10-002997RU 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 Tuesday, December 28, 2010.

Summary: Statements in a 1997 letter constitute a rule and the statements were not promulgated as rules pursuant to Section 120.54, Florida Statutes.

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 s , )

)

vs. ) Case Nos. 10 - 2997RU

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION , )

)

Respondent . )

)

SUMMARY FINAL ORD ER

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

Tallahassee, Florida 32302 - 3189

Joanne B. Erde, Esquire

Duane Morris, LLP

200 Sou th Biscayne Boulevard

Suite 3400

Miami, Florida 33131

For Respondent: David W. Nam, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahass ee, Florida 32303

STATEMENT OF THE ISSUE S

The issue s in this case are whether the statement contained

in Respondent's letter dated September 9, 1997 (1997 Letter),

establishing a $24.00 payment for hospital outpatient services

billed as revenue code 451 constitutes a rule as defined by

Subsection 120.52(15), Florida Statutes (2010), 1 and, if so,

whether Respondent violated Subsection 120.54(1), Florida

Statutes, by not adopting the statement in accordance with

applicable rulemaking procedures.

PRELIMINA RY 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,

N orth 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 Petitione rs), filed a Petition for Determination

of Invalidity of Non - Rule Policy. Specifically, Petitioners are

challenging certain provisions of a letter from Respondent,

Agency for Health Care Administration (AHCA), dated September 9,

1997, to hospital administ rators.

On October 15, 2010, AHCA filed AHCA's Motion for Summary

Final Order , in which AHCA conceded that the challenged

statement of the 1997 L etter constitutes a rule, which has not

been promulgated pursuant to Section 120.54, Florida Statutes.

At the request of Petitioners, the motion was heard by

telephonic conference call on October 18, 2010. Petitioners

requested and were granted leave to file a proposed final order.

Petitioners filed their Proposed Final Order on October 29,

2010.

FINDINGS OF FAC T

1. AHCA is the s tate agency responsible for the

administration of the Florid a Medicaid Program. § 409.902, Fla.

Stat.

2. Petitioners are acute care hospitals that are and were

enrolled as Medicaid providers of outpatient services in

Florida, at all ti mes relevant to this proceeding.

3. On September 9, 1997, AHCA issued a letter to hospital

administrators, which provided the following:

This letter is to inform you that Medicaid

coverage for hospital emergency room

screening and examination services is now in

effect. Hospitals will be reimbursed a

$24.00 flat fee for providing these services

to Medipass and Medicaid fee - for - service

recipients who do not require further

treatment beyond the screening an d

examination services. This policy is

retroactive to July 1, 1996.

The letter further provides that the $24.00 reimbursement would

be billed under the revenue code 451.

5. The statement in the letter applies to hospitals which

are Medicaid providers and, therefore, is a statement of general

applicabilit y. The statement meets the definition of a rule.

AHCA concedes that the statement, which provides "payment of a

$24 rate for Medicaid Hospital Outpatient Services billed under

Revenue Code 451, constitutes a rule under s. 120.52(16), Fla .

Stat."

6. AHCA concedes that the statement has not been adopted

as a rule by the rule adoption procedures provided in

Section 120.54, Florida Statutes.

7. AHCA has discontinued all reliance on the challenged

statement.

CONCLUSIONS OF LAW

8. The Division of Administ rative Hearings has

jurisdiction over the parties to and the subject matter of this

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

9. S ubs ection 120.52(16), Florida Statutes , defines a rule

as follows:

ÐRuleÑ means each agency statement of

general applicabilit y that implements,

interprets, or prescribes law or policy or

describes the procedure or practice

requirements of an agency and includes any

form which imposes any requirement or

solicits any information not specifically

required by statute or by an existi ng rule.

The term also includes the amendment or

repeal of a rule. The term does not include:

(a) Internal management memoranda which do

not affect either the private interests of

any person or any plan or procedure

important to the public and which have no

application outside the agency issuing the

memorandum.

(b) Legal memoranda or opinions issued to an

agency by the Attorney General or agency

legal opinions prior to their use in

connection with an agency action.

(c) The preparation or modification of:

1. Agency budgets.

2. Statements, memoranda, or instructions to

state agencies issued by the Chief Financial

Officer or Comptroller as chief fiscal

officer of the state and relating or

pertaining to claims for payment submitted

by state agencies to the Chief Financial

Officer or Comptroller.

3. Contractual provisions reached as a

result of collective bargaining.

4. Memoranda issued by the Executive Office

of the Governor relating to information

resources management.

10. S ubs ection 120.56(4), Florida Statutes, provides that

"[a]ny person substantially affected by an agency statement may

seek an administrative determination that the statement violates

Subsection 120.54(1)(a)," Florida Statutes. Petitioners must

show that the statement constitutes a rul e and that the

statement has not been adopted as a rule by the rulemaking

procedures described in Section 120.54, Florida Statutes.

11. The challenged statement of reimbursing $24.00 for

screening and examination is a rule, which has not been

promulgate d as a rule in accordance with the rulemaking

procedures in Section 120.54, Florida Statutes, and, therefore,

violates Subsection 120.54(1)(a), Florida Statutes.

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is ORDERED that the c hallenged statement contained in

AHCA's letter dated September 9, 1997, establishing a $24.00

payment for Medicaid hospital outpatient services billed under

revenue code 451 is invalid.

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

Tallahassee, Leo n 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.d oah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 28th day of December , 2010 .

ENDNOTE

1/ All references to the Florida Statutes are to the 2010

version.

COPIES FURNISHED :

Joanne B. Erde, Esquire

Duane Morris, LLP

200 South Biscayne Boulevard, Suite 3400

Miami, Florida 33131

David W. Nam, Esquire

Agency for Health Care Administration

Fort Knox Building III, Mail Stop 3

2727 Mahan Drive, Suite 3431

Tallahassee, Florida 32308

Amy W. Schrader, Esquire

Gray Robinso n, P.A.

Post Office Box 11189

Tallahassee, Florida 32302

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

Elizabeth Dudek, Interim Secretary

Agency for Health Care Administrat ion

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

Justin Senior, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

F. Scott Boyd, Executive Director and

General Counsel

Joint Ad ministrative Procedure Committee

120 Holland Building

Tallahassee, Florida 32399 - 1300

Liz Cloud, Program Administrator

Administrative Code

Department of State

R.A. Gray Building, Suite 101

Tallahassee, Florida 32399

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 appe llate district where the party resides. The

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

the order to be reviewed.