00-003921F Manuel Fernandez, M.D. vs. Department Of Health, Board Of Medicine Status: Closed DOAH Final Order on Tuesday, July 31, 2001.

Summary: A rule challenge proceeding is not a proceeding "initiated by an agency." Petition dismissed where petition was filed almost two months late and where agency action was substantially justified.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MANUEL J. FERNANDEZ, M.D. , )

)

Petitioner , )

)

vs. ) Case No. 00-3921F

)

DEPARTMENT OF HEALTH, BOARD OF )

MEDICINE , )

)

Respondent. )

___________________________________)

FINAL ORDER

Pursuant to agreement of the parties, this matter has been

submitted on stipulated facts without an evidentiary hearing for

preparation of a Final Order by Administrative Law Judge

Michael M. Parrish of the Division of Administrative Hearings .

APPEARANCES

For Petitioner : Michael Manthei, Esquire

Broad & Cassel

Broward Financial Centre, Suite 1130

500 East Broward Boulevard

Fort Lauderdale, Florida 33394

For Respondent : Amy M. Jones, General Counsel

Department of Health

2020 Capital Circle Southeast, Bin A02

Tallahassee, Florida 32399-1703

ISSUE

The issue in this case is whether the Petitioner is

entitled to an award of costs and attorney's fees pursuant to

Section 57.111, Florida Statutes.

PRELIMINARY STATEMENT

The background of this proceeding goes back to a Final

Order dated December 30, 1999, in which the Department of

Health, Board of Medicine ("Department") adopted a Consent

Agreement to bring an end to disciplinary proceedings against

Manuel J. Fernandez, M.D. ("Dr. Fernandez") in Agency for Health

Care Administration's (" AHCA's ") Case No. 95-16820. In the

Consent Agreement, Dr. Fernandez agreed to pay an administrative

fine in the amount of $5,000.00 and agreed to attend two

specific medical education courses. In the Consent Agreement,

Dr. Fernandez specifically states that he "neither admits nor

denies the allegations of fact contained in the Administrative

Complaint."

On January 7, 2000, the Division of Medical Quality

Assurance filed an "Adverse Action Report" with the Healthcare

Integrity and Protection Data Bank, maintained by the United

States Department of Health and Human Services, in which it

reported the entry of the Final Order in AHCA Case No. 95-16820

against Dr. Fernandez.

Dr. Fernandez was of the view that the subject Final Order

was not the type of order that should be reported to the

Healthcare Integrity and Protection Data Bank. Accordingly,

Dr. Fernandez promptly requested that the report be withdrawn.

The Department initially took the view that the Adverse Action

Report was properly filed and refused to take action to withdraw

it. Dr. Fernandez then filed two petitions, one under Section

120.57(1), Florida Statutes, challenging the Department's

refusal to withdraw the Adverse Action Report, and one under

Section 120.56, Florida Statutes, challenging the Department's

reporting policy on the grounds that it was an unpromulgated

rule.

Eventually, the Department conceded that the Adverse Action

Report had been inappropriately filed, and took effective action

to have the report rescinded and expunged. Such action had the

effect of granting the relief sought in the Section 120.57(1)

case and, by agreement of the parties, that case was dismissed

as moot. By reason of receiving the relief sought in the

Section 120.57(1) case, Dr. Fernandez no longer had standing in

the rule challenge case, and that case was dismissed.

Dr. Fernandez is now before the Division of Administrative

Hearings asserting entitlement to his costs and attorney's fees

pursuant to Section 57.111, Florida Statutes.

Early in this proceeding the parties agreed to bifurcate

the issues of entitlement and amount. Consistent with that

agreement, this Final Order addresses only the issue of

entitlement. Prior to the hearing date in this case, the

parties stipulated that an evidentiary hearing would not be

necessary to resolve the issue of entitlement. Accordingly, on

April 19, 2001, the parties filed a Joint Stipulation in which

they stipulated to the material facts and described additional

documents to be relied upon in the disposition of the

entitlement issue.

Pursuant to the request of the parties, oral argument was

heard on April 20, 2001. At the conclusion of the oral

argument, the parties requested 30 days within which to file

their proposed orders. At the joint request of the parties,

that deadline was extended until June 5, 2001. Both parties

filed timely proposed orders containing proposed findings and

conclusions of law. The parties' proposals have been carefully

considered during the preparation of this Final Order.

FINDINGS OF FACT

In their Joint Stipulation, the parties have stipulated to

the following facts:

1. Dr. Fernandez is a physician licensed in the State of

Florida since 1973. He is a small business party as defined in

Section 57.111(3)(d)(1), Florida Statutes.

2. Dr. Fernandez was the subject of a disciplinary action

by AHCA on behalf of the Board of Medicine. The action was

commenced by an administrative complaint being filed by AHCA.

It was resolved by a Consent Agreement adopted by the Board of

Medicine as a Final order on December 30, 1999. The relevant

terms of the Consent Agreement included Dr. Fernandez's paying a

$5,000 fine and attending continuing education classes; and

while denying liability, the Petitioner neither admitted nor

denied the facts in the administrative complaint. There is no

mention of the reporting of the Consent Agreement in either the

National Practitioner Data Bank (" NPDB") or the Healthcare

Integrity and Protection Data Bank ("HIPDB").

3. Subsequent to the action by the Board of Medicine, on

January 7, 2000, the Respondent submitted a report of the

disposition of Dr. Fernandez's disciplinary action to the HIPDB.

4. HIPDB was established by Pub Law 104-191 enacted in

1996. Federal legislation establishing HIPDB was enacted in

August 1996 with instructions to the Secretary of Health and

Human Services (" HHS") to adopt rules implementing the law.

Draft rules were published in October 1998 with final rules

being adopted in October 26, 1999. The Guidebook was released

in February 2000.

5. Dr. Fernandez objected to the report to HIPDB on

February 3, 2000, but was advised by the Respondent in a letter

dated February 23, 2000, that his discipline was correctly

reported "based on Federal Register 64 CFR Part 61 : Healthcare

Fraud and Abuse Data Collection Program: Reporting of Final

Adverse Actions; Final Rule."

6. On March 6, 2000, the Petitioner's counsel wrote the

Respondent an 8-page letter requesting the report be removed

from HIPDB. The letter set forth extensive legal analysis based

in large part on the Federal Register citation in the

Respondent's February 23, 2000, letter with attachments in

support, and included that disciplinary action involving only a

fine and continuing education courses was not reportable to

HIPDB under the prevailing statutes and the administering

instructions issued by the federal agency in charge of operating

the HIPDB. Also in the letter, the Petitioner put the

Respondent on notice that the Petitioner was going to file

Petitions for Administrative Hearings if the Respondent did not

respond by March 13, 2000. The Respondent did not contact

Petitioner until after March 13, 2000.

7. The Petitioner filed a Petition for Formal

Administrative Hearing with the Board of Medicine on March 16,

2000. On the same day, the Petitioner filed a challenge to an

alleged unpromulgated rule of the Respondent regarding the

reporting of disciplinary actions to HIPDB where no liability

was admitted. The cases were DOAH Case Nos. 00-1562 and 00-

1253RU, respectively.

8. In DOAH Case No. 00-1562, the Petitioner requested the

Report be rescinded or, alternatively, the Consent Agreement be

rescinded to allow the Petitioner the opportunity to argue the

merits of the case.

9. In DOAH Case No. 00- 1253RU , the Petitioner requested

that the Administrative Law Judge ("ALJ") issue a Final Order

determining that the Respondent issued an unpromulgated rule in

violation of Section 120.54(1)(a), Florida Statutes, that the

Respondent immediately discontinue reliance upon the statement

as a basis for agency action, and that the Report be rescinded.

10. The Department was seeking clarification of the issues

surrounding the reporting of discipline as demonstrated by

Exhibits A and B. By letter dated March 17, 2000, the

Respondent informed the Petitioner that it had removed the

report of Dr. Fernandez's disciplinary action f rom HIPDB. To

confirm the Respondent's assertion, the parties agreed that

Dr. Fernandez would initiate a "self-query" to the HIPDB to

verify removal of the report. On May 15, 2000, the Petitioner's

counsel received confirmation that a query to the HIPDB would

not reveal the existence of an expunged report.

11. On April 5, 2000, the Respondent filed a Motion to

Dismiss for Mootness because relief had been granted to the

Petitioner since the disciplinary report had been removed from

HIPDB on March 17, 2000. On September 26, 2000, the

Respondent's Motion to Dismiss was granted by the ALJ in DOAH

Case No. 00-1562.

12. The Petitioner filed an Application for Attorney's

Fees and Costs on July 14, 2000.

CONCLUSIONS OF LAW

13. The Division of Administrative Hearings has

jurisdiction over this proceeding pursuant to Sections 57.111

and 120.57, Florida Statutes.

14. With regard to the underlying Section 120.56 rule

challenge case (DOAH Case No. 00- 1253RU ), Dr. Fernandez is not

entitled to an award of costs and attorney's fees pursuant to

Section 57.111, Florida Statutes, because that proceeding was

not "initiated by a state agency" and Dr. Fernandez was not a

prevailing party in that proceeding. See definitions at

Section 57.111(3)(b) and (c), Florida Statut es.

15. With regard to the Section 120.57 case (DOAH Case

No. 00-1562), the parties have stipulated that Dr. Fernandez was

at all material times a ”small business party." But the

Respondent asserts that Dr. Fernandez is not entitled to an

award of costs and attorney's fees because: (a) he filed his

petition for fees too late; (b) he was not a "prevailing" party;

(c) the Respondent's action was "substantially justified"; and

(d) "special circumstances exist which would make the award

unjust."

16. Hayes Group Home, Inc. v. Agency for Health Care

Administration , DOAH Case No. 99-0148F (Final Order issued

March 23, 1999), was a proceeding seeking costs and attorney's

fees pursuant to Section 57.111, Florida Statutes. In Hayes the

ALJ concluded:

Section 57.111(4)(b )2, Florida Statutes,

requires that the application for an award

of attorney's fees and costs be made within

60 days after the date on which the small

business party becomes a prevailing party.

In this cause, the underlying proceeding

involved Petitioner's application for

licensure. According to the Renewed

Petition for Attorneys' Fees and Costs,

Petitioner received its license to operate

an assisted living facility by transmittal

letter dated April 10, 1998. That is the

date upon which Petitioner obtained the

relief sought by Petitioner in the

underlying proceeding. Since more than 60

days elapsed between April 10, 1998, the

date on which Petitioner's application for

licensure was granted, and January 11, 1999,

the date on which Petitioner filed its

Renewed Petition for Attorneys' Fees and

Costs, the Petition filed in this cause is

untimely.

17. The same result must be reached here. On March 17,

2000, the Department informed Dr. Fernandez that it had removed

the report regarding his disciplinary action from the HIPDB.

The removal was the relief sought by Dr. Fernandez.

Accordingly, that is the date upon which Dr. Fernandez became a

prevailing party, and on which the 60-day time period began to

run. The Application for Attorney's Fees and Costs was filed on

July 14, 2000, almost two months too late. As in Hayes , the

petition seeking costs and attorney's fees under Section 57.111,

Florida Statutes, was untimely filed and must be dismissed.

18. Normally it would not be necessary to address the

additional issues raised by the Department, but because the

rationale in Hayes has not yet been directly addressed by the

Florida appellate courts, it is prudent to address the remaining

issues raised by the Department.

19. The Department argues that Dr. Fernandez is not a

prevailing party within the meaning of any of the definitions of

the term "prevailing small business party" at Section

57.111(3)(c), Florida Statutes. The statutory definitions of

the quoted term include when a "settlement has been obtained by

the small business party which is favorable to the small

business party on the majority of issues which such party raised

during the course of the proceeding." The Department's action

of granting the substantive relief sought by Dr. Fernandez,

however denominated, is the functional equivalent of a

settlement. Dr. Fernandez was a "prevailing small business

party" in DOAH Case No. 00-1562.

20. The Department argues that its action was

"substantially justified." Section 57.111(3)(e), Florida

Statutes, states: "A proceeding is 'substantially justified' if

it had a reasonable basis in law and fact at the time it was

initiated by a state agency." The Department had a reasonable

basis in law and fact at the time it took the action about which

Dr. Fernandez complained. At the time of the Department's

action, the federal legislation, regulations, and guidelines

were all new and not all of the regulations and guidelines were

final. Further, there was a great deal of ambiguity and

uncertainty in the federal legislation, regulations, and

guidelines. Faced with such ambiguity and uncertainty, the

Department made a reasonable interpretation of the requirements ;

an interpretation that was substantially justified. Such being

the case, Dr. Fernandez is not entitled to recover his costs and

attorney's fees.

21. The ambiguous and uncertain nature of the federal

statutory and regulatory provisions discussed in paragraph 20,

above , also constitute "special circumstances . . . which would

make the award unjust."

22. For all of the foregoing reasons, it is concluded that

Dr. Fernandez is not entitled to recover costs and attorney's

fees under Section 57.111, Florida Statutes, and his petition

seeking same is hereby DENIED and DISMISSED.

DONE AND ORDERED this 31st day of July, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

MICHAEL M. PARRISH

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488- 9675 SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 31st day of July, 2001.

COPIES FURNISHED:

Amy M. Jones, General Counsel

Department of Health

2020 Capital Circle, Southeast

Bin A02

Tallahassee, Florida 32399-1703

M. Catherine Lannon, Esquire

Lee Ann Gustafson, Esquire

Department of Legal Affairs

The Capitol, Plaza Level 01

Tallahassee, Florida 32399-1050

Michael Manthei, Esquire

Broad & Cassel

Broward Financial Centre, Suite 1130

500 East Broward Boulevard

Fort Lauderdale, Florida 33394

Theodore M. Henderson, Agency Clerk

Department of Health

4052 Bald Cypress Way, Bin A02

Tallahassee, Florida 32399-1701

Dr. Robert G. Brooks, Secretary

Department of Health

4052 Bald Cypress Way, Bin A00

Tallahassee, Florida 32399-1701

William W. Large, General counsel

Department of Health

4052 Bald Cypress Way, Bin A02

Tallahassee, Florida 32399-1701

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled to judicial review pursuant to Section 120.68, Florida

Statutes. Review proceedings are governed by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing one copy of a Notice of Appeal with the agency clerk of

the Division of Administrative Hearings and a second copy,

accompanied by filing fees prescribed by law, with the District

Court of Appeal, First District, or with the District Court of

Appeal in the appellate district where the party resides. The

Notice of Appeal must be filed within 30 days of rendition of

the order to be reviewed.