STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

BAPTIST HOSPITAL OF MIAMI, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 88-2064RU

) HOSPITAL COST CONTAINMENT BOARD, )

)

Respondent. )

)

FINAL ORDER

This case is a challenge to the Hospital Cost Containment Board's non-rule policy. The basis of the challenge is that the policy is generally applied by the Board to hospitals regulated by the Board, but has not been promulgated as a rule.

On May 3, 1988, the Hearing Officer set this case for formal administrative hearing on May 27, 1988. At the same time, an order was entered in an effort to simplify issues. The parties have responded to that order. From those responses, there no longer is a dispute as to material issues of fact, and this case may be resolved without a hearing as a matter of law. The findings of fact which follow are based upon the responses of the parties.

FINDINGS OF FACT

1. The Hospital Cost Containment Board has adopted a policy known as the "outlier" policy. Generally speaking, the policy is a credit available to a hospital as a result of the hospital's having experienced a higher level of outlier experience compared to total admissions in one period as compared to another period.

   
   

2. The policy has an exception in which a hospital can receive credit in an amendment for a change in outlier experience in a previous year if it files an amendment to its budget within the first ninety days of its current fiscal year. For such amendments, the comparison is between changes in outlier experience which have occurred between two specific timeframes. The first is the change between outlier experience during all the fiscal year two years prior to the current year and the first half of the year prior to the current year. The second is the change between outlier experience in all the fiscal year two years prior to the current year and all of the year prior to the current year. If the second change is greater than the first change, the difference is the outlier credit that is allowed. For an amendment filed after the first ninety days of a hospital's current fiscal year, no credit is allowed for changes in outlier experience from the prior year because in such cases the comparison is between outlier experience which has actually occurred in the current year-to- date compared to the hospital's prior year actual outlier experience.

3. The "outlier" policy described above has been adopted by the Hospital Cost Containment Board as a policy that it generally applies to all hospitals subject to its regulation.

   
   

4. The "outlier" policy described above has not been promulgated as a rule in accordance with the procedures established by Section 120.54, Fla. Stat. (1987).

   
   

   CONCLUSIONS OF LAW

   
   

5. The Division of Administrative Hearings has jurisdiction of the parties and the subject matter of this proceeding.

   
   

6. The "outlier" policy described in the findings of fact is a rule. Section 120.52(16), Fla. Stat. (1987).

   
   

7. The "outlier" policy described in the findings of fact has not been promulgated as a rule in accordance with the procedures established by Section 120.54, Fla. Stat. (1987).

   
   

8. As a rule, the "outlier" policy is invalid because not promulgated in accordance with the procedures established by Section 120.54, Fla. Stat. (1987). Stated another way, the Hospital Cost Containment Board cannot use the "outlier" policy as a rule in its decisions. State, Department of Administration, Division of Personnel v. Harvey, 356 So.2d 323, 326 (Fla. 1st DCA 1978).

   
   

9. The advantage of a rule is that it may be used as a basis for decision without having to establish the basis for the rule each time it is used.

   
   

10. However, even though the "outlier" policy is an invalid rule, it is a settled principle of Florida administrative law that an agency need not adopt all policy as a rule, but to the extent that it relies upon non-rule incipient policy as a basis for decision and that decision is challenged in a formal administrative hearing, the agency has the burden to establish in the record "adequate support for its decision." Florida Cities Water Company v. Florida Public Service Commission, 384 So.2d 1280, 1281 (Fla. 1980); Baxter's Asphalt and Concrete, Inc. v. Department of Transportation, et al., 475 So.2d 1284, 1286 (Fla. 1st DCA 1985); McDonald v. Department of Banking and Finance, 346 So.2d 569, 582-584 (Fla. 1st DCA 1977).

FINAL ORDER

It is therefore ORDERED that the "outlier" policy is an invalid rule, but the Hospital Cost Containment Board may rely upon the "outlier" policy as a basis for decision on a case by case basis by establishing in the record adequate support for its decision in accordance with the cases set forth above.

DONE and ORDERED this 31st day of May, 1988, in Tallahassee, Florida.

WILLIAM C. SHERRILL, JR.

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 31st day of May, 1988.

COPIES FURNISHED:

John H. Parker, Jr., Esquire Jonathan L. Rue, Esquire Parker, Hudson, Ranier & Dobbs 1200 Carnegie Way

Atlanta, Georgia 30303

Robert A. Weiss, Esquire The Perkins House

118 North Gadsden Street Tallahassee, Florida 32301

Gary Walker, Esquire David R. Terr, Esquire

Hospital Cost Containment Board Woodcrest Office Park

Building L, Suite 101

325 John Knox Road Tallahassee, Florida 32303

Liz Cloud, Chief

Bureau of Administrative Code Room 1802, The Capitol Tallahassee, Florida 32399-0250

Carroll Webb, Executive Director Administrative Procedures Committee

120 Holland Building Tallahassee, Florida 32399-1300

Gregory L. Coler, Secretary Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

John Miller, Esquire Acting General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE 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: 88-002064RU

Orders for Case No: 88-002064RU