89-006088 South County Mental Health Center vs. Department Of Health And Rehabilitative Services Status: Closed Recommended Order on Wednesday, March 28, 1990.

Summary: How HRS interprets general appropriations act and distributes money to districts for crisis stabilization beds not subject to APA review. No jurisdiction.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SOUTH COUNTY MENTAL HEALTH CENTER, )

)

Petitioner, )

)

vs. ) CASE NO. 89-6088

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

___________________________________)

RECOMMENDED ORDER

This matter was heard by William R. Dorsey, Jr., the hearing officer

designated by the Division of Administrative Hearings, in Tallahassee, Florida,

on January 8 & 9, 1990.

APPEARANCES

For Petitioner: Theodore D. Mack, Esquire

Cobb Cole & Bell

315 South Calhoun Street, Suite 500

Tallahassee, Florida 32301

For Respondent: John W. Hedrick, Esquire

Department of Health and

Rehabilitative Services

Building One, Suite 407

1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

STATEMENT OF THE ISSUES

The primary issue is whether the allocation of funds from specific

appropriation 895 of the 1989-90 General Appropriations Act made by the

Department of Health and Rehabilitative Services in District IX was proper.

That portion of the General Appropriations Act provided a special price level

increase for providers of crisis stabilization services. The secondary issue is

whether the Department's distribution in District IX was computed correctly,

utilizing the Department's own methodology.

PRELIMINARY STATEMENT

South County Mental Health Center (South County) requested a formal hearing

after it was notified of the Department's distribution of crisis stabilization

unit deficiency funds under specific appropriation 895 of the 1989-90 General

Appropriations Act. At the hearing, the Department moved to dismiss the

petition contending the distribution was a budget matter which could not be

challenged under Chapter 120, Florida Statutes. A ruling on that motion was

reserved for the Recommended Order. At the hearing, South County presented the

testimony of Bennie Barnes, Linda Giesler, Charles Carbone, Ben Toole, and

Steven Hill. Exhibits 1, 2, 4, 5, 8, 10, 11, 13, 14, 16, 17, 18, and 20 were

admitted. The Department presented the testimony of Baldwin Bunkley, Ivor

Groves, and Philip Fleisher. Exhibits 27-34 were admitted in evidence. A

transcript of the hearing was filed, the parties filed their proposed

recommended orders on February 26, 1990. Rulings on proposed findings of fact

are made in the Appendix to this Recommended Order.

The motion filed by South County on February 26, 1990 for official

recognition of House Bill 217 filed in the 1990 legislative session is denied.

The filing of that bill sheds no light on the meaning of the 1989 General

Appropriations Act.

FINDINGS OF FACT

Crisis Stabilization Units

1. The Legislature dealt comprehensively with the subject of mental health

when it enacted Chapter 394, Florida Statutes, in 1971. The Act is officially

known as the Florida Mental Health Act, and popularly known as the Baker Act.

The Act established programs in the Department to reduce the occurrence,

severity, duration and disabling aspects of mental, emotional, and behavioral

illness or disorders. The Department was directed to "coordinate the

development, maintenance, and improvement of [mental health] receiving and

community treatment facilities within the programs" of HRS districts in Florida.

The Legislature also required that "the least restrictive means of intervention

[i.e., treatment] be employed based on the individual needs of each patient

within the scope of available services." Sections 394.451 and 394.453, Florida

Statutes (1971). 1/

2. Mental health services provided by community treatment facilities under

the Baker Act may include emergency screening services, mobile crisis response

teams, crisis stabilization units, short-term residential treatment centers

which provide inpatient care and short-term hospitalization in a psychiatric

hospital or psychiatric unit. Long term psychiatric hospitalization is not

funded with Baker Act appropriations. Community treatment facilities provided

most of their care by purchasing services from hospitals prior to 1979. The

rates paid for those hospitalization services had been increasing constantly.

Most inpatient psychiatric hospitals now charge patients $300-400 per day.

3. Crisis stabilization units (CSU) were developed as a less costly

alternative to psychiatric hospitalization. A CSU was designed to provide

treatment to help the individual through an immediate psychiatric crisis, to

provide a rapid assessment of the client's needs, and direct the client to

appropriate programs, which could include inpatient pay hospital care, if

necessary. The time required to stabilize a patient in a psychiatric crisis, to

evaluate the patient and determine the most appropriate and least restrictive

treatment program is generally about 14-15 days. Short-term residential

treatment is provided as an alternative to psychiatric hospitalization for those

needing therapy for up to 90 days.

4. Some community treatment facilities established their own inpatient

hospital programs about the time CSUs were first established. These psychiatric

hospitals are regulated in the same manner as other specialty hospitals under

Chapter 395, Florida Statutes. Once a community treatment facility had the

approval to establish a hospital, that hospital obtained the ability to bill

"third parties," usually insurance companies, for the psychiatric crisis

stabilization services they provided. These facilities are able to use that

reimbursement to offset, to some extent, any losses incurred in treating Baker

Act patients. Most policies of health insurance will not provide reimbursement

for crisis stabilization care provided by a CSU, such as South County. On the

other hand, Medicaid will not reimburse a free-standing psychiatric hospital

such as 45th Street for its services.

5. When CSUs were first organized, they were not regulated by the state.

As with hospitals, the size of a CSU is measured by its number of approved beds.

Sections 394.878(4) and 395.003(4), Florida Statutes. After their

establishment, some units sacrificed quality of care in order to minimize costs,

and as a result the Legislature established a program of departmental licensure

and regulation for CSUs in 1985. Under those statutes, a CSU may not be

licensed for more than 30 beds. South County is licensed as a CSU.

6. HRS District IX includes Palm Beach County. The 45th Street Mental

Health Center operates in a portion of Palm Beach County. It was one of the

community treatment facilities which established a hospital under Chapter 395,

which had 44 beds. It can treat psychiatric patients as inpatients, but as a

matter of fact it operates almost solely as a CSU. It takes all indigent

patients in psychiatric crises who are brought to them by the police or others,

without regard to the patient's ability to pay for the services it renders to

them. Licensed CSU facilities, such as South County, also take all patients

bought to them.

7. Recently, 45th Street Mental Health Center also licensed a CSU at its

hospital with 16 beds.

8. The Legislature has recognized the value of crisis stabilization beds

in providing quality, low-cost treatment to citizens suffering from acute bouts

of mental illness. It has not, however, directed or specifically funded the

establishment of crisis stabilization beds in every HRS district. The

Legislature has funded and directed the establishment of a specific number of

crisis stabilization unit beds in some HRS districts. These are known as

"appropriated beds." The Department also has had the authority to devote some

of the money generally appropriated for Baker Act services to establish crisis

stabilization beds where it believes they are needed. These are generally known

as "unappropriated beds," because they have not been established by specific

legislative direction and funding.

9. The Department usually distinguishes between in-patient psychiatric

treatment and CSU treatment. CSU beds, short-term residential treatment beds,

and in-patient psychiatric hospital beds are usually treated as separate points

on the continuum of services available to those with psychiatric problems.

Ordinarily, hospital beds are used for longer-term care of patients whose

psychiatric illness is such that confinement is the least restrictive means to

provide the patient necessary mental health services. A CSU ordinarily limits

itself to helping the patient get over his current crisis, evaluating a patient

after stabilization, and referring the patient to some other provider for long-

term care. The referral may be to out-patient counseling for mild cases of

mental illness, to day treatment, to a short-term residential treatment

facility, up to hospitalization in a psychiatric unit for serious mental

illness.

10. Legislatively appropriated CSU beds are licensed as CSU beds, and not

as inpatient psychiatric hospital beds. Appropriated and unappropriated CSU beds

are funded at different rates depending on whether or not they were

legislatively established, and when they came into existence. The price level

adjustment made available in specific appropriation 895 was a legislative effort

to reduce the disparity in funding of CSU beds around Florida, since all provide

similar services.

11. The Florida Council for Community Mental Health (Florida Council)

represents most community treatment facilities before the Legislature.

Increased funding for acute Baker Act services, which include CSU beds and

inpatient hospital beds, has been a high priority issue for the Florida Council

for several years. In 1987, the Florida Council surveyed CSUs to determine

their costs for providing services, as distinct from their reimbursement rates.

12. The Florida Council did not obtain additional funding in the 1987

legislative session. In preparation for the 1988 legislative session, the

Florida Council conducted a second survey. This survey also distinguished

between CSU and in- patient hospital beds, and was intended to gather

information on both of those Baker Act services for use in its lobbying

activities.

13. The Florida Council summarized the survey results in a chart

identified as "Crisis Stabilization Unit Deficiency Distribution" and "Inpatient

Baker Act Hospital Deficiency Distribution" (Exhibit 30). The Florida Council's

survey results categorized 45th Street as an inpatient hospital, and calculated

its reimbursement as $59 per bed per day, but its costs as $160 per bed per day.

The reimbursement rate was so low that it was incurring an operating deficit.

14. Independent of the Florida Council's efforts, the Department wanted to

identify the Baker Act services that it purchased with public funds throughout

the state, and to determine what the Department was paying for those services.

The program office in Tallahassee conducted a telephone inventory of CSU beds,

by contacting each of the Department's district offices. In response to the

survey, the Department's District IX reported sixteen unappropriated CSU beds at

South County and no CSU beds, appropriated or unappropriated, at 45th Street.

All of 45th Street's inpatient services were reported as "other Baker Act

services" in that survey. The survey did not ask District IX officials whether

the beds at 45th Street functioned as CSU beds rather than as psychiatric

hospital beds.

15. Departmental administrators ultimately produced a spread sheet based

on the information derived from its informal, internal telephone survey. It

showed 52 unappropriated CSU beds in District IX, which included beds at South

County, but none at 45th Street's inpatient psychiatric hospital. 45th Street's

beds were shown in a spreadsheet column entitled "number [of] mental health

center in-patient beds". (Exhibit 1, Attachment 1, Col. 23.). No funding

deficiency was identified by the Department for 45th Street's beds on the

spreadsheet.

16. During 1989, the Department's central office was notified that the

Legislature might be able to appropriate as much as $2.2 million more for Baker

Act services, and the Department was requested to suggest appropriate uses for

those funds. The administrators in the Department's central office created a

document entitled "Funds needed to increase all CSU beds to $113 per day, Baker

Act Funds" (Exhibit 8). The methodology employed by the administrator to

produce that spreadsheet did not include any data for inpatient hospital beds;

it included only licensed CSU beds. It therefore did not include any of 45th

Street's inpatient beds but did include money to increase reimbursement for the

52 unappropriated CSU beds at South County. The Department based its

calculations on an estimated split of 75 percent/25 percent in the use of Baker

Act funds for the state as a whole between CSU services (75 percent), and other

services, including emergency screening, mobile crisis response teams, short-

term residential services and inpatient services (25 percent), for fiscal year

1987-88 (the most recent data available). The 25 percent includes inpatient

psychiatric hospitalization services which can be provided to clients needing

them after stabilization in a CSU.

17. In its calculations, the Department's central office reduced the $2.2

million which the appropriations committee staff had indicated might be

available by $717,590 which was needed to increase the funding level for

previously appropriated CSU beds to the target level of $1i3 per bed per day.

The remaining funds would not be enough to fund all unappropriated CSU beds in

the state at the target level of $113 per bed per day, so a plan was devised to

prorate the remaining amount over the unappropriated CSU beds. The prorated

share for District IX was .2723 of the available funds, which would equal

$403,636. These internal calculations made by the Department's central office

included no money for 45th Street's inpatient beds. The Department's

calculations were ultimately delivered to appropriations staff at the

Legislature. This information was not broken down by agency within each

district (Tr. 55).

18. The 1989-90 General Appropriations Act appropriated $2 million (not

the anticipated $2.2 million) in specific appropriation 895 for crisis

stabilization unit beds. $717,590 was allocated for appropriated CSU beds in

the same manner suggested by the Department to legislative staff. The remaining

$1,282,410 was divided among unappropriated CSU beds. This is 29 percent of the

money needed to bring all unappropriated beds up to $113 per bed per day. While

the allocations made in the General Appropriations Act are similar to those

suggested by the Department (Finding 17), it is impossible to determine from the

language in specific appropriation 895 whether the members of the Legislature

intended to adopt the methodology implicit in the Department's suggested pro

rata distribution. The text of the appropriation proviso does not speak to the

distribution of funds within a district. The application of the Department's

pro rata formula does yield the same increases specifically allocated by the

proviso language to each HRS district. It is by no means clear, however, that

the use of that suggested percentage figure for each district was also meant to

serve as an appropriation to each CSU provider in each district of the amount of

money which can be found in the workpapers prepared by the HRS central office,

but which were never sent to the Legislature. For District IX, the pro rata

share of .2723 would yield $349,179, the amount which is contained in the

proviso language for District IX. The evidence offered fails to prove that the

Legislature had any specific will as to the distribution of the monies among

providers within a district. The Legislature's focus, to the extent it can be

discerned from the proviso language itself, appears to have been the funding of

CSU services, without regard to licensure status of those providing the

services. The beds at 45th Street provide CSU services.

19. Proviso language for specific appropriation 895 states that the entire

$2 million would be used for a "price level increase directly relating to the

operation of CSU beds, and not to other Baker Act support services". The

proviso language requires the Department to insure that the contracts with

providers identify the amounts associated with the operation of CSU beds, as

opposed to emergency screening and "other Baker Act services". Chapter 89-253,

Law of Florida, specific appropriation 895.

20. Specific appropriation 895 also allocated $291,404 to "community

mental health centers that operate licensed psychiatric hospital beds" from

general revenue to reimburse them for assessments paid to the Public Medical

Assistance Trust Fund. That portion of the proviso language was vetoed by the

Governor, and is not significant here.

21. The meaning of the proviso language actually included in specific

appropriation 895 has been subjected to varying interpretations, and as would be

expected, South County advances the interpretation which would grant it the

greatest funding.

Actual Distribution of Funds in District IX

22. After the Department received the proviso language for specific

appropriation 895, all districts were sent a memorandum (including attachments)

which required them to establish a plan for spending the funds made available

under specific appropriation 895. The plan each district submitted to the

Department was known as its "CSU -Deficiency Funding Distribution Plan". In the

Department's memo, Assistant Secretary Ivor Groves stated "this analysis

addresses only the funding levels of CSU beds and does not speak to increasing

the funding levels of SRT [short-term residential treatment] beds or inpatient

beds operated by community mental health centers". (Exhibit 1, pg. 3). The

memo noted that funds would be allocated based upon the 75/25 ratio of CSU bed

funding to funding for other services, and the memorandum specifically requested

information on each district's suggested formula for the equitable distribution

of funds to providers which operated unappropriated CSU beds. Each district was

asked to identify the amount of money it paid to contractors providing CSU beds.

The districts reported separately amounts paid to contractors for "other Baker

Act services," which would have encompassed inpatient services.

23. After receiving the Department's memorandum about the CSU price level

increase, the program supervisor for District IX handling mental health programs

was concerned that the memorandum did not appear to permit funding for inpatient

beds from the $2 million special appropriation. She consulted with the

Department's program office and local legislators, 2/ and determined that the

distinction between CSU beds, and the in- patient beds operated by 45th Street

was irrelevant in District IX. This was so because although 45th Street was

licensed as an inpatient psychiatric hospital, the beds located at 45th Street

functioned as crisis stabilization beds. There is no crisis stabilization unit

in the catchment area for District IX other than the 45th Street Mental Health

Center. The police and others bring people suffering acute psychiatric crisis

to 45th Street for the purpose of crisis stabilization, and ultimate referral to

appropriate psychiatric treatment. Generally, 45th Street does not utilize its

beds as inpatient short-term psychiatric hospital beds. Instead, they operate

exactly as the crisis stabilization unit beds operated by other providers, such

as South County, under their CSU licensure under Chapter 394.

24. 45th Street's Baker Act-funded inpatient hospital beds serve as crisis

stabilization unit beds. 45th Street was also in need of the special price

level increase monies to permit it to continue to operate those beds as the

crisis stabilization beds for its catchment area.

25. 45th Street is not the only facility which operates short-term

psychiatric beds as crisis stabilization unit beds. It is, however, the only

facility licensed as a short-term psychiatric hospital whose reimbursement rates

were so low that it already did not recover at least $113 per patient per day

for crisis stabilization services. Thus, it is the only facility licensed as a

short-term psychiatric hospital under Chapter 395 which would stand to gain any

additional funding under specific appropriation 895.

26. In order to deal with this unique circumstance in District IX, a

district program supervisor struck out the term "CSU beds" in the form attached

in Assistant Secretary Ivor Groves' memorandum (Finding 22), and substituted the

all- encompassing term "Baker Act beds" when calculating the CSU deficiency

funding distribution plan for District IX. She included in that calculation the

funding of the short-term psychiatric inpatient beds at 45th Street, as well as

other licensed CSU beds operated by other providers in District IX.

27. In order to determine the increases necessary to bring all "Baker Act"

beds up to the same reimbursement rate per bed per day, the District IX mental

health program supervisor had to determine the rate at which District IX

reimbursed each provider for the CSU services it made available to the

Department. She did so by dividing the number of Baker Act patient days for

each agency for the previous year into 75 percent of the Baker Act funds the

agency received from the Department that year. The .75 multiplier was used to

reflect the statewide 75/25 split in the use of Baker Act funds (see Finding 16

above). In performing this calculation for South County, the Department

included all Baker Act funds South County had received. When performing the

calculation for 45th Street, the Department did not include all funds that 45th

Street had received that year; this had the effect of lowering the rate of

reimbursement per bed per day computed under the formula, which in turn had the

effect of requiring greater allocations of the deficiency appropriation to 45th

Street for fiscal year 1989-90 in order to bring it up to the same reimbursement

rate received by other providers, such as South County.

28. The funds excluded from 45th Street's calculation were:

(1) a special allocation the Department made to it to reduce the $150,000

operating deficit incurred in a prior period. This was not money used to

provide Baker Act services during 1988-89, was not recurring money and was

properly excluded;

(2) $258,776 45th Street had received for CSU beds newly appropriated for

45th Street that year, even though those beds had not yet been opened, (only

$59,000 actually was used for start-up costs, the rest also was applied toward

45th Street's operating deficit). The start-up costs were not recurring, and

were properly excluded; and

(3) any "profits" from third party reimbursement that may have been paid to

45th Street due to its ability to be reimbursed by third party insurers. The

amount of such reimbursement, if any, was not proven at the hearing. 45th

Street had provided 10,845 days of CSU services for eligible Baker Act patients

in 1988-89; its total reimbursement was $619,326. This was multiplied by .75

(see finding 16), to estimate the total CSU reimbursement it had received. This

in turn was divided by the 10,845 patient days to yield a reimbursement rate of

$42.42 per bed per day in fiscal year 1988- 89. This is obviously a rough

approximation of the reimbursement rate, but the methodology used is reasonable.

29. When District IX calculated its distribution of the $349,179 available

to providers of CSU services, the District included 30 beds at 45th Street in

the formula, even though 45th Street had 44 beds. The volume of its services

was such that 45th Street did fill 30 beds all year with Baker Act CSU patients.

30. The Department's distribution of the CSU deficiency money in District

IX does permit patients treated in licensed psychiatric inpatient beds at 45th

Street to be billed for in- patient services if they have insurance, but will

also consider them CSU patients if they are receiving treatment under the Baker

Act. There is no proof, however, that any significant number of patients the

police or others bring to 45th Street for crisis stabilization have private

insurers which 45th Street can bill. No evidence of any such reimbursement was

introduced at the hearing.

31. South County complains that the Department's "functional"

interpretation, which treats 45th Street's beds as CSU beds, is improper because

it did not use this interpretation when it provided data to legislative staff,

and that the Department has never utilized this interpretation in any rule,

policy or procedure. The record does not indicate that any other CSU deficiency

appropriations have been made, however, so there has been no occasion for the

Department to face this question before. It is not surprising that no prior

rule, policy or procedure dealt with this issue. In addition, the data provided

to legislative staff was necessarily general data. Legislative staff sought and

received a suggested plan for distribution of funds among districts, not among

providers. The Department's suggestion was never intended to account for

special or unique situations, such as that in District IX, where 45th Street,

while licensed as an inpatient psychiatric hospital, functions as a crisis

stabilization unit, but received such a low reimbursement rate per patient per

day that it was operating in a deficit.

32. The Department's interpretation means that South County, which has 31

percent of the CSU beds in District IX, will receive only 7 percent of the

deficiency appropriation, while 45th Street will receive 83 percent of the

deficiency funding. This results from the low reimbursement rate which 45th

Street has been receiving, and is consistent with the legislative intent to try

to raise all providers of CSU services toward the goal of reimbursement at the

rate of $113 per bed per day. 45th Street will receive $68.83 per bed per day

under the Department's distribution plan. The Indian River Community Mental

Health Center received none of the CSU deficiency distribution funds, because it

already was receiving more than $86 per bed per day.

33. After the issue of the Department's interpretation of the proviso

language came up, both parties attempted to obtain correspondence from the

members of the appropriations committees in the House and Senate giving their

view of the proper interpretation of the proviso language. The positions

expressed in these letters are irreconcilable. These after-the-fact statements

from individual legislators lack evidentiary value.

CONCLUSIONS OF LAW

Jurisdiction

34. The Division of Administrative Hearings has no jurisdiction over this

dispute. The preparation, modification or allocation of agency budgets are not

reviewable in Section 120.57(1) substantial interest proceedings. The

legislative definitions of the terms "rule" and "order", when read together,

exempt the budgeting issues South County has raised from administrative

challenge. Section 120.52(16) defines what a rule is. Under subsection (c),

"rule" is defined so as not to include "the preparation or modification of: 1)

agency budgets." An "order" is defined in Section 120.52(11) a: "a final agency

decision which does not have the effect of a rule which is not excepted from the

definition of a rule. . ." Thus, the preparation or modification of agency

budgets are neither rules nor orders.

35. The current definition of "rule" found in Section 120.52(16)(c)1.,

Florida Statutes, is remarkably different from that contained in the Reporter's

Final Draft of the Administrative Procedure Act prepared by The Florida Law

Revision Council for the 1974 Legislature.

36. The definition section of the Reporter's Final Draft, Section 0120.2,

defined "rule" in subsection 11 as follows:

"Rule means any statement of general

applicability by an agency made to implement,

interpret, or prescribe law or policy; to

describe the organization, procedure, or

practice requirements of an agency; to

allocate or spend state resources and finds;

or to amend or repeal a prior rule... The

term does not include (a) internal management

memoranda which do not affect either the

private interest of any person, or any plan

or procedure important to the public, (b)

legal memoranda or opinions issued to an

agency by the Attorney General or counsel to

the agency prior to their use in connection

with agency action, or (c) the allocation of

trust funds within an agency which derives

none of its resources from the general

revenue fund of the state. (emphasis added)

See Volume 3, England and Levinson, Florida

Administrative Practice Manual, Appendix B,

Reporters Final Draft Statute, at 2-3.

(emphasis supplied)

37. The Reporter's comments on that definition are also instructive. They

include the following:

"(c) The definition is specifically designed

to encompass the budget process in

administrative agencies, including the

proceedings by which budget recommendations

are formulated, and agency action in which

budget items are allocated after

appropriation (such as action by the Board of

Regents to divide a lump-sum appropriation

among all state universities and colleges).

* * *

(e) The exclusion for allocating trust funds

provides needed flexibility for the

assignment of regulatory fees and industrial

assessments by any agency whose sole income

is from those sources - i.e., so-called

governmental trade association such as the

Citrus Commission."

3 England and Levinson, supra, Appendix C at

13-14.

38. The definition ultimately enacted by the Legislature is greatly at

odds with the definition and commentary on the term "rule" in the text of the

Reporter's Final Draft Statute. The Legislature rejected the Reporter's view,

and insulated the acts of agencies in formulating and allocating budgeted

appropriations from review in Chapter 120 proceedings by providing that such

allocations are neither rules nor orders. These legislative history materials

are not discussed in the decision of the Court of Appeals in Palm Beach County

Classroom Teachers Association v. School Board of Palm Beach County, 406 So.2d

1208 (Fla. 1st DCA 1981), but the Court's decision is consistent with them.

That court held that a disappointed competitor for appropriated funds, the

Classroom Teachers Association, could not use a Section 120.57(1) substantial

interest proceeding to increase the School Board's intended allocation of funds

for salary increases for instructional personnel. Similarly, South County may

not challenge the allocations of CSU deficiency funds here. The issue South

County has raised falls outside the range of disputes which may be resolved

under Chapter 120. Out of an abundance of caution, however, a ruling on the

merits of the claim will be made below. South County's argument that its

position here is similar to that advanced by Medicaid providers seeking

distribution of Medicaid funds under Section 40.226, Florida Statutes, is

unpersuasive. Medicaid providers are entitled to reimbursement under their

provider agreements, which are basically contracts with the state. Disputes

over reimbursement are substantial interest proceedings which are governed by

the terms of the contract, or under applicable statutes, rules or provider

reimbursement manuals. They are not disputes over the appropriate allocation of

legislative appropriations by the Department and its districts.

Specific Appropriation 895

39. Specific appropriation 895 of the 1989-90 General Appropriations Act

states:

Special Categories

Grants and Aids - Baker Act Services

* * *

From the general revenue funds provided in

Specific Appropriation 895, $2,000,000 is

provided for a special price level increase

for Crisis Stabilization Unit (CSU) beds.

This special price level shall be allocated

prior to and separate from other price level

increases provided with other funds. Of the

$2,000,000, $717,590 shall be allocated as

follows to be used as price level increases

for specifically appropriated CSU beds:

* * *

The remaining $1,282,410 shall be allocated

to districts to use as price level increases

for other CSU bed contracts as follows:

* * *

$349,179 to HRS District 9;

* * *

All of the $2,000,000 shall be used for price

level increases directly relating to the

operation of CSU beds, and not to other Baker

Act support services. The Department of

Health and Rehabilitative Services shall

ensure that contracts with providers identify

the contract amounts associated with

operation of CSU beds as opposed to crisis

screening and other Baker Act services.

Chapter 89-253, Laws of Florida.

The Department's interpretation of the language of the appropriations act is to

be accorded deference, as would its interpretation of substantive law under the

decisions in Pan American World Airways, Inc. v. Florida Public Service

Commission, 427 So.2d 716, 719 (Fla. 1983); State Department of Health and

Rehabilitative Services v. Framat Realty, Inc., 407 So.2d 238, 242 (Fla. 1st DCA

1981); Natelson v. Department of Insurance, 454 So.2d 31 (Fla. 1st DCA 1984),

rev. den., 461 So.2d 115 (Fla. 1985); Florida Department of Corrections v.

Provin, 515 So.2d 302, 305 (Fla. 1st DCA 1987); and Gulf Coast Home Health

Services of Florida, Inc. v. Department of Health and Rehabilitative Services,

527 So.2d 262 (Fla. 1st DCA 1988). The starting point for interpreting a

legislative enactment is the language of that enactment itself. The agency has

taken a functional approach to the legislative use of the term "CSU beds", which

appears to be wholly consistent with the legislative purpose. The question is

not whether the beds at 45th Street are licensed to a short-term psychiatric

hospital, so that they may be used for longer-term care than is provided by

crisis stabilization units. The question is whether they actually function as

crisis stabilization unit beds. Nothing in the language of the Appropriation

Act indicates a concern with licensure status of facilities actually providing

CSU services. South County places entirely too much reliance on the language

"and not to other Baker Act services" because the evidence established that the

money is not being provided to 45th Street for emergency screening, mobile

crisis intervention, short-term residential treatment or for psychiatric

hospitalization, which would be "other Baker Act services." 45th Street is

being reimbursed for its CSU services.

40. A definition of a crisis stabilization unit appears in Chapter 394,

Florida Statutes. The Legislature had already required licensure of psychiatric

hospital beds under Chapter 395, Florida Statutes when Chapter 394 was enacted.

Under Section 394.875(1)(a), Florida Statutes, CSU units are described in the

following way:

The purpose of a crisis stabilization unit is

to stabilize and redirect the client to the

most appropriate and least restrictive

community setting available, consistent with

the client's needs. Crisis stabilization

units may screen, assess, and admit for

stabilization persons who present themselves

to the unit and persons who are brought to

the unit under Section 394.463. Clients may

be provided 24-hour observation, medication

prescribed by a physician or psychiatrist,

and other appropriate services. Crisis

stabilization units shall provide services

regardless of the client's ability to pay and

shall be limited in size to a maximum of 30

beds.

Crisis stabilization units provide services which any psychiatric hospital must

also provide to patients they admit (although they might condition admission on

proof of ability to pay for hospital services). Crisis stabilization units are

not, however, required to provide all the ancillary services ordinarily

associated with a hospital, which accounts, in part, for their ability to

provide crisis stabilization at a lower cost per patient day than is charged by

general or psychiatric hospitals. It is improper, however, to assume that only

a crisis stabilization unit licensed under Chapter 394 can do those things

described in Section 394.875(1)(a). The statute itself shows this, when it

states:

The department may issue a license for a

crisis stabilization unit or short-term

residential treatment facility, certifying

the number of authorized beds for such

facility as indicated by existing need and

available appropriations. The department may

disapprove an application for such a license

if it determines that a facility should not

be licensed pursuant to the provisions of

this chapter. Any facility operating beds in

excess of those authorized by the department

shall, upon demand of the Department, reduce

the number of beds to the authorized number,

forfeit its license, or provide evidence of a

license issued pursuant to Chapter 395 for

the excess beds. (emphasis added) Section

394.875(8), Florida Statutes.

This final clause of Section 394.875(8) reflects a legislative understanding

that those things done in a crisis stabilization unit are a subset of the things

done in a psychiatric hospital licensed under Chapter 395, Florida Statutes.

41. This case illustrates, in the Florida context, the observation made by

Professor Jeremy Rabkin of Cornell University at the program of the Section of

Administrative Law of the American Bar Association in October, 1987, The

Contribution of the D.C. Circuit to Administrative Law, 40 Administrative Law

Review 507 (1988). There, Professor Rabkin reflected on the caseload of the

federal appellate court which deals most often and most comprehensively with

federal administrative law. After reviewing decisions of that court, he

believed that the decisions disclose a division among those

who are most concerned to see that particular

interests groups get what they "deserve"

(meaning whatever they may have wrung out of

legislative or administrative bargaining in

the past), and those on the other side .

who are more sympathetic to executive power.

40 Administrative Law Review at 541-42.

42. Here, South County believes that it had "wrung" from the legislative

process through the Florida Council certain benefits, and it has attempted to

use the administrative process to wrest from the administrators at the

Department the authority to make an interpretation of the Appropriations Act

which South County believes despoils it of a legislative victory. The

Department's administrators have made a persuasive case that their

interpretation is consistent with the Legislature's intention to provide crisis

stabilization services to persons who need them. The Department's

interpretation provides additional funding to a low-cost provider, which

otherwise would find it difficult to remain in the market, and therefore

maintains the availability of crisis stabilization services within the district.

43. South County's argument that the funding calculation used by District

IX artificially deflates the reimbursement per bed per day which 45th Street

obtains by ignoring third party reimbursements, which are not available to

ordinary, licensed CSU providers, is unpersuasive. The vast majority of the

services rendered by 45th Street are CSU services. It provided 10,845 days of

CSU services in the last fiscal year, which would fill 30 beds over the course

of a year. While it can admit psychiatric patients, South County failed to

advance any evidence that third party reimbursement to 45th Street exceeded a

negligible amount. There is no evidence that the Department's calculation of

reimbursement per patient day at 45th Street is wrong and that some other

specific figure should have been used.

RECOMMENDATION

It is RECOMMENDED that the Department of Health and Rehabilitative Services

enter a Final Order dismissing the Petitioner's challenge to the disbursement of

monies in District IX under Specific Appropriation 895 of the 1989-90 General

Appropriations Act for lack of jurisdiction.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this

28th day of March, 1990.

___________________________________

WILLIAM R. DORSEY, JR.

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 28th day of March, 1990.

ENDNOTES

1/ All references to the Florida Statutes shall be to the 1989 edition, unless

otherwise specified.

2/ The response recounted for individual legislators has no persuasive value

here.

APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 89-6088

Rulings on proposals made by South County Mental Health Center:

1. Adopted in finding of fact 1.

2. Adopted in finding of fact 2.

3. Adopted in finding of fact 3.

4. Adopted in finding of fact 4.

5. Adopted in finding of fact 5.

6. Adopted in findings of fact 5 and 6.

7. Adopted in finding of fact 7, but the second sentence is rejected as

unnecessary.

8. Incorporated in finding of fact 9.

9. Adopted in finding of fact 9.

10. Incorporated in finding of fact 8.

11. Incorporated in finding of fact 11, but the third sentence is rejected

as unnecessary.

12. Adopted in finding of fact 12.

13. Adopted in finding of fact 13.

14. Incorporated in finding of fact 14.

15. Incorporated in finding of fact 15.

16. Incorporated in finding of fact 16.

17. Incorporated in finding of fact 17.

18. Rejected because while the memo does use the term "licensed beds" no

distinction between licensed and unlicensed beds was significant for the

purposes for which that memorandum was prepared.

19. Generally adopted in finding of fact 18.

20. Adopted in finding of fact 20.

21. Rejected as unnecessary.

22. Generally adopted in finding of fact 22.

23. Generally adopted in finding of fact 23.

24. Adopted in finding of fact 27. It was appropriate to consider all

services at 45th Street to be CSU services, because those are the services it

provided to HRS for the money received.

25. Rejected because the licensure distinction, for purposes at hand, is

not significant. The services provided for the money made available by the

Department controls.

26. Discussed in finding of fact 28.

27. Rejected; the hospital has very little in the way of private pay

patients (Tr. 167), so there is little likelihood that "profits" from

psychiatric hospitalization services was being hidden from the Department.

28. Incorporated in finding of fact 28.

29. Discussed in finding 26.

30. To the extent necessary, discussed in finding of fact 29. The funding

of Indian River is not at issue in this matter.

31. Discussed in finding of fact 30. There is very little in-patient

psychiatric service provided at 45th Street. Practically all of its services

are CSU services.

32. Implicit in finding of fact 30.

33. Discussed in finding of fact 25. The comparison for Lake Sumter and

Circles of Care are misleading. (See Tr. 219-210)

34. Rejected, see finding of fact 31.

35. Rejected as irrelevant. The question was the number of beds in 1989,

not whether 45th Street could now be said to have 50 beds. What the Department

may have done in its 1990-1991 budget is irrelevant to the issue presented here.

36. Adopted in finding of fact 32.

37. Rejected as a matter of law. See conclusions of law.

38. Rejected. See finding of fact 33.

Rulings of findings proposed by the Department of Health and Rehabilitative

Services:

The proposed order is rather general. All of the findings have, in

essence, been adopted in the recommended order.

COPIES FURNISHED:

Theodore D. Mack, Esquire

Cobb Cole & Bell

Suite 500

315 South Calhoun Street

Tallahassee, Florida 32301

John W. Hedrick, Esquire

Department of Health and

Rehabilitative Services

Building One, Suite 407

1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Sam Power, Agency Clerk

Department of Health and

Rehabilitative Services

1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

John Miller, General Counsel

Department of Health and

Rehabilitative Services

1323 Winewood Boulevard

Tallahassee, Florida 32399-0700