05-000402RX Florida Academy Of Cosmetic Surgery, Inc. vs. Department Of Health, Board Of Medicine Status: Closed DOAH Final Order on Monday, August 8, 2005.

Summary: Florida Administrative Code Rules 64B8-9.0092 (4)(a) and 64B8-9.0092 (4)(c) are invalid because they are vague and leave Respondent with unbridled discretion.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA ACADEMY OF COSMETIC )

SURGERY, INC., )

)

Petitioner, )

)

vs. ) Case No. 05 - 0402 RX

)

DEPARTMENT OF HEALTH, BOARD OF )

MEDICINE, )

)

Respondent. )

)

FINAL ORDER

A formal hearing was conducted in this case on April 26,

200 5 , in Tallahassee, Florida, before Suzanne F. Hood,

Administrative Law Judge with the Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Alfred W. Clar k, Esquire

Post Office Box 623

Tallahassee, Florida 32302 - 0623

For Respondent: Edward A. Tellochea, Esquire

Office of the Attorney General

Department of Legal Affai rs

The Capitol, P laza L evel 01

Tallahassee, Florida 32399 - 1050

STATEMENT OF THE ISSUE

The issue is whether Florida Administrative Code Rules 64B -

9.0092(2)(f), 64B8 - 9.0092(4)(a), and 64B8 - 9.0092(4)(c)

consti tute invalid exercises of delegated legislative authority

as defined by Section 120.52(8), Florida Statutes (2004).

PRELIMINARY STATEMENT

On July 12, 2004, Petitioner Florida Academy of Cosmetic

Surgery (FLACS) filed an application for approval as an offi ce

surgery accrediting organization pursuant to Section 458.309,

Florida Statutes (2004) and Florida Administrative Code Rule

64B8 - 9.0092. On August 20, 2004, Respondent Department of

Health (DOH), Board of Medicine (Board), issued a Notice of

Intent to D eny the application.

On or about September 2, 2004, FLACS filed a Petition for

Formal Administrative Proceedings pursuant to Sections 120.569

and 120.57(1), Florida Statutes (2004). On September 17, 2004,

the Board referred the petition to the Division of

Administrative Hearings (DOAH). DOAH assigned the case DOAH

Case No. 04 - 3249.

On September 28, 2004, the undersigned issued a Notice of

Hearing, scheduling DOAH Case No. 04 - 3249 for hearing on

December 13, 2004. Pursuant to the Board's unopposed Moti on for

Continuance dated December 1, 2004, the undersigned rescheduled

DOAH Case No. 04 - 3249 for hearing on February 23 and 24, 2005.

On February 4, 2005, FLACS filed a Petition for an

Administrative Determination of the Invalidity of Florida

Administra tive Code Rule 64B8 - 9.0092. DOAH assigned the rule

challenge DOAH Case No. 05 - 0402RX.

On February 4, 2005, FLACS filed an unopposed Motion to

Consolidate DOAH Case Nos. 04 - 3240 and 05 - 0402RX. An Order of

Consolidation dated February 15, 2005, granted t he motion.

On February 14, 2005, the Board filed an unopposed

Motion for Continuance. An Order Granting Continuance and

Re - scheduling Hearing was entered on February 17, 2005,

rescheduling the hearing for April 25 and 26, 2005.

By letter dated April 18, 2005, the parties advised the

undersigned that they required only one day for hearing and

requested that the hearing commence on April 26, 2005. The

undersigned granted the parties' request via telephonic

communication.

During the hearing, the parties offered one joint exhibit,

which was accepted as evidence. FLACS presented the testimony

of two witnesses and offered four exhibits that were accepted as

evidence. The Board presented the testimony of two witnesses

and offered five exhibits that were acc epted as evidence. At

the conclusion of the hearing, the parties agreed to file late -

filed depositions and exhibits in lieu of testimony during the

hearing.

During the final hearing, the parties also agreed to file

separate proposed orders for DOAH Case Nos. 04 - 3249 and 05 -

0404RX. Accordingly, the cases are hereby deconsolidated. 1

On May 13, 2005, the court reporter filed the Transcript of

the proceedings.

On May 17, 2005, the Board filed the deposition of

Charles E. Grapper, M.D., D.D.S.

On May 19, 2 005, the undersigned issued an Order Granting

Agreed Motion for Extension of Time to file proposed orders.

On May 27, 2005, FLACS filed the deposition of R. Gregory

Smith, M.D.

The Board filed the deposition of Jerry A. Cohen, M.D. and

Rina A. Palladino on May 31, 2005, and June 1, 2005,

respectively.

On June 13, 2005, the Board filed an unopposed Motion for

Extension of Time to file p roposed Orders.

FLACS filed its Proposed Final Order on June 21, 2005. The

Board filed its Proposed Final Order on June 22, 2005.

All citations hereinafter shall refer to Florida Statutes

(2004) unless otherwise indicated.

FINDINGS OF FACT

1. In Florida, physicians who perform certain surgical

procedures in their offices are required to register the office

with DOH. Addit ionally, DOH must inspect such offices unless a

nationally recognized accrediting agency or an accrediting

organization approved by the Board inspects and accredits the

offices every three years. See § 458.309(3), Fla. Stat. and

Fla. Admin. Code R . 64B8 - 0 .0091.

2. Florida Administrative Code Rule 64B8 - 9.0092, entitled

"Approval of Physician Office Accrediting Organizations,"

establishes requirements that FLACS must meet in order to

achieve the Board's approval to operate as an accrediting

organization. F LACS is the only organization that the Board has

ever approved as an accrediting organization.

3. FLACS is a not - for - profit corporation, organized for

the following purposes: (a) to promote office safety through

its accreditation activities; (b) to pro mote cosmetic surgery;

and (c) to provide continuing education courses related to

office surgery. FLACS was formed in 1999 and, since that time,

has participated actively in office surgery issues considered by

the Board.

4. FLACS began operating as an approved office surgery

accrediting organization early in 2001. In January 2003 FLACS

filed a complete renewal application, seeking the Board's

approval to continue operating as an office surgery accrediting

organization. The Board denied the applicatio n and, after a

formal administrative hearing, entered a Final Order denying

FLACS's application. See Florida Academy of Cosmetic Surgery,

Inc. v. Board of Medicine , Case No. DOH - 04 - 0661 - FOF - MQA (Final

Order, June 18, 2004)(adopting Recommended Order in DO AH Case

No. 03 - 3349, April 15, 2004.)

5. FLACS filed a new application for approval as an office

surgery accrediting organization on July 12, 2004. The Board

never advised FLACS whether its application was complete or

incomplete. There is evidence that a member of the Board's

staff, Melinda Grey, reviewed the application, finding it

incomplete in many respects.

6. On August 5, 2004, Ms. Grey prepared a spreadsheet

entitled "Board of Medicine Staff Issues Regarding FLACS

Application." The spreadshee t compared the application with the

requirements of the applicable provisions of the Florida

Administrative Code, including Florida Administrative Code Rule

64B8 - 9.0092.

7. Larry McPherson, the Board's Executive Director, was

aware that Ms. Grey was re viewing FLACS's application. She did

not tell Mr. McPherson that the application was incomplete.

Instead, she informed the Board's legal counsel that FLACS had

filed the application. Subsequently, Ms. Grey placed the

application on the Board's next sche duled meeting agenda.

8. On August 7, 2004, the Board voted to deny the new

application. On August 23, 2004, the Board entered an Notice of

Intent to Deny FLACS's new application on the following grounds:

1. When participating in accrediting

ac tivities in the past, the applicant

violated Section 458.331(1)(nn), Florida

Statutes, by failing to comply with rules of

the Board in the following manner:

a. The applicant failed to provide

copies of accreditation reports and

corrective action plan s to the Board office

within 30 days of completion of accrediting

activities in violation of Rule 64B8 -

9.0092(4)(e), Florida Administrative Code.

b. The applicant failed to immediately

report to the Department conditions in

physicians' offices that p osed a potential

immediate threat to patients in violation of

Rule 64B8 - 9.0092(4)(f), Florida

Administrative Code.

c. When inspecting and accrediting

facilities the applicant ignored its written

accreditation standards and failed to

provide the Board office with accreditation

standards under which it was actually

operating. Such facts reveal that the

applicant operated in violation of Rule

64B8 - 9.0092(4)(g), Florida Administrative

Code.

d. When inspecting the facilities, the

applicant operated with inadequate or

applied inconsistently its quality assurance

program in violation of Rule 64B8 -

9.0092(4)(a), Florida Administrative Code.

2. The applicant failed to provide

evidence of an adequate quality assurance

program as required by Rule 64B8 -

9.0092(4)(a), Florida Administrative Code.

3. The applicant failed to provide

evidence of an adequate ongoing anesthesia

related accreditation and quality assurance

processes as required by Rule 64B8 -

9.0092(4)(c), Florida Administrative Code.

4 . The applicant failed to submit

copies of all incident reports filed with

the state that originated at FLACS

accredited facilities as required by Rule

64B8 - 9.0092(4)(f), Florida Administrative

Code.

Rule 64B8 - 9.0092(2)(f) -- Incident Reports

9. Florida Administrative Code Rule 64B8 - 9.0092(2)(f)

requires an application for approval as an office surgery

accreditation organization to include copies of all incident

reports filed with the state. The incident reports are defined

by Section 458.351(4), Florid a Statutes, which reads as follows:

(4) For purposes of notification to

the department pursuant to this section, the

term "adverse incident" means an event over

which the physician or licensee could

exercise control and which is associated in

whole o r in part with a medical

intervention, rather than the condition for

which such intervention occurred, and which

results in the following patient injuries:

(a) The death of a patient.

(b) Brain or spinal damage to a

patient.

(c) The perfo rmance of a surgical

procedure on the wrong patient.

(d) 1. The performance of a wrong -

site surgical procedure;

2. The performance of a wrong surgical

procedure; or

3. The surgical repair of damage to a

patient resulting from a planned surgical

procedure where the damage is not a

recognized specific risk as disclosed to the

patient and documented through the informed -

consent process if it results in: death;

brain or spinal damage; permanent

disfigurement not to include the incision

scar ; fracture or dislocation of bones or

joints; a limitation of neurological,

physical or sensory function; or any

condition that required transfer of the

patient.

(e) A procedure to remove unplanned

foreign objects remaining from a surgical

procedur e.

(f) Any condition that required

transfer of a patient to a hospital licensed

under Chapter 395, Florida Statutes, from

any facility or any office maintained by a

physician for the practice of medicine which

is not licensed under Chapter 395, Flori da

Statutes.

10. The incident reports are further defined by Florida

Administrative Code Rule 64B8 - 9.001(1)(a), which states as

follows in relevant part:

. . . an event over which the physician or

other licensee could exercise control and

which is asso ciated in whole or in part with

a medical intervention, rather than the

condition for which such intervention

occurred, and which results in the following

patient injuries:

1. The death of a patient.

2. Brain or spinal damage to a

patient.

3. The performance of a surgical

procedure on the wrong patient.

4. The performance of a wrong - site

surgical procedure, the performance of a

wrong surgical procedure; or the surgical

repair of damage to a patient resulting from

a planned surgical p rocedure where the

damage is not a recognized specific risk as

disclosed to the patient and documented

through the informed - consent process and if

one of the listed procedures in the

paragraph results in: death; brain or

spinal damage; permanent disfigure ment not

to include the incision scar; fracture or

dislocation of bones or joints; a limitation

of neurological, physical or sensory

function; or any condition that required

transfer of the patient.

5. A procedure to remove unplanned

foreign object s remaining from a surgical

procedure.

6. Any condition that required

transfer of a patient to a hospital licensed

under Chapter 395, Florida Statutes, from

any facility or any office maintained by a

physician for the practice of medicine which

is no t licensed under Chapter 395, Florida

Statutes.

11. FLACS understood that the "incident reports"

referenced in Florida Administrative Code Rule 64B8 - 9.0092(2)(f)

are the same as the "reports on adverse incident" defined by

Section 458.351, Florida Statut es. FLACS's application

specifically references adverse incident reports as defined by

Section 458.351, Florida Statutes. FLACS filed two such adverse

incident reports with it s new application.

12. FLACS has several methods to use in collecting

incide nt reports. First, FLACS requires its accredited

physicians and office surgery facilities to attest and

acknowledge that they are required to provide FLACS with any and

all adverse incident reports related to or following surgery in

the accredited offices . Second, FLACS requires the staff of

accredited offices to perform self - evaluation surveys after the

first and second year of accreditation, said surveys to include

such incident reports. Third, FLACS watches for information

about adverse incidents as r eported by news media or complaints

from the public.

13. Most important, FLACS can make quarterly public record

searches even though the state system of record keeping for

adverse incident reports is not computerized. There is no

persuasive evidence th at FLACS ever made an oral or written

public records request for copies of incident reports related to

its accredited practices.

14. There is no statutory or rule requirement for

physicians to file copies of incident reports with their

accrediting organ ization. However, at least two of the

nationally recognized accrediting agencies, Joint Commission on

Accreditation of Healthcare Organization s (JACHO) and American

Association for Accreditation of Ambulatory Surgical Facilities

(AAAASF), have provisions in their accreditation manuals related

to adverse incidents.

15. JACHO's "Accreditation Manual for Office - Based Surgery

Practices," Second Edition (2005), defines a "sentinel event" as

follows:

A sentinel event is an unexpected occurrence

involving de ath or serious physical or

psychological injury, or the risk thereof.

Serious injury specifically includes loss of

limb or function. The phrase "or risk

thereof" includes any process variation for

which a recurrence would carry a significant

chance of a serious adverse outcome.

Such events are called "sentinel" because

they signal the need for immediate

investigation and response.

The terms "sentinel event" and "medical

error" are not synonymous; not all sentinel

events occur because of an error, and not

all errors result in sentinel events.

16. JACHO requires each accredited practice to define

"sentinel event" for its own purposes in establishing mechanisms

to identify, report, and manage these events. JACHO encourages,

but does not require, its cl ients to report "sentinel events" to

the accrediting agency within 45 days of the event or of

becoming aware of the event. The report should include a root

cause analysis and an action plan. If JACHO becomes aware of an

unreported "sentinel event," JACHO will advise the accredited

practice to prepare and submit the report within a certain time

frame. If the accredited practice fails to file an appropriate

report within that time frame, JACHO will not revoke

accreditation, but will place the accredited pr actice on an

"Accreditation Watch" list.

17. AAAASF's "Standards and Checklist for Accreditaion of

Ambulatory Surgery Facilities" contains forms for accredited

surgery facilities to use in reporting "unanticipated sequela."

The forms refer one to AAAASF' s "Quality Assurance and Peer

Review Manual" for questions relative to their completion. The

record indicates that "unanticipated sequela" are the equivalent

of adverse incident reports, including but not limited to,

events that result in unplanned hospit al admissions.

18. In Florida, physicians are required to file adverse

incident reports with DOH's Consumer Services Unit (CSU), which

is part of DOH's Medical Quality Assurance Program. On at least

a quarterly basis, the Board's staff requests CSU to provide it

with copies of adverse incident reports filed during a certain

time frame.

19. The staff of the CSU has access to medical consultants

who review the incident reports to determine whether there might

have been a violation of law or a violation of a standard of

care. If so, the matter is referred for further investigation,

determination of probable cause, and possible disciplinary

prosecution by the Board.

20. The Board's staff places the incident reports in

physician registration files and in office surgery

inspection/accreditation files. The Board's staff also places

copies of incident reports involving physicians or facilities in

the respective file of their accrediting agency or accrediting

organization.

21. The Board's staff provide s copies of adverse incident

reports to DOH's state inspectors before they make office

inspections of non - accredited facilities or facilities formerly

accredited by a national agency or FLACS. The state

inspector/risk manager uses the incident reports dur ing

inspections to recommend improvements so that such incidents can

be avoided in the future.

22. The Board's Surgical Care Committee, uses the incident

reports for statistical purposes. The Surgical Care Committee

reviews the reports to determine whe ther changes need to be made

in administrative rules, including but not limited to, rules

related to standard of care or physician registration.

23. It is important for FLACS to be aware of adverse

incident reports filed by its accredited physicians and office -

surgery facilities. Such reports are an essential part of any

accreditation program. Without such knowledge, FLACS cannot be

assured that its accredited physicians and offices are taking

steps to prevent such incidents from occurring in the futur e.

Moreover, if FLACS is not aware of the adverse incidents

occurring in the offices it inspects, FLACS cannot implement

changes in its policies to improve the accreditation process.

24. The Board has no policy or practice for routinely

sharing inciden t reports with accrediting organizations.

Nevertheless, requiring FLACS to file copies of incident reports

with the Board could alert the Board to incidents that were

known to FLACS but never reported to the state and vice versa.

As stated above, FLACS could make routine public records

requests for copies of reports filed with the Board but not

reported directly to FLACS.

Rule 64B8 - 9.0092(4)(a) -- Quality Assurance Program

25. Florida Administrative Code Rule 64B8 - 9.0092(4)(a)

requires an accrediting orga nization to "have a mandatory

quality assurance program approved by the Board of Medicine."

Though it is not apparent on the face of the rule, this

provision relates to an "internal" quality assurance program

used by the accrediting organization, not a qu ality assurance

program implemented at a physician's office.

26. The rule does not define a quality assurance program

or describe the required contents of a quality assurance program

necessary to achieve the Board's approval. There are no forms

or inst ructions to provide guidance in designing an such a

program.

27. Mr. McPherson testified that FLACS could have used the

quality assurance programs of national accrediting agencies as a

reference when designing its own program. The greater weight of

the evidence indicates that the "internal" quality assurance

programs of national agencies are proprietary and not available

to the public.

28. Public information from JACHO and AAAASF relates to

the ways that they monitor the quality assurance programs of t he

offices they inspect. For example, JACHO's manual discusses

quality management issues for accredited practices, including

standards, elements of participation, and the rationale that

supports each. There is no evidence to show what internal steps

the national agencies take to assure the quality of their

programs apart from monitoring the programs of the accredited

practices. Therefore, the Board could not have compared FLACS's

"internal" quality assurance program and processes with the

"internal" qual ity assurance programs and processes of the

national accrediting agencies.

29. During the hearing, the Board presented expert

testimony about quality assurance programs in general. The

expert testified that a generic quality assurance program for

healthc are providers requires the following: (a) identification

of positive outcomes that one desires; (b) identification of

undesired negative outcomes based on the service and risk

profile of the facility; (c) evaluation of accrued adverse

incidents to identif y trends; and (d) identification of ways to

prevent future problems.

30. The Board's quality assurance expert based his

testimony on the standards published by the Center for Medicare

and Medicaid Services (CMS). The description of a quality

assurance program in the CMS document forms a skeleton for

national accreditation programs such as the AAAASF, JACHO, and

the Accreditation Association for Ambulatory Health Care

(AAAHC). The rule does not reference CMS, JACHO, AAAASF, or

AAAHC as having establishe d models for an "internal" mandatory

quality assurance program that the Board would approve.

31. FLACS's office quality improvement plan compares

favorably to the one established by AAAASF in some respects.

For instance FLACS requires its accredited ph ysicians and

offices to perform a random chart screen of five cases on a

quarterly basis. AAAASF requires a minimum of six cases per

surgeon utilizing a facility or two percent of all cases in a

group practice every six months.

32. AAAASF requires its clients to engage in a peer review

process at least every six months. The review is done by a

recognized peer review organization or a medical doctor other

than the operating room surgeon. FLACS does not require peer

review evaluations due to concerns th at peer review documents

would be subject to discovery in legal proceedings in Florida.

Rule 64B8 - 9.0092(4)(c) -- Ongoing Anesthesia - related

Accreditation and Quality Assurance Processes Involving the

Active Participation of Anesthesiologists

33. Florida Administrative Code Rule 64B8 - 9.0092(4)(c)

requires an accrediting organization to have "ongoing

anesthesia - related accreditation and quality assurance processes

involving the active participation of anesthesiologists." The

Board did not base its denial on FLACS's anesthesia - related

accreditation standards and quality assurance processes required

by Florida Administrative Code Rule 64B8 - 9.0092(4)(b). Instead,

the denial is based upon the requirement for "active

participation of anesthesiologists."

34. T he Board has no standards that describe or define the

"active participation of anesthesiologists." There is no

evidence that shows how the Board applied this requirement to

FLACS's application. There are no forms or instructions to

provide guidance for a n applicant attempting to show the ongoing

active participation of anesthesiologists. There is no evidence

regarding the participation of anesthesiologists in ongoing

anesthesia - related accreditation and quality assurance processes

of national accreditati on agencies.

35. FLACS has an Anesthesia Review Committee, which is

made up of three participating anesthesiologists, FLACS's

inspectors, and FLACS's Executive Director. The committee meets

quarterly to discuss current issues involving office surgery

a nesthesia, any anesthesia incidents involving FLACS's

accreditees, new pharmacological agents available for outpatient

anesthesia and, when available, additional information such as

incident reports involving anesthesia mishaps of physicians who

are not FL ACS's accreditees.

36. The Anesthesia Review Committee keeps written minutes.

FLACS's Board of Directors reviews the minutes during regularly

scheduled meeting.

37. The Anesthesia Review Committee is responsible for

updating FLACS's Anesthesis Param eters of Care on an annual

basis. They also attend FLACS's educational meeting to update

members on current practice in outpatient/office surgery

anesthesia.

38. The Board's quality assurance expert testified that he

could not determine exactly how FLACS 's anesthesiologists

participated, i.e . what they did and how they came to

conclusions. The expert could not say whether the participation

of FLACS's anesthesiologists resembled the participation of

anesthesiologists in the programs of national accreditat ion

agencies. The expert acknowledged that for a relatively small

number of physician's offices with a small number of anesthesia -

related problems occurring within those offices, an evaluation

of such problems on a quarterly basis might be quite adequate.

CONCLUSIONS OF LAW

39. The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of this

proceeding pursuant to Section 120.56, Florida Statutes (2005).

40. FLACS has the burden of proving, by a preponderance of

th e evidence, that Florida Administrative Code Rules 64B8 -

9.0092(2)(f), 64B8 - 9.0092(4)(a), and 64B8 - 9.0092(4)(c) are

invalid exercises of delegated legislative authority as to the

objection raised. See § 120.56(3)(a), Fla. Stat.

41. Section 120.56(1)(e), F lorida Statutes, provides in

pertinent part that "[h]earings held under this section shall be

de novo in nature."

42. The parties have agreed and the facts establish that

FLACS has standing to bring this rule challenge. FLACS's

application was denied in part based on the Board's reliance

upon the challenged rules.

43. Section 120.52(8), Florida Statutes, provides as

follows in relevant part:

(8) "Invalid exercise of delegated

legislative authority" means action which

goes beyond the powers, functio ns, and

duties delegated by the Legislature. A

proposed or existing rule is an invalid

exercise of delegated legislative authority

if any one of the following applies:

* * *

(b) The agency has exceeded its grant

of rulemaking authority, citation t o 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 standar ds for agency

decisions, or vest unbridled discretion in

the agency;

(e) The rule is arbitrary or

capricious. A rule is arbitrary if it is

not supported by logic or the necessary

facts; a rule is capricious if it is adopted

without thought or reason or is irrational.

* * *

A grant of rulemaking 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 specific power s 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 powers and duties, nor shall an

agency have the authority to implement

statutory provision setting forth general

legislative intent or policy. Statutory

language granting rulemaking authority shall

be construed to extend no further than

implementing or interpreting the specific

powers and duties conferred by the same

statute.

44. Paragraphs (b) and (c) of Subsection 120.58, Florida

Statutes, are somewhat similar, but have been held to impose

different requirements upon agency rulemaking. Paragraph (8)(b)

relate s to the adequacy of the grant of rulemaking authority,

while paragraph (8)(c) and the "flush left" language relate to

the limitations imposed by an agency's enabling statutory

authority, which is being implemented. See St. Johns Water

Management District v. Consolidated - Tomoka Land Company , 717

So. 2d 72, 81 (Fla. 1st DCA 1998); The Sierra Club v. St. Johns

Water Management District , DOAH Case No. 01 - 0583RP at p. 19

(Final Order, June 16, 2001). The "flush left" language has

been described as "a set of general standards to be used in

determining the validity of a rule in all cases." See Southwest

Florida Water Management District v. Save the Manatee Club , 773

So. 2d 594, 597 - 598 (Fla. 1st DCA 2000).

45. Florida Administrative Code Rule 64B8 - 9.0092 sta tes as

follows in pertinent part:

(1) Definitions.

* * *

(b) "Approved accrediting agency or

organization" means nationally recognized

accrediting agencies: American Association

for Accreditation of Ambulatory Surgery

Facilities (AAAASF), Ac creditation

Association for Ambulatory Health Care

(AAAHC) and Joint Commission on

Accreditation of Healthcare Organization

(JACHO). Approved organizations also

include those approved by the Board after

submission of an application for approval

pursuant t o this rule.

* * *

(2) Application. An application for

approval as an accrediting organization

shall be filed with the Board office at 4052

Bald Cypress Way, Bin #C)#, Tallahassee,

Florida 32399 - 3252, and shall include the

following information an d documents:

* * *

(f) Copies of all incident reports

filed with the state.

* * *

(4) Requirements. In order to be

approved by the Board, an accrediting

organization must comply with the following

requirements:

(a) The accrediting age ncy must have a

mandatory quality assurance program approved

by the Board of Medicine.

(b) The accrediting agency must have

anesthesia - related accreditation standards

and quality assurance processes that are

reviewed and approved by the Board of

Medi cine.

(c) The accrediting agency must have

ongoing anesthesia - related accreditation and

quality assurance processes involving the

active participation of anesthesiologists.

Petitioner challenges the validity of Florida Administrative

Code Rules 64 B8 - 9.0092(2)(f), 64B8 - 9.0092(4)(a), and 64B8 -

9.0092(4)(c).

Section 120.52(8)(b), Florida Statutes

46. FLACS argues that the Board exceeded its rulemaking

authority contrary to Section 120.52(8)(b), Florida Statutes, in

the following ways: (a) in Florid a Administrative Code Rule

64B8 - 9.0092(2)(f) by requiring an application to include

incident reports; (b) in Florida Administrative Code Rule 64B8 -

9.0092(4)(a) by mandating an requirement for an approved quality

assurance program; and (c) in Florida Admini strative Code Rule

64B8 - 9.0092(4)(c) by requiring that an applicant have ongoing

anesthesia - related processes involving the active participation

of anesthesiologists.

47. The Board does not cite to Section 458.309(1), Florida

Statu t es, as specific autho rity for the challenged rules.

Section 458.309(1), Florida Statutes, states as follows:

458.309 Rulemaking authority. --

(1) The board has authority to adopt

rules pursuant to ss. 120.536(1) and 120.54

to implement the provisions of the chapt er

conferring duties upon it.

Instead, the Board cites the specific authority of Section

458.309(3), Florida Statutes, which states as follows:

(3) All physicians who perform level 2

procedures lasting more than 5 minutes and

all level 3 surgical pr ocedures in an office

setting must register the office with the

department unless that office is licensed as

a facility pursuant to chapter 395. The

department shall inspect the physician's

office annually unless the office is

accredited by a nationally r ecognized

accrediting agency or an accrediting

organization subsequently approved by the

Board of Medicine. The actual costs for

registration and inspection or accreditation

shall be paid by the person seeking to

register and operate the office setting in

which the office surgery is performed.

48. Section 120.54(1)(a), Florida Statutes, states as

follows:

120.54 Rulemaking. --

(1) GENERAL PROVISIONS APPLICABLE TO

ALL RULES OTHER THAN EMERGENCY RULES. --

(a) Rulemaking is not a matter of

agency discretion. 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.

49. Any standards that the Board uses to approve or

disapprove applicants would constitute rules as defined by

Section 120.52(15), Florida Statutes, which states as follows in

relevant part:

(15) "Rule" means each agency

statement of general applicability that

implements, interprets, or prescribes law or

policy or descri bes the procedure or

practice requirements of an agency and

includes any information not specifically

required by statute or by an existing rule.

. . .

50. By locating Section 458.309(3), Florida Statutes, in a

statutory section entitled "Rulemaking Auth ority," the

Legislature has necessarily given the Board explicit authority

to promulgate the challenged rules. Any other interpretation of

the statute would mean that the Board could not establish the

standards to be employed when granting or denying appr oval of

office surgery accrediting organizations without violating

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

Section 120.52(8)(c) and the "Flush Left" Language

51. FLACS argues that Florida Administrative Code Rules

64B8 - 9.0092(2)(f), 64B8 - 9.0092(4)(a) an d 64B8 - 9.0092(4)(c)

enlarge, modify, or contravene the specific provisions to be

implemented contrary to Section 120.52(8)(c), Florida Statutes,

and the "flush left" language, quoted above. The challenged

rules cite Section 458.309(3), Florida Statutes, as the law

implemented.

52. Specifically, FLACS asserts that Section 458.351(4),

Florida Statutes, and Florida Administrative Code Rule 64B8 -

9.001(1)(a), quoted above in the Findings of Fact, require

physicians to file adverse incident reports. FLACS t akes the

position that Section 458.309(3), Florida Statutes, does not

refer to incident reports or give the Board the power or duty to

force accrediting organizations to comply with Section

458.351(4), Florida Statutes, by requiring them to file copies

of incident report with their applications.

53. FLACS also asserts that Section 458.309(3), Florida

Statutes, does not give the Board the power or duty to mandate

the implementation of quality assurance programs or the active

participation of anesthesiolog ist in anesthesia - related

accreditation and quality assurance processes.

54. In Section 458.309(3), Florida Statutes, the

Legislature did not limit the Board's discretion to decide what

applicants must include with their applications or what they

must s how to achieve approval of their accreditation processes.

The Legislature's decision not to spell out the contents of

applications or to list all standards the Board must apply

before approving applications does not mean that the challenged

rules violate Section 120.58(c), Florida Statutes. Section

458.309(3), Florida Statutes, gives the Board the specific power

and duty to exercise its discretion in this regard.

Section 120.52(8)(d), Florida Statutes

55. FLACS argues that Florida Administrative Code R ules

64B8 - 9.0092(2)(f), 64B8 - 9.0092(4)(a) and 64B8 - 9.0092(4)(c)

violate Section 120.58(8)(d), Florida Statutes, because they are

vague, fail to establish adequate standards for agency

decisions, and vest unbridled discretion upon the Board.

56. As to Fl orida Administrative Code Rule 64B8 -

9.0092(2)(f), FLACS is correct that the rule does not

specifically identify incident reports as defined in Section

458.351(4), Florida Statutes, and Florida Administrative Code

Rule 64B8 - 9.001(1)(a). However, FLACS had no trouble

identifying the incident reports when it filed two such reports

with its application. There is nothing vague about the term

"incident reports" in the medical community.

57. The requirement for applicants to file incident

reports is very stra ightforward. If the reports are filed, the

accreditation organization meets the requirement and the Board

would have no discretion to find otherwise.

58. The requirement for an applicant to include incident

reports with its application does not violate Section 120.58(d),

Florida Statutes. In fact, FLACS did not assert this argument

in its Proposed Final Order.

59. In considering whether Florida Administrative Rules

64B8 - 9.0092(4)(a) and 64B8 - 9.0092(4)(c) are vague, one must

construe the terms "quali ty assurance program" and "ongoing

anesthesia - related accreditation and quality assurance processes

involving the active participation of anesthesiologist" in

accordance with the meaning assigned to the terms by the class

of persons within the purview of t he rule and within the context

of the subject matter of the rule. See Southwest Florida Water

Management Dist. v. Charlotte County , 774 So. 2d 903, 915 - 916

(Fla. 2nd DCA 2001). Given that the challenged rules are meant

to regulate office surgery accredit ation organizations, the

terms must be given the meaning assigned them by individuals who

operate such organizations.

60. During the hearing, the Board presented expert

testimony that the term "quality assurance program" is judged by

a national standard , which originates from CMS and its deemed

national healthcare accrediting programs (AAAASF, AAAHC, and

JACHO). The Board's expert also opined that the national

accrediting agencies express the national standards for quality

assurance in different ways. In other words, they do not mirror

each other in every detail.

61. It might be possible to determine the national

standard for quality assurance programs of office surgery

facilities by examining the programs that national accrediting

agencies require o f their accredited practices. One cannot use

the same process to determine the national standard for an

"internal quality assurance program" or "ongoing anesthesia -

related accreditation and quality assurance processes involving

the active participation of anesthesiologists" because the

"internal" quality assurance programs and processes of the

national accrediting agencies are proprietary.

62. In any event, having a national standard, implemented

by national accrediting agencies in different ways, does not

eliminate the problem here. In Section 458.309(3), Florida

Statutes, the Legislature created three inspection methods for

office surgery facilities: (a) inspection by DOH; (b)

inspection by a nationally recognized accrediting agency; and

(c) inspecti on by an accrediting organization approved by the

Board. In making a distinction between national agencies and

state - approved organizations, the Legislature authorized the

Board to establish office surgery inspection standards, i.e.

something other than t he national experience per se . However,

the challenged rules do not inform applicants whether the Board

wants them to use the quality assurance program and processes of

a particular national agency as a model, to select parts of the

programs and processes from each of the named national agencies,

or to design quality assurance programs and processes based

entirely on Florida's experience and independent of the national

standard.

63. The challenged rules are open - ended and do not provide

sufficient infor mation for applicants to know whether their

"internal" quality assurance programs and processes are

adequate. Accordingly, Florida Administrative Code Rules 64B8 -

9.0092(4)(a) and 64B8 - 9.0092(4)(c) are vague and enable the

Board to exercise unbridled discr etion in violation of Section

120.52(8)(d), Florida Statutes.

Section 120.52(8)(e), Florida Statutes

64. FLACS argues that Florida Administrative Code Rule

64B8 - 9.0092(2)(f) is arbitrary and capricious because it

requires applicants to file incident rep orts in violation of

Section 120.52(8)(e), Florida Statutes. FLACS asserts that the

rule is invalid for the following reasons: (a) the rule enables

the Board to deny an application for failing to include incident

reports , even though the Board is in poss ession of the reports

and knows which agency or organization accredited the office;

(b) there is no statutory requirement for an accrediting

organization to file such report; and (c) there is no way for an

applicant to know for certain when a physician's o ffice has

filed an incident report.

65. FLACS's argument that it is arbitrary or capricious to

require applicants to file incident reports is without merit for

several reasons. First, the Board uses the requirement as a

cross - reference to ensure that p hysicians are filing the reports

with the state. The requirement is important to ensure that

every adverse incident reported to an accrediting organization

is also reported to CSU.

66. Second, accrediting organizations need to be aware of

adverse event s that occur in the offices they inspect. Without

such knowledge, accrediting organizations would not be aware of

the need to take action to prevent reoccurrence of the event.

Regardless of the type of quality assurance programs or

processes that applica nts employ "internally" or impose on their

accredited offices, a minimal requirement would be knowledge of

adverse events occurring in those offices.

67. Third, the challenged rule is not arbitrary or

capricious because there is no statutory requirement for

applicants to file physicians' adverse incident reports. As

discussed above, the Board has the power and duty to decide the

contents of applications, including incident reports, where

consideration of such documents is an important part of

evaluating applications, i.e . to ensure that applicants are

aware of what is going on in their accredited offices.

68. FLACS has requested an award of fees and costs

pursuant to Section 120.595(3), Florida Statutes, which states

as follows:

(3) CHALLENGES TO EXISTING AGENCY

RULES PRUSUANT TO section 120.56(3). -- If the

court or administrative law judge declares a

rule or portion of a rule invalid pursuant

to s. 120.56(3), a judgment or order shall

be rendered against the agency for

reasonable costs and reas onable attorney's

fees, unless the agency demonstrates that

its actions were substantially justified or

special circumstances exist which would make

the award unjust. An agency's are

"substantially justified" if there was a

reasonable basis in law and fac t at the time

the actions were taken by the agency. If

the agency prevails in the proceedings, the

court or administrative law judge shall

award reasonable costs and reasonable

attorney's fees against a party if the court

or administrative law judge deter mines that

a party participated in the proceedings for

an improper purposed as defined by paragraph

(1)(e). No award of attorney's fees as

provided by this subsection shall exceed

$15,000.

69. The undersigned reserves jurisdiction to determine the

que stion of an award of fees and costs in this case, pending a

motion for such relief and the opportunity for the parties to

present facts related to the request.

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

ORDERED:

1. That the challenge to Florida Administrative Code Rule

64B8 - 0092(2)(f) is dismissed.

2. That Florida Administrative Code Rules 64B8 -

9.0092(4)(a) and 64B8 - 9.0092(4)(c) are invalid exercises of

delegated legislative authority.

DONE AND ORDERED this 8th day of August , 2005 , in

Tallahassee, Leon County, Florida.

S

SUZANNE F. HOOD

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 8th day of August , 2005 .

ENDNOTE

1/ The Exhibits and Transcript in DOAH Case No. 04 - 3249 are

located with the re cord in DOAH Case No. 05 - 0402RX.

COPIES FURNISHED :

Alfred W. Clark, Esquire

Post Office Box 623

Tallahassee, Florida 32302 - 0623

Timothy M. Cerio, General Counsel

Department of Health 6400

4052 Bald Cypress Way, Bin A02

Tallahassee, Florida 32399 - 1701

Edward A. Tellochea, Esquire

Office of Attorney General

Department of Legal Aff airs

The Capitol , Plaza Level 01

Tallahassee, Florida 32399 - 1701

Dr. John O. Agwunobi, Secretary

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 Ap pellate Procedure. Such proceedings are commenced by

filing the original 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 D istrict, 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.