-5444 ZEPHYRHILLS, INC.,
GENESIS REHABILITATION CASE NO.: 1D16-5453 HOSPITAL, INC. d/b/a BROOKS REHABILITATION HOSPITAL, INC.,
THE VILLAGES TRI-COUNTY CASE NO.: 1D16-5454 MEDICAL CENTER, INC. d/b/a THE VILLAGES REGIONAL HOSPITAL,
LEESBURG REGIONAL CASE NO.: 1D16-5455 MEDICAL CENTER, INC.,
14 AGENCY FOR HEALTH CARE ADMINISTRATION,
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,
MARTIN MEMORIAL CASE NO.: 1D16-5470 MEDICAL CENTER,
NAPLES COMMUNITY CASE NO.: 1D16-5471 HOSPITAL, INC.,
SOUTH LAKE HOSPITAL, CASE NO.: 1D16-5472
LARKIN COMMUNITY CASE NO.: 1D16-5473 HOSPITAL PALM SPRINGS CAMPUS,
and 15 ORLANDO HEALTH, INC., CASE NO.: 1D16-5474 d/b/a ORLANDO HEALTH,
SOUTHERN BAPTIST CASE NO.: 1D16-5475 HOSPITAL OF FLORIDA d/b/a BAPTIST MEDICAL CENTER OF THE BEACHES,
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,
SOUTHERN BAPTIST CASE NO.: 1D16-5478 HOSPITAL OF FLORIDA d/b/a BAPTIST MEDICAL CENTER NASSAU,
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
23 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 24 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
25 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. 26 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.