08-000711RX Technology Insurance Company vs. Department Of Financial Services
 Status: Closed
DOAH Final Order on Tuesday, March 4, 2008.


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Summary: DOAH does not have jurisdiction to consider a challenge to the 2004 version of Workers` Compensation Reimbursement Manual because the manual is no longer incorporated by reference into any rule. The petitions are dismissed.

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.

Select the PDF icon to view the document.
PDF
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: 03/04/2008
Proceedings: DOAH Final Order
PDF:
Date: 03/04/2008
Proceedings: Final Order. CASE CLOSED.
PDF:
Date: 02/26/2008
Proceedings: Order of Consolidation (DOAH Case Nos. 08-0398RX and 08-0711RX).
PDF:
Date: 02/25/2008
Proceedings: Petitioner`s Response to Order to Show Cause 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).
PDF:
Date: 02/13/2008
Proceedings: Order of Assignment.
PDF:
Date: 02/12/2008
Proceedings: Rule Challenge transmittal letter to Liz Cloud from Claudia Llado copying Scott Boyd and the Agency General Counsel.
PDF:
Date: 02/11/2008
Proceedings: Petition for Formal Administrative Hearing filed.

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

Related Florida Statute(s) (5):