05-000399RU Bonnie Siegel And Gayle Knight vs. Agency For Health Care Administration Status: Closed Settled and/or Dismissed prior to entry of RO/FO on Thursday, June 23, 2005.

Summary: The Agency statement limiting Medicaid coverage for a particular drug was an unpromulgated rule.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BONNIE SIEGEL AND GAYLE KNIGHT, )

)

Petitioners, )

)

vs. ) Case No. 05 - 0399RU

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

_________________________________)

FINAL ORDER

Pursuant to notice, a formal hearing was held in this case

before Larry J. Sartin, an Administrative Law Judge of the

Division of Administrative Hearings, on March 1, 2005, in

Tallahassee, Florida.

APPEARANCES

For Petitioner William H. Fraser, Esquire

Bonnie Siegel: Legal Aid Society of

Palm Beach County

423 Fern Street, Suite 200

West Palm Beach, Florida

For Petitioner Treena A. Kaye, Esquire

Gayle Knight: Community Legal Services of

Mid - Florida, Inc.

315 Magnolia Avenue

Sanford, Florida 32271

For Respondent: Christine M. Thorson, Esquire

Office of the Attorney General

The Capitol, Plaza Level 01

Tallahassee, Florida 32399 - 1050

STATEMENT OF THE ISSUES

The issue in this case is whether a July 1, 2004,

announcement by Respondent Agency for Health Care Administration

concerning limitations of Medicaid coverage for the use of the

drug Actiq constitutes a rule that Respo ndent has not adopted by

the rulemaking procedure provided by Section 120.54, Florida

Statutes (2004), and, if so, whether rulemaking was feasible and

practicable under Section 120.54(1)(a), Florida Statutes (2004).

PRELIMINARY STATEMENT

On February 3, 200 5, Petitioners Bonnie Siegel and Gayle

Knight filed a Petition Challenging Agency Statement as

Unadopted Rule Before the Department of Administration [sic]

Division of Administrative Hearings (hereinafter referred to as

the "Petition"). By Order of Assign ment, the Petition was

assigned to the undersigned to conduct a formal administrative

hearing pursuant to the authority of Section 120.56(4), Florida

Statutes (2004).

By Notice of Hearing issued February 10, 2005, the final

hearing was scheduled to commenc e at 9:30 a.m., March 1, 2005.

By Order Granting Continuance of Hearing Time entered February

25, 2005, the time for commencement of the hearing was moved to

1:00 p.m.

On February 26, 2005, the parties filed a Pre - Hearing

Stipulation (hereinafter referred to as the "Stipulation"). The

Stipulation contains certain "admitted facts" and agreed

statements of law. To the extent relevant, those facts and

statements of law have been included in this Final Order.

At the commencement of the final hearing, Petitio ner's

[Bonnie Siegel's] Motion for Official Recognition was granted.

Official recognition was taken of Florida Administrative Code

Rules 59G - 4.250 and 65A - 1.702, with Respondent being given leave

to raise any objection to the latter rule after having an

o pportunity to review it. No objection has been raised by

Respondent.

During the final hearing, both Petitioners testified.

Petitioners also had admitted nine exhibits. Petitioners'

Exhibit 9 is the deposition testimony of Dr. Bruce McCall.

Respondent p resented the testimony of Dr. McCall and had one

exhibit admitted. Joint Exhibit "A" was also admitted.

The Transcript of the final hearing was filed on March 18,

2005. By Notice of Filing Transcript, the parties were informed

of the filing and that prop osed final orders were to be filed on

or before March 28, 2005. Both parties filed post - hearing

submittals. Those pleadings have been considered in rendering

this Final Order.

On the March 28, 2005, Petitioners filed Petitioners'

Motion to Reopen the Rec ord for Taking of Administrative Notice

and for Order Requiring Filing of Proposed Rule with the

Tribunal. The Motion was opposed by Respondent. By Order

entered April 4, 2005, the Motion was denied.

FINDINGS OF FACT

A. The Parties .

1. Petitioners Bonn ie Siegel and Gayle Knight are Florida

recipients of Medicaid health coverage.

2. Respondent Agency for Health Care Administration

(hereinafter referred to as "AHCA") is the Florida agency that

administers the Medicaid program in Florida.

B. Medicaid Dru g Coverage; Clinical Prior Authorization

for Drugs .

3. Most of the AHCA's current rules governing Medicaid

prescription drug coverage appear in its Prescribed Drug

Coverage, Limitations and Reimbursement Handbook (hereinafter

referred to as the "Handbook" ). The July 2001 version of the

Handbook has been adopted by reference in Florida Administrative

Code Rule 59G - 4.250. The Handbook is, therefore, a duly -

promulgated rule.

4. The Handbook at page 7 - 4 lists 19 drugs which require

"clinical prior authoriza tion" before Medicaid will pay for them

(hereinafter referred to as the "19 Listed Drugs").

5. The Handbook, at pages 7 - 5 through 7 - 14, also specifies

how to request clinical prior authorization for the 19 Listed

Drugs (page 7 - 5), the "justifications" whi ch must be shown to

obtain clinical prior authorization for each of the 19 Listed

Drugs (pages 7 - 6 through 7 - 13), and other miscellaneous

information concerning the process of obtaining approval (page

7 - 14)(pages 7 - 5 through 7 - 14 of the Handbook will herei nafter be

referred to as the "Handbook's Authorization Criteria and

Procedures").

6. Pursuant to the Handbook's Authorization Criteria and

Procedures, which by inclusion in the Handbook constitutes a

duly - promulgated rule, clinical prior authorization for any of

the 19 Listed Drugs may be obtained by the submission of a prior

authorization form submitted by the prescribing doctor answering

questions about the specific use for which the drug is being

prescribed which are consistent with the "justifications" listed

for the drug prescribed by the prescribing doctor.

7. In addition to the foregoing, the Handbook, on

page 7 - 4, contains the following note concerning the 19 Listed

Drugs (hereinafter referred to as the "Handbook Note"):

Note : AHCA may add ot her drugs to the list

of drugs requiring prior authorization if

abuse or misuse has been identified or if

AHCA evaluation indicates that a newer, more

expensive drug has no substantive additional

value over existing therapies.

C. Actiq .

8. Actiq is a lo llipop - like form of the drug Fentanyl.

Fentanyl is a potent drug in the narcotic analgesic class of

drugs which provides quick - acting relief from pain.

9. Actiq's only U.S. Food and Drug Administration

(hereinafter referred to as the "FDA") approved use is for the

relief of breakthrough cancer pain. "Breakthrough" pain may be

defined as spikes in pain too severe to be managed by a

patient's regular maintenance drugs. Any use of Actiq not

involving breakthrough cancer pain is considered "off - label,"

beca use it has not been FDA - approved. The prescription of drugs

for off - label uses, which happens not infrequently, is not

unlawful or medically unacceptable per se. AHCA rules afford

Medicaid coverage for off - label uses of many drugs. AHCA,

however, also l imits off - label use for some drugs and as

discussed, infra ., Actiq.

10. Actiq is not one of the 19 drugs listed on page 7 - 4 of

the Handbook for which clinical prior authorization is required.

Nor is it mentioned anywhere else in the Handbook.

11. Prior to July 15, 2004, AHCA did not restrict the uses

for which Actiq could be put in order to be covered by Medicaid.

Additionally, although in some circumstances not relevant to

this matter it was necessary for doctors prescribing Actiq to

obtain prior autho rization from AHCA or its fiscal agent before

obtaining Medicaid coverage for Actiq, AHCA's rules allowed

prior authorization after a clinical discussion with the ACS

Therapeutic Consultation Program if the doctor continued to

prescribe Actiq.

D. AHCA's J uly 1, 2004 Announcement .

12. On July 1, 2004, AHCA posted the following

announcement on its internet website:

Beginning July 15, 2004, Medicaid Pharmacy

Services will not approve payment of Actiq,

(oral transmucosal fentanyl citrate) for any

indication o ther than malignant pain

associate [sic] with cancer. Prescribers

wanting to use Actiq for breakthrough pain

in their patients with cancer, may obtain it

by completing the Actiq form posted on the

Florida Medicaid web site .

Petitioners' Exhibit 1.

13. This July 1, 2004, announcement (hereinafter referred

to as the "Actiq Policy") provided that, beginning July 15,

2004, AHCA would no longer approve payment for Actiq through the

Medicaid program for any use of the drug other than the relief

of breakthroug h pain associated with malignant cancer.

14. The Actiq Policy also imposed a requirement that

doctors prescribing Actiq submit an Actiq prior authorization

form posted on AHCA's internet website before Medicaid would

agree to pay for the drug. This prior authorization form

requires a prescribing doctor to indicate whether his or her

patient is receiving another opioid analgesic drug on a daily or

routine basis, and whether the pain to be addressed by Actiq

relates to cancer or malignancy. The form also i ndicates that

Actiq will be approved only for treatment of acute pain,

secondary to cancer in opioid tolerant patients.

15. The statement posted by AHCA on its internet website

was in the form of a "remittance voucher banner." Remittance

voucher banners are posted on the AHCA website and are mailed to

Medicaid - accepting doctors with their next Medicaid

reimbursement checks.

16. The effect of the Actiq Policy, which AHCA intended,

is to add the drug to the 19 Listed Drugs without amending

AHCA's rules. A HCA did not publish the Actiq Policy in the

Florida Administrative Weekly or modify the Handbook and then

adopt the revised Handbook by reference as a rule. AHCA has

taken the position that the Handbook Note, quoted in Finding of

Fact 6, supra , authorizes its action without the necessity of

pursing rule - making.

17. The Actiq Policy applies to all Medicaid recipients.

AHCA does not allow its staff or contractor staff discretion to

approve uses of Actiq at variance with the Actiq Policy.

E. Lack of Compli ance with the Handbook Note .

18. The Handbook Note is subject to different

interpretations, discussed further, infra . Assuming that the

interpretation of the Handbook Note authorizes AHCA to add drugs

to the 19 Listed Drugs without following formal rulem aking

procedures, the Handbook Note allows the addition of drugs only

if one of the following circumstances are met:

a. "[A]buse or misuse [of the drug] has been identified";

or

b. "AHCA evaluation indicates that a newer, more expensive

drug has no subst antive additional value over existing

therapies."

19. The evidence in this case failed to prove that either

of these circumstances exists with regard to Actiq. Therefore,

even if the Handbook Note authorizes AHCA to add drugs to the 19

Listed Drugs witho ut following the formal rulemaking process,

which it does not, the Handbook Note does not give AHCA such

authority with regard to Actiq.

F. Impact of the Actiq Policy on Medicaid Recipients,

Including Petitioners .

20. Actiq has been prescribed for Petiti oners for uses

other than the relief of breakthrough cancer pain. Neither

Petitioner suffers from cancer.

21. As to Ms. Siegel, Actiq has been prescribed by a pain

specialist for chronic pain from a back injury, nerve damage,

deteriorating discs, abdomin al adhesions, bowel obstruction and

stomach problems, ulcers, and a hiatal hernia. In addition to

alleviating pain from these problems, Actiq also alleviates pain

from migraine headaches which Ms. Siegel suffers from.

22. As to Ms. Knight, Actiq has been prescribed for

chronic back pain, the aftermath of two lower lumbar surgeries,

and the rupture of two cervical discs.

23. Since the announcement of the Actiq Policy on July 1,

2004, AHCA has denied prior authorization of Actiq for Ms.

Siegel and Ms. Knig ht because the uses for which the drug has

been prescribed did not meet AHCA's Actiq Policy. The record

does not reflect whether Petitioners have challenged AHCA's

denial of coverage by requesting a formal administrative hearing

or whether AHCA has given Petitioners notice of a point of entry

to challenge its denial.

24. As the result of the Actiq Policy, Petitioners and

others previously receiving Medicaid - reimbursed supplies of

Actiq from their pharmacies for uses other than for breakthrough

cancer pain will have to either do without the drug or purchase

it from other sources. Actiq is an expensive drug, costing

$1,600.00 a month for Ms. Siegel's prescription and $466.77 a

week for Ms. Knight. Due to its costs, some Medicaid recipients

have had their s upplies of Actiq interrupted or discontinued.

G. The Feasibility and Practically of Rulemaking .

25. AHCA has been preparing comprehensive amendments to

the Handbook. Among the amendments being considered is the

removal of the list of drugs requiring cli nical prior

authorization and, substituting in its place, a process whereby

the reader will be referred to AHCA's website. AHCA intends to

then place any drug for which it intends to require clinical

prior authorization on the website. Drugs added or del eted to

the website would not undergo the rulemaking process. The

amendments, and, in particular the foregoing described change in

the process for identifying drugs requiring clinical prior

authorization, do not identify Actiq in any manner. Therefore,

t he amendments now under consideration would not have the effect

of limiting the coverage for off - label uses of Actiq, as the

Actiq Policy does, without further action by AHCA (the posting

of Actiq on its website). The amendments are also a part of a

much broader package of amendments.

26. On June 18, 2004, AHCA published notice of rule

development in the Florida Administrative Weekly proposing to

incorporate by reference the comprehensive changes to the

Handbook it has been considering. Joint Exhibit A. The

evidence failed to prove, however, when AHCA began this

rulemaking process.

27. Given AHCA's decision that the Actiq Policy needed to

be implemented before completing its rulemaking efforts, AHCA

could have, but did not, pursue rulemaking to add Acti q to the

19 Listed Drugs independently of its broader effort to modify

the rules governing its Medicaid policies on drugs.

28. AHCA failed to prove that rulemaking with regard to

the Actiq Policy was not feasible and practicable under Section

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

H. The Actiq Policy is a Rule .

29. The Actiq Policy is an agency statement of general

applicability which implements, interprets, and prescribes law.

30. The Actiq Policy also includes a description of

procedures or practices of AHCA with regard to Medicaid coverage

of Actiq.

31. The Actiq Policy specifies the use of a form that

imposes requirements and solicits information from prospective

Actiq users that is not specifically required by state or an

existing rule.

32. The Ac tiq Policy does not come within any of the

exceptions to what constitutes a rule listed in Section

120.52(15)(a) through (c), Florida Statutes (2004).

33. The Actiq Policy is a rule as that term is defined in

Section 120.52(15), Florida Statutes (2004).

C ONCLUSIONS OF LAW

A. Jurisdiction .

34. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

the parties thereto pursuant to Section 120.56(1), Florida

Statutes (2004)(all references to statutes are to Florida

Statutes (2004)).

B. Petitioners' Challenge .

35. Petitioners have challenged the Actiq Policy pursuant

to Section 120.56(4), Florida Statutes, which provides, in

pertinent part:

Any person substantially affected by an

agency statement may seek an administrative

determination that the statement violates s.

120.54(1)(a). . . .

36. In order to conclude that the agency statement at

issue in this matter, the Actiq Policy, violates Section

120.54(1)(a), Florida Statutes, it must be concluded that the

Actiq Policy constitutes a "rule" as defined in Section

120.52(15), Florida Statutes, and that the Actiq Policy has not

been adopted pursuant to the procedures of Section 120.54,

Florida Statutes (that it was feasible and practicable for AHCA

to adopt the Actiq Policy as a rule).

C. Burden of Proof .

37. Petitioners have the burden, in the absence of a

statutory directive to the contrary, of establishing by a

preponderance of evidence that the Actiq Policy constitutes an

"agency statement," and that i t is the type of agency statement

which must comply with Section 120.54(1)(a), Florida Statutes

(that it is a "rule"), and that they are substantially affected

by the Actiq Policy. See Dravo Basic Materials Co., Inc., v.

Department of Transportation , 602 So. 2d 632 (Fla. 2d DCA 1992);

and Florida Department of Transportation v. J.W.C. Company , 396

So. 2d 778 (Fla. 1st DCA 1981).

38. Once the Petitioners establish their standing and that

the Actiq Policy constitutes a rule that does not comply with

Section 120.54(1)(a), Florida Statutes, the burden then shifts

to AHCA to establish that rulemaking is not feasible and

practicable under Section 120.54(1)(a), Florida Statutes.

§ 120.56(4)(b), Fla. Stat.

D. Standing .

39. In order for Petitioners to have stand ing to bring

this action, they are required to be persons "substantially

affected" by the Actiq Policy.

40. The parties have stipulated, and the evidence proved,

that Petitioners are substantially affected. The parties

stipulated that "[t]he Petitioners are and will be substantially

affected, within the meaning of section 120.56(4)(a) of the

Florida Statutes, by Respondent's Actiq announcement of July 1,

2004."

E. The Actiq Policy is a "Rule ."

41. Subsection 120.52(15), Florida Statutes, in relevant

par t defines a "rule" as follows:

"Rule" means each agency statement of

general applicability that implements,

interprets, or prescribes law or policy or

describes the procedure or practice

requirements of an agency and includes any

form which imposes any r equirement or

solicits any information not specifically

required by statute or by an existing rule.

The term also includes the amendment or

repeal of a rule. The term does not

include:

(a) Internal management memoranda which

do not affect either the private interests

of any person or any plan or procedure

important to the public and which have no

application outside the agency issuing the

memorandum.

(b) Legal memoranda or opinions issued to

an agency by the Attorney General or agency

legal opini ons prior to their use in

connection with an agency action.

(c) The preparation or modification of:

1. Agency budgets.

2. Statements, memoranda, or instructions

to state agencies issued by the Comptroller

as chief fiscal officer of the state a nd

relating or pertaining to claims for payment

submitted by state agencies to the

Comptroller.

3. Contractual provisions reached as a

result of collective bargaining.

4. Memoranda issued by the Executive

Office of the Governor relating to

inform ation resources management.

42. An agency statement or policy is a "rule" as defined

in Section 120.52(15), Florida Statutes, if its effect requires

compliance, creates certain rights while adversely affecting

others, or otherwise has the direct and con sistent affect of

law. See Jenkins v. State , 855 So. 2d 1219 (Fla. 1st DCA 2003);

and Department of Highway Safety & Motor Vehicles v. Schulter ,

705 So. 2d 81, 82 (Fla. 1st DCA 1997).

43. In the Pre - Hearing Stipulation, the parties included

the following "agreed statement of law" which relates to the

question of whether the Actiq Policy is a "rule":

1. AHCA's Actiq announcement of July 1,

2004:

a. was an agency statement of general

applicability within the meaning of section

120.52(15) of the Florida Statutes;

This agreed statement of law, to the extent it includes fact

determinations, is supported by the evidence presented in this

matter.

44. While the foregoing stipulation appears to constitute

agreement on the part of AHCA that the Actiq Policy c onstitutes

a "rule," it is clear from the proposed final order filed by

AHCA that AHCA did not intend to agree to such a stipulation.

Nor have Petitioners argued in their proposed final order that

AHCA has so stipulated.

45. The evidence in this case, ho wever, proves that the

Actiq Policy is a "rule" as that term is defined in Section

120.52(15), Florida Statutes. The Actiq Policy is an agency

statement of general applicability and it implements,

interprets, and prescribes law and policy of AHCA with reg ard to

the coverage of Actiq. It also describes a procedure or

practice of obtaining prior authorization for the use of Actiq

and specifies the use of a form which imposes requirements and

solicits information from prospective Actiq users that is not

spec ifically required by statute or an existing rule.

46. The Actiq Policy is no different in its effect than

the inclusion of the 19 Listed Drugs and the Handbook

Authorization Criteria and Procedures, which AHCA clearly

realized it needed to adopt as a rule .

47. The evidence also proved that the Actiq Policy does

not come within any of the exceptions to what constitutes a rule

listed in Section 120.52(15)(a) through (c), Florida Statutes.

48. In its proposed final order, AHCA has argued that the

Actiq Poli cy is not a rule, stating, in part, that "[t]he

challenged statement simply notified Petitioners that prior

authorization would be required for prescribing Actiq for cancer

patients with breakthrough pain." AHCA goes on to argue that

the Actiq Policy is n ot a rule because it "is consistent with

Section 409.912, F.S., Rule 59G - 4.250, F.A.C., and the Medicaid

Prescribed Drug Services Coverage, Limitations and Reimbursement

Handbook [the Handbook Note] . . . ."

49. Section 409.912, Florida Statutes, essentia lly

requires that AHCA provide Medicaid health - care services in a

cost - effective manner. While the parties have stipulated that

Section 409.912, Florida Statutes, "grants AHCA the authority to

impose [the Actiq Policy] limits," the parties have also agree d

that it must do so "in compliance with the Florida

Administrative Procedures Act." Thus, the parties have

correctly agreed that, although Section 409.912, Florida

Statutes, may authorize AHCA to limit the use of Actiq, it must

do so consistent with the requirements of Chapter 120, Florida

Statutes.

50. Florida Administrative Code Rule 59G - 4.250 adopts by

reference the Handbook, and in particular, the 19 Listed Drugs,

the Handbook Authorization Criteria and Procedures, and the

Handbook Note. Therefore, AHCA argues that the Handbook Note is

a rule which authorized it to issue the Actiq Policy.

51. The Handbook Note is subject to two interpretations.

One, that all that AHCA needs to do to add a drug to the 19

Listed Drugs, is announce its intention to do so, as it has done

with Actiq. The other interpretation, however, is that the list

is not an exclusive list; that other drugs may be added in the

future, by adopting a modified Handbook list by rulemaking as it

did the original 19 Listed Drugs. The firs t interpretation

would render the Handbook Note invalid, a result not favored

under the law. See Royal World Metropolitan, Inc. v. City of

Miami Beach , 863 So. 2d 320 (Fla. 3d DCA 2003), rev . denied ,

2005 WL 589872 (Feb. 9, 2005); and Department of Legal Affairs

v. Rogers , 329 So. 2d 257, 263 (Fla. 1976). The interpretation

argued by AHCA would vest unbridled discretion in AHCA to add

drugs to the 19 Listed Drugs without following the

administrative processes proscribed by Chapter 120, Florida

Statutes. The second possible interpretation, however, would

not cause such a result.

52. Therefore, in order to avoid an interpretation of the

Handbook Note that would cause it to be declared invalid as

vesting unbridled discretion in AHCA, it is concluded that th e

Handbook Note is merely a reminder that the 19 Listed Drugs may

not be an exclusive list and that future developments may

require an amendment of the list to add other drugs; but that

any such modification will be accomplished consistent with

Chapter 120 , Florida Statutes.

53. Finally, even if the Handbook Note authorized AHCA to

add drugs to the 19 Listed Drugs without following the

rulemaking process, the evidence failed to prove that the

conditions specified in the Handbook Note for AHCA to add a drug

to the 19 Listed Drugs apply to Actiq.

F. AHCA's Application of the Actiq Policy Does Not Comply

with Section 120.54(1)(a), Florida Statutes .

54. Section 120.54(1)(a), Florida Statutes, provides as

follows:

(a) Rulemaking is not a matter of agency

di scretion. Each agency statement defined

as a rule by s. 120.52 shall be adopted by

the rulemaking procedure provided by this

section as soon as feasible and practicable.

1. Rulemaking shall be presumed feasible

unless the agency proves that:

a. T he agency has not had sufficient time

to acquire the knowledge and experience

reasonably necessary to address a statement

by rulemaking;

b. Related matters are not sufficiently

resolved to enable the agency to address a

statement by rulemaking; or

c. The agency is currently using the

rulemaking procedure expeditiously and in

good faith to adopt rules which address the

statement.

2. Rulemaking shall be presumed

practicable to the extent necessary to

provide fair notice to affected persons of

r elevant agency procedures and applicable

principles, criteria, or standards for

agency decisions unless the agency proves

that:

a. Detail or precision in the

establishment of principles, criteria, or

standards for agency decisions is not

reasonable un der the circumstances; or

b. The particular questions addressed are

of such a narrow scope that more specific

resolution of the matter is impractical

outside of an adjudication to determine the

substantial interests of a party based on

individual circ umstances.

55. In order to be considered not in compliance with

Section 120.54(1)(a), Florida Statutes, it is necessary to find

that the Actiq Policy has not been adopted following the

procedures specified in Section 120.54, Florida Statutes, and

that i t was feasible and practicable for AHCA to follow those

procedures.

56. The evidence proved, and AHCA does not dispute, that

the Actiq Policy has not been adopted pursuant to the formal

rulemaking procedures of Section 120.54, Florida Statutes.

57. It is also concluded that AHCA has failed to prove

that it was not feasible and practical to adopt the Actiq Policy

as a rule:

a. The evidence proved that "[AHCA has . . . had

sufficient time to acquire the knowledge and experience

reasonably necessary to addr ess [the Actiq Policy] by

rulemaking." Otherwise, AHCA presumably would not have

instituted the Actiq Policy in July 2004;

b. AHCA, while proving that before and at the time of the

final hearing of this case it has been considering comprehensive

modifica tions to the Handbook through the rulemaking process,

failed to prove that the adoption of the Actiq Policy could not

have be accomplished separately from that effort before it

actually instituted the Policy. It has also not, therefore,

been proved that " [r]elated matters are not sufficiently

resolved to enable the agency to address [the Actiq Policy] by

rulemaking . . . ."; and

c. AHCA has also failed to prove that it is currently

using the rulemaking procedure expeditiously and in good faith

to adopt ru les which address the [Actiq Policy]". AHCA failed

to prove that it is moving expeditiously and it failed to prove

that the Actiq Policy, which specifically requires prior

clinical authorization for, and limits the uses of, Actiq, is

actually be addressed in the comprehensive changes to the

Handbook AHCA is considering. Those changes, as they relate to

drugs for which prior clinical authorization may be required,

merely creates a totally new process of identify such drugs.

The process under consideration gives absolutely no

consideration by its terms to Actiq.

58. As to the conclusion reached in paragraph 57.c., AHCA

failed to prove why it did not adopt the Actiq Policy separately

from its current rulemaking efforts concerning the more

comprehensive chan ges being considered by it. More

significantly, the evidence presented by AHCA at hearing failed

to prove that its current rulemaking effort specifically

includes the Actiq Policy.

59. Finally, AHCA also failed to prove those matters

addressed in Section 120.54(1)(a)2.a. and b., Florida Statutes.

G. Conclusion .

60. Based upon the foregoing, it is concluded that the

Actiq Policy is a "rule" as defined in Section 120.52(15),

Florida Statutes, and that it has not been adopted by the

rulemaking procedures p rovided by Section 120.54, Florida

Statutes.

61. It is also concluded that AHCA failed to prove that

adoption of the Actiq Policy as a rule was not feasible and

practicable under Section 120.54(1)(a), Florida Statutes.

62. Therefore, it is concluded that the Actiq Policy

violates Section 120.54(1)(a), Florida Statutes. Upon the entry

of this Final Order, AHCA is required by Section 120.56(4)(d),

Florida Statutes, to "immediately discontinue all reliance upon

the statement or any substantially similar sta tement as a basis

for agency action." While there are exceptions to this

prohibition contained in Section 120.56(4)(e), Florida Statutes,

whether those exceptions, and in particular the exception of

Section 120.56(4)(e)3., Florida Statutes, apply is not a n issue

properly before this forum for determination.

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

ORDERED:

1. The Actiq Policy constitutes an agency statement that

violates Section 120.54(1)(a), Florida Statutes;

2. The Ag ency for Health Care Administration shall

immediately discontinue all reliance upon the Actiq Policy or

any substantially similar statement as a basis for agency

action; and

3. Jurisdiction over this matter is retained for the

purpose of determining the a mount of any attorneys' fees and

costs to be awarded Petitioners.

DONE AND ORDERED this 12th day of April, 2005, in

Tallahassee, Leon County, Florida.

S

LARRY J. SARTIN

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 (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 12th day of April, 20 05.

COPIES FURNISHED :

Treena A. Kaye, Esquire

Community Legal Services

of Mid - Florida, Inc.

315 Magnolia Avenue

Sanford, Florida 32771

William H. Fraser, Esquire

Legal Aid Society of Palm

Beach County, Inc.

423 Fern Street, Suite 200

West Palm Be ach, Florida 33401

Christine M. Thorson, Esquire

Office of the Attorney General

The Capitol, Plaza Level 01

Tallahassee, Florida 32399

Scott Boyd

Executive Director and General Counsel

Joint Administrative Procedures Committee

Holland Building, Room 1 20

Tallahassee, Florida 32399 - 1300

Richard Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Station 3

Tallahassee, Florida 32308

Valda Clark Christian, General Counsel

Agency for Health Care Administration

2727 Mahan Dri ve, Suite 3431

Tallahassee, Florida 32308

Alan Levine, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Suite 3116

Tallahassee, Florida 32308

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 original Notice of Appeal with the agency clerk of

the Di vision 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 District where the party resides. The notice of

appeal mus t be filed within 30 days of rendition of the order to

be reviewed.