08-000711RX
Technology Insurance Company vs.
Department Of Financial Services
Status: Closed
DOAH Final Order on Tuesday, March 4, 2008.
DOAH Final Order on Tuesday, March 4, 2008.
1STATE OF FLORIDA
4DIVISION OF ADMINISTRATIVE HEARINGS
8FFVA MUTUAL , )
11)
12Petitioner , )
14)
15vs. ) Case No. 08 - 0398RX
22)
23DEPARTMENT OF FINANCIAL )
27SERVICES , )
29)
30Respondent , )
32)
33and )
35)
36HOLMES REGIONAL MEDICAL )
40CENTER, INC., )
43)
44Intervenor. )
46)
47TECHNOLOGY INSURANCE COMPANY, )
51)
52Petitioner, )
54)
55vs. ) Case No. 08 - 0711RX
62)
63DEPARTMENT OF FINANCIAL )
67SERVICES, )
69)
70Respondent. )
72)
73FINAL ORDER
75These cases are before the undersigned based upon the
84parties' responses to the Orders to Show Cause issued on
94January 30, 2008, and February 15, 2008. No hearing is
104necessary.
105APPEARANCES
106For Petitioners: Timothy L. Newhall, Esquire
112Law Offices of Timoth y L.
118Newhall, L.L.C.
1201334 Timberlane Road, Suite 11
125Tallahassee, Florida 32312
128For Respondent: Jill Bennett, Esquire
133Department of Financial Services
137Division of Legal Services
141200 East Gaines Street
145Tallahassee, Florida 32399 - 4229
150For Intervenor: Jerome W. Hoffman, Esquire
156Gigi Rollini, Esquire
159Holland & Knight, LLP
163Post Office Drawer 810
167Tallahassee, Florida 32302
170ISSUE
171The issue is whether Section 11B(3) of the Florida Workers'
181Compensation Reimbursement M anual for Hospitals , 2004 Second
189Edition, is an invalid exercise of delegated legislative
197authority.
198PRELIMINARY STATEMENT
200On or about November 15, 2007, FFVA Mutual (FFVA) filed a
211Petition for Formal Administrative Hearing with the Agency for
220Health Care Administration (AHCA). The petition requests a
228hearing under Sections 120.569 and 120.57(1), Florida Statutes, 1/
237on AHCA's determination that FFVA is required to reimburse
246Holmes Regional Medical Center, Inc. (HRMC) , more than $55,000
256for in - patient serv ices that HRMC provided to P atient E.C. The
270petition also seeks a determination under Section 120.56,
278Florida Statutes, that Section 11B(3) of the Florida Workers'
287Compensation Reimbursement Manual for Hospitals , 2004 Second
294Edition ("the 2004 Manual"), i s an invalid exercise of delegated
307legislative authority. The petition alleges that the 2004
315Manual is incorporated by reference into Florida Administrative
323Code Rule 69L - 7.501.
328On November 28, 2007, AHCA referred the petition to the
338Division of Administ rative Hearings (DOAH). The petition was
347designated DOAH Case No. 07 - 5414 and assigned to Administrative
358Law Judge Bram D.E. Canter.
363On January 16, 2008, the Department of Financial Services
372(Department) filed a motion in DOAH Case No. 07 - 5414 requesting
384that it be added to the case style , because it was the agency
397that promulgated the rule incorporating the manual challenged by
406FFVA. The Department's motion also requested that DOAH Case
415No. 07 - 5414 be consolidated with two other cases - DOAH Case
429Nos. 07 - 5489 and 07 - 5661 - in which the same provision of the
4462004 Manual was being challenged. 2/
452Judge Canter denied the motion to consolidate in an Order
462entered in DOAH Case No. 07 - 5414 on January 24, 2008. The Order
476also stated that DOAH had "opened Case No. 08 - 0398RX, based on
489the rule challenge included in the petition for hearing filed by
500FFVA Mutual in the companion case of 07 - 5414."
510On January 28, 2008, HRMC filed a petition to intervene in
521DOAH Case No. 08 - 0398RX. The petition was granted in an Order
534entered on January 30, 2008.
539Judge Canter held a telephonic status conference in DOAH
548Case No. 08 - 0398RX on January 29, 2008, at which "the parties
561appeared to be in agreement that the rule being challenged in
572this case, a manual adopted by reference in F lorida
582Administrative Code Rule 69L - 7.501, is no longer adopted by
593reference." Because the challenged rule did not appear to be a
604proposed rule or an existing rule and because DOAH only has
615jurisdiction to consider challenges to proposed rules and
623existin g rules, Judge Canter issued an Order to Show Cause on
635January 30, 2008, directing FFVA to "show cause in writing . . .
648why this rule challenge should not be dismissed." Thereafter,
657on February 6, 2008, this case and the related DOAH Case
668No. 07 - 5414 were transferred to the undersigned.
677FFVA filed a response to the Order to Show Cause on
688February 6, 2008. The Department and HRMC filed replies to
698FFVA's response on February 12, 2008.
704On February 11, 2008, DOAH established Case No. 08 - 0711RX
715based upon the Petition for Formal Hearing filed by Technology
725Insurance Company (TIC) with AHCA and referred to DOAH. The
735petition filed by TIC, like FFVA's petition, requests a hearing
745under Sections 120.569 and 120.57(1), Florida Statutes, on the
754determination is sued by AHCA in the reimbursement dispute
763between TIC and a health care provider, 3/ and also seeks a
775determination under Section 120.56, Florida Statutes, that
782Section 11B(3) of the 2004 Manual is an invalid exercise of
793delegated legislative authority.
796On February 15, 2008, the undersigned issued an Order to
806Show Cause in DOAH Case No. 08 - 0711RX. The Order directed the
819parties to show cause as to why DOAH Case Nos. 08 - 0398RX and
83308 - 0711RX should not be consolidated and also directed TIC to
845show cause "as to why this case should not be dismissed for the
858reasons identified in the Order to Show Cause issued in DOAH
869Case No. 08 - 0398RX on January 30, 2008."
878The Department filed a response to the Order to Show Cause
889on February 24, 2008, and TIC filed a respons e on February 25,
9022008. An Order consolidating DOAH Case Nos. 08 - 0398RX and
91308 - 0711RX was entered on February 26, 2008.
922Due consideration has been given to the parties' filings.
931No hearing is necessary to rule on the jurisdictional issue
941framed by the Or ders to Show Cause and the parties' responses to
954the Orders.
956FINDINGS OF FACT
9591. The petitions filed by FFVA and TIC challenge the
969validity of Section 11B(3) of the 2004 Manual , 4/ which prior to
981October 1, 2007, was adopted by reference as part of Florida
992Administrative Code Rule 69L - 7.501(1).
9982. Florida Administrative Code Rule 69L - 7.501(1) was
1007amended effective October 1, 2007, to adopt by reference the
1017Florida Workers' Compensation Reimbursement Manual for
1023Hospitals , 2006 Edition ("the 2006 Manual").
10313. Florida Administrative Code Rule 69L - 7.501(1), as it
1041existed when the petitions were filed and as it currently
1051exists, adopts by reference the 2006 Manual, not the 2004
1061Manual.
10624. The 2004 Manual is no longer adopted by reference as
1073part of Florida Ad ministrative Code Rule 69L - 7.501, or any other
1086rule.
10875. AHCA applied the 2004 Manual in the reimbursement
1096dispute initiated by HRMC against FFVA under Section 440.13,
1105Florida Statutes, as reflected in the determination letter
1113issued by AHCA on October 24, 2007, which was attached to FFVA's
1125petition. The reimbursement dispute is the subject of the
1134pending DOAH Case No. 07 - 5414.
11416. AHCA applied the 2004 Manual in a reimbursement dispute
1151involving TIC under Section 440.13, Florida Statutes, as
1159reflected in the determination letter issued by AHCA on
1168January 9, 2008, which was attached to TIC's petition. The
1178reimbursement dispute is the subject of the pending DOAH Case
1188No. 08 - 0703.
1192CONCLUSIONS OF LAW
11957. DOAH has jurisdiction to consider rule challenges
1203purs uant to Section 120.56, Florida Statutes.
12108. DOAH's jurisdiction is limited to considering
1217challenges to proposed rules, existing rules, agency statements
1225that meet the definition of a rule but that have not been
1237formally adopted as rules , and emergency rules. See
1245§ 120.56(2) - (5), Fla. Stat.
12519. DOAH does not have jurisdiction to consider challenges
1260to rules that have been repealed or that are otherwise "no
1271longer in existence." See Dept. of Revenue v. Sheraton Bal
1281Harbour Ass'n, Ltd. , 864 So. 2d 454 ( Fla. 1st DCA 2003); Fla.
1294Retail Federation v. Agency for Health Care Admin. , Case
1303No. 04 - 1828RX, 2004 Fla. Div. Adm. Hear. LEXIS 2018, at ¶ 22
1317(DOAH July 19, 2004) (concluding that "the general principle
1326announced in Sheraton -- that rules no longer in exist ence cannot
1338be challenged -- extends beyond Section 120.56 proceedings
1346involving rules that have been formally repealed"), per curiam
1356aff'd , 903 So. 2d 939 (Fla. 1st DCA 2005) (table);
1366§ 120.56(3)(a), Fla. Stat. ("A substantially affected person may
1376seek an administrative determination of the invalidity of an
1385existing rule at any time during the existence of the rule ."
1397(emphasis supplied)).
139910. Sheraton is materially indistinguishable from this
1406case. In that case, a taxpayer filed a petition under Section
14171 20.56, Florida Statutes, challenging a rule that had been
1427repealed by operation of law , but that was still being applied
1438to determine the taxpayer's substantial interests in a pending
1447tax refund case. The agency moved to dismiss the rule challenge
1458on the ground that DOAH lacked jurisdiction to consider a
1468challenge to a rule that had been repealed. The Administrative
1478Law Judge denied the motion, and the agency petitioned for a
1489writ of prohibition from the appellate court. The court granted
1499the petition in a per curiam opinion, agreeing with the agency's
1510argument that "section 120.56, Florida Statutes does not
1518authorize a rule challenge to a rule that is no longer in
1530existence." Sheraton , 864 So. 2d at 454.
153711. Petitioners argue in their responses to the Orders to
1547Show Cause that Sheraton is distinguishable because the rule at
1557issue in that case had been repealed, whereas the 2004 Manual
"1568remains in full force and effect for hospital admissions
1577occurring prior to October 1, 2007." The fact that AHCA may
1588s till be applying the 2004 Manual in disputes involving services
1599rendered prior to October 1, 2007, does not change the fact that
1611the rule adopting the 2004 Manual is no longer in existence.
162212. Petitioners also argue that it would be "an
1631unreasonable resul t" and "a clear violation of [their] due
1641process rights" if they were precluded from challenging the
1650validity of the 2004 Manual because AHCA is still using the
1661manual to determine their substantial interests. The
1668undersigned is not unsympathetic to Petit ioners' argument, but
1677this result is mandated by Sheraton and Section 120.56, Florida
1687Statutes.
168813. In sum, DOAH does not have jurisdiction to consider
1698Petitioners' rule challenge to Section 11B(3) of the 2004
1707Manual , because the manual is no longer adopt ed as part of
1719Florida Administrative Code Rule 69L - 7.501 or any other rule
1730and , therefore , is no longer in existence for purposes of
1740challenge under Section 120.56, Florida Statutes.
174614. Finally, to the extent that Petitioners are
1754challenging AHCA's interp retation of the 2004 Manual or its
1764application of the manual in the reimbursement disputes, those
1773issues are beyond the scope of a rule challenge proceeding. See
1784Fairfield Communities v. Fla. Land & Water Adj. Comm'n , 522
1794So. 2d 1012, 1014 (Fla. 1st DCA 1 988) (explaining that the
1806purpose of a rule challenge is "to determine the facial validity
1817of [the challenged rules], not to determine their validity as
1827applied to specific facts, or whether the agency has placed an
1838erroneous construction on them").
1843ORDER
1844Based upon the foregoing findings of fact and conclusions
1853of law, it is
1857ORDERED that:
18591. The portions of the petitions filed by FFVA and TIC
1870challenging the validity of Section 11B(3) of the 2004 Manual
1880under Section 120.56, Florida Statutes, are dismis sed.
18882. The other aspects of the petitions remain pending in
1898DOAH Case Nos. 07 - 5414 and 08 - 0703.
19083. The files in DOAH Case Nos. 08 - 0398RX and 08 - 0711RX are
1923closed.
1924DONE AND ORDERED this 4th day of March , 2008 , in
1934Tallahassee, Leon County, Florida.
1938S
1939T. KENT WETHERELL, II
1943Administrative Law Judge
1946Division of Administrative Hearings
1950The DeSoto Building
19531230 Apalachee Parkway
1956Tallahassee, Florida 32399 - 3060
1961(850) 488 - 9675 SUNCOM 278 - 9675
1969Fax Filing (850) 921 - 6847
1975www.doa h.state.fl.us
1977Filed with the Clerk of the
1983Division of Administrative Hearings
1987this 4th day of March , 2008 .
1994ENDNOTES
19951/ All statutory references are to the 2007 version of the
2006Florida Statutes.
20082/ DOAH Case No. 07 - 5489 was voluntarily dismissed on
2019February 1, 2008. DOAH Case No. 07 - 5661 was bifurcated, and the
2032rule challenge included in the petition in that case was
2042designated DOAH Case No. 07 - 5676RX. DOAH Case Nos. 07 - 5661 and
205607 - 5676RX were voluntarily dismissed on February 28, 2008.
20663/ This portion of the petition is pending as DOAH Case
2077No. 08 - 0703 , which is assigned to Administrative Law Judge P.
2089Michael Ruff .
20924/ According to the petitions, Section 11B(3) of the 2004
2102Manual states: " When charges for inpatient services at either
2111an acute care hospital or a trauma center exceed $50,000.00, the
2123stop - loss method for reimbursement shall be used to reimburse
2134the hospital instead of the established per diem. Reimbursement
2143shall be at 75 percent of charges. "
2150COPIES FURNISHED :
2153Timothy L. Newha ll, Esquire
2158Law Offices of Timothy L.
2163Newhall, L.L.C.
21651334 Timberlane Road, Suite 11
2170Tallahassee, Florida 32312
2173Jill Bennett, Esquire
2176Department of Financial Services
2180Division of Legal Services
2184200 East Gaines Street
2188Tallahassee, Florida 32399 - 422 9
2194Jerome W. Hoffman, Esquire
2198Gigi Rollini, Esquire
2201Holland & Knight, LLP
2205Post Office Drawer 810
2209Tallahassee, Florida 32302
2212Honorable Alex Sink
2215Chief Financial Officer
2218Department of Financial Services
2222The Capitol, Plaza Level 11
2227Tallahassee, Florida 32 399 - 0300
2233Daniel Sumner, General Counsel
2237Department of Financial Services
2241The Capitol, Plaza Level 11
2246Tallahassee, Florida 32399 - 0307
2251Scott Boyd, Executive Director
2255and General Counsel
2258Joint Administrative Procedures Committee
2262120 Holland Building
2265Tall ahassee, Florida 32399 - 1300
2271Liz Cloud, Program Administrator
2275Bureau of Administrative Code
2279Department of State
2282R.A. Gray Building, Suite 101
2287Tallahassee, Florida 32399 - 0250
2292NOTICE OF RIGHT TO JUDICIAL REVIEW
2298A party who is adversely affected by this Final Order is
2309entitled to judicial review pursuant to Section 120.68, Florida
2318Statutes. Review proceedings are governed by the Florida Rules
2327of Appellate Procedure. Such proceedings are commenced by
2335filing the original notice of appeal with the Clerk of the
2346Division of Administrative Hearings and a copy, accompanied by
2355filing fees prescribed by law, with the District Court of
2365Appeal, First District, or with the District Court of Appeal in
2376the Appellate District where the party resides. The notice of
2386app eal must be filed within 30 days of rendition of the order to
2400be reviewed.
- Date
- Proceedings
- PDF:
- Date: 04/09/2008
- Proceedings: Intervenor Holmes Regional Medical Center, Inc.`s Notice of Withdrawal of Motion for Attorneys` Fees & Costs filed.
- PDF:
- Date: 04/08/2008
- Proceedings: Order (Intervenor Holmes Regional Medical Center, Inc.`s Motion for Attorneys` Fees & Costs is denied).
- PDF:
- Date: 03/31/2008
- Proceedings: Intervenor Holmes Regional Medical Center, Inc.`s Motion for Attorneys` Fees & Costs filed.
- PDF:
- Date: 02/22/2008
- Proceedings: Department of Financial Services Response to Order to Show Cause filed.
- PDF:
- Date: 02/15/2008
- Proceedings: Order to Show Cause (on or before February 25, 2008, parties shall show cause in writing as to why this case should not be consolidated with DOAH Case No. 08-0398RX, and Petitioner shall also show cause in writing as to why this case should not be dismissed).
Case Information
- Judge:
- T. KENT WETHERELL, II
- Date Filed:
- 02/11/2008
- Date Assignment:
- 02/13/2008
- Last Docket Entry:
- 04/09/2008
- Location:
- Health Care, Florida
- District:
- HC
- Agency:
- Department of Financial Services
- Suffix:
- RX
Counsels
-
Timothy L. Newhall, Esquire
Address of Record -
Daniel Sumner, General Counsel
Address of Record