07-003404RP Select Specialty Hospital-Orlando, Inc. vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Tuesday, September 23, 2008.

Summary: Petitioners proved that the proposed rule to include long-term care hospitals within the definition of tertiary health service is an invalid exercise of delegated legislative authority.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PROMISE HEALTHCARE, INC., )

)

Petitioner, )

)

and )

)

SELECT SPECIALTY HOSPITAL- )

ORLANDO, INC., )

)

Intervenor, )

)

vs. ) Case No. 07-3403RP

)

AGENCY FOR HEALTH CARE ADMINISTRATION, )

)

)

Respondent. )

)

SELECT SPECIALTY HOSPITAL- )

ORLANDO, INC., )

)

Petitioner, )

)

vs. ) Case No. 07-3404RP

)

AGENCY FOR HEALTH CARE ADMINISTRATION, )

)

)

Respondent. )

)

SUMMARY FINAL ORDER

This case involves a challenge to a proposed rule and is

resolved based upon consideration of motions for summary final

order filed on behalf of Petitioners, Promise Healthcare, Inc.

(Promise) and Select Specialty Hospital-Orlando, Inc. (Select)

and the Agency for Health Care Administration (Agency or AHCA).

Petitioners contend that proposed rule 59C-1.002(41)(i)

(proposed rule) is an invalid exercise of delegated legislative

authority because the proposed rule enlarges and contravenes the

specific provisions of the law implemented and the services

provided by long-term care hospitals (LTCHs) are not the types

of services which can be reasonably considered to be tertiary

health services as defined in Section 408.032(17), Florida

Statutes. The Agency contends that long-term care hospital

services provided within long-term care hospitals are tertiary

health services and, as a result, the proposed rule is valid.

The parties agree there are no genuine issues as to any

material fact for resolution and that entry of a summary final

order is appropriate. See § 120.57(1)(h), Fla. Stat.

APPEARANCES

For Petitioner Promise Healthcare, Inc.:

F. Philip Blank, Esquire

Blank & Meenan, P.A.

204 South Monroe Street

Tallahassee, Florida 32301

For Petitioner/Intervenor Select Specialty Hospital-

Orlando, Inc.:

Mark A. Emanuele, Esquire

Panza, Maurer & Maynard, P.A.

Bank of America Building, Third Floor

3600 North Federal Highway

Fort Lauderdale, Florida 33308

For Respondent Agency for Health Care Administration:

Bart O. Moore, Esquire

Shaddrick A. Haston, Esquire

Agency for Health Care Administration

Fort Knox Building III, Mail Stop 3

2727 Mahan Drive, Suite 3431

Tallahassee, Florida 32308

PRELIMINARY STATEMENT

The proposed rule was published in the June 8, 2007,

edition of the Florida Administrative Weekly in Volume 33,

Number 23. The proposed rule is numbered 59C-1.002(41)(i) and

includes "Long-term care hospitals" within the definition of

"tertiary health service."

On July 23, 2007, Promise filed a Petition to Determine

Invalidity of Proposed Rule. On July 24, 2007, Select filed a

Petition to Determine Invalidity of Proposed Rule.

On August 23, 2007, Select filed a Petition to Intervene in

Case No. 07-3403RP, which was granted.

After an unopposed continuance was granted, the final

hearing was scheduled for January 9-10, 2008, and then re-

scheduled without objection for January 10-11, 2008.

Thereafter, the matter was placed in abeyance by agreement of

the parties until the parties advised that the matter should be

re-scheduled for final hearing. The final hearing was re-

scheduled to commence on November 5, 2008.

During a pre-hearing conference held on June 3, 2008, the

parties suggested that the proposed rule should be read to mean

long-term care hospital services within long-term care hospitals

for the purpose of determining whether the proposed rule is

invalid. The parties advised that they would be offering

evidence during the final hearing on the issue of whether long-

term care hospital services within long-term care hospitals are

a tertiary health service.

By Order dated July 11, 2008, the parties were requested to

respond in writing to the following issues: "In this proceeding

involving a facial challenge to the proposed rule, are the

parties and the undersigned restricted to consideration of the

written language in the proposed rule or, as suggested, not so

restricted? Is an evidentiary hearing required if consideration

is limited to the proposed rule? If an evidentiary hearing is

not required, can the issues raised in the petitions be

determined on cross-motions for summary final order pursuant to

Section 120.57(1)(h), Florida Statutes, see generally Board of

Trustees of the Internal Improvement Trust Fund v. Day Cruise

Association, Inc. , 794 So. 2d 696 (Fla. 1st DCA 2001)?"

On July 28, 2008, the Agency responded, advising in part,

that an evidentiary hearing was not required given the

Petitioners facial challenge to the proposed rule. The Agency

requested leave to file a motion for summary final order.

On July 28, 2008, Petitioners filed a response to the

July 11, 2008, Order; a Motion for Summary Final Order, with

attachments; and a Notice of Filing, with a copy of the

deposition of Jeffrey N. Gregg taken December 18, 2007, and an

affidavit of Michael J. Kornblatt dated July 18, 2008.

Petitioners also requested that judicial notice (official

recognition) be taken of Chapter 2004-383, Laws of Florida, and

a House of Representatives Staff Analysis, February 17, 2004.

On August 27, 1008, the parties filed a document entitled

Joint Stipulated Facts setting forth stipulated undisputed

facts. On September 2, 2008, the parties filed an Amended Joint

Stipulation of Facts (AJSF), which included the party's

positions. The stipulated facts have been incorporated in the

Findings of Fact.

On September 5, 2008, the Agency filed a Motion for Summary

Final Order, which included an affidavit of Jeffrey N. Gregg,

the Bureau Chief of the Health Facility Regulation Bureau,

Health Quality Assurance Division, of AHCA. Several exhibits

are attached to the affidavit, which "summarize the research,

the rationale, and the reasoning used by the Agency in

promulgating" the proposed rule.

On September 12, 2008, the Agency filed a response to

Petitioners' Motion for Summary Final Order and on September 18,

2008, Petitioners filed a response to the Agency's Motion for

Summary Final Order.

Official recognition is taken of the two documents attached

to Petitioners' motion. See §§ 120.569(2)(i) and 120.57(1)(f),

Fla. Stat.

FINDINGS OF FACT

Parties

1. The Agency is statutorily responsible for administering

the Certificate of Need (CON) program and the promulgation of

rules pertaining to tertiary health services.

2. Promise Healthcare, Inc., is located at 999 Yamato

Road, Third Floor, Boca Raton, Florida. Promise's wholly-owned

subsidiary, Promise Healthcare of Florida III, Inc., has

received approval to construct and operate an LTCH in AHCA

Health Service Planning District (District) 3. See Promise

Healthcare of Florida III, Inc. v. State of Florida, Agency for

Health Care Administration , Case No. 06-0568CON (DOAH April 10,

2008; AHCA May 16, 2008).

3. Select owns and operates an LTCH in Orlando, Florida,

within District 7.

4. Petitioners related corporations are currently and have

been applicants in proceedings before the Division of

Administrative Hearings (DOAH) seeking to establish LTCHs in the

State of Florida. Id. See also Select Specialty Hospital -

Marion, Inc. v. State of Florida, Agency for Health Care

Administration , Case No. 04-3150CON (DOAH July 11, 2006; AHCA

Sept. 23, 2006); Select Specialty Hospital - Broward, Inc. v.

Agency for Health Care Administration , Case No. 07-0597CON and

Promise Healthcare of Florida X, Inc. v. Agency for Health Care

Administration , Case No. 07-0598CON (Consolidated).

The Proposed Rule

5. In December 2005 and September 2006, the Agency

published separate notices of proposed rule development

proposing to include long-term care hospitals within the rule

definition of tertiary health service.

6. On June 8, 2007, the Agency published a copy of the

proposed rule at issue in this proceeding in the Florida

Administrative Weekly . The proposed rule is one of several

proposed changes to Florida Administrative Code Rule 59C-1.002,

providing definitions. The stated purpose and effect of the

entire proposed rule changes to Rule 59C-1.002 is "to amend the

rule that defines terms in Chapter 59C-1, F.A.C. due to recent

statutory changes "

7. On July 13, 2007, a public hearing was held.

8. Proposed rule 59C-1.002(41)(i) provides: "'Tertiary

health service' means a health service. . . . .The types of

tertiary services to be regulated under the Certificate of Need

Program in addition to those listed in Florida Statutes include:

. . . (i) Long-term care hospitals.

9. The Agency relies on Sections 408.034(6) and 408.15(8),

Florida Statutes, as the specific authority for all of the

changes to Rule 59C-1.002, including subsection(41)(i). All of

the proposed rule changes implement Sections 408.033(1)(a),

408.036(1)-(3), 408.037(1), 408.039(1) and (2), and 651.118,

Florida Statutes. See also endnote 3. ("'Law implemented'

means the language of the enabling statute being carried out or

interpreted by an agency through rulemaking." Ch. 2008-104,

§ 2, Laws of Fla.)

10. Section 408.034(6) authorizes the Agency to adopt

rules necessary to implement Sections 408.031-408.045, known as

the "Health Facility and Services Development Act." See also

§ 408.15(8), Fla. Stat., providing similar authority.

11. Section 408.033(1)(a) pertains to Local Health

Councils.

12. Section 408.036(1)-(3) include projects that are

subject to CON review, including expedited review, and projects

that are exempt from CON review. (The new construction or

establishment of additional health care facilities, which

includes long-term care hospitals by definition, see Section

408.032(8), Florida Statutes, are subject to CON review.)

13. Section 408.037(1) pertains to CON application

content.

14. Section 408.039(1) and (2) pertains to CON review

cycles and letters of intent, respectively.

15. Section 651.118 pertains generally to the Agency's

authority regarding nursing home beds and sheltered nursing home

beds.

Statutory Definitions

16. "'Health services' means inpatient diagnostic,

curative, or comprehensive medical rehabilitative services and

includes mental health services. Obstetric services are not

health services for purposes of ss. 408.031-408.045."

§ 408.032(9), Fla. Stat.

17. In 2004, the Legislature amended the definition of

"health services" as follows: "'Health services' means inpatient

diagnostic, curative, or comprehensive medical rehabilitative

services and includes mental health services. Obstetrical

services are not health services for purposes of ss. 408.031-

408.045." Ch. 2004-383, § 2, Laws of Fla. (emphasis in

original).

18. "'Health care facility' means a hospital, long-term

care hospital. . . ." § 408.032(8), Fla. Stat.

19. "'Hospital' means a health care facility licensed

under chapter 395." § 408.032(11), Fla. Stat.

20. "Hospital" is defined in Section 395.002(12), Florida

Statutes. "'Hospital' means any establishment that" offers

"services more intensive than those required for room, board,

personal services, and general nursing care, and offers

facilities and beds for use beyond 24 hours by individuals

requiring diagnosis, treatment, or care for illness, injury,

deformity, infirmity, abnormality, disease, or pregnancy. . . ."

§ 395.002(12)(a)-(b), Fla. Stat.

21. The parties stipulated that the Agency licenses LTCH

facilities as Class 1 general hospitals.

22. Generally, a Class 1 general hospital is a "basic

multipurpose hospital." Like Class 1 general hospitals, LTCHs

are subject to CON review and approval prior to offering those

services. Unlike a Class 1 general hospital, a Class I LTCH

seeks exclusion from the acute care Medicare prospective payment

system for inpatient services.

23. "'General hospital' means any facility which meets the

provisions of subsection (12) and which regularly makes its

facilities and service available to the general population."

§ 395.002(10), Fla. Stat. See also § 395.002(28), Fla. Stat.

for a definition of "specialty hospital." For example, a

freestanding children's hospital is classified as a Class 3

specialty hospital because it provides services to a specialized

population related to gender or age. Comprehensive

rehabilitation hospitals are classified as Class 2 specialty

hospitals. Gregg deposition at 35-39.

24. If a Class 1 general hospital desires to add a

tertiary health service, such as pediatric cardiac

catheterization, the hospital would need to obtain a CON.

25. Aside from LTCHs and perhaps some referral hospitals,

the Agency believes a comprehensive inpatient rehabilitation

facility is an example of a facility providing services that are

high in intensity, complexity, or a specialized or limited

application at a high cost associated with the Medicare program.

Gregg deposition at 36-37.

26. The new construction or establishment of additional

health care facilities, including an LTCH, is subject to CON

review. § 408.036(1)(b), Fla. Stat. 1

27. Conversions from one type of health care facility to

another, including the conversion from a general hospital, a

specialty hospital, or a long-term care hospital are also

subject to CON review. § 408.036(1)(c), Fla. Stat. See endnote

5.

28. Also, unless exempt, all health care-related projects

requesting "[t]he establishment of tertiary health services,

including inpatient comprehensive rehabilitation services" are

subject to CON review. § 408.036(1)(f), Fla. Stat.

29. An LTCH desiring to offer a tertiary health service is

required to obtain a CON in order to provide the service.

30. LTCHs, like other general hospitals, can add

additional beds without CON review by filing an appropriate

notice with the Agency.

31. "'Long-term care hospital' means a hospital licensed

under chapter 395 which meets the requirements of 42 C.F.R.

s. 412.23(e) [ 2 ] and seeks exclusion from the acute care Medicare

prospective payment system for inpatient hospital services."

§ 408.032(13), Fla. Stat. See also Fla. Admin. Code R. 59C-

1.002(28), as amended, which mirrors the statutory definition.

32. In 2004, the Legislature amended the definition of

long-term care hospital in Section 408.032(13), adding the terms

"acute care" before "Medicare." Ch. 2004-383, § 2, Laws of Fla. 3

33. "'Tertiary health service' means a health service

which, due to its high level of intensity, complexity,

specialized or limited applicability, and cost, should be

limited to, and concentrated in, a limited number of hospitals

to ensure the quality, availability, and cost-effectiveness of

such service. Examples of such service include, but are not

limited to, pediatric cardiac catheterization, pediatric open-

heart surgery, organ transplantation, neonatal intensive care

units, comprehensive rehabilitation, and medical or surgical

services which are experimental or developmental in nature to

the extent that the provision of such services is not yet

contemplated within the commonly accepted course of diagnosis or

treatment for the condition addressed by a given service. The

agency shall establish by rule a list of all tertiary health

services. § 408.032(17), Fla. Stat.(emphasis added). 4

34. In 2004, the Legislature added "pediatric cardiac

catheterization" and "pediatric open-heart surgery" to the

statutory list of tertiary health services and deleted

"specialty burn units". Ch. 2004-383, § 2, Laws of

Fla.(emphasis in original). 5

35. By its terms, the statutory list of tertiary health

services is not exhaustive. The Agency reviews this list

periodically.

36. To accomplish the legislative purpose stated in the

statutory definition of tertiary health service, the Agency

includes a list of tertiary health services in Florida

Administrative Code Rule 59C-1.002(41)(a)-(j).

37. Like its statutory counterpart, Section 408.032(17),

Florida Statutes, all of the items listed in Rule 59C-

1.002(41(a)-(j) are health services, which, by definition,

"should be limited to, and concentrated in, a limited number of

hospitals to ensure the quality, availability, and cost-

effectiveness of such service." Fla. Admin. Code R. 59C-

1.002(41).

38. Over time, the Agency has added several tertiary

health services, such as heart, kidney, liver, bone marrow,

lung, pancreas, islet cells, and heart/lung transplantation, and

adult open heart surgery. The Agency proposes to delete

neonatal and pediatric cardiac and vascular surgery, and

pediatric oncology and hematology, from the list and add

pediatric cardiac catheterization and pediatric open-heart

surgery to the list, the latter reflecting the 2004 statutory

amendments. See proposed rule 59C-1.002(41)(a)-(j).

The Agency's Rationale for the Proposed Rule

39. According to the Agency, Section 408.032(17) provides

a broad definition of tertiary health services and the Agency

has the authority to decide if certain services, due to their

complexity and cost, should be added to or deleted from the list

of tertiary health services.

40. Notwithstanding the stated purpose and effect of the

proposed rule, see Finding of Fact 6, "[t]he Agency has proposed

to include long term care hospital (LTCH) services as a tertiary

service in the [CON] program because the services are intense,

complex, specialized and costly." See AHCA's Motion for Summary

Final Order, "Rationale for Proposing Long Term Care Hospital

Services as a Tertiary Service in the CON Program" at 1.

41. In attachments to its Motion for Final Summary Order,

the Agency provided information that the Agency believes

demonstrates that LTCH services are tertiary health services.

The Agency contends that "[t]he undisputed evidence shows that a

long term care hospital is a tertiary health service" and

further asserts "[t]here are no genuine issues of material fact

present in this case." AHCA's Motion at 2, ¶¶ 2 and 3.

42. For the Agency, "[t]here is really no such thing as a

tertiary hospital. Tertiary has to do with the services that

are provided." Within the Agency's framework, tertiary health

services are "a combination of specialized, complicated, complex

services that are a high cost." Further, "[t]hey are somewhat

unique. They are high-end services that are the most complex,

the most technologically advanced, the most difficult to

provide, the most resource intensive, and inherently limited as

a result." According to the Agency, LTCHs are health services

that provide a high level of intensity, treat complex patients,

and have a high cost associated with the services provided.

Gregg deposition at 30-33, 48-53.

43. By the proposed rule, the Agency proposes to make

services that are provided in an LTCH a tertiary health service.

But, if those same services are provided in some other type of

facility, they are not LTCH services. Gregg deposition at 48-

49. 6

44. The Agency's approach is based in part on several

reports published by, for example, MedPAC, which characterize

the role of the LTCH to provide post-acute care to a small

number of medically complex patients at a high cost and for

relatively extended periods. Id. at 21-29, 67-68. (The MedPAC

reports relied on by the Agency do not define tertiary services.

Id. at 58.)

45. The Agency's approach is also based on the experience

of the Agency in reviewing LTCH CON applications and developing

an understanding of the complex patient population treated at

LTCHs. Id. at 29, 68. See also AHCA's Motion at Gregg

affidavit and supporting information.

46. The Agency's rationale for the proposed rule is

informative and thoughtful, but not material to the disposition

of this rule challenge in light of the facial challenge to the

proposed rule as written. See endnotes 7 and 13.

47. If the case was resolved on the current record, none

of the parties would be entitled to entry of a final order as a

matter of law if the issue was whether LTCH services within an

LTCH are tertiary health services because whether LTCH services

provided within an LTCH are tertiary health services requires

the resolution of genuine issues of material fact. Compare ,

e.g. , Petitioners' Motion for Summary Final Order, Exhibit 9

(Kornblatt affidavit) with AHCA's Motion for Summary Final

Order, Gregg affidavit and supporting information. Rather, the

challenge is resolved based on an evaluation of the proposed

rule in light of the plain meaning of several statutory

provisions.

CONCLUSIONS OF LAW

Jurisdiction

48. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

Fla. Stat.

Standing

49. No issue is raised regarding the standing of Promise

and Select. Nevertheless, Promise and Select have standing to

participate as parties in this proceeding.

Invalid Exercise of Delegated Legislative Authority

50. Any substantially affected person may seek an

administrative determination of the invalidity of any proposed

rule by filing a petition seeking such a determination with the

Division of Administrative Hearings within the time set forth in

Section 120.56(2)(a), Florida Statutes. In this proceeding,

Promise and Select have the burden of going forward and the

Agency then has the burden to prove by a preponderance of the

evidence that the proposed rule is not an invalid exercise of

delegated legislative authority as to the objections raised.

be valid or invalid. § 120.56(2)(c), Fla. Stat. 7

51. "'Invalid exercise of delegated legislative authority'

means action that goes beyond the powers, functions, and duties

delegated by the Legislature. A proposed or existing rule is an

invalid exercise of delegated legislative authority if,"

material here, the rule "enlarges, modifies, or contravenes the

specific provisions of law implemented, citation to which is

required by s. 120.54(3)(a)1," [ 8 ] or is "arbitrary or

capricious." § 120.52(8)(c) and (e), Fla. Stat., as amended,

see Ch. 2008-104, § 2, Laws of Fla. "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." § 120.52(8)(e), Fla. Stat.

52. Pursuant to Section 120.536(1), Florida Statutes,

"[a]n agency may adopt only rules that implement or interpret

the specific powers and duties granted by the enabling statute."

See also Bd. of Trustees of the Internal Improvement Trust Fund

v. Day Cruise Association, Inc. , 794 So. 2d 696, 700 (Fla. 1st

DCA 2001) (agency may adopt rules "only where the Legislature

has enacted a specific statute, and authorized the agency to

implement it, and then only if the (proposed) rule implements or

interprets specific powers or duties").

53. "Tertiary health service" is defined by statute and

several tertiary health services are listed. 9 By its terms, the

statutory definition is not exhaustive. 10 The Legislature

granted the Agency the express authority and discretion to add,

by rule, tertiary health services to the statutory list and

thereby implement this specific statutory power and duty.

54. The issue is whether the Agency exceeded its authority

by proposing to include "long-term care hospitals" as a

"tertiary health service" in light of the statutory definition

and other statutes implemented by the proposed rule? 11 Stated

otherwise, does the inclusion of "long-term care hospitals"

within the rule definition of "tertiary health service" enlarge,

modify, or contravene the specific laws implemented, citation to

which is required by Section 120.54(3)(a)1., Florida Statutes? 12

Statutory Interpretation

55. The guiding purpose in construing a statute is to give

effect to the Legislature's intent. State v. J.M. , 824 So. 2d

105, 109 (Fla. 2002). A determination of legislative intent "is

derived primarily from the language of the statute." State v.

Bodden , 877 So. 2d 680, 685 (Fla. 2004), cert. denied , 125 S.

Ct. 628 (2004). Further, when construing a statute, courts

"look first at the statute's plain meaning." Moonlit Waters

Apartments, Inc. v. Cauley , 666 So. 2d 898, 900 (Fla. 1996). If

the intent is unclear from the plain language of the statute,

only then are rules of statutory construction and legislative

history used to determine legislative intent. BellSouth

Telecommunications, Inc. v. Meeks , 863 So. 2d 287, 289 (Fla.

2003).

56. Where the Legislature uses particular words to define

a term, a court does not have the authority to redefine it.

Racetrac Petroleum, Inc. v. Delco Oil, Inc. , 721 So. 2d 376,

377-378 (Fla. 5th DCA 1998). Also, courts are extremely

reluctant to add words to a statute. Armstrong v. City of

Edgewater , 157 So. 2d 422, 425 (Fla. 1963).

57. Here, the term "tertiary health service" is defined,

but the list is not exhaustive by the plain terms of the

definition and the Agency has the authority to establish by rule

a list of tertiary health services in addition to those listed

in Section 408.032(17), Florida Statutes.

58. An agency is accorded broad discretion and deference

in the interpretation of the statutes which it administers. See

Bd. of Podiatric Med. v. Fla. Med. Ass'n , 779 So. 2d 658, 660

(Fla. 1st DCA 2001) (citing Public Employees Relations Comm'n v.

Dade County Police Benevolent Ass'n , 467 So. 2d 987 (Fla.

1985)). Also, an agency's interpretation "should be upheld when

it is within the range of permissible interpretations." Id.

(citing Bd. of Trustees of Internal Improvement Trust Fund v.

Levy , 656 So. 2d 1359 (Fla. 1st DCA 1995)). See also Fla. Dep't

of Educ. v. Cooper , 858 So. 2d 394, 396 (Fla. 1st DCA 2003)("If

the agency's interpretation is within the range of possible and

reasonable interpretations, it is not clearly erroneous and

should be affirmed."(citations omitted)).

59. The court has recognized and supported the principle

that rules may clarify and flesh out the details of an enabling

statute. Agencies utilize their expertise by creating rules to

effectuate specific duties. "The Legislature itself is hardly

suited to anticipate the endless variety of situations that may

occur or to rigidly prescribe the conditions or solutions to the

often fact-specific situations that arise." Avatar Dev. Corp.

v. State , 723 So. 2d 199, 204 (Fla. 1998).

60. However, "judicial adherence to the agency's view is

not demanded when it is contrary to the statute's plain

meaning." Sullivan v. Dep't of Envtl. Prot. , 890 So. 2d 417,

420 (Fla. 1st DCA 2004)(citations omitted). See also Willette

v. Air Products , 700 So. 2d 397, 399 (Fla. 1st DCA 1997)

(statute takes precedence over a rule); Cortes v. State Bd. of

Regents , 655 So. 2d 132, 136 (Fla. 1st DCA 1995)(explaining that

the legislature may authorize administrative agencies to

interpret, but never to alter statutes). Also, "an

administrative agency may not adopt a rule which conflicts with

or modifies an existing statute." State, Dep't of Transp. v.

Pan Am. Constr. Co. , 338 So. 2d 1291, 1293 (Fla. 1st DCA

1976)(citations omitted), appeal dismissed , 345 So. 2d 427 (Fla.

1977).

61. There is no dispute that a health care facility such

as an LTCH provides services inside the facility. As defined by

statute, all general or specialty hospitals, including LTCHs,

are facilities that offer services, including health services.

If CON approved, any of these facilities may offer tertiary

health services.

62. It may be that an LTCH is a tertiary facility that

should be limited in number because of the nature of the patient

population, e.g. , acuity levels, complex nature of the patient

care provided, and the cost of the services rendered. But the

Legislature has the prerogative to make this decision and has

not done so.

63. The Legislature defines an LTCH and includes an LTCH

in the definition of health care facility. No health care

facilities are included in the definition of health services.

The definition of tertiary health service, a sub-set of health

services, and the examples which follow the statutory

definition, do not include any health care facilities. As a

matter of law, an LTCH is not a tertiary health service. See

endnote 13.

64. Given the plain meaning of the relevant statutes

referenced herein and those relied on by the Agency, the

proposed rule enlarges the statutory definitions of health

services and tertiary health service, Subsections 408.032(9) and

(17), Florida Statutes, and, accordingly, the proposed rule is

an invalid exercise of delegated legislative authority. 13

CONCLUSION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is:

ORDERED that the Motion for Summary Final Order filed by

Promise and Select is granted; the proposed rule 59C-

1.002(41)(i) is determined to be an invalid exercise of

delegated legislative authority; and the Agency's Motion for

Summary Final Order is denied. The final hearing scheduled for

November 5-7, 2008, is canceled.

DONE AND ORDERED this 23rd day of September, 2008, in

Tallahassee, Leon County, Florida.

S

CHARLES A. STAMPELOS

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 23rd day of September, 2008.

ENDNOTES

1 / In its motion, the Agency states in part: "Additionally,

including Long Term Care Hospital on the list of tertiary

services is to allow the [CON] review process to take place

prior to approval of this type of establishment. This rationale

is consistent with the letter of the law and the overall

legislative intent of Section 408.032(17), Florida Statutes."

AHCA's Motion at 8, ¶ 32. See also AJSF at 13, ¶ 56. By

statute, new LTCHs are required to undergo CON review and

approval. While the proposed rule may add a new criterion for

the Agency's consideration when LTCHs are reviewed, the proposed

rule does not establish a requirement for CON review for new

LTCHs.

2

long-term care hospitals must have provider agreements and "an

average Medicare inpatient length of stay of greater than 25

days (which includes all covered and noncovered days of stay of

Medicare patients) as calculated under paragraph (e)(3) of this

section" or an alternative average length of stay as provided

under subsection (e)(2)(ii).

3 / In proposing the proposed rule, the Agency also relies in

part on the 2004 amendment to Section 408.032(13). It is the

only provision of Chapter 2004-383, Laws of Florida, relied on

by the Agency as statutory support for the proposed rule. The

Agency also relies on Section 408.032(17) as statutory support

for the proposed rule. Gregg deposition at 14-16. See also

endnotes 11 and 12.

4 / No party suggests that LTCHs are experimental or

developmental in nature.

5 / Also, in 2004, the Legislature amended Section 408.036(1)(c),

Florida Statutes, to require CON review when a general,

specialty, or long-term care hospital is converted. Ch. 2004-

383, § 6, Laws of Fla.

6 / Stated otherwise, according to the Agency, the proposed rule

captures the services provided in an LTCH, not the LTCH building

per se. "A hospital is a licensed provider of hospital

services; it's not the building" that is the subject of the

proposed rule. Id. at 64-65.

7 / This proceeding involves a facial challenge to the proposed

rule and not a challenge to this subsection as applied. See

generally Beverly Health and Rehabilitative Services, Inc. v.

Agency for Health Care Admin. , 708 So. 2d 616 (Fla. 1st DCA

1998); Fairfield Communities v. Florida Land and Water

Adjudicatory Comm'n , 522 So. 2d 1012 (Fla. 1st DCA 1988).

8 / See , e.g. , Fla. Petroleum Marketers and Convenience Store

Ass'n v. Dep't of Envtl. Prot. , DOAH Case No. 05-0529RP (DOAH

June 16, 2005), and cases cited therein at Conclusion of Law 39.

9 / "Under the doctrine of noscitur a sociis , the meaning of

statutory terms, and the legislative intent behind them, may be

discovered by referring to words associated with them in the

statute." Turnberry Isle Resort and Club v. Fernandez , 666 So.

2d 254, 256 (Fla. 3d DCA 1996)(citation omitted). All of the

services listed are health services, not health care facilities.

Even "neonatal intensive care units" is classified as a health

service ("[e]xamples of such service include"), not a facility.

§ 408.032(8),(9),(11),(13), and (17), Fla. Stat.

10 / The words "include, but are not limited to," see Section

408.032(17), Florida Statutes, appear to be words of

enlargement, not of limitation and therefore convey the

conclusion that there are other terms includable, though not

specifically enumerated by the statute. See generally Argosy

Limited v. Hennigan , 404 F.2d 14, 20 (5th Cir. 1968); Miami

Country Day School v. Bakst , 641 So. 2d 467, 469 (Fla. 3d DCA

1994), rev. denied , 651 So. 2d 1195 (Fla. 1995); Yon v. Fleming ,

595 So. 2d 573, 577 (Fla. 4th DCA 1992), rev. denied , 599 So. 2d

1281 (Fla. 1992); Op. Att'y Gen. Fla. 081-40 (1981). This

general statement is buttressed by the express terms of the

definition of tertiary health service as explained herein.

11 / The implementing statutes referred to in proposed rule 59C-

1.002 do not support proposed rule 59C-1.002(41)(i). See

Findings of Fact 9-15 and endnote 3.

12 / Section 408.032(17) provides express authority for the

Agency to adopt a rule pertaining to tertiary health services

and Section 408.032(17) is implemented by Florida Administrative

Code Rule 59C-1.002(41) and by the proposed rule, subsection

(41)(i). Nevertheless, Section 408.032(17) was not cited as an

implementing statute by the Agency in the published version of

the proposed rule, see Section 120.54(3)(a)1., Florida Statutes.

"The failure of an agency to follow the applicable rulemaking

procedures or requirements set forth in this chapter shall be

presumed to be material; however, the agency may rebut this

presumption by showing that the substantial interests of the

petitioner and the fairness of the proceedings have not been

impaired." § 120.56(1)(c), Fla. Stat. Here, no interests have

been impaired.

13 / Given the disposition herein, it is unnecessary to resolve

whether long-term care services provided in an LTCH is a

tertiary health service.

COPIES FURNISHED :

Richard Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Station 3

Tallahassee, Florida 32308

Craig H. Smith, General Counsel

Agency for Health Care Administration

Fort Knox Building, Suite 3431

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

Holly Benson, Secretary

Agency for Health Care Administration

Fort Knox Building, Suite 3116

2727 Mahan Drive

Tallahassee, Florida 32308

Liz Cloud, Program Administrator

Administrative Code

Department of State

R. A. Gray Building, Suite 101

Tallahassee, Florida 32399

F. Scott Boyd, Executive Director

and General Counsel

Administrative Procedures Committee

Holland Building, Room 120

Tallahassee, Florida 32399-1300

F. Philip Blank, Esquire

Blank & Meenan, P.A.

204 South Monroe Street

Tallahassee, Florida 32301

Mark A. Emanuele, Esquire

Panza, Maurer, & Maynard, P.A.

Bank of America Building, Third Floor

3600 North Federal Highway

Fort Lauderdale, Florida 33308

Bart O. Moore, Esquire

Agency for Health Care Administration

Fort Knox Building III, Mail Stop 3

2727 Mahan Drive, Suite 3431

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

the Division of Administrative Hearings and a second copy,

accompanied by filing fees prescribed by law, with the District

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

Appeal in the appellate district where the party resides. The

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

the order to be reviewed.