08-001060RX Indemnity Insurance Company Of North America vs. Department Of Financial Services Status: Closed DOAH Final Order on Tuesday, March 11, 2008.

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

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

INDEMNITY INSURANCE COMPANY OF ) )

NORTH AMERICA, )

)

Petitioner, )

) Case No. 08-1060RX

vs. )

)

DEPARTMENT OF FINANCIAL )

SERVICES, )

)

Respondent. )

FINAL ORDER

This case is before the undersigned based upon Respondent's

Motion to Dismiss for Lack of Subject Matter Jurisdiction, filed

February 28, 2008. No hearing is necessary.

APPEARANCES

For Petitioner: Timothy L. Newhall, Esquire

Law Offices of Timothy L.

Newhall, L.L.C.

1334 Timberlane Road, Suite 11

Tallahassee, Florida 32312

For Respondent: Jill Bennett, Esquire

Department of Financial Services

Division of Legal Services

200 East Gaines Street

Tallahassee, Florida 32399-4229

STATEMENT OF THE ISSUE

The issue is whether Section 11B(3) of the Florida Workers'

Compensation Reimbursement Manual , 2004 Second Edition, is an

invalid exercise of delegated legislative authority.

PRELIMINARY STATEMNET

On February 21, 2008, Petitioner filed a Petition for

Formal Administrative Hearing with the Agency for Health Care

Administration (AHCA). The petition requests a hearing on the

determination issued by AHCA in a reimbursement dispute

involving Petitioner under Section 440.13, Florida Statutes. 1/

The petition also includes a "rule challenge" under Section

120.56, Florida Statutes, in which Petitioner alleges that

Section 11B(3) 2/ of the Florida Workers' Compensation

Reimbursement Manual , 2004 Second Edition ("the 2004 Manual"),

is an invalid exercise of delegated legislative authority.

The "affected agencies" identified in the petition are AHCA

and the Department of Financial Services (Department). The

Department is identified because it promulgated Florida

Administrative Code Rule 69L-7.501, which according to the

petition, incorporates by reference the 2004 Manual.

On February 27, 2008, AHCA referred the petition to the

Division of Administrative Hearings (DOAH). The DOAH Clerk

established two cases based upon the petition--DOAH Case

No. 08-1058, which is the reimbursement dispute, and DOAH Case

No. 08-1060RX, which is the rule challenge. AHCA is designated

as the Respondent in the reimbursement dispute, and the

Department is designated as the Respondent in the rule

challenge.

On February 28, 2008, the Department filed a motion to

dismiss the rule challenge for lack of subject matter

jurisdiction because the 2004 Manual is no longer adopted by

reference in Florida Administrative Code Rule 69L-7.501.

Petitioner did not file a response to the motion within the time

allowed by Florida Administrative Code Rule 28-106.204(1). No

hearing is necessary to rule on the jurisdictional issue raised

in the motion.

FINDINGS OF FACT

1. The 2004 Manual is no longer adopted by reference in

Florida Administrative Code Rule 69L-7.501 or any other rule.

2. Florida Administrative Code Rule 69L-7.501(1) was

amended, effective October 1, 2007, to incorporate the 2006

version of the Florida Workers' Compensation Reimbursement

Manual . The amendment deleted the Rule's reference to the 2004

Manual.

3. AHCA applied the 2004 Manual in the reimbursement

dispute involving Petitioner, which is pending as DOAH Case

No. 08-1058.

CONCLUSIONS OF LAW

4. DOAH has jurisdiction to consider challenges to the

validity of agency rules pursuant to Section 120.56, Florida

Statutes.

5. DOAH does not have jurisdiction to consider challenges

to rules that have been repealed or that otherwise are "no

longer in existence." See Dept. of Revenue v. Sheraton Bal

Harbour Ass'n, Ltd. , 864 So. 2d 454 (Fla. 1st DCA 2003); Fla.

Retail Federation v. Agency for Health Care Admin. , Case

No. 04-1828RX, 2004 Fla. Div. Adm. Hear. LEXIS 2018, at ¶ 22

(DOAH July 19, 2004) (concluding that "the general principle

announced in Sheraton --that rules no longer in existence cannot

be challenged--extends beyond Section 120.56 proceedings

involving rules that have been formally repealed"), per curiam

aff'd , 903 So. 2d 939 (Fla. 1st DCA 2005)(table);

§ 120.56(3)(a), Fla. Stat. ("A substantially affected person may

seek an administrative determination of the invalidity of an

existing rule at any time during the existence of the rule .

(Emphasis supplied)).

6. DOAH does not have jurisdiction to consider

Petitioner's rule challenge to Section 11B(3) of the 2004 Manual

because the manual is no longer adopted as part of Florida

Administrative Code Rule 69L-7.501 or any other rule and,

therefore, is no longer in existence for purposes of challenge

under Section 120.56, Florida Statutes. Accord FFVA Mutual v.

Dept. of Financial Services , Case Nos. 08-0398RX and 08-0711RX

(DOAH Mar. 4, 2008).

7. Moreover, to the extent that Petitioner is challenging

AHCA's interpretation of the 2004 Manual or its application of

the manual in the reimbursement dispute, those issues are beyond

the scope of a rule challenge proceeding. See Fairfield

Communities v. Fla. Land & Water Adj. Comm'n , 522 So. 2d 1012,

1014 (Fla. 1st DCA 1988)(explaining that the purpose of a rule

challenge is "to determine the facial validity of [the

challenged rules], not to determine their validity as applied to

specific facts, or whether the agency has placed an erroneous

construction on them").

ORDER

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is

ORDERED that:

1. The portion of the petition challenging the validity of

the 2004 Manual is dismissed, and the file in DOAH Case

No. 08-1060RX is closed.

2. The other aspects of the petition remain pending in

DOAH Case No. 08-1058.

DONE AND ORDERED this 11th day of March, 2008, in

Tallahassee, Leon County, Florida.

S

T. KENT WETHERELL, II

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 11th day of March, 2008.

ENDNOTES

1/ All statutory references are to the 2007 version of the

Florida Statutes.

2/ According to the petition, Section 11B(3) of the 2004 Manual

states: "When charges for inpatient services at either an acute

care hospital or a trauma center exceed $50,000.00, the

stop-loss method for reimbursement shall be used to reimburse

the hospital instead of the established per diem. Reimbursement

shall be at 75 percent of charges."

COPIES FURNISHED :

Timothy L. Newhall, Esquire

Law Offices of Timothy L.

Newhall, L.L.C.

1334 Timberlane Road, Suite 11

Tallahassee, Florida 32312

Daniel Sumner, General Counsel

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399

Jill Bennett, Esquire

Department of Financial Services

Division of Legal Services

200 East Gaines Street

Tallahassee, Florida 32399-4229

Honorable Alex Sink

Chief Financial Officer

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399-0300

Scott Boyd, Executive Director

and General Counsel

Joint Administrative Procedures Committee

120 Holland Building

Tallahassee, Florida 32399-1300

Liz Cloud, Program Administrator

Bureau of Administrative Code

Department of State

R.A. Gray Building, Suite 101

Tallahassee, Florida 32399-0250

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled to judicial review pursuant to Section 120.68, Florida

Statutes. Review proceedings are governed by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing the original notice of appeal with the Clerk of the

Division of Administrative Hearings and a copy, accompanied by

filing fees prescribed by law, with the District Court of

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

the Appellate District where the party resides. The notice of

appeal must be filed within 30 days of rendition of the order to

be reviewed.