STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ANNIE ELIZABETH KEARSE, )

)

Petitioner, )

)

v. ) CASE NO. 86-0142RP

) DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on February 13, 1986, in Tallahassee, Florida. The issue for determination in this proceeding is whether HRS's proposed amendments to Rule 10C-7.065 (formerly 10C- 7.65), Florida Administrative Code, constitutes an invalid exercise of delegated legislative authority.

APPEARANCES

For Petitioner: Marilyn G. Rose

Jacksonville Area Legal Aid, Inc. 604 Hogan Street

Jacksonville, Florida 32302

For Respondent: Theodore E. Mack

Assistant General Counsel 1323 Winewood Boulevard

Tallahassee, Florida 32301

INTRODUCTION AND RULING ON PREHEARING MOTIONS

In a prior administrative proceeding styled Christina Youngblood and Annie Elizabeth Kearse v. Department of Health and Rehabilitative Services (DOAH Case No. 84-0462R), petitioner challenged the validity of HRS's proposed Rule 10C- 7.65, as published in the Florida Administrative Weekly, Vol. 10, No. 4, pp.

241-246, January 27, 1984. On May 31, 1984, Hearing Officer Carpenter with the Division of Administrative Hearings entered a Final Order upholding the proposed rule's validity. In its original decision of April 23, 1985, affirming the Hearing Officer's Order declaring the validity of the challenged rule, the Court specifically discussed that aspect of the rule which requires that, in order to obtain reimbursement for medically necessary, non-emergency services provided to certain participants of the Florida Medicaid recipient case management program, prior approval from a case manager must be obtained. The Court noted that the language of the rule required prior approval without exception, but gave deference to the agency's interpretation that a provider need only notify the case manager at a reasonable time following the provision of services when the

case manager is not available for "prior" approval. On rehearing, the Court recognized that it had allowed the agency to place a construction on the rule which was clearly contradictory to the unambiguous language of the rule.

Accordingly, the Court found invalid "those portions of proposed FAC Rule 10C-

1. which require prior authorization for reimbursement of medically necessary services." Kearse v. Department of Health and Rehabilitative Services, 474 So.2d 819 (Fla. 1st DCA, 1985). By Mandate issued on October 29, 1985, the District Court of Appeal, First District commanded that further proceedings be had in accordance with the opinions rendered on April 23, 1985, and August 20, 1985, the rules of that court and the laws of the State of Florida.

   
   

   By publication in the Florida Administrative Weekly, Vol. 11, No. 52, pp. 4863 and 4864, on December 27, 1985, HRS gave notice of its intent to adopt two amendments to Rule 10C-7.065 (formerly 10C-7.065). By a timely-filed "Petition to Determine Proposed Invalidity of Proposed Rule," petitioner Kearse challenged the proposed amendments, primarily on the grounds that they did not remedy the defects in the prior rule, as found by the District Court of Appeal, First District. The petitioner also moved to consolidate this proceeding with then- closed DOAH Case No. 84-0462R and to reopen the latter case for the purpose of holding further proceedings in accordance with the Court's Mandate issued on October 29, 1985. After considering oral argument on that issue, the motions to reopen Case Number 84-0462R and to consolidate are DENIED. The undersigned knows of no authority and the petitioner has cited no authority for a Hearing Officer with the Division of Administrative Hearings to take any further action in a completed rule-challenge proceeding. The Court's Mandate issued on October 29, 1985, did not remand the case to the DOAH for additional hearing purposes.

   The authority of a Hearing Officer in a rule-challenge proceeding, is to render a determination of a challenged rule's validity. A Hearing Officer has no statutory authority to enforce its own decision or to enforce a decision rendered by the District Court of Appeal. The orders and decisions entered in the prior rule challenge proceeding have been received into evidence in this proceeding and are relevant and controlling insofar as they relate to a determination of the validity of the proposed amendments to Rule 10C-7.065, as published in the Florida Administrative Weekly, Vol. 11, No. 52, December 27, 1985 -- the only issue presently before the undersigned.

   
   

   In support of their respective positions, the parties offered into evidence Joint Exhibits 1 through 15, petitioner's Exhibit 1 and respondent's Exhibit 1. The respondent objected to the relevancy of several joint exhibits, specifically Joint Exhibits 3, 4, and 5, consisting of certain testimony and affidavits received into evidence in the prior rule-challenge proceeding. Rulings on the admissibility of these exhibits was reserved pending review of the contents thereof. Having now reviewed the exhibits with the objections in mind and recognizing that the present proposed challenged amendments were not in existence at the time the statements contained in Exhibits 3, 4 and 5 were made, it is concluded that the objections to these exhibits go more to the weight to be given them as opposed to their admissibility. Accordingly, all Exhibits offered are received into evidence. HRS also presented the testimony of Jane McLeod, a senior human service program specialist in HRS's Medicaid program and the state coordinator for Florida's Medicaid recipient case management system.

   
   

   Subsequent to the hearing, both parties submitted proposed findings of fact and conclusions of law. Many of the parties' proposed factual findings, while accurate, simply recite the procedural history and restate the substantive conclusions reached in the prior rule-challenge case, as set forth in DOAH Case No. 84-0462R and the Court's opinions reported at 474 So.2d 819. While these proposed findings are not rejected, they are not included in the Findings of

   Fact portion of this Final Order either because they are not deemed pertinent to the specific issue for determination in this proceeding; to wit: the validity of HRS's proposed amendments to Rule 10C-7.065, or because they are more appropriately contained in the Introduction or Conclusions of Law portions of this Order. Specific rulings on the proposed findings of fact submitted by the parties are contained in the Appendix attached hereto.

   
   

   FINDINGS OF FACT

   
   

   1. Upon consideration of the oral and documentary evidence adduced at the final hearing, as well as the factual stipulations of the parties, the following relevant facts are found:

      
      

   2. Petitioner suffers from various medical problems, is a recipient of Medicaid benefits and is potentially eligible for supervision under the Florida Medicaid recipient case management program.

      
      

   3. The HRS policies governing recipient case management are set forth in Rule 10C-7.065, Florida Administrative Code. The purpose of the case management program is to limit inappropriate utilization of Medicaid services by recipients by enrolling them in a four-level program which includes education, counseling, a requirement of prior authorization for non-emergency medical services and "lock-in" to a single primary care provider for non-emergency services, as well as a single pharmacy provider.

      
      

   4. In a prior proceeding, Rule 10C-7.065 (formerly 10C-7.065) was challenged by the petitioner. The final result of that challenge was that those portions of the rule which require prior authorization for reimbursement of non- emergency, but medically necessary services were invalid. The remaining portions of the rule were declared valid.

      
      

   5. In an effort to remedy the defects found in the rule governing the recipient case management program, HRS now proposes two amendments to the prior rule. The first proposed amendment adds additional language to subsection (8)(c)(3) of Rule 10C-7.065. That subsection requires that a provider of services to a Level Three Medicaid recipient must contact the case manager and obtain payment authorization prior to the provision of services. The proposed amendatory language reads as follows:

      
      

      "Providers of medically-necessary services to a recipient at such times as the Case Manager is not available for prior authorization, such as after working hours, or on weekends, need only notify the Case Manager at a reasonable time, defined by the Department as the next working day, following provision of such services."

      
      

      Other provisions of Rule 10C-7.065(8)(c) pertaining to Level Three recipients require the recipient to contact the case manager prior to using his Medicaid identification card to obtain non-emergency services, require a case manager's verification on the provider claim form that prior authorization was obtained and provide that all other provider claim forms shall be denied Medicaid payment. HRS is not proposing any amendatory language to these subsections.

      
      

   6. The second challenged amendment proposed by HRS adds additional language to subsection (8)(d) 5 of Rule 10C-7.065. That portion of the rule

      pertains to Level Four recipients and requires such a recipient to utilize or be "locked-in" to a single primary care provider for all non-emergency services, except transportation. Subsection (8)(d) 5 requires the Level Four recipient to contact the lock-in primary care provider prior to using his Medicaid identification card to obtain non-emergency services and requires the lock-in provider to provide all necessary non-emergency care either directly or by referral. The proposed amendatory language adds the following words to subsection (8)(d) 5:

      
      

      "Referral by the lock-in primary care provider to a referred provider includes,

      but is not limited to, an acute care hospital provider for admission, or to another medical practitioner for professional consultation, special medical treatment, or temporary relief of lock-in responsibilities while on vacation, out of town, or otherwise unavailable to the recipient."

      
      

      The rule also provides that a lock-in pharmacy provider may be designated for Level Four recipients who have a utilization problem with prescribed drug services. In such an event, all prescribed drugs must be obtained from the lock-in pharmacy provider and no other pharmacy provider's claim forms will be reimbursable except for drugs provided in an emergency situation. Rule 10C- 7.065(8)(d) 8 and 10. No amendatory language has been proposed for those subsections of the rule pertaining to pharmacy providers.

      
      

   7. In proposing the added language to Rules 10C-7.065 (8)(c) 3 and (8)(d) 5, it was the intention of HRS to assure that reimbursement would be allowed for services provided a Level Three recipient when the case manager was not available for prior authorization and for services to Level Four recipients when the lock-in primary care provider was not available and had arranged for a referred provider.

      
      

      CONCLUSIONS OF LAW

      
      

   8. The parties have stipulated and it is concluded that the petitioner is substantially affected by a rule governing the recipient case management program, and thus has standing to challenge the validity of the proposed amendments to that rule pursuant to Section 120.54(4), Florida Statutes.

      
      

   9. In this proceeding, the petitioner has presented no evidence or argument regarding the validity or invalidity of, or the statutory authority for, the actual wording of the two challenged proposed amendments to Rule 10C- 7.065, Florida Administrative Code. Instead, petitioner's complaint is simply that HRS did not do enough to remedy the defects previously found in the Rule.

      
      

   10. The problem with petitioner's position in this case can perhaps best be resolved by noting what type of proceeding this is and what type it is not. Petitioner has instituted this proceeding pursuant to Section 120.54(4), Florida Statutes, to obtain an administrative determination of the invalidity of two proposed rule amendments published in the Florida Administrative Weekly, Vol. 11, No. 52, December 27, 1985. As such, the two amendments are subject to a determination of procedural compliance with the Administrative Procedure Act and substantive compliance with the statutes or other legal requirements which govern and prescribe HRS's authority, including any judicial opinions which have interpreted that authority. On the other hand, this proceeding is not for the

       purpose of relitigating the issues raised and finally determined in the prior rule-challenge proceeding. It is not a proceeding to clarify the Court's opinion in that case. It is not a proceeding brought pursuant to Section 120.54(5), Florida Statutes, to petition the agency to adopt, amend or repeal a rule. It is not a proceeding to determine whether HRS properly complied with Section 120.54(4)(c), Florida Statutes, with regard to its duties in the event that a proposed rule is declared invalid in part. It is not an enforcement action as contemplated by Section 120.69, Florida Statutes. And, it is not a proceeding under Section 120.57(1), Florida Statutes, contesting the agency's application of the rule in a specific context.

       
       

   11. As noted above, petitioner does not contend that the actual wording contained in the two proposed amendments is either procedurally or substantively invalid. Rather, petitioner's argument is either with the location of that language in the particular subsections sought to be amended or that other sections of the Rule continue to contain invalid language. Even if this proceeding can properly be considered to constitute a further challenge to HRS's now existing Rule 10C-7.065, 1/ petitioner's claim of invalidity must fail.

       
       

   12. In the prior rule-challenge proceeding, the District Court of Appeal upheld the validity of the entire challenged rule with one exception. The Court was concerned that Medicaid payments or reimbursements to providers could be denied under the rule if a case manager were not available to authorize the services before they were performed. The Court initially validated the rule in that regard by giving deference to the agency's interpretation that when a case manager was not available, a "provider" need only notify the case manager at a reasonable time after the provision of medically necessary services. On rehearing, the Court recognized that the agency's interpretation was clearly contradictory to the clear language of the rule, and reversed its initial opinion on this issue. The Court ultimately concluded that the rule did not provide for "reimbursement" for non-emergency but medically necessary services without "prior agency approval" as required by federal regulations, and invalidated those portions which require "prior authorization" for "reimbursement" of medically necessary services. Kearse v. Department of Health and Rehabilitative Services, 474 So.2d 819 (Fla. 1st DCA, 1985).

       
       

   13. The key words in the Court's two opinions, which must be read together, are those quoted above; to wit: "provider," "reimbursement," "prior agency approval" and "prior authorization." Recipients are Medicaid-eligible persons who receive services. Recipients do not receive payment or reimbursement. Providers receive payment or reimbursement for the provision of services to recipients. Thus, it was entirely proper for HRS to place its challenged amendatory language in that section of the rule which requires providers to obtain prior authorization, and then, to modify that requirement to take into account those instances when the case manager is not available. The proposed amendment is simply an effort by HRS to incorporate into the rule the interpretation which the Court found proper, but inconsistent with the rule's prior language. While other portions of the rule require recipients placed in the Level Three category to obtain prior authorization for services, the concern of the Court was with payment or reimbursement for such services. It is clear from the opinions that the Court did not invalidate all requirements for prior authorization for Level Three participants. It simply found that reimbursement or payment ford services provided could not be denied when a case manager was

       not available to ask for or give prior authorization for such services. The amendatory language proposed by HRS allows a provider to contact the case manager the next working day after the provision of services in order to obtain authorization for payment of the services and cures the defect in the Rule's prior language.

       
       

   14. The second amendment proposed and challenged in this proceeding pertains to referrals by lock-in primary care providers of recipients placed in a Level Four category. This portion of the rule does not involve reimbursement, does not involve prior authorization, and thus was not invalidated by the District Court's opinion cited above. Again, petitioner does not claim that the proposed amendatory language is offensive or invalid. She simply alleges that she would like additional language added to another portion of the rule to provide for a similar referral arrangement for lock-in pharmacy providers.

       While such a request might be the proper subject for a petition filed pursuant to Section 120.54(5), Florida Statutes, it is not a proper basis for challenging the proposed rule under Section 120.54(4), Florida Statutes.

       
       

   15. When challenging a proposed rule pursuant to Section 120.54(4), Florida Statutes, the burden is upon the challenger to demonstrate that either the APA's procedural requirements were violated or that the agency exceeded its statutory authority in some respect. Petitioner has not satisfied this burden and has not demonstrated that the challenged proposed amendments to Rule 10C- 7.065(8)(c) 3 and (8)(d) 5 constitute invalid exercises of delegated legislative authority.

FINAL ORDER

Based upon the Findings of Fact and Conclusions of Law recited herein, it is ORDERED that petitioner has failed to demonstrate that HRS's proposed Rules 10C-7.065(8)(c)3 and 10C- 7.065(8)(d)5 constitute an invalid exercise of delegated legislative authority. Accordingly, the petition to determine the invalidity of those proposed rules is DISMISSED.

Entered and ordered this 27th day of March, 1986, in Tallahassee, Florida.

DIANE D. TREMOR

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 27th day of March, 1986.

ENDNOTE

1/ The petition which instituted this proceeding is entitled "petition to determine proposed invalidity of proposed rule" and recites that the action is brought pursuant to Section 120.54(4), Florida Statutes. However, the contents of the petition make reference to other portions of the existing rule which are

not the subject of the amendatory language proposed by HRS. At the beginning of the final hearing, the undersigned inquired as to whether petitioner was seeking to challenge only the two proposed amendments or the entire existing rule.

Counsel for the petitioner stated her desire to amend the petition to also cite Section 120.56, Florida Statutes, so that other portions of the existing rule might also be challenged in this proceeding. No written amendment was ever filed, but the undersigned has considered and this Order discusses petitioner's contentions with regard to other portions of existing Rule 10C-7.065.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-0142RP

The proposed findings of fact submitted by the parties have been accepted and/or incorporated in this Final Order, except as noted below:

Petitioner 1 and 2 Accepted as correct recitation of

federal law, but not appropriate as Findings of Fact.

3 through 5 Accepted as correct recitation of prior

proceedings, but not appropriate as Findings of Fact.

7 Discussed in the Conclusions of Law.

9 Rejected, not a proper Finding of Fact. 10 through 13 Rejected as mere recitations of

testimony and said testimony was given without knowledge of the contents of the proposed challenged rules.

15 Rejected as legal conclusions as opposed to factual findings, and discussed in Conclusions of Law portion of Order.

Respondent 2 through 4 Accepted as correct statements of law,

but not appropriate as Findings of Fact.

6 through 12 Accepted as accurate representation of

prior proceedings, orders and opinions,

but not appropriate as Findings of Fact. 13 Discussed in Introduction.

15 Not relevant to any issue in dispute.

COPIES FURNISHED:

Marilyn G. Rose, Esquire Jacksonville Area Legal Aid,

Inc.

604 Hogan Street

Jacksonville, Florida 32302

Theodore E. Mack, Esquire Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32301

William Page, Jr., Secretary Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32301

Steve Huss, General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32301

Liz Cloud, Chief

Bureau of Administrative Code Department of State

1802 The Capitol

Tallahassee, Florida 32301

Carroll Webb, Executive Director Joint Administrative Procedures

Committee

120 Holland Building Tallahassee, Florida 32302

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED, TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

Docket for Case No: 86-000142RP

Orders for Case No: 86-000142RP