21-002714RP Positive Behavior Support vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Thursday, November 18, 2021.

Summary: Petitioner failed to prove that proposed rule subsection 59G-4.132(3)(b)3. is an invalid exercise of delegated legislative authority, is vague, is arbitrary or capricious. Therefore, the amended petition challenging the proposed rule is dismissed.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

P OSITIVE B EHAVIOR S UPPORT ,

Petitioner ,

vs. Case No. 21 - 2714RP

A GENCY F OR H EALTH C ARE

A DMINISTRATION ,

Respondent .

/

F INAL O RDER

Pursuant to notice, the final hearing on this matter was conducted on

October 6 and 7, 2021, in Tallahassee, Florida , and via Zoom video conference

before Robert S. Cohen, an A dministrative L aw J udge (ÑALJÒ) with the

Division of Administrative Hearings (ÑDOAHÒ).

A PPEARANCES

For Petitioner: William D . Hall , III , Esquire

Jordane Wong , Esquire

Dean Mead and Dunbar

106 East College Avenue, Suite 1200

Tallahassee, Florida 32301

For Respondent: Bradley S. Butler, Jr., Esq uire

Timothy P. Sparks, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, F lorida 32308

Shena L. Grantham, Esquire

Agency for Health Care Administration

Building 3, Room 3407B

2727 Mahan Drive

Tallahassee, F lorida 32308

S TATEMENT O F T HE I SSUE

Whether proposed subsection (3)(b)3 . of Proposed Florida Administrative

Code Rule 59G - 4.132 (ÑProposed RuleÒ) is an invalid exercise of delegated

legislative authority.

P RELIMINARY S TATEMENT

Respondent, Agency for Health Car e Administration (ÑAHCA,Ò ÑAgency,Ò

or ÑRespondentÒ) , has proposed an amendment to the language of the

Proposed Rule . Petitioner , Positive Behavior Support (ÑPBSÒ or ÑPetitionerÒ) ,

timely requested an administrative hearing pursuant to section 120.56(1)

an d (2), Florida Statutes, alleging that subsection (4) of the Proposed Rule

was an invalid exercise of delegated legislative authority. The matter was

filed with DOAH on September 8, 2021, to conduct a final hearing, and the

matter was assigned DOAH Case No . 21 - 2714RP.

The Agency filed a Motion to Dismiss the Petition which was denied.

Subsequent to the scheduling of the hearing, the Agency issued a Notice of

Change, altering the language in the Proposed Rule to that under

consideration now. Following the N otice of Change, Petitioner filed an

a mended p etition amending its challenge from subsection (4) of the Proposed

Rule to subsection (3)(b)3., pursuant to the latter sectionÔs adjustment within

the Notice of Change. On September 15, 2021, this matter was sc heduled for

hearing to occur on October 6 and 7, 2021, with the AL J , counsel for both

parties, and the AgencyÔs r epresentative to be present in Tallahassee ,

Florida , while the other witnesses from South Florida were to appear via

Zoom video conference.

As directed by the September 15, 2021, Order of Pre - hearing Instructions,

the parties filed a Joint Prehearing Stipulation. Additionally, Petitioner filed

a Motion for Summary Final Order, and Respondent filed a Motion in Limine

to Exclude Evidence. Both mat ters were heard at the beginning of the

hearing on October 6 , 2021 .

After hearing from the parties, the undersigned denied PetitionerÔs m otion

and reserved ruling on RespondentÔs m otion, stating that testimony and

evidence regarding the AgencyÔs current p ractices would be heard and

reserving the decision as to whether such testimony and evidence would be

considered. Thereafter, the hearing commenced .

The parties offered Joint Exhibits 1 through 8 into evidence without

objection. Petitioner offered Exhibit s 1 through 22 into evidence, subject to

the AgencyÔs relevance objections to PetitionerÔs Exhibits 1 through 4 and 11

through 22 as stated in both the Joint Prehearing Stipulation and the m otion

in l imine. The Agency offered Exhibits 1 through 14 into evi dence, subject to

PetitionerÔs ÑbolsteringÒ objections to Exhibits 1 and 2. The Tribunal accepted

all exhibits into evidence and reserved ruling on the partiesÔ objections.

AHCA presented live testimony from the AgencyÔs r epresentative, Melissa

Vergeson, b ureau c hief of the AgencyÔs Bureau of Medicaid Quality . The

Agency also presented the testimony of Kelly A. Bennett, c hief of the AgencyÔs

Bureau of Medicaid Program Integrity, by Zoom video conference.

PBS presented testimony by Zoom video conference of Daniel Black, its

c orporate r epresentative and PBSÔ s d irector of Medicaid s ervices; Krystal

Lexima, o wner of Bridges Behavioral Therapy; and Diane Donahue, c o - owner

of Treasure Coast ABA.

At the conclusion of the hearing , the parties agreed to file propo sed final

orders no later than ten days after the transcript was filed with DOAH,

reserving the possibility of extending the deadline on mutual agreement. The

Agency then renewed its request for a ruling on its Motion in Limine to

Exclude Evidence. The und ersigned stated its ruling would be issued at a

later date.

The T ranscript of the final hearing was filed on October 18, 2021, making

the p roposed f inal o rders due on October 28, 2021. The parties timely filed

their p roposed f inal o rder s .

All statutory c itations will be to the 2019 version of the Florida S tatutes,

unless otherwise indicated.

F INDINGS O F F ACT

1. The Agency is designated as the single state agency authorized to make

payments for medical assistance and related services under Title XIX of th e

Social Security Act, the ÑMedicaid p rogram.Ò The Agency is responsible for

administering the Florida Medicaid p rogram in accordance with state and

federal law.

2. The Agency is statutorily charged with operating a program Ñto oversee

the activities of Fl orida Medicaid recipients, and providers and their

representatives, to ensure that fraudulent and abusive behavior and neglect

of recipients occur to the minimum extent possible, and to recover

overpayments and impose sanctions as appropriate , Ò pursuant to

section 409.913, Florida Statutes.

3. PBS is a provider of applied behavior analysis (ÑBAÒ) services to the

Medicaid program. It provides those services pursuant to a voluntary

Medicaid Provider Agreement (ÑProvider AgreementÒ) with the Agency. PBS

plans to continue offering such Medicaid services for the foreseeable future.

4. The Proposed Rule will regulate providers of Medicaid BA services

if/when it takes effect.

5. BA is an optional Medicaid service that is often associated with and

utilized by those with autism or other developmental disabilities.

Factual Testimony from the Parties

6. Melissa Vergeson is b ureau c hief of Medicaid Quality. Ms. Vergeson has

worked for the State of Florida since 1997 and has held positions for the

Florida Department of H ealth, the Florida Department of Elder Affairs, and

several positions with Respondent . Ms. Vergeson is tasked with monitoring

health plan performance to make sure that plans are providing services that

their members need and in a timely manner.

7. Kelly Be nnett is b ureau c hief of Medicaid Program Integrity (ÑMPIÒ).

Ms. Bennett is a member of the Florida Bar, has worked for the State of

Florida since 1997, and for the Agency since 2001. Ms. Bennett has worked

with Medicaid fraud issues in her previous roles with the Agency since 2002

and has worked with or for MP I for approximately 20 years.

8. Daniel Black is the c orporate r epresentative and d irector of Medicaid

s ervices for Petitioner .

9. Krystal Lexima provided testimony at the request of Petitioner and is

the owner of Bridges Behavioral Therapy. Neither she nor her Medicaid

provider company filed a rule challenge or petition to intervene in this

matter, or otherwise attempted to achieve party status.

10. Diane Donahue provided testimony at the request of P etitioner and is

the co - owner of Treasure Coast ABA. As was the case with Ms. L e xima,

n either she nor her Medicaid provider company filed a rule challenge or

petition to intervene in this matter, or otherwise attempted to achieve party

status.

11. Ms. Benn ett testified that MPI is the program required under federal

law to Ñaddress fraud and abuse and what we more commonly refer to as

program integrity.Ò

12. The parties conduct business pursuant to the terms of the Provider

Agreement, which requires Petition er to comply with all Medicaid rules,

statutes, and law.

13. Petitioner is presently a provider of Medicaid Services, operating

pursuant to a Provider Agreement.

14. The Provider Agreement is a voluntary contract between the Agency

and the p rovider. An enr olled Medicaid provider must comply fully with all

state and federal laws pertaining to the Medicaid p rogram, including

Medicaid Provider Handbooks incorporated by reference into rule, as well as

all federal, state, and local laws pertaining to licensure, in order to receive

payment from the Medicaid p rogram.

15. Petitioner has executed a Provider Agreement and provides BA

services to the Medicaid program pursuant to that agreement .

16. The Proposed Rule does not regulate the profession of BA . Instead , the

Proposed Rule establishes requirements that providers of Medicaid services

must follow to be reimbursed for the provision of BA services to Medicaid

recipients. The provisions of the P roposed R ule do not apply to the practice of

BA , and properly credentia led individuals may provide BA services to non -

Medicaid patients within Florida without being required to submit to the

requirements of the P roposed R ule.

17. Both Petitioner and the Agency may terminate PetitionerÔs Provider

Agreement at any time, without cause. Diaz v. Ag. for Health Care Admin. ,

65 So. 3d 78 (Fla. 3d DCA 2011). Petitioner has no expectation of continued

participation in Medicaid. Id. at 82 - 83 (finding that despite being long - time

providers to Florida Medicaid and expecting to continue pa rticipating, such

expectation is not appropriate based on the statutory authority and case law) .

Historical and Present Fraud and Abuse from BA Providers

18. The BA provider type has been a cause of significant fraud and

abusive billing practices to the M edicaid program, as detailed in the AgencyÔs

report to the Legislature titled ÑFloridaÔs Efforts to Control Medicaid Fraud &

Abuse, Fiscal Year 2018 - 2019.Ò

19. After the Medicaid B A program launched, within the first few weeks,

MPI began to witness inciden ts of fraud in isolated areas, and began to try to

get a Ñlay of the landÒ of what was occurring within the BA program. After

the Agency began to review the BA program, the Agency discovered what

Ms. Bennett described as Ñthe most pervasive fraud that IÔve ever seen in my

20 years.Ò

20. Ms. Bennett testified at length regarding the issues of fraud and abuse

that have occurred in the BA program. Ms. Bennett discussed discovering

Ñfolks that had no business in this businessÒ and who had Ñlied on their

applica tions.Ò This was before even looking at whether services were actually

delivered or delivered appropriately.

21. While the Agency has authority to recover overpayments, recovery is

costly to the Agency , as it must spend significant resources recovering fun ds

inappropriately paid for services that were not performed in accordance with

the requirements of Medicaid. Each dollar that is retained because of a fraud

prevention system becomes Ña dollar that would have been lost that's now not

lost, so we don't hav e to have the additional expense of going to chase after

it.Ò

22. Ms. Bennett testified that the Florida Medicaid Management

Information System ( Ñ FMMIS Ò ) is simply a repository for claims information.

All other functions are performed by a system that is built as an add - on to

the FMMIS system. Specifically, ÑFMMIS itself is not like a fraud detection

system or a fraud prevention system, itÔs a repository of information, and a

system to pay claims.Ò

23. Issues may arise when fraudulent claims are submitted to the system,

given that those claims are still paid even if the claims were for Ñpeople

working or children receiving more Ï more services, like units that would add

up to more than 24 hours in a day.Ò While FMMIS was updated to Ñnot allow

claims that ex ceed 24 hours in a day,Ò the system is limited in its

functionality, including being unable to address Ñthe greatest shortcoming of

any claims processing system ... the inability to know if the services were

rendered.Ò

24. Any system that can interact with the claims system to increase the

likelihood that submitted claims are valid and legitimate, like the electronic

visit verification (Ñ EVV Ò) system proposed by th e Proposed Rule , would be Ña

win from a fraud prevention standpoint.Ò While EVV is an importan t tool for

fraud prevention, it is not a magic wand that will either prevent all fraud or

totally eliminate errors or inconvenient glitches, as Ms. Bennett testified,

Ñ[y]ou build systems, and build a program for the masses, who you presume

will try to be legitimate, and then you try to build things that will make the

most obvious illegitimate things denied.Ò EVV helps because Ñjust the ability

to know that a service provider interacted with the recipient for the time

period that the claim is being billed,Ò is beneficial to preventing and deterring

fraudulent and abusive billing, Ñparticularly for services that are not

typically rendered in a typical office setting.Ò

25. Ms. Bennett testified to the extraordinary efforts that the Agency

implemented to combat the pervasive fraud in the BA program, including the

implementation of a moratorium on enrollment for BA providers, a

mechanism that had never been used by the Agency previously and that

required approval by the federal Centers for Medica re & Medicaid Ser vices

( Ñ CMS Ò ) .

26. Each of the provider witnesses who testified at hearing, Mr. Black,

Ms. Lexima, and Ms. Donahue, agreed there was fraud and abuse in the area

of Medicaid - reimbursed BA services, and that they were keenly aware of the

issues of fraud and abuse permeating the BA industry in recent years.

27. EVV is one effective method of deterring fraud , and it Ñwill take a

burden off of us if it works,Ò according to Ms. DonahueÔs testimony.

28. Mr. Black went a step further when he testified that Petitio ner has

used its own EVV system to catch its employees committing fraud, stating

Ñwe have turned them in.Ò

The EVV System

29. In subsection (2)(a) of the Proposed Rule, the Agency defines EVV as:

A process by which service encounters are

electronically ve rified with respect to the type of

service performed, the recipient receiving the

service, the date of the service, the location of

service delivery, the provider rendering the service,

and the time the service begins and ends .

30. This comports with th e federal definition of EVV at 42 U.S.C.

§ 1396b(1)(5)(A). This definition references Ñpersonal care services or home

health services,Ò but does not specifically reference BA services. With respect

to BA services, the same holds true for the applicable pro visions in the

Florida Statutes, which will be discussed more fully below.

31. Despite the lack of such federal or state statutory requirement, PBS is

a strong advocate for the use of EVV in all Medicaid services. In fact, in

Florida and other states where PBS operates, it is already utilizing an

internal EVV system to prevent and detect any fraud in the provision of its

BA services. Utilizing this internal program, PBS has been able to catch some

of its own employees attempting to commit fraud, and it has referred those

persons to the proper authorities .

32. Therefore, PBS does not challenge the use of EVV generally. Rather, it

specifically challenges the portion of the Proposed Rule requiring BA

providers to submit Medicaid claims for processing and paymen t through the

EVV system .

33. As a plain reading of both the AgencyÔs proposed definition and the

federal EVV definition shows, submitting claims for payment (or playing any

role in the payment of claims) is outside of the defined scope of EVV. The

Agency did not present any evidence to the contrary.

34. Federal law and guidance also require states implementing EVV to

ensure that their systems are Ñminimally burdensomeÒ and to Ñtake into

account a stakeholder process that includes input from beneficiaries, family

caregivers, individuals who furnish personal care services or home health

care services, and other stakeholders.Ò See 42 U.S.C. § 1396b(l)(2)(A)(i)

and (B).

35. CMS has issued EVV guidance to states in an effort to help ensure

these systems are succ essful. One such piece of guidance is entitled ÑEVV

Requirements in the 21st Century CURES Act , Ò offered into evidence by PBS

at hearing. In that guidance, CMS makes clear that it Ñis not endorsing anyÒ

particular home health EVV model or system discussed therein. It then

identif ies five different types of EVV system models that states have utilized.

CMS then provides an overview of those system types, as well as some

considerations pertinent to each one. Whatever model a state selects, CMS

stressed the imp ortance of soliciting feedback from providers, patients, and

other effected persons.

36. One of those potential models is for a state to contract with a single

external vendor to develop an EVV system that all providers must use.

Although the Agency chose this model, it has provided no evidence to support

the concept that utilizing such an external EVV vendor for billing purposes is

an accepted or preferable practice. Further, as detailed below, the Agency

cannot credibly contend that it gave any real consi deration or weight to

p rovider feedback in crafting this policy. The Agency also did not, and could

not, argue that its system has been Ñminimally burdensomeÒ to Florida

Medicaid BA providers. As will be described below, it has been an extreme

burden to th em. Despite this and the universally negative feedback it has

received from those affected, the Agency has refused to consider any change

to its proposed EVV policy .

Claims Submission for BA Services

37. Pursuant to the Florida Reimbursement Handbook (ÑRei mbursement

HandbookÒ) , claims for payment for all Medicaid services may be submitted

Ñdirectly to the Medicaid fiscal agent through the fiscal agentÔs secure web

portal.Ò This refers to submission of claims directly to FMMIS . This is the

only permissible m eans of electronic claims submission listed in the

Reimbursement Handbook. Submission directly to FMMIS Ñoffers the

advantage of speed and accuracy in processingÒ of claims and allows

providers to Ñcorrect data entry errors immediately.Ò

38. The Reimbursem ent Handbook also offers providers a recourse in the

event there is an issue that prevents a claim from being paid. It states that

providers Ñshould submit claims immediately after providing services so that

any problems with a claim can be corrected and t he claim resubmitted before

the filing deadline.Ò As discussed previously, the Reimbursement Handbook

only contemplates submission of claims directly through FMMIS, meaning

that any ÑresubmissionÒ would occur through the same system. In the event

of denial due to a Ñsystem error,Ò the promulgated remedy within the

Reimbursement Handbook is once again for providers to submit a new claim

through FMMIS .

39. Mr. Black has been resubmitting and correcting claims through

FMMIS for approximately 25 years. He provi ded testimony as to how that is

accomplished easily and effectively pursuant to the provisions of the

Reimbursement Handbook.

40. The Florida Medicaid Provider General Handbook (ÑProvider

HandbookÒ) defines a Ñbilling agentÒ as Ñan entity that offers claim s

submission services to providers.Ò It states further that Ñproviders may

submit claims themselves or choose to have a billing agent.Ò The

Reimbursement Handbook includes essentially the same provision. This is

reasonable in that, if a provider contracts with a billing agent that is not

properly or timely submitting claims for payment, then the provider can

replace them with another agent who can properly fulfill that essential task.

The AgencyÔs EVV S ystem for BA Services and I ts Impact

41. In late 2019, the Agency entered into a contract with 4Tellus, LLC

(ÑTellusÒ) (now known as ÑNetsmartÒ) , to serve as the AgencyÔs designated

EVV system provider for Medicaid BA services. Pursuant to that contract,

BA providers would be Ñallow[ed], but not require[d]Ò t o use the EVV system

in December 2019 Ñin order for claims to be submitted and paid.Ò That

practice would then become mandatory, at least for a portion of the state, in

March 2020. After that point, all Medicaid BA providers Ñin the impacted

regionsÒ would be required Ñto use the Tellus system in order to submit

claims and be paid.Ò

42. According to Ms. Vergeson , the signing of that contract represents the

point at which the Agency officially made the policy decision to ut i lize an

external EVV vendor that w ould act as a mandatory billing agent for

Medicaid BA services. When asked, in light of this contractual obligation,

what any BA provider could have done or said to even potentially change this

policy position during rulemaking, Ms. Vergeson responded, ÑI donÔt have an

answer to that.Ò

43. Before that contract was even signed, representatives of Tellus and

PBS began to correspond regarding beta testing of the EVV system. David

Graci, c hief d irector of Business Processes for PBS, stated that the company

woul d be happy to try the beta testing and to give Tellus a demonstration of

its current EVV processes.

44. Mr. Black testified that, Ñvery early onÒ in that beta testing process, it

became Ñvery apparentÒ to PBS that the EVV system had Ñsignificant

problemsÒ relating to claims submissions. PBS conveyed these concerns to the

Agency Ñmultiple times.Ò In fact, problems escalated to the point where PBS,

Tellus, and Agency representatives were Ñmeeting regularly at weekly

meetings, biweekly meetingsÒ for Ñmany mont hs.Ò

45. The Agency did not change its policy course. Between September 2019

and February 8, 2021, the Agency permitted, but did not require , BA

providers to submit claims for payment through the EVV system for all

Medicaid services provided in Medicaid Re gions 9, 10, and 11 (ÑPilot

RegionsÒ). The Agency also permitted BA providers to submit claims for

Medicaid services provided in the Pilot Regions directly to FMMIS (as

discussed in the Reimbursement Handbook) during that time.

46. Since at least February 8, 2021, the Agency has imposed a non - rule

policy requiring BA providers to submit all claims for Medicaid services

provided in the Pilot Regions through the EVV system. B A providers have not

been permitted to submit claims directly to FMMIS during that ti me period.

47. The EVV system has resulted in financial burdens to P BS and other

providers since its implementation in the Pilot Regions. Specifically, it has

altered claims, failed to properly submit claims to FMMIS (or submit them to

FMMIS at all), and o therwise caused delays in payment and improper denial

of Medicaid claims. At one point, things deteriorated to the point where an

Agency representative gave PBS permission to bill straight to FMMIS again

for a brief period of time. In one week in June of 2 021, the EVV system

improperly caused the denial of approximately $67,000 worth of PBSÔ s

claims. Early the following month, there was a point where more than 1,600

claims worth around $275,000 were delayed without justification . Due solely

to the EVV syste m, PBS has had to devote an inordinate amount of time and

resources trying to get its claims paid in the Pilot Regions. The time and

stress devoted to this has caused Mr. Black , in his words, Ñsignificant issues

professionally and personally.Ò

48. Mr. Blac k testified that one of the major issues with the EVV system

is its inability to handle a high volume of claims at once. This issue, in and of

itself, has caused claims processing errors and delays. Based on this, PBS has

sometimes had to hold back submitt ing some claims or not submit claims on

certain days to avoid overloading the system. This continuing problem leads

Mr. Black to have Ñlegitimate concernsÒ regarding how the EVV system will

be able to process claims when it is expanded statewide and Ñthe v olume

essentially doubles.Ò

49. Ms. Lexima is a board - certified behavior analyst who owns her own

BA company. Her company is a provider of Medicaid BA services in Palm

Beach County. Before the EVV system was implemented, she never had

significant issues wi th Medicaid claims payment. However, since the EVV

system was rolled out in the Pilot Regions, she has experienced significant

payment issues. Ms. Lexima approximates that payment has been delayed

for around 70 to 80 percent of her Medicaid claims since sh e began having to

bill through the EVV system. This has caused her business such harm that

she had to take out a loan to keep her business solvent. Ms. Lexima has also

experienced significant confusion and issues regarding how to resubmit

denied claims usi ng the EVV system. Based on these issues, Ms. Lexima has

had to consider limiting or capping the number of Medicaid patients she will

treat.

50. Ms. Donahue is the co - owner of Treasure Coast A BA services in Palm

Coast, Florida. Her company is a Medicaid BA provider in the Pilot Regions.

Much like Ms. Lexima, she never experienced significant claims denial issues

when billing directly to FMMIS. Since the EVV system was implemented in

the Pilot Regions, however, her company has also seen approximately

80 perc ent of its claims improperly delayed or denied. T his equates to

approximately $35,000 in delayed or denied claims per week. Further, the

company has had to hire additional staff to deal solely with the processing

errors and issues resulting from the EVV sy stem. To keep her business open,

Ms. Donahue has had to take out a home - equity loan. Still, due purely to the

EVV system, she and her business partner are ÑconstantlyÒ discussing

whether their company can stay financially viable.

51. PBS and others have re peatedly made the Agency aware of these

issues and financial injuries. The Agency concedes that the EVV system has

caused at least many of these issues and that they are not the result of user

error, fraud, or any other legitimate reason. In fact, the Agen cy did not

present any evidence showing or suggesting that any of the payment delays

or denials discussed in evidence were the result of anything other than issues

with the EVV system itself.

The Proposed Rule

52. The Agency published the Proposed RuleÔs text in the Florida

Administrative Register on August 9, 2021. Proposed subsection (4) of the

Proposed Rule stated:

Providers must submit claims through the

designated EVV vendorÔs system for services

rendered and verified in accordance with prior

authoriz ations.

53. The clear intent of this proposal was to codify, and expand statewide,

the current non - rule policy requiring BA providers to submit Medicaid claims

through the EVV system. The Agency confirmed this in a written question -

and - answer sheet publis hed during rulemaking.

54. The Agency held a rulemaking workshop regarding the Proposed Rule

on May 28, 2021. That workshop was strictly an online webinar and did not

have any in - person attendees. The Agency did not publish any specific rule

language befor e or at this workshop.

55. The Agency did not record or transcribe the comments that its

representatives made at this workshop. However, it did make a spreadsheet

including the written comments that virtual attendees submitted through the

webinar. This spr eadsheet reflects a number of critical comments regarding

the EVV system and payment/processing issues stemming from it.

56. The Agency also received a number of written comments after the

workshop regarding the EVV systemÔs impact in the Pilot Regions. Al though

there were a few written comments that did not address the system directly,

those that did universally decried it. A number of those comments mirrored

Ms. Lexima Ôs and Ms. DonahueÔs testimony, noting , in part , that:

In [the Pilot Regions], providers have report[ed]

devastating errors, glitches, and issues that have

prevented them from being able to continue to

provide services to Medicaid recipients or even

forced them to close their doors due to the inability

to receive accurate, consistent, and tim ely

reimbursements.

57. They stated further, as Mr. Black testified, that the EVV system was

already experiencing Ñload issues on a regular basisÒ and that expanding its

use would Ñoverload the system, furthering the negative impact on providers

and Medic aid recipients.Ò Therefore, those parties asked that the Agency

Ñhalt the expansion of the programÒ and discontinue its use.

58. The Agency held a rulemaking hearing regarding the Proposed Rule

on August 30, 2021. By that time, the Agency had published the previously -

mentioned original Proposed Rule text. That hearing was conducted as both

an online webinar and an in - person meeting. There were in - person attendees

for this hearing.

59. Ms. Donahue testified at the August 30, 2021, hearing. Others, who

attend ed by electronic means, offered written comments. The comments were

again critical of the AgencyÔs proposed EVV policy.

60. Ms. Vergeson testified that the Agency considered all comments

submitted during rulemaking. Petitioner disagreed with this statement ,

believing that the AgencyÔs rulemaking activities were merely a ÑformalityÒ

and that the Agency had no intention of making any changes based upon

attendees and other interested partiesÔ critiques of the Proposed Rule.

61. However, on September 29, 2021, a Notice of Change regarding the

Proposed Rule was published in the Florida Administrative Register. The

language in that Notice of Change is the pertinent rule challenge for the

purpose of this proceeding.

62. Proposed subsection (3)(b)3 . of the Proposed Rule, which is the portion

of the proposal that PBS is challenging, states:

Providers who furnish home health or behavioral

analysis services must submit claims through

AHCAÔs designated EVV vendorÔs system to the

Florida Medicaid fiscal agent for services rendered

and verified in accordance with prior

authorizations in the Florida Medicaid

Management Information System. Neither a

provider who furnishes home health or behavior

analysis services, nor a billing agent of that

provider, may submit claims direct ly to the Florida

Medicaid fiscal agent irrespective of any other

provision including, but not limited to,

Rule 59G4.001, F.A.C.

63. Subsection (3)(b)3 . replaced what was originally listed as

subsection (4) of the Proposed Rule when it was first published .

64. If subsection (3)(b)3 . of the Proposed Rule goes into effect, BA and

home health providers will not be permitted to electronically submit Medicaid

claims directly through FMMIS. Instead, they will be required to submit such

claims through the EVV sys tem, which then forwards those claims to FMMIS

for processing and payment. But for this subsection, Medicaid BA providers

would be permitted to bill directly to FMMIS, as discussed in the

Reimbursement Handbook.

65. As discussed previously, this subsection will make the AgencyÔs EVV

system a mandatory billing agent for all Medicaid BA providers. Such

providers may contract with an additional, optional billing agent to then

submit their claims to this mandatory billing agent, if they wish. However,

Medicaid BA providers will have no choice regarding whether to submit

claims through the EVV system.

66. Petitioner argues that this proposed policy does not account in any

way for the provisions of the Provider Handbook or the Reimbursement

Handbook permitting pro viders to choose their billing agents. Those policies,

which the Agency has officially promulgated, do not even contemplate the

idea of a mandatory billing agent. Although subsection (3)(b)3 . of the

Proposed Rule expressly exempts other rules which might p ermit a Medicaid

provider to bill claims directly to FMMIS, it in no way acknowledges the

conflicting provisions which expressly permit providers to choose whether

they utilize a billing agent. There is no reasonable reading of this provision

that can be s quared with the Provider Handbook or the Reimbursement

Handbook on that point . The question remaining is whether the Agency has

statutory authority to make such a process mandatory.

67. Subsection (3)(b)3 . also does not address how the resubmission or

corr ection of claims would be addressed in the event (which the Agency has

actual knowledge has occurred repeatedly) that the EVV system itself causes

processing or payment issues. The Reimbursement Handbook provides that

such a claim may be corrected and/or r esubmitted through FMMIS . However,

providers can no longer ÑsubmitÒ claims to FMMIS, making it unclear how

they can ÑresubmitÒ claims there. In the event the EVV system itself causes

such a problem, the Proposed Rule provides no remedy. Currently, a provid er

could simply replace an optional billing agent that is not fulfilling its duties.

However, as previously stated, Medicaid BA providers will not have that

option for the EVV system.

68. Mr. Black testified that, if the challenged section of the Proposed Rule

went into effect, it is not clear to him from the rule language how

resubmission or correction of claims would be accomplished. Although Agency

and/or Tellus personnel have provided Mr. Black with an unofficial

explanation of how this could occur, Mr. Black testified as to why the process

they described is nonsensical and Ñdefeats the entire purpose of having an

EVV system.Ò

69. The Agency said this should not be a concern by asserting that the

Reimbursement Handbook would still apply. Ms. Vergeson tes tified that it is

not reasonably possible for a provider to be confused as to how ÑresubmissionÒ

of claims to FMMIS is possible when they may not ÑsubmitÒ claims to

FMMIS. Contrary to this assertion, it appears difficult, if not impossible, to

make the cha llenged section of the Proposed Rule conform to the

Reimbursement Handbook in this area. Petitioner fears that, through the

adoption of the Proposed Rule, it has been placed in a precarious position,

which leaves it unclear as to what their rights for subm ission and/or

resubmission of claims will be going forward.

70. The Agency did not give a satisfactory response, at least to PBSÔ s way

of thinking , as to why it decided to require that its EVV system serve as a

mandatory billing agent. Ms. Vergeson testifi ed simply, ÑitÔs the model we

chose. Ò When asked to expound on that, she stated that it Ñseemed the best

model for the state of Florida given how our FMMIS operates, and limitations

with how it can be changed or adapted.Ò The Agency did not elicit any

evid ence as to why this model works best with FMMIS or what limitations

that system faces. The Agency representative added that having one single

vendor allowed the Agency to Ñmonitor that vendor much more carefully, and

truly try and prevent and control fraud .Ò

71. The testimony offered by both the Agency and Petitioner at the

hearing supports EVV as an effective tool to combat fraud. While the p etition

alleges that the EVV system has caused Ñdelays in payment,Ò not even one

specific instance of a payment dela y correlated to a particular claim number

was specified, although testimony from Mr. Black indicated, anecdotally and

without documentary evidence to support the exact amount , that at least one

payment delay lasted Ñless than two weeks.Ò This was supported by

testimony from PetitionerÔs witness, Ms. Lexima, who stated it took her

third - party billing company Ñmaybe two business daysÒ to figure out how to

adjust their system and confirm it worked.

72. The Reimbursement Handbook, at p age 2 - 2, states that ÑClai ms are

processed daily. Payments are made on a weekly basis. Under normal

conditions, a claim can be processed from receipt to payment within 7 to 30

days.Ò None of the witnesses testified that any claim was delayed greater

than 30 days.

73. The p etition m akes no allegations of non - payment for validated

claims . Petitioner Ô s own witnesses concede that despite there being issues

with payments being delayed, all claims have eventually been paid by the

Agency. Mr. Black stated that Ñ[e]ventually they did pay.Ò Ms. Lexima stated,

Ñthey eventually figured it out.Ò Additionally, she stated that, while she had

to call to check in . Ñthey just kind of worked what they had to do behind the

scenes È eventually they were all resubmitted.Ò

74. Petitioner concedes that the Agency has the legal authority to

promulgate a rule that requires Medicaid providers to submit to EVV.

Amended Petition, ¥ 38 (asserting that Ñ[i]t is possible (in the event of a

functioning EVV system and in the absence of another rule directly to the

co ntrary) that the Agency could promulgate a reasonable rule that permitted

claims to be submitted through the EVV system, which would then forward

the claims to FMMIS.Ò). I n testimony at hearing, Mr. Black stated , Ñif things

worked correctly , and we could r esubmit claims properly ... I donÔt think

anybody would have a problem, we wouldnÔt be here today.Ò

Ultimate Facts Regarding Arbitrary and Capricious

75. Petitioner admits , through its responses to interrogatories and

through Mr. BlackÔs testimony , that t he requirement that the Agency

Ñmandate that all claims for ABA services be subject to verification of the

claims data submittedÒ is a reasonable requirement, and , in fact, it is

required by law that the Agency verify claims data submitted.

76. The Agency reviewed several options for the implementation of EVV in

Florida , and , based on the needs of the Agency and the costs of implementing

the system, the Agency determined that a model where the Agency contracts

with an external vendor to operate the system w ould be the most efficient

model for Florida. Ms. Vergeson testified:

With the external contract, the external model that

we chose to implement, that seemed Ï all things

considered seemed to be the best approach for

Florida. ItÔs a one - stop shop. The syste m collects

the information. The providers release the claims.

The EVV system does the calculations that FMMIS

did not have the capability of doing, verifies

services, does sort of a prepayment review, and

then transmits a file to the [FMMIS] for actual

adj udication of the claims.

77. The external model offers several benefits to the Agency . As stated by

Ms. Vergeson, ÑHaving one vendor for the agency to manage greatly

simplifies [the AgencyÔs] ability to monitor that vendor, and require

performance measure s, and to make sure that that vendor is operating

appropriately.Ò

78. Ms. Vergeson identified some of those performance measures,

including : (1) that no less than 95 percent of all claims are transmitted to

FMMIS for adjudication and , then additionally , (2 ) that no more than five

percent of those claims can be denied due to an issue with the vendor. For

failing to hit these measures , there are monetary penalties. The Agency has

imposed these penalties in the past Ñmultiple times.Ò

79. The Agency determined that this single point for submission would be

the best approach to meet the needs of the Agency that is Ñsolely responsible

for managing the Medicaid programÒ and to Ñprotect the integrity of the

[Medicaid] program to the best extent possible.Ò

80. Furthe rmore, as testified by Ms. Bennett, it is Ñ[h]ands downÒ easier to

prevent fraud from occurring than to recover the monies after they ha ve been

paid to providers.

81. Petitioner concedes that the model is Ñallowable and one of the

recommended models by CMS .Ò Petitioner acknowledges that the ÑExternal

MethodÒ is a method identified by CMS for implementing an EVV system.

Ultimate Facts Regarding Rulemaking Authority

82. The Agency has rulemaking authority to promulgate rules for the

Medicaid program, pursuan t to the grant of rulemaking authority present

within s ection 409.919, that states the Agency Ñshall adopt any rules

necessary to comply with or administer ss. 409.901 - 409.920 and all rules

necessary to comply with federal requirements.Ò § 409.919, Fla . St at.

83. The Agency followed all applicable rulemaking procedures pursuant to

the Administrative Procedure Act, c hapter 120, as confirmed by the

testimony of Ms. Vergeson. Furthermore, Petitioner has not alleged any

dispute as to whether the Agency followed all applicable rulemaking

procedures. See generally Amended Petition.

Ultimate Facts Regarding NetSmart

84. Prior to the implementation of the Proposed Rule, the Agency

implemented a Pilot Program in the Pilot Regions in Southeast Florida to

determine wh ether EVV would be effective and to work through any issues

with the implementation of a new system. The Agency contracted with

NetSmart (formerly Tellus) for implementing the EVV system in the Pilot

Regions prior to the implementation of the Proposed Rule .

85. The Agency worked with Netsmart to improve the operation of the

EVV system in the Pilot R egion s during the P ilot P rogram. The Agency

has monitored the performance through the entirety of the contract.

Ms. Vergeson testified that Ñthere was a period o f several months where as

more and more providers were using the system, issues would come to our

attention, and we would work through our standard process. And then, in

fact, we improved our internal processes, so that we can make sure that those

issues g et addressed, that fixes get put into place.Ò

86. When preparing for the statewide expansion, the Agency included in

its contract extension specific metrics to ensure Ñthat any visits that are

released by the providers in the Netsmart system are ultimately transmitted

to FMMIS for claims adjudication. Every single week at least 95 percent of

visits that are released must make it to FMMIS or there are financial

penalties for the vendor.Ò Additionally, when FMMIS adjudicates those

claims Ñno more than five pe rcent can get denied for an issue related to the

vendor,Ò or the vendor will be sanctioned by the Agency.

87. ÑFor the past six weeks [from the time of the amendment to the

Proposed Rule] since we've been monitoring based on that amendment, the

claims subm ission rate has been 100 percent, and on a weekly basis the

denial rate is approximately 1.8 percent on the average.Ò

88. Mr. Black testified that there were significant problems very early in

the implementation of EVV in the P ilot R egion s , but that Ñwe wo rked through

a lot of problems, and some of the problems have Ï I mean, 100 percent

gotten Ï you know, they have Ï they have gotten better.Ò

89. Petitioner testified that the primary issues with the EVV system were

Ñless to do with the gathering of the EVV data as much as they are to do with

the transmission of the Ï the actual claim files to the FMMIS system.Ò

90. There are no allegations that the Agency has not paid the claims at

issue in this proceeding. Mr. Black stated during testimony that Ñthey did

r eprocess and pay these claims, yes.Ò His concern was with the speed of

payment on occasion.

Ultimate Facts Regarding PetitionerÔs Purpose for Initiating the Rule

Challenge

91. Petitioner has not identified any practice or methodology that is in the

P ropo sed R ule that would preclude the prompt payment of claims or the

reasonable functioning of the system for the purposes intended. The P roposed

R ule does not provide that the intent of the P roposed R ule is to delay

payments to providers, or that the system m ust function poorly and prevent

providers from being paid.

92. As Ms. Bennett testified, while claims may be delayed because of

technical issues or because of claims with errors in them, ÑEVV is not a

process that slows claims down.Ò

93. Petitioner is prec luded, pursuant to the principle of res judicata, from

asserting that the AgencyÔs EVV system in the P ilot R egion s is operating

pursuant to an unadopted or unpromulgated rule. Positive Behav . Support v.

A g. f or Health Care Admin. , Case No . 21 - 1789RU ( Fla. DOAH July 23, 2021)

( Final Order of Dismissal ) (pending appeal) .

94. Ms. Vergeson stated that she, on behalf of the Agency, was not aware

of any other dispute regarding the proposed rule, other than the fact that

providers will have to submit their service s through EVV.

95. PetitionerÔs stated goal , through Mr. BlackÔs testimony, with this

litigation is not to prevent the Agency from using EVV, but rather, Ñ[t]o make

the claims that are generated after EVV data is È gathered correctly to be

transmitted to t he fiscal agent, FMMIS, so that they would be appropriately

adjudicated, and either paid or denied based on the appropriateness of the

claim.Ò

96. Petitioner believes that EVV is a useful tool for detecting and

deterring fraud and is reasonable .

97. Mr. Bl ack admitted that the functioning of the EVV system in the

P ilot R egion s is the only reason for this rule challenge, stating ÑI think it

would be fair to say, that if things Ï yeah, if things worked correctly, and we

could resubmit claims properly, if they were Ï needed to be resubmitted,

yeah, I donÔt think anybody would have a problem, we wouldnÔt be here

today.Ò

98. The function of the EVV system in the Pilot Region s is an improper

basis to support a rule challenge. To the extent that Petitioner has prev iously

attempted to prosecute a rule challenge to contest the operation of the EVV

system in the P ilot R egion s , such challenge has already been litigated,

dismissed with prejudice, and Petitioner is barred from re - litigating those

issues pursuant to res ju dicata. See i d .

99. PetitionerÔs attempt to rephrase its allegations to fit within the limits

of a rule challenge is inappropriate, and an abuse of the administrative

process, when PetitionerÔs true goal is to re - litigate allegations that have

already been resolved, or that would be inappropriate in an administrative

forum, such as adjudicating the denial of claims caused by an error in the

functioning of the EVV system in the P ilot R egions.

C ONCLUSIONS O F L AW

100 . DOAH has jurisdiction over the subject ma tter and parties to this

action , pursuant to sections 120.56, 120.569 , and 120.57(1), Fl orida Stat utes

(2021) .

101. Pursuant to section 120.56(2)(a), the following burdens of proof apply

to a proposed rule challenge:

The petitioner has the burden to prove by a

preponderance of the evidence that the petitioner

would be substantially affected by the proposed

rule. The agency then has the burden to prove by a

preponderance of the evidence that the proposed

rule is not an invalid exercise of delegated

legislati ve authority as to the objections raised.

102. Section 120.52(8) states that an ÑInvalid exercise of delegated

legislative authorityÒ means an:

[A]ction that goes beyond the powers, functions,

and duties delegated by the Legislature. A

proposed or existin g 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 exceed ed its grant of

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 vagu e, 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 adopted

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

t he 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 agencyÔs class of powers and duties, nor

shall an agen cy 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 furth er than

implementing or interpreting the specific powers

and duties conferred by the enabling statute.

103. The Ñflush leftÒ language is intended to restrict and narrow the scope

of agency rulemaking. See Sw. Fla. Water Mgmt. Dist. v. Save the Manatee

Clu b, Inc. , 773 So. 2d 594 (Fla. 1st DCA 2000); Bd. of Trs. of the Internal Imp .

Tr . Fund v. Day Cruise AssÔn, Inc. , 794 So. 2d 696 (Fla. 1st DCA 2001). This

language makes clear that the entire point of rulemaking is to Ñimplement[ ]

and interpret[ ] the spe cific powers and duties conferredÒ in a statute. See

§ 120.52(8), Fla. Stat.; Day Cruise AssÔn , 794 So. 2d at 700. An agency may

not Ñimprovis[e] in an area that can be said to fall only generally within some

class of powers or duties the Legislature has c onferred on the agency.Ò Id .

10 4 . Additionally, section 120.52(9) states that ÑLaw implementedÒ is

defined as Ñthe language of the enabling statute being carried out or

interpreted by an agency through rulemaking.Ò

10 5 . Section 120.56(1)(a) states that Ñan y person substantially affected by

a rule or proposed ruleÒ may challenge such a provision. Section

120.56(1)(b)2 . goes on to state that such a challenger must include Ñfacts

sufficient to show that [they] È would be substantially affected by the

proposed ruleÒ at issue.

10 6 . It is undisputed that (a) PBS is a provider of Medicaid BA services

and that (b) the challenged portion of the Proposed Rule will regulate

providers of Medicaid BA services. The Agency has all but conceded this

point. Although the Agen cy notes that the Medicaid program is voluntary in

nature, PBS made clear that it has no intention to stop offering such services

going forward. The Agency did not offer anything to the contrary.

Accordingly, it is clear that PBS will be regulated by the c hallenged portion of

the Proposed Rule .

10 7 . This regulation is Ñalone sufficient to establish that [PBSÔ s ]

substantial interests will be affectedÒ in this matter. Coal. o f Mental Health

Pro s . v. Dept. of Pro . Reg . , 546 So. 2d 27, 28 (Fla. 1st DCA 1988). T here is Ñno

need for further factual elaborationÒ regarding exactly how such a petitioner

will be affected once that basic showing is made. Id . ÑSo long as it [is] made

apparent that [a petitionerÔs] conductÒ will be regulated by a proposed rule,

its burde n for standing has been met. Id .; ABC Fine Wine & Spirits v. Target

Corp . , 321 So. 3d 896, 899 (Fla. 1st DCA 2021) (ÑAppellants are subject to the

regulations set forth in the existing rule. This is sufficient to satisfy

standing.Ò); see also Televisual Co mm cÔn s, Inc. v. DepÔt of Labor & Emp .

Sec./Div. of WorkersÔ Comp. , 667 So. 2d 372, 374 (Fla. 1st DCA 1995); Reiff v.

Ne . Fla. State Hosp. , 710 So. 2d 1030, 1032 (Fla. 1st DCA 1998); and Ward v.

Bd. of Trs . , 651 So. 2d 1236, 1237 (Fla. 4th DCA 1995).

10 8 . T his l ine of case law regarding FloridaÔs broad interpretation of

standing in rule challenge proceedings is Ñconsistent with the supreme courtÔs

contention that standing should be liberally appliedÒ in such cases. ABC ,

321 So. 3d at 899 ( citing NAACP v. Fla . Bd. of Regents , 863 So. 2d 294, 300

(Fla. 2003) ) . Petitioner has clearly demonstrated its standing to challenge the

Proposed Rule.

10 9 . Petitioner asserts that the Proposed Rule is invalid because the rule

violates section 120.52(8)(b), (d), and (e). Now that the issue of standing to

proceed has been resolved in favor of Petitioner, i t is necessary to discuss

what objections to the P roposed R ule have been made by Petitioner in order

to determine whether the Proposed Rule is an invalid exercise of the Agen cyÔs

delegated legislative authority .

110. Petitioner, neither in its o riginal or a mended p etition, nor during its

presentation at the final hearing, objected to the Proposed Rule on the basis

that the Proposed Rule Ñenlarges, modifies, or contravenes the specific

provisions of law implemented,Ò and , therefore, pursuant to the express

provision of s ection 120.56(2)(a), Petitioner has waived this potential

objection to the Proposed Rule. The Agency thus does not have the burden

here to prove that the P ropose d R ule is an invalid exercise of delegated

legislative authority on the basis that the Proposed Rule Ñenlarges,

modifies, or contravenes the specific provisions of law implemented.Ò

§ § 120.52(8)(c) and 120.56(2)(a), Fl a. Stat.

111. It is a well - settled pri nciple that any claim that is not sufficiently

pled is waived, even in the administrative context. See TECO Energy, Inc. v.

Williams , 234 So. 3d 816, 823 (Fla. 1st DCA 2017) (finding that an

affirmative defense must be timely and sufficiently plead by a cl aimant); See

also McFarlane v. Miami - Dade Transit Auth. , 215 So. 3d 658, 660 (Fla. 1st

DCA 2017) (finding no amendment or supplemental pleading may be used to

raise a new claim or defense that was not raised in the initial pretrial

stipulation in WorkersÔ Compensation cases) . Even if Petitioner had failed to

timely and sufficiently plead its specific objections, which it did not,

NetsmartÔs performance cannot be used to demonstrate that the proposed

rule Ñenlarges, modifies, or contravenes the specific prov isions of law

implementedÒ or is beyond the AgencyÔs rulemaking authority, because its

actions were not performed pursuant to the provisions of the P roposed R ule.

See Hospice of the Fla. Suncoast, Inc. v. Ag. for Health Care Admin. , Case

No. 15 - 3656RX, FO at ¶ 54 (Fla. DOAH Sept. 28, 2016), aff'd per curiam , 203

So. 3d 159 (Fla. 1st DCA 2016) (finding that a Ñrule challenge pursuant to

section 120.56 is directed to the facial validity of the challenged rule, and not

to its validity as interpreted or applied in specific factual scenariosÒ); See also

Fairfield Cmties. v. Fla. Land & Water Adj. Comm'n , 522 So. 2d 1012, 1014

(Fla. 1st DCA 1988) (in deciding the facial validity of rules promulgated by an

administrative agency, only the statutory basis for the rul es need be

examined to determine whether the agency has exceeded its authority).

112. PetitionerÔs ultimate assertion rests not on eliciting proof that the

requirements of the proposed rule are beyond the AgencyÔs delegated

legislative authority, but rathe r, that the AgencyÔs specific choice of vendor is

an invalid delegation of legislative authority because the vendorÔs

performance is inadequate in PetitionerÔs estimation.

113. T o even reach the question of whether the AgencyÔs choice of vendor

is an inval id delegation of legislative authority, th e undersigned must first

reach the conclusion that the Agency has the legislative authority to choose a

vendor. If that conclusion is reached , then the Agency has a lawful P roposed

R ule. Thus, because the actions o f Netsmart have no bearing on whether the

Agency has exceeded its legislative authority, they are immaterial and

irrelevant to this hearing.

114. Moreover, a major point made by Mr. Black, Ms. Lexima, and

Ms. Donahue in their testimony at hearing was that the delays in

reimbursement of their claims in some way leads to a finding by the

undersigned that the Proposed Rule is an invalid exercise of delegated

legislative authority. As Ms. Bennett, correctly, albeit bluntly, testified, it is

not the AgencyÔs con cern that providers have to wait as much as two weeks

(or longer in more isolated instances) to be reimbursed and that waiting could

force them to borrow money or even mortgage assets to cover payroll and

expenses. The Agency is concerned first and foremos t with paying valid,

reimbursable claims in a timely manner. The fact that payments may have

previously been made within 48 hours of submission, and now may take a

week or two, does not render the rule invalid. There may be some form of

action that could b e brought in state court to deal with delayed payments, but

a rule challenge under chapter 120 is not the method for dealing with a

vendor the providers deem to be inadequate.

The Proposed Rule I s N ot Vague

115. A rule is impermissibly vague Ñif it forbi ds or requires the

performance of an act in terms that are so vague that persons of common

intelligence must guess at its meaning and differ as to its application.

Generally, where words or phrases are not defined, they must be given their

common and ordin ary meaning. Ó[T]he plain and ordinary meaning of [a]

word can be ascertained by reference to a dictionary.ÔÒ Dep't of Fin. Servs. v.

Peter R. Brown Const r ., Inc. , 108 So. 3d 723, 728 (Fla. 1st DCA 2013)

(internal citations omitted). The Proposed R ule is n ot vague. Every individual

who testified stated that, while EVV may be more burdensome on p roviders

than Medicaid blindly paying p roviders immediately, the implementation of

EVV is still a beneficial policy for the Agency to pursue .

116. Each of Petitioner Ôs witnesses clearly understood the effect of the

Proposed Rule. Ms. Lexima, when asked what part of the rule was vague or

that she did not understand stated, ÑNo, I understand the rule. I understand

it. I understand this document, this notice of change do cument. I understand

whatÔs outlined here.Ò

117. Petitioner has attempted to stretch its argument that the Proposed

R ule is vague by arguing that, while it is now clear that claims must be

submitted to the EVV system, Ñfor resubmission itÔs not clear at al l because

under the handbook the only means of electronic submission considered is

through FMMIS.Ò This is true, but is an inaccurate reading of the Proposed

Rule in conjunction with the Reimbursement Handbook. Under the provisions

of the P roposed R ule, al l claims will be adjudicated by FMMIS. The P roposed

R ule does nothing to change this fact, and claims will all be submitted to

FMMIS, even if they must first be submitted through the EVV system.

Moreover, PetitionerÔs attempt to separate submission and res ubmission into

two separate processes is splitting definitional hairs. Even when PetitionerÔs

counsel referred to the issue, he stated, Ñthe only means of electronic

submission considered is through FMMIS,Ò which implicitly agrees with the

common understan ding that submission and resubmission are the same.

118. The Reimbursement Handbook does not grant providers of a service

an affirmative, legal right to submit claims to the Medicaid program. Only

those providers who have voluntarily executed a Provider Ag reement, that

are in good standing with the Agency, and have , th erefore , become ÑMedicaid

providers,Ò may be paid for services rendered to Medicaid recipients.

§ 409.907, Fl a. Stat. Further, Petitioner has no expectation of continued

participation in Medic aid. § 409.907(13), Fla. Stat.; Diaz , 65 So. 3d at 82 - 83

(finding that despite being longtime providers to Florida Medicaid and

expecting to continue participating, such expectation is not appropriate based

on the statutory authority and case law) .

119. Th e Reimbursement Handbook does not mention ÑFMMISÒ when

describing the process of ÑHow to Resubmit a Denied Claim.Ò In fact, the only

statement on where to send a resubmitted claim refers to paper claims, and

states, ÑDo you have the correct P.O. Box Number and corresponding nine -

digit zip code for mailing the resubmitted claim? Resubmitted claims should

be sent to the same P.O. Box as the original claim.Ò Based on this excerpt, it

i s clear that the Reimbursement Handbook views both submission and

resubmissi on as the same process, and claims should be resubmitted to the

same location as the original submission. Further, under the section ÑWhere

to Send Claim Forms,Ò the Reimbursement Handbook contemplates that both

the original CMS - 1500 and the Resubmitted CM S - 1500 claims are to be sent

to the same location .

120. It is also factually inaccurate to state that providers may not use

their own billing agent to submit claims to the EVV system, because the

P roposed R ule does not prevent any provider from using a bil ling agent.

Ms. Lexima, testifying for Petitioner, confirmed this when she testified that

she u s ed a billing agent to bill the EVV system in the Pilot Region s . Further,

the wording of the Proposed Rule makes it clear that all submissions,

including resubmi ssions, are to be submitted through the AgencyÔs EVV

system for BA service claims.

121. Case law does not require the Agency to address how the rule will be

applied in a particular set of facts, so long as the meaning of the language is

clear on its face. See Env Ôt Tr. v. State, DepÔt of Env Ô t Prot . , 714 So. 2d 493,

498 (Fla. 1st DCA 1998) (stating, ÑAn agency statement explaining how an

existing rule of general applicability will be applied in a particular set of facts

is not itself a rule. If that were tr ue, the agency would be forced to adopt a

rule for every possible variation on a theme, and private entities could

continuously attack the government for its failure to have a rule that

precisely addresses the facts at issue. Instead, these matters are lef t for the

adjudication process under section 120.57, Florida Statutes.Ò) .

122. A s ALJ Elizabeth W. McArthur informed Petitioner in her Final

Order d ismissing its un adopted r ule c hallenge, with prejudice :

E qually untenable would be to allow private

entities to utilize the unadopted rule challenge

process, with its attendant provision for attorney's

fees, to attack government for technical errors

arising during a transition to a new electronic

system developed and operated by a vendor. No

doubt such errors ar e frustrating to Petitioner and

interfere with the smooth operations of its

business. But system errors are part of the

promulgated claim process, subject to a

promulgated resolution process, and should be

dealt with accordingly, by seeking the allowable

r elief as to the improperly denied claims.

Positive Behav. Support , Case No. 21 - 1789RU , FOD at ¶ 66.

123. Regardless, the Notice of Change clarifies any ambiguity that may

have existed with regard to optional services, such as the electronic

submission of claims directly to FMMIS, as implied by the Reimbursement

Handbook, by stating that ÑNeither a provider who furnishes home health or

behavior analysis services, nor a billing agent of that provider, may submit

claims directly to the Florida Medicaid fiscal agent irrespective of any other

provision including, but not limited to, Rule 59G - 4.001, F.A.C.Ò

124. The P roposed R ule does not make any further exceptions to the

provisions of the Reimbursement Handbook, or to any other provision of law,

beyond the expr essed clarification found in the Notice of Change ( J. Ex. 2 at

subsection (3)(b)3. ) to address and remedy any ambiguity in how the

regulatory framework will function. A Ñperson of common intelligenceÒ would

not consider the language vague about whether the Proposed Rule requires

BA services to be submitted to the EVV system before being processed by the

AgencyÔs fiscal agent.

The AgencyÔs Interpretation of EVV I s Neither Arbitrary nor Capricious

under S ection 120.52(8)(e), Florida Statutes

125. ÑA rule is arbitrary if it is not supported by logic or the necessary

facts and capricious if it is adopted without thought or reason or is

irrational.Ò Dep't of Elder Aff. v. Fla. Senior Living Ass'n, Inc. , 295 So. 3d

904, 912 (Fla. 1st DCA 2020) (quoting Fla. E. Co ast Indus. Inc. v. Dep't of

Cmty. Aff . , 677 So. 2d 357, 362 (Fla. 1st DCA 1996) , and § 120.52, Fla . Stat . )

A proposed rule is Ñarbitrary if it is not supported by logic or the necessary

facts.Ò The logic of this rule was demonstrated repeatedly through tes timony

at hearing. Petitioner itself, along with PetitionerÔs witnesses, support the

use of an EVV system to combat fraud. The fact that there was, and still is,

rampant fraud in the BA program was also well - established throughout the

hearing and reflected in the testimony of Petitioner and PetitionerÔs

witnesses. Petitioner itself has had employees abusing the exact same

service type at issue in this hearing, fraud which was identified through

PetitionerÔs own use of an EVV system. A proposed rule is Ñcapr icious if it is

adopted without thought or reason or is irrational.Ò The Agency witness,

Ms. Vergeson, testified repeatedly that the Agency had put significant

thought into the method for employing EVV in this state. The reason for it Ð

the rampant fraud and abuse occurring by BA providers Ð is also well

documented .

126. PetitionerÔs arguments that the rule is arbitrary and capricious

because of any action by NetSmart is immaterial to the determination of

whether the AgencyÔs implementation of an EVV requiremen t is arbitrary or

capricious. The actions or practice of a third party have no bearing on

whether the Agency has the legislative authority to promulgate the policy at

issue in this proceeding. Further, to the extent the parties wish to challenge a

reimburs ement methodology or manner of reimbursement to providers, this

is not the appropriate forum. See Cathy A. Sellers, Overview of the

Administrative Procedure Act , pp. 2 - 39, Florida Administrative Practice

(1 3 th Edition 20 21 ) (stating Ñ[a] challenge to a pro posed or existing rule

under F.S. 120.56 is directed only to the invalidity of the rule itself and does

not address the legality of the manner in which the rule is being applied or

enforced.Ò citing Beverly Health & Rehab. Serv s ., Inc. v. Ag. for Health Ca re

Admin. , 708 So. 2d 616 (Fla. 1st DCA 1998) ) .

127. It is undisputed that the Agency has worked with its vendor to

drastically improve the system since the implementation of the Pilot

Program, and that p roviders have been able to adapt. The AgencyÔs speci fic

metrics moving forward address PetitionerÔs primary concerns with the EVV

system failing to properly transmit claims to FMMIS for processing. Based

upon the ample evidence of fraud, the AgencyÔs implementation of EVV is a

reasonable response to the fra ud and abuse observed and prosecuted within

the BA provider type of service .

128. While Petitioner may argue it is unreasonable for the Agency to

employ an EVV system with a history of problems, it is not appropriate to

weigh the issues with the initial im plementation of the system greater than

the systemÔs current status, or to let every BA service provider employ its

own EVV system, which would logically lead to even further issues.

Petitioner has conceded that glitches and errors are commonplace in new

s ystems. Furthermore, Petitioner agreed that ÑEVV in and of itself is

reasonable.Ò In short, Petitioner has not proven that the Proposed Rule was

adopted without thought or reason, or on a whim.

The Agency Has Not Exceeded I ts Grant of Rulemaking Authority u nder

S ection 120.52(8)(b), Florida Statutes

129. Rulemaking authority is defined as Ñstatutory language that

explicitly authorizes or requires an agency to adopt, develop, establish, or

otherwise create any statement coming within the definition of the t erm

Órule.Ô As a result, any agency action that goes beyond the powers, functions,

and duties delegated by the Legislature constitutes an invalid exercise of

delegated legislative authority.Ò Fla. Senior Living Ass'n, Inc. , 295 So. 3d

at 909. When determin ing whether a rule exceeds its grant of legislative

authority, the First District Court of Appeal has stated that the tribunal

should focus on whether Ñthe statute contains a specific grant of legislative

authority for the rule, as opposed to whether the g rant of authority is specific

enough. Either the enabling statute authorizes the rule at issue or it does

not.Ò Id . at 910 (quoting Sw. Fla. Water Mgmt. Dist. v. Save the Manatee

Club, Inc. , 773 So. 2d 594, 598 (Fla. 1st DCA 2000) ) .

130. The Agency has sig nificant and broad rulemaking authority to

promulgate Medicaid r ules regarding payment, to review claims for fraud and

abuse, and to use technology, such a s the FMMIS system or the EVV system

at issue in this proceeding, before adjudicating whether to pay or deny a

claim. See generally , §§ 409.901 - 409.920, Fl a. Stat. (Section 409.919 states

that Ñ[t]he agency shall adopt any rules necessary to comply with or

administer ss. 409.901 - 409.920 and all rules necessary to comply with federal

requirements.Ò) .

131. Section 120.52(8) further states that Ñ[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 s pecific powers and duties granted by

the enabling statute.Ò

132. Despite all the noise made at hearing about how the EVV system is

not working properly and denying providers timely payment of their claims,

both of which were refuted by the facts that, ulti mately and not unreasonably

in terms of length of time, claims have been paid and the EVV system for

submission and reimbursement of claims has improved markedly over time,

t he Proposed Rule is clearly within the general grant of rulemaking authority

in se ction 409.919. While Petitioner may assert that implementing this

requirement is outside its rulemaking authority, PetitionerÔs arguments do

not address section 409.919, but rather, the laws implemented by the

P roposed R ule, i.e., sections 409.906, 409.913 , and 409.9132. See Notice of

Change, Joint E xhibit 2, which states, ÑRulemaking Authority 409.919,

409.961 FS. Law Implemented 409.905, 409.906, 409.913, 409.9132, 409.973

FS. Ò

133. However, as set forth previously, the p etition does not assert,

and Petit ioner has made no claim, that the Proposed Rule violates

section 120.52(8)(c), i.e., that the Proposed Rule Ñenlarges, modifies, or

contravenes the specific provisions of law implemented,Ò and its failure to

make such a claim waives its right to assert tha t the Proposed Rule is invalid

because the Proposed Rule exceeds the boundaries of the specific law

implemented. § 120.56 , Fla. Stat.

134. Petitioner has conceded that the Agency has the authority to require

EVV in BA on multiple instances and in various c ontexts throughout the

proceeding . Despite these concessions and the AgencyÔs broad rulemaking

authority, Petitioner argues that because EVV is authorized in home health

by s ection 409.9132, and the statute is silent on BA services, this silence

indicates that the Agency is forbidden from using EVV to review BA claims.

However, this claim does not address the AgencyÔs rulemaking authority, but

rather, whether the Proposed Rule exceeds the scope of the law implemented.

135. I n the rule challenge here , s ectio n 409.913 is the clearest expression

of legislative intent for the integrity of the Medicaid program and provides

the Agency broad authority to contract with private entities to prevent and

deter fraud, where doing so is advantageous and cost - effective to the state to

safeguard the Medicaid program. § 409.913, Fl a. Stat.

136. Section 409.913 states that:

The agency shall operate a program to oversee the

activities of Florida Medicaid recipients, and

providers and their representatives, to ensure that

fraudu lent and abusive behavior and

neglect of recipients occur to the minimum extent

possible , È .

* * *

(2) The agency shall conduct, or cause to be

conducted by contract or otherwise, reviews,

investigations, analyses, audits, or any combination

the reof, to determine possible fraud, abuse,

overpayment, or recipient neglect in the Medicaid

program and shall report the findings of any

overpayments in audit reports as appropriate.

(3) The agency may conduct, or may contract for,

prepayment review of p rovider claims to ensure

cost - effective purchasing; to ensure that billing by a

provider to the agency is in accordance with

applicable provisions of all Medicaid rules,

regulations, handbooks, and policies and in

accordance with federal, state, and local law; and to

ensure that appropriate care is rendered to

Medicaid recipients. Such prepayment reviews may

be conducted as determined appropriate by the

agency, without any suspicion or allegation of

fraud, abuse, or neglect, and may last for up to 1

year.

* * *

(11) The agency shall deny payment or require

repayment for inappropriate, medically

unnecessary, or excessive goods or services from

the person furnishing them, the person under

whose supervision they were furnished, or the

person causing them to be furnished.

137 . The record is filled with testimony from PetitionerÔs witnesses who

have either used an EVV system to detect and deter fraud or stated their

belief that the use of EVV will unquestionably safeguard the Medicaid

program and is de sirable to all parties . A finding that the Agency may not

use an efficient, effective, and reasonable system to prevent and deter fraud

simply because that system is authorized to be used by Medicaid for another

provider type would defeat the Ñnatural and obvious senseÒ of the Medicaid

statuteÔs provisions to prevent and deter fraud of the Medicaid program and

to ensure that they occur to the minimum extent possible .

O RDER

Based on the foregoing Findings of Fact and Conclusions of Law, it is

O RDERED that t he Amended Petition Challenging Subsection (3)(b)3 . of

Proposed Florida Administrative Code Rule 59 G - 4.132 is hereby D ISMISSED .

D ONE A ND O RDERED this 1 8 th day of November , 2021 , in Tallahassee,

Leon County, Florida.

S

R OBERT S. C OHEN

Administrative Law Judge

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 1 8 th day of November , 2021 .

C OPIES F URNISHED :

William D. Hall, III, Esquire Daniel R . Russell, Esquire

Dean Mead and Dunbar Dean Mead and Dunbar

106 East College Avenue , Suite 1200 106 East College Avenue , Suite 1200

Tallahassee, Florida 32301 Tallahassee, Florida 32301

Jordane Wong, Esquire John L. Wharton, Esquire

Dean Mead and Dunbar Dean Mead and Dunbar

106 East College Avenue , Suite 1200 106 East C ollege Avenue , Suite 1200

Tallahassee, Florida 32301 Tallahassee, Florida 32301

Bradley S . Butler , Jr. , Esquire Thomas M. Hoeler, Esquire

Agency for Health Care Administration Agency for Health Care Administration

27 27 Mahan Drive , Mail Stop 3 2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308 Tallahassee, Florida 32308

Timothy P . Sparks, Esquire William H. Roberts, Acting General Counsel

Agency for Health Care Administration Agency for Health Care Administrati on

2727 Mahan Drive , Mail Stop 3 2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308 Tallahassee, Florida 32308

Shena L. Grantham, Esquire Anya Owens, Program Administrator

Agency for Health Care Administration Florida Administrative Code

Building 3 , Room 3407B and Register

2727 Mahan Drive Department of State

Tallahassee, Florida 32308 R. A. Gray Building

500 South Bronough Street

Simone Marstiller, Secretary Tallahassee, Florida 32399 - 0250

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1 Ken Plante, Coor dinator

Tallahassee, Florida 32308 Joint Admin istrative Proced ures Committee

Room 680, Pepper Building

Margaret Swain 111 West Madison Street

Florida Administrative Code Tallahassee, Florida 32399 - 1400

and Register

Department of State

R. A. Gray Building

500 South Bronough Street

Tallahassee, Florida 32399 - 0250

N OTICE O F R IGHT T O J UDICIAL R EVIEW

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 administrative appeal with the

agency clerk of the Division of Admini strative Hearings within 30 days of

rendition of the order to be reviewed, and a copy of the notice, accompanied

by any filing fees prescribed by law, with the clerk of the d istrict c ourt of

a ppeal in the appellate district where the agency maintains its h eadquarters

or where a party resides or as otherwise provided by law .