04-000879RU School Board Of Osceola County And G.F., On Behalf Of Minor Child G.F. vs. Department Of Children And Family Services Status: Closed DOAH Final Order on Monday, August 15, 2005.

Summary: Petitioners failed to prove standing to file a rule challenge, to prove that the Settlement Agreement in the federal lawsuit was an unpromulgated rule, and cannot challenge a rule when the agency adopting and enforcing the rule is not a party in the case.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SCHOOL BOARD OF OSCEOLA COUNTY )

AND G.F., ON BEHALF OF MINOR )

CHILD G.F., )

)

Petitioner, )

)

vs. ) Case No. 04 - 0879RU

)

DEPARTMENT OF CHILDREN AND )

FAMILY SERVICES, )

)

Respondent. )

)

FINAL ORDER

This cause came on for formal hearing before Daniel M.

Kilbride, Administrative Law Judge of the Division of

Administrative Hearings , on March 31, 2005, and completed on

April 7, 2005, in Tallahassee , Florida.

APPEARANCES

For Petitioner: Usher L. Brown, Esquire

Joseph E. Blitch, Esquire

Brown, Garganese, Weiss & D'Agresta, P.A.

Post Office Box 2873

Orlando, Florida 32 802 - 2873

For Respondent: Lee Ann Gustafson, Esquire

Office of the Attorney General

The Capitol, Plaza Level 01

Tallahassee, Florida 32399 - 1050

STATEMENT OF THE ISSUES

Whether a provision contained in a Settlement Agreement of

a federal lawsuit is the statement the Department of Children

and Family Services (Respondent) relied upon to deny Petitioner ,

G.F. , on behalf of minor child G.F. (Student G.F.), Medicaid

waiver benefits and constitutes an invalid exercise of delegated

legislative authority on the grounds that the statement in

question w as not promulgated as a rule; and

Whether Petitioners can challenge a provision which is

contained in the Developmental Services Waiver Services Florida

Medicaid Coverage and Limitations Handbook , October 2003, in

Florida Administrative Code Rule 59G - 8. 200(12), as an invalid

exercise of delegated legislative authority when the agency

which adopted the rule is not a party to this proceeding .

PRELIMINARY STATEMENT

On March 15, 2004, Petitioner s filed their Petition Seeking

Review and Determinations pursu ant to Subsection 120.56(4),

Florida Statutes (2004). On March 26, 2004, Petitioner s filed

an Amended Petition Seeking Review and Determinations Pursuant

to Subsection 120.56(4), Florida Statutes (2004), which deleted

paragraph 11 1/ of the original Pet iti on.

The hearing was scheduled for April 7, 2004. Petitioner s

filed a Motion for Continuance on March 25, 2004, which was

granted, and the hearing was rescheduled for April 27, 2004.

Petitioner s filed an Amended Motion for Continuance, and the

hearing wa s rescheduled for June 11, 2004. Respondent filed a

Motion for Summary Final Order on April 30, 2004. On May 25,

2004, an Order was filed rescheduling the hearing for August 10,

2004. Following a response by Petitioner and oral argument on

the motion , a n Order was entered which denied Respondent's

Motion for Summary Final Order on July 19, 2004. On July 27,

2004, the parties filed a Joint Motion for Continuance, and the

hearing was rescheduled for October 12, 2004. On September 27,

2004, Respondent fil ed its Renewed Motion for Summary Final

Order , which was denied by this tribunal's Order dated

October 11, 2004. On November 12, 2004, Respondent filed a

Petition to Review Non - Final Agency Action Under the

Administrative Procedures Act in the First Distr ict Court of

Appeal of Florida ("First DCA") and a Motion to Abate. This

case was abated during the pendency of Respondent's Petition.

Upon notification that Respondent's Petition was denied by the

First DCA , this case was rescheduled for hearing on Marc h 31,

2005. The hearing was completed on April 7, 2005.

At the hearing, Petitioner s presented the testimony of four

witnesses, who appeared in person at the hearing: Penny

Collins, director of Exceptional Student Education for

Petitioner ; Petitioner , G.F., the mother of Student G.F.;

Dr. Alan Cohen, M.D., expert witness; and Karen Henderson,

program analyst with the Agency for Healthcare Administration

(AHCA), and eight deposition witnesses ; and introduced

29 exhibits into evidence. Of those exhibits, 11 exhibits were

introduced with a reserved ruling on Respondent's objection to

the relevancy and materiality of those exhibits. Those exhibits

were numbered 2, 6, 9, 11, 15, 20, 22, 23 , 46A, 46B, and 46C.

Respondent presented the testimony of one witne ss, Karen

Henderson, and entered one exhibit into evidence, the deposition

testimony of G.F. At Respondent's request, official recognition

was taken of the Developmental Services Waiver Services Florida

Medicaid Handbook , October 2003 ("the Medicaid Handb ook " ) , and

the following pages from the F lorida Administrative Weekly:

Volume 27, No. 52 dated December 28, 2001, consisting of four

pages ; Volume 28, No. 4 dated January 25, 2002, consisting of

four pages; Volume 28, No. 18 dated May 3, 2002, consisting of

four pages; and Volume 28, No. 30 dated July 26, 2002, also

con sisting of four pages.

The Transcript was filed on April 25, 2005, and the parties

timely submitted Proposed Final Orders . In addition,

Petitioners filed a Motion to File Supplemental Auth ority on

July 22, 2005. All of which were considered in the preparation

of this Final Order.

Rulings on Evidentiary Objections

Based on the findings below, the following rulings on

evidentiary objections are made:

A . Respondent's objection to the testi mony of Dr. Alan

Cohen, on the grounds that his testimony is irrelevant and

immaterial as to the allegations in the Petition , is granted, in

part , on the grounds that the efficacy of Student G.F.'s

treatment at the National Deaf Academy (NDA) is not releva nt to

the issue of whether Respondent had an agency statement which

has not been adopted as a rule or whether Respondent has any

duty to adopt a rule on the matter challenged . W ith the

exception of his testimony concerning Student G.F.'s diagnosis

appeari ng at pages 40 through 42, line 1 , and the facilities of

the NDA appearing at pages 50 through 57, line 7 , t he remainder

of Dr. Cohen's testimony has not been considered.

B . Respondent's objection to the testimony of Penny

Collins on the grounds that her testimony is irrelevant and

immaterial as to the allegations in the Petition , is granted .

The testimony of Ms. Collins has not been considered.

C . Respondent's objection to the testimony of Karen

Henderson regarding the rationale for the Medicaid H andb ook that

appears on pages 173 through 177 on the grounds that the

testimony is irrelevant and immaterial to the allegations in the

Petition , is denied.

D . Respondent's objection to Petitioner 's Exhibits 2, 6,

9, 11, 15, 20, 22, 23, 46A, 46B, and 46C on the grounds that the

exhibits are irrelevant and immaterial as to the allegations in

the Petition , is granted. Pictures of Student G.F. are not

probative of the matter challenged. The various docum ents

relating specifically to Student G. F.'s application and

Respondent's evaluation of her service needs are not probative

of the matter challenged. These exhibits have not been

considered. Respondent's objections to Petitioner s' Exhibits 6,

8, 9, and 11 are denied .

FINDINGS OF FACT

1. Medicaid is a coopera tive federal/state program in

which Florida participates in partnership with the national

government. Medicaid provides medically necessary health care.

In addition to shouldering administrative and regulatory

responsibilities, Florida partially funds th e Florida Medicaid

Program, contributing about 42 percent of the money budgeted for

the program's operation. Federal funds make up the balance.

The Florida Retail Federation, Inc. v. Agency for Health Care

Administration , Case No. 04 - 1828RX (DOAH July 19 , 2004).

2. Under the statutory scheme, states who participate in

Medicaid are required to have a state plan. See 42 C.F.R.

§ 430.10. A p articipating state may also grant waivers to the ir

state plan pursuant to Section 1915(c) of the Social Security

Act. See 42 C.F.R. § 430.25. Each participating state must

designate a single - state agency to administer or supervise

administration of the state plan. The state plan must also

specify whether the agency that determines eligibility is the

Medicaid agenc y or the single - state agency for the financial

assistance program under Title IV - A. See 42 C.F.R. § 431.10.

The State of Florida has identified AHCA as the single - state

agency to administer the plan and the previously identified

Respondent to determine e ligibility. § 409.902, Fla. Stat.

(2002) . 2/

3. AHCA is required to enter an interagency agreement with

Respondent and other agencies "to assure coordination and

cooperation in serving special needs citizens." § 408.302(1),

Fla. Stat. It is required th at Respondent approve and have

input with regard to AHCA's rules when the rules directly impact

the mission of Respondent. Access to quality healthcare is "an

important goal" for all citizens in Florida. § 408.301, Fla.

Stat. Persons served by Responden t are citizens with special

needs, and it is the policy of Florida that persons with special

needs are adequately and appropriately served. The Florida

L egislature recognizes that the Medicaid p rogram is "an

intricate part of the service delivery system f or the special

needs citizens" in Florida.

4. AHCA is not a service provider and does not develop or

direct programs for special needs citizens , such as Student G.F.

§ 408.301, Fla. Stat. In fact, it is Respondent that plays the

vital role to assure that "the needs of special citizens are

met."

5. Under the Medicaid p rogram in Florida, AHCA is the

" single state agency authorized to make payments for medical

assistance and related services." § 409.902, Fla. Stat.

However, Respondent is responsibl e for "Medicaid eligibility

determinations, including, but not limited to, policy, rules,

. . . as well as the actual determination of eligibility."

Specifically, Respondent administers the Developmental

Disabilities Home and Community - Based Services Med icaid Waiver

Program (HCBS Medicaid Waiver Program ) in Fl o rida, and under

Section 409.919, Florida Statutes, is authorized and required to

enact administrative rules , as necessary , to fulf i ll its

obligation to comply with federal and state Medicaid law.

6 . Student G.F. is a developmentally disabled child with

multiple developmental disabilities, including autism, mental

retardation, and profound deafness. Student G.F.'s combination

of disabilities have resulted in significant cognitive

impairment, social withdrawal, violence , and self - injurious

behavior . This has resulted in extreme challenges in

communication and acquisition of skills related to daily living.

7. In 2000, Student G.F. was placed at the NDA in Mount

Dora, Lake County, Florida, as a da y student under the treatment

of Dr. Cohen, as part of Student G.F.'s Individual Education

Plan under the Federal Individual with Disabilities Education

Act. Approximately five months later, Dr. Cohen determined that

residential placement of Student G.F. was medically necessary.

8 . Petitioner asserts that the NDA in Mount Dora, Florida,

i s the only facility that could provide residential habi li tation

services for Student G.F. and treat her complex array of

disabilities. The NDA is a certified Medicaid w aiver provider

for Respondent in District 10.

9. On or about August 1, 2001, Deloris Battle , an

independent contractor who provides support coordination

services to recipients under the HCB S Medicaid W aiver Program ,

prepared the Florida Status Tracking S urvey for Student G.F.

Respondent's surveyor concluded that Student G.F. was in a state

of crisis and required residential placement for habilitation

services.

1 0 . Petitioner School Board reached an understanding with

Battle whereby the parties would sha re in the cost of services

for Student G.F. at the NDA. Petitioner School Board would fund

the cost of educational services , and Respondent would fund the

cost of medical and residential habilitation services.

Respondent's share of the cost of the servic es would be funded

by the HCBS Medicaid Waiver Program .

11. Student G.F. qualifies as developmentally disabled and

is eligible for Medicaid services pursuant to Chapter 409,

Florida Statutes. Student G.F. is also eligible for services

under the HCBS Med icaid Waiver Program .

1 2 . Battle submitted a cost plan to Respondent's

district's office that requested HCB S Medicaid W aiver Program

funding for Student G.F.'s residential placement at NDA. Battle

had no authority to commit Respondent to expend any Medic aid

waiver funds without approval . The cost plan submitted by

Battle was not sent to Tallahassee for approval . Approval was

delayed at the d istrict level until it was learned that

Petitioner School Board agreed to pay for the residential

placement of Stu dent G.F.

1 3 . In May 2002, Petitioner School Board and G.F. were

advised that Medicaid waiver funding for Student G.F.'s

residential placement at the NDA was denied. Respondent offered

no other options for service.

1 4 . Petitioner School Board agreed to fund Student G.F.'s

residential placement at the NDA for a trial period. Such

funding by Petitioner School Board has continued , b ecause

Petitioner s believed that the NDA is the only facility that can

treat Student G.F.'s array of disabilities .

15. Petiti oner School Board elected to fund the entire

cost of Student G.F.'s residential placement under protest.

T he Dispute

1 6 . P etitioner s brought this instant proceeding because

they believe that Respondent's denial of M edica id waiver funding

for Student G.F .'s residential placement was (and continues to

be) based on an agency statement by Respondent that was not

adopted as a rule, in violation of Sections 120.54 and 120.56,

Florida Statutes (2004).

1 7 . In 1998, Prado - Steinman v. Bush , Case No. 98 - 6496 - CIV -

F ERGUSON, was filed in the United States District Court for the

Southern District of Florida. One of the defendants was the

Florida Department of Children and Family Services. On June 27,

2000, a settlement agreement was signed by the parties to the

Prado - Steinman litigation.

18 . Petitioners allege that the initial basi s for

Respondent's denial of funding for Student G.F.'s placement was

an agency statement purportedly based entirely upon Respondent's

interpretation of the settlement agreement reached i n Prado -

Steinman , that Medicaid waiver funding is unavailable for

facilities with a capacity to house more than 15 persons.

19. Specifically, page 16 of the S ettlement A greement

dated June 29, 2000 , paragraph (F)(1), "Group Home Placement"

reads as foll ows:

The parties agree that they prefer that

individuals who are enrolled in the Waiver

live and receive in smaller facilities.

Consistent with this preference, the parties

agree to the following:

(1) The Department will target choice

counseling to those individuals, enrolled on

the Waiver and who presently reside in

residential habilitation centers (where more

than 15 persons reside and receive

services). The focus of this choice

counseling will be to provide information

about alternative residenti al placement

options. The Department will begin this

targeted choice counseling by December 1,

2000, and will substantially complete this

choice counseling by December 1, 2001.

See generally Prado - Stei n man v. Bush , 221 F.3d 1266 (11th Cir.

2000).

2 0 . At paragraph 24 of the Amended Petition, Petitioner s

assert that the alleged agency statement , which has not been

adopted as a rule , are the statements by Respondent that the

agency will not authorize Medicaid waiver funding for facilities

with a greater n umber of beds than specified in the agreement

and that the NDA is not an eligible Medicaid w aiver facility

under the agreement.

2 1 . The settlement agreement does not prohibit placement

of individuals who are enrolled in the HCBS Medicaid Waiver

Program wi th specific facility sizes. The portion of the

agreement that refers to residential facilities concerns Group

Home Placements , as quoted in paragraph 19 above, and provides

that Respondent will (1) counsel residents of residential

habilitation centers whe re more than 1 5 persons reside about

alternative residential placements ; (2) will develop alternative

residential placements ; (3) will encourage the use of client

advocates for residents of residential habilitation centers who

have no family, friends, or g uardian to advocate on their

behalf ; and (4) will not fill vacancies in residential

habilitation centers with individuals enrolled on the waiver.

Paragraph J of the Settlement Agreement, found on page 25,

provides that Respondent will continue to develop residential

program models that encourage an environment for self -

determination. Further, Respondent will emphasize to s upport

c oordinators that the annual needs assessment for waiver

recipients should include an assessment of the need for

alternative pla cement.

2 2 . The focus of the language is to move more clients into

residences meeting the policy and philosophy of Chapter 393,

Florida Statutes. Parents were given the opportunity to take

their children out of institutions and into less restrictive

envi ronments.

2 3 . At paragraph 27, the Amended Petition alleges that the

use of the Settlement A greement "to adversely affect the

interests of the Petitioners is an invalid exercise of delegated

legislative authority " as defined in Subsection 120.56(4),

Flori da Statutes (2004). The Amended Petition makes no

allegation that the alleged agency statement , which has not been

adopted as a rule is arbitrary or capricious, even if that

standard were applicable to a petition under Subsection

120.56(4), Florida Statut es (2004), nor does the Amended

Petition allege that the alleged agency statement is in

violation of federal law.

2 4 . The Amended Petition does not include AHCA as a party

and does not mention Florida Administrative Code Rule 59G - 8.200 ,

although, Petitio ners have been aware of the rule since early in

this rule - challenge proceeding.

25. The Ame nded Petition does not cite any proposed or

existing rule or delineate a challenge to any proposed or

existing rule, regardless of the promulgating agency. The

A mended Petition does not allege that Florida Administrative

Code Rule 59G - 8.200 somehow violates federal law.

2 6 . AHCA began rule - making to adopt a handbook for the

HCBS Medicaid Waiver Program in October 2001. Rule - making was

initiated to meet the requi rements of the federal Center for

Medicare and Medicaid Services . It require s the states who

participate to promulgate handbooks.

2 7 . AHCA published its notice of rule development in

Volume 27, No. 52 of the Florida Administrative Weekly dated

December 2 8, 2001. AHCA held seven rule workshops concerning

the Medicaid H andbook : two in Tallahassee (January 14, 2002,

and February 14, 2002) ; one in Pensacola (February 27, 2002) ;

one in Jacksonville (February 19, 2002) ; one in Tampa ; one in

Orlando (February 22, 2002) ; and one in Fort Lauderdale

(February 15, 2002). The workshops were attended by a large

number of person s and representatives of advocacy groups.

28 . The rule notice was published in Volume 28, No. 18 of

the Florida Administrative Weekly dated May 3, 2002. A public

hearing was held on May 28, 2002. Subsequent to the public

hearing, a notice of change was filed and a second public

hearing was held on August 19, 2002.

29 . Florida Administrative Code Rule 59G - 8.200, and the

Medicaid H andbook i ncorporated therein by reference, were

originally adopted on October 27, 2002. It has since been

amended.

3 0 . Florida Administrative Code Rule 59G - 8.200(12)

currently provides in pertinent part:

(12) Developmental Services Waiver –

General. This rule applies to all

Developmental Services Waiver Services

providers enrolled in the Medicaid program.

All Developmental Services Waiver Services

providers enrolled in the Medicaid program

must comply with the Developmental Services

Waiver Services Florida Me dicaid Coverage

and Limitations Handbook, October 2003,

incorporated by reference, and the Florida

Medicaid Provider Reimbursement Handbook,

Non - Institutional 081, October 2003. Both

handbooks are available from the Medicaid

fiscal agent. The Development al

Disabilities Waiver Services Provider Rate

Table, November 2003, is incorporated by

reference. The Developmental Disabilities

Waiver Services Provider Rate Table is

available from the Medicaid fiscal agent.

3 1 . Chapter 1 of the Handbook is entitled, "Purpose,

Background and Program Specific Information , " and contains

general definitions. "Licensed Residential Facility" is defined

at page s 1 - 3 as:

Facilities providing room and board, and

other services in accordance with the

licensing requirements f or the facility

type. Community - based beneficiaries with

developmental disabilities may receive DS

waiver services while residing in:

Group and foster homes licensed by the

Department of Children and Families in

accordance with Chapter 393, Florida

Sta tutes, and Chapter 409, Florida Statutes.

Comprehensive, transitional education

program facilities, licensed by the

Department of Children and Families in

accordance with Chapter 393, Florida

Statutes.

Assisted Living Facilities, and

Transitional Liv ing Facilities, licensed by

the Agency for Health Care Administration in

accordance with Chapter 400, Florida

Statutes.

Residential Habilitation Centers and any

other type of licensed facility not

mentioned above, having a capacity of 16 or

more persons , if the beneficiary has

continuously resided at the facility since

August 8, 2001, or prior to this date.

32. "Institution" is generally understood by persons in

the disabilities profession as a facility with more than 15 beds

that is self - contained, pr oviding all the needs of its

residents, as opposed to a more home - like environment. The

"best practice" model for developmental disabilities services is

a group home with six beds.

3 3 . Respondent interprets th ese provisions to mean that

Medicaid waiver f unding is unavailable for a residential

placement if the facility has a capacity of 16 or more persons,

unless the beneficiary has continually resided at the facility

since August 8, 2001, or prior to that date.

3 4 . The Medicaid H andbook is incorporated b y reference in

AHCA's rule. ( Fla . Admin . Code R . 59G - 8.200) Respondent has

n ot promulgated a separate administrative rule pursuant to

Chapter 120, Florida Statutes (2004), that incorporates the

Medicaid Handbook or any part of it into its own rules.

How ever, it did cooperate and coordinate with AHCA when the rule

and Medical Handbook were adopted , as required by Subsection

408.302(1), Florida Statutes . AHCA and Respondent have entered

into an agreement by which Respondent has agreed to implement

the HCB S Medicaid Waiver Program. AHCA retains the authority

and responsibility to issue policy, rules, and regulations

concerning the HCBS Medicaid Waiver Program, and Respondent is

required to operate the program in accordance with those

policies, rules, and r egulations.

3 5 . Section 409.919, Florida Statutes, and AHCA's rule

incorporating the Medicaid H andbook by reference , supplied

Respondent with the necessary rule authority to deny the

funding .

36. Petitioners have failed to prove that page 96 of the

Settl ement Agreement dated June 29, 2000, paragraph (F)(1) in

the Prado - Steinman case , was relied upon to deny Student G.F.

Medicaid waiver benefits.

37. Petitioners have failed to prove that page 16 of the

Settlement Agreement was an unpromulgated rule.

38. Petitioners cannot challenge a provision in the

Medicaid Handbook , which has been adopted by reference in

Florida Administrative Code Rule 59G - 8.200(12), when the agency

which adopted the rule is not a party to this proceeding .

CONCLUSIONS OF LAW

3 9 . The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding pursuant to Section 120.56, Florida Statutes (2004) .

40 . Subsection 120.56(4)(a), Florida Statutes (2004),

provides that any person substant ially affected by an agency

statement , which has not been adopted as a rule , may seek an

administrative determination that the statement violates

Subsection 120.54(1)(a), Florida Statutes (2004).

41 . Subsection 120.56(4)(c), Florida Statutes (2004),

provi des that an Administrative Law Judge may determine whether

all or part of a statement , which has not been adopted as a

rule , violates Subsection 120.54(1)(a), Florida Statutes (2004).

42 . Subsection 120.56(4)(d), Florida Statutes (2004),

provides that if an Administrative Law Judge enters a final

order that all or part of any agency statement, which has not

been adopted as a rule, violates Subsection 120.54(1)(a),

Florida Statutes (2004), the agency shall immediately

discontinue all reliance upon the state ment as a basis for

agency action.

4 3 . T he gravamen of a challenge under Subsection

120.56(4), Florida Statutes (2004), is that an agency has failed

to exercise its delegate d legislative authority.

4 4 . Subsection 120.52(8), Florida Statutes (2004), reads

in pertinent part, as follows:

(8) "Invalid exercise of delegated

legislative authority" means action which

goes beyond the powers, functions, and

duties delegated by the Legislature. A

proposed or existing rule is an invalid

exercise of delegated leg islative authority

if any one of the following applies:

(a) The agency has materially failed to

follow the applicable rulemaking procedures

or requirements set forth in this chapter;

(b) The agency has exceeded its grant of

rulemaking authority, citation to which is

required by s. 120.54(3)(a)1.;

(c) The rule enlarges, modifies, or

contravenes the specific provisions of law

implemented, citation to which is required

by s. 120.54(3)(a)1.;

(d) The rule is vague, fails to establish

adequate standards for agency decisions, or

vests unbridled discretion in the agency;

(e) The rule is arbitrary or

capricious. . . .

Standing

4 5 . Petitioner School Board bases its claim to standing

upon the allegations contained in paragraph 10 of the Amen ded

Petition. Petitioner G.F. assigned to Petitioner School Board

her rights in the alleged "funding commitment and obligation" of

Respondent and assignment of rights to enforce her daughter's

"Medicaid waiver." Although documents were attached to the

Am ended Petition, no evidence, document s , or test imony was

introduced by Petitioner s to establish that such an assignment

was made. Petitioner School Board does not otherwise have

standing to challenge the alleged non - rule policy.

4 6 . Petitioner School Boa rd did not establish that

Respondent made a "funding commitment" for Student G.F.'s

placement at the NDA. Petitioner School Board was aware before

it committed to fund the placement that Respondent would not

agree to fund payment of Student G.F.'s placeme nt through the

HCBS Medicaid Waiver P rogram. 3 / Petitioner School Board is not

entitled to receive HCBS Medicaid Waiver Program services .

Petitioner School Board is not an enrolled Medicaid waiver

services provider n or is it eligible to be an enrolled as a

waiver services provider.

4 7 . A two - part test is applied in evaluating whether a

person or entity has alleged a sufficient interest to entitle

that person or entity to challenge a proposed rule. First, the

individual or entity must suffer an i njury in - fact , which is of

sufficient immediacy to entitle the individual or entity to a

Section 120.57, Florida Statutes, hearing. Second, the

individual or entity's substantial injury must be of a type or

nature the proceeding is designed to protect. See Agrico

Chemical Co. v. Department of Environmental Regulation , 406

So. 2d 478, 482 (Fla. 2d DCA 1981).

4 8 . Petitioner School Board has not demonstrated that it

has suffered an injury in - fact , because it has an independent

responsibility to provide appropriate r esidential services to

Student G.F. pursuant to Subsection 393.0651(2)(a), Florida

Statutes, and 20 U.S.C. Section 1400, et seq . , if it is

necessary that the client's placement in private residential

program is "necessary to provide special education and r elated

services to the client." Petitioner School Board has not

established that it has an interest to be protected by the

provisions of Chapters 393 and 409, Florida Statutes, and

Florida Administrative Code Rule 59G - 8.200 or any alleged agency

statement by Respondent.

The Dispute

4 9 . A grant of rule - making authority is necessary, but not

sufficient to allow an agency to adopt a rule; a specific law to

be implemented is also required. An agency may adopt only rules

that implement or interpret the specif ic powers and duties

granted by the enabling statute. No agency shall have authority

to adopt a rule only because it is reasonably related to the

purpose of the enabling legislation and is not arbitrary and

capricious or is within the agency's class of po wers and duties,

nor shall an agency have the authority to implement statutory

provisions setting forth general legislative intent or policy.

Statutory language granting rule - making authority or generally

describing the powers and functions of an agency s hall be

construed to extend no further than implementing or interpreting

the specific powers and duties conferred by the same statutes.

§ 120.52(8), Fla. Stat. (200 4 ).

50 . The language in Subsection 120.52(8), Florida Statutes

(2004), thus , requires that a rule must be based on an explicit

power or duty identified in the enabling statute -- either the

enabling statute authorizes a rule or it does not. Southwest

Florida Water Management District v. Save the Manatee Club,

Inc. , 773 So. 2d 594, 599 (Fla. 1s t DCA 2000).

51 . Under the Home and Community Based Services Waiver

Act, Title XIX of the Social Security Act, 42 U.S.C. Section

1396n(c) ("the Act") , Congress has authorized certain persons

with developmental disabilities to receive Medicaid services in

a community setting, rather than in an institutional facility.

The Act empowers the Secretary to grant a waiver to a state

under which approved costs of home - and community - based services

are reimbursed for eligible individuals who otherwise would

require care in an institution - like facility, but who instead

elect to remain in their homes. 42 U.S.C. § 1396(c). To

qualify for a waiver, a state must develop alternative

regulatory schemes aimed at lowering the cost of medical

assistance while still maintain ing the same level of care.

Florida has chosen to participate in the HCBS M edicaid W aiver

Program. See generally Prado - Steinman v. Bush , 221 F.3d at 1268

(11th Cir. 2000).

52 . Section 409.919, Florida Statutes, reads as follow:

Rules. -- The agency shal l adopt any rules

necessary to comply with or administer

ss. 409.901 - 409.920 and all rules necessary

to comply with federal requirements. In

addition, the Department of Children and

Family Services shall adopt and accept

transfer of any rules necessary to carry out

its responsibilities for receiving and

processing Medicaid applications and

determining Medicaid eligibility, and for

assuring compliance with and administering

ss. 409.901 - 409.906, as they relate to these

responsibilities, and any other provisi ons

related to responsibility for the

determination of Medicaid eligibility.

5 3 . Section 409.919, Florida Statutes, provides that the

"agency" shall adopt any rules necessary to comply with or

administer Sections 409.901 through 409.920, Florida Statutes .

"Agency" is defined in Section 409.901, Florida Statutes, as

AHCA. The language of the statute goes on to state that

Respondent " shall adopt and accept transfer of any rules"

regarding its responsibilities for receiving and processing

Medicaid applicat ions "and determining Medicaid eligibility, and

for assuring compliance with and administering Sections 409.901

through 409.906, as they relate to these responsibilities and

any other provisions" regarding Medicaid eligibility.

§ 409.919, Fla. Stat.

5 4 . Section 409.902, Florida Statutes, provides that AHCA

is designated as the single - state agency authorized to make

payments for medical assistance and related services under the

Act. That statute further states Respondent is responsible for

Medicaid eli gibility determinations.

5 5 . The grant of rule - making authority in Section 409.919 ,

Florida Statutes, is consistent with the responsibilities and

the specific grants of rule - making authority conferred by

Chapter 393, Florida Statutes. See §§ 393.065, 393 .067(8),

393.067(5)(a)1. and 393.125(2), Fla. Stat. 4/

5 6 . The evidence demonstrates that both AHCA and

Respondent had the appropriate rule - making authority to engage

in rule - making, and did so properly, resulting in the enactment

of Florida Administrative Code Rule 58G - 8.200(12) and the

Medical Handbook. Further, the parties coordinated and

cooperated in serving special needs citizens, as directed by

Subsection 408.302(1), Florida Statutes, in making Medicaid

waiver determination decisions. Therefore, Pe titioners cannot

challenge this rule since the agency which adopted and enforces

the rule has not been made a party to this proceeding.

§ 120.56(1)(e), Fla. Stat. (2004).

5 7 . Further , t he only relief Petitioner s could receive

would be a ruling that Respo ndent cannot prospectively rely on

its "agency statement which has not been adopted as a rule"

unless or until it adopted a rule. See , e.g. , Florida Retail

Federation v. Agency for Health Care Administration , Case

No. 04 - 1828RX (DOAH July 19, 2004) (F or a party to be granted

effective relief in a rule challenge, that party must be in a

position to benefit from prospective (future) agency or judicial

action taken without resort to the disputed rule, which

prospective action cannot include the reversal of pa st final

agency action. )

5 8 . In addition , pursuant to Section 409.285 , Florida

Statutes, and Subsection 120.80(7), Florida Statutes (200 4 ),

hearing s on denials of the Me dicaid w aiver services are under

the jurisdiction of hearing officers within Respond ent, not the

Division of Administrative Hearings . Thus, this tribunal has no

authority to determine whether the decision of Respondent to

decline to fund residential placement of Student G.F. at the NDA

was appropriate.

5 9 . The alleged agency statement, which has not been

adopted as a rule , that forms the basis of this action , has not

been proven to be outside of the stated legislative policy for

the expenditure of Medicaid waiver funds pursuant to Chapter

393, Florida Statutes, and the Code of Federal Re gulations.

60 . Petitioners have failed to prove that the alleged

agency statement is a rule requiring compli anc e with

Chapter 120, Florida Statutes (2004).

61. Petitioners cannot challenge a provision in Me dicaid

Handbook, as incorporated in Florida Admi nistrative Code Rule

58G - 8.200(12) , since the agency which adopted the rule is not a

party to this proceeding .

ORDER

Based on the foregoing Findings of Facts and Conclusions of

Law, it is

ORDERED that :

1. Petitioner, School Board of Osceola County, is

d ismissed for lack of standing.

2. The Amended Petition is dismissed on the merits.

DONE AND ORDERED this 15th day of August , 2005 , in

Tallahassee, Leon County, Florida.

S

DANIEL M. KILBRIDE

Administrative Law Judge

Divis ion of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 15th day of August , 2005 .

ENDNOTES

1/ The deleted paragraph alleged as follows: "The School Board

has an obligation to provide educational services and related

services as necessary to deliver an appropriate educational

program pursuant to the requir ements of the Individuals with

Disabilities in Education Act, 20 U.S.C. Section 1400, et. seq."

2/ Unless otherwise indicated, all citations are to Florida

Statutes (2002).

3 / While it claims to have approved the funding for residential

expenses with a "reservation of rights," Petitioner School Board

has no "rights" to reserve for the same reason it doe s not have

standing to bring this action.

4 / Effective October 2004, Respondent's responsibilities under

Chapters 393 and 409, Florida Statutes, were transferred to the

Agency for Persons with Disabilities. Chap. 04 - 267, § 71 , Laws

of Florida .

COPIES FURNISHED :

M. Catherine Lannon, Esquire

Office of the Attorney General

Administrative Law Section

The Capitol, Plaza Level 01

Tallahassee, Florida 32399 - 1050

Lee Ann Gustafson, Esquire

Office of the Attorney General

The Capitol, Plaza Level 01

Tallahassee, Florida 32399 - 1050

Usher L. Brown, Esquire

Joseph E. Blitch, Esquire

Brown, Garganese, Weiss & D'Agresta, P.A.

Post Office Bo x 2873

Orlando, F lorida 3280 2 - 2873

Scott Boyd, Executive Director

and General Counsel

Joint Administrative Procedures Committee

120 Holland Building

Tallahassee, Florida 32399 - 1300

Liz Cloud, Program Administrator

Bureau of Administrative Code

Department of State

R.A . Gray Building, Suite 101

Tallahassee, FL 32399 - 0250

Josie Tamayo, General Counsel

Department of Children and

Family Services

Building 2, Room 204

1317 Winewood Boulevard

Tallahassee, Florida 32399 - 0700

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 the or iginal Notice of Appeal with the agency Clerk of

the Division of Administrative Hearings and a 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 Dist rict where the party resides. The notice of

appeal must be filed within 30 days of rendition of the order to

be reviewed.