10-002996RX Baptist Hospital, Inc., Bay Medical Center, Holmes Regional Medical Center, Inc., Lee Memorial Health System, Lifemark Hospitals Of Florida, Inc., D/B/A Palmetto General Hospital, Munroe Regional Medical Center, North Broward Hospital District Et Al. vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Wednesday, January 26, 2011.

Summary: AHCA conceded that portions of the Florida Medicaid Hospital Services Coverages Handbook were invalid exercises of delegated legislative authority.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BAPTIST HOSPITAL, INC., BAY )

MEDICAL CENTER, HOLMES REGIONAL )

MEDICAL CENTER, INC., LEE )

MEMORIAL HEALTH SYSTEM, )

LIFEMARK HOSPITALS OF FLORIDA, )

INC., d/b/a PALMETTO GENERAL )

HOSPITAL, MUNROE REGIONAL )

MEDI CAL CENTER, NORTH BROWARD )

HOSPITAL DISTRICT , ET AL . , )

)

Petitioner , )

)

vs. ) Case No. 10 - 2996RX

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION , )

)

Respondent . )

)

SUMMARY FINAL ORDER

Pursuant to Respondent's Motion for Summary Final Order, a

telephonic conference call was held on October 18, 2010, before

Susan B. Harrell, a designated Administrative Law Judge of the

Division of Administrative Hearings.

APPEARANCES

For Petitioner: William E. Williams, Esquire

Gray Robinson, P.A.

Post Office Box 11189

301 South Bronough Street, Suite 600

Tallahassee, Florida 32302 - 3189

Joanne B. Erde, Esquire

Duane Morris, LLP

200 South Biscayne Boulevard, Suite 3400

Miami, Florida 33131

For Respondent: David W. Nam, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 3230 8

STATEMENT OF THE ISSUE S

The issue s in the case are whether certain provisions of

the Florida Medicaid Hospital Services Coverage and Limitations

Handbook (Handboo k) that exclude non - emergent services rendered

in the emergency room from covered Medicaid outpatient services

and require revenue C ode 451 to be bill ed with CPT Code 99281

constitute an invalid exercise of delegated legislative

authority within the meanin g of Subsection 120.56(3), Florida

Statutes (2010). 1

PRELIMINARY STATEMENT

On June 1, 2010, Petitioners, Baptist Hospital, Inc. ; Bay

Medical Center ; Holmes Regional Medical Center, Inc. ; Lee

Memorial Health System ; Lifemark Hospitals of Florida, Inc. ,

d/b /a Palmetto General Hospital ; Munroe Regional Medical Center ;

North Broward Hospital District , d/b/a Broward Health ;

St. Joseph's Hospital, Inc. ; South Broward Hospital District ,

d/b/a Memorial Regional Hospital ; Tallahassee Memorial

Healthcare, Inc. ; and Wuesthoff Health System (collectively

referred to as Petitioners) filed a Petition for Administrative

Determination of the Invalidity of a Rule. Specifically,

Petitioners are challenging provisions of the Handbook, which is

incorporated by reference in Fl orida Administrative Code Rule

59G - 4.160.

On October 15, 2010, Respondent, Agency for Health Care

Administration (AHCA), filed AHCA's Motion for Summary Final

Order, in which AHCA conceded that the provisions of the

Handbook at issue were invalid. At the request of Petitioners ,

the motion was heard by telephonic conference call on

October 18, 2010. Petitioners did not file a written response

to the motion, but argued that any order invalidating the

provisions of the Handbook must include findings of fact and

conclusions of law. Petitioners requested that they be allowed

to file a proposed final order. The request was granted.

Petitioners filed their Proposed Recommended Order on

October 29, 2010.

FINDINGS OF FACT

1. AHCA is the Medicaid agency for the State of Florida as

provided under federal law. § 409.901(2), Fla. Stat.

Ð'Medicaid agency' . . . means the single state agency that

administers or supervises the administration of the state

Medicaid plan under federal law." § 409.901(15), Fla. Stat.

2. AHCA must administer the Medicaid program pursuant to a

state plan that is approved by the Center for Medicare and

Medicaid Services (CMS). 42 U.S.C. §§ 1396 and 1396a(a).

3. AHCA reimburses Medicaid providers in accordance with

state and federal l aw, according to methodologies set forth in

rules promulgated by AHCA and in policy manuals and handbooks

incorporated by reference in the rules. AHCA has adopted

Florida Administrative Code Rule 59G - 6.030, which incorporates

by reference the Florida Titl e XIX Outpatient Hospital

Reimbursement Plan, Version XIX (the Outpatient Plan), with an

effective date of July 1, 2009. Reimbursement to participating

outpatient hospitals, such as Petitioners, is to be provided in

accordance with the Outpatient Plan. A HCA has issued the

Florida Medicaid Hospital Services Coverage and Limitations

Handbook. The Handbook is incorporated by reference in Florida

Administrative Code Rule 59G - 4.160.

4. The Outpatient Plan and the Handbook identify those

outpatient hospital s ervices that are covered by the Medicaid

program by revenue code. Only those revenue codes listed in

Appendix A of the Outpatient Plan (Appendix A) and Appendix B of

the Handbook (Appendix B) are covered outpatient services.

5. Petitioners have challeng ed the following provisions of

the Handbook:

Handbook at page 2 - 7: EMTALA Medical

Screening Exam

The federal Emergency M edical Treatment and

Labor Act (EMTALA) requires emergency rooms

to conduct a medical screening exam on any

patient presenting to the emergency room for

medical services . . . . If the medical

screening exam determines that no emergency

medical condition exists, Florida Medicaid

reimburses only for the screening and the

ancillary services required to make the

determination (e.g., lab wo rk or x - rays).

Medicaid policy does not provide for

reimbursement of non - emergency services

beyond the medical screening exam required

by EMTALA.

Handbook at page 2 - 40: Non - Emergency Care

in the Emergency Room

Medicaid policy does not provide for

reimb ursement of non - emergency services

beyond the medical screening exam required

by Emergency M edical Treatment and Labor Act

(EMTALA). EMTALA requires emergency rooms

to conduct a medical screening exam on any

patient presenting to the emergency room for

me dical services. The purpose of the

medical screening exam is to determine if an

emergency medical condition exists. If the

screening determines that an emergency

medical condition exists, the provider must

either stabilize the condition or

appropriately transfer the patient to a

facility that can stabilize the condition.

If the medical screening determines that no

emergency medical condition exists, Florida

Medicaid reimburses only for the screening

and the ancillary services required to make

the determi nation (e.g., lab work or

x - rays). Recipients are responsible for a

coinsurance on such claims.

Handbook, Appendix B at pages B - 6 and B - 7:

EMERGENCY ROOM

0450 General Classification

Ʊ Use General Classification code 0450 when

recipients require emergency room care

beyond the EMTALA emergency medical

screening services. Code 0450 cannot be

used in conjunction with 0451 (99281).

Ʊ All other appropriate and covered

outpatient revenue codes can be billed with

0450 to reflect services rendered to the

patient during the course of emergency room

treatment.

Ʊ No MediPass authorization is required

when billing 0450, if the type of admission

in Form Locator 19 on the claims is "1"

(Emerge ncy). MediPass authorization is

required when the condition of the patient

is not an emergency.

0451(99281) EMTALA Emergency Medical

Screening Services (Effective 7/1/96)

Ʊ Report the EMTALA Medical Screening code

0451 (99281) when, following the scre ening

and exam, no further emergency room care or

treatment is necessary. If ancillary

services are not necessary to determine

whether or not emergency or further

treatment is required, report the ancillary

charges using the appropriate revenue center

cod es in conjunction with code 0451 (99281).

Note that 0451 (99281) cannot be used in

conjunction with 0450.

Ʊ Effective 10/16/03, HCPCs code 99281

replaces code W1700, used prior to 10/16/03,

when billing revenue code 0451.

6. Florida Administrative Code Rule 59G - 4.160 provides

that the specific authority for the promulgation of the rule is

Section 409.919, F lorida Statutes, and the law implemented is

Sections 409.905, 409.908, and 409.9081, Florida Statutes.

7. Petitioners are acute care hospitals that are and were

enrolled as Medicaid providers of outpatient service in Florida

at all times material to this proceeding.

CONCLUSIONS OF LAW

8 . The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding. § 120.56, Fla. Stat. (2010).

9 . Subsection 120.56(1)(a), Florida Statutes, provides

that "[a]ny p erson substantially affected by a rule . . . may

seek an administrative determination of the invalidity of the

rule on the ground that the rule is an invalid exercise of

delegated legislative authority." Subsection 120.52(8), Florida

Statutes, defines "in valid exercise of delegated legislative

authority" as follows:

ÐInvalid exercise of delegated legislative

authorityÑ 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 any one of the

following applies:

(a) The agency has materially failed to

follow the applicable rulemaking procedures

or requirements set forth in this chapter;

(b) The agency has exceeded its grant o f

rulemaking authority, citation to 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 standards for agency decisions, or

vests 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 adop ted without thought

or reason or is irrational; or

(f) The rule imposes regulatory costs on

the regulated person, county, or city which

could be reduced by the adoption of less

costly alternatives that substantially

accomplish the statutory objectives.

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 powers 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 agencyÓs class of powers and

duties, nor shall an agency have the

authority to implement statutory provisions

setting forth general legislative intent or

policy. Statutory language granting

rulemaking authority or generally describing

the powers and functions of an agency shall

be construed to extend no further than

implementing or interpreting the specific

powers and duties conferred by the enabling

statute.

10. AHCA concedes that the challenged provisions of the

Handbook constitute an invalid exercise of delegated legislative

authority. AHCA's int erpretation of the statutes and rules that

it is charged with implementing is entitled to great deference.

Cone v. State, Dept. of Health , 886 So. 2d 1007, 1009 (Fla. 1st

DCA 2004).

1 1 . The challenged portions of the Handbook modifies and

contravenes S ubs ection 409.905(6), Florida Statutes, which

provides:

The agency may make payments for the

following services, which are required of

the state by Title XIX of the Social

Security Act, furnished by Medicaid

providers to recipients who are determined

to be eligible on the dates on which the

services were provided. Any service under

this section shall be provided only when

medically necessary and in accordance with

state and federal law. Mandatory services

rendered by providers in mobile units to

Medicaid r ecipients may be restricted by the

agency. Nothing in this section shall be

construed to prevent or limit the agency

from adjusting fees, reimbursement rates,

lengths of stay, number of visits, number of

services, or any other adjustments necessary

to com ply with the availability of moneys

and any limitations or directions provided

for in the General Appropriations Act or

chapter 216.

* * *

(6) HOSPITAL OUTPATIENT SERVICES. Ï The

agency shall pay for preventive, diagnostic,

therapeutic, or pallia tive care and other

services provided to a recipient in the

outpatient portion of a hospital licensed

under part I of chapter 395, and provided

under the direction of a licensed physician

or licensed dentist, except that payment for

such care and services is limited to $1,500

per state fiscal year per recipient, unless

an exception has been made by the agency,

and with the exception of a Medicaid

recipient under age 21, in which case the

only limitation is medical necessity.

S ubs ection 409.906(6), Florida Statutes, does not delineate

between outpatient services that are provided in an emergency

room and outpatient services that are not provided in an

emergency room.

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

ORDERED that t he challenged provisions of the Handbook are

invalid exercises of delegated legislative authority.

DONE AND ORDERED this 28th day of December , 2010 , in

Tallahassee, Leon County, Florida.

S

SUSAN B. HARRELL

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 28 th day of December , 2010 .

ENDNOTE

1/ Unless otherwise stated, all references to the Florida

Statutes are to the 2010 version.

COPIES FURNISHED :

Elizabeth Dudek, Interim Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Ta llahassee, Florida 32308

Justin Senior, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Ta llahassee, Florida 32308

Scott Boyd, Executive Director

and General Counsel

Administrative Procedures Committee

Holland Building, Room 120

Tallahassee, Florida 32399 - 1300

William E. Williams, Esquire

Gray Robinson, P.A.

Post Office Box 11189

301 Sout h Bronough Street, Suite 600

Tallahassee, Florida 3230 2 - 3189

David W. Nam, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

Joanne B. Erde, Esquire

Duane Morris, LLP

200 South Biscayne Boulevard, Suite 3400

Miami, Florida 33131

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 n otice of a ppeal with the Clerk of the

Division of Administrative Hearings and a copy, accompanied by

fil ing 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 review ed.