STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS
FLORIDA LEAGUE OF HOSPITALS, ) INC., )
Petitioner, )
)
vs. )
) HEALTH CARE COST CONTAINMENT ) BOARD, )
)
Respondent, ) CASE NO. 90-8145RP and )
) CITIZENS OF THE STATE OF ) FLORIDA, OFFICE OF THE )
PUBLIC COUNSEL, )
)
Intervenor. )
) FLORIDA HOSPITAL )
ASSOCIATION, INC., )
)
Petitioner, )
)
vs. )
)
HEALTH CARE COST CONTAINMENT ) CASE NO. 90-8146RP BOARD, )
)
Respondent, )
and )
) CITIZENS OF THE STATE OF ) FLORIDA, OFFICE OF THE )
PUBLIC COUNSEL, )
)
Intervenor. )
)
ASSOCIATION OF VOLUNTARY ) HOSPITALS, INC. )
)
Petitioner, )
)
vs. )
) HEALTH CARE COST CONTAINMENT )
BOARD, ) CASE NO. 90-8147R
)
Respondent, )
and )
) CITIZENS OF THE STATE OF ) FLORIDA, OFFICE OF THE )
PUBLIC COUNSEL, )
)
Intervenor. )
)
FINAL ORDER
When this matter came on for hearing on February 15, 1991, in Tallahassee, Florida, before Robert T. Benton, II, Hearing Officer of the Division of Administrative Hearings, the parties announced that they had entered into a stipulation obviating the necessity for an evidentiary hearing, and sought leave to file proposed orders. Leave granted, the parties did file proposed orders on March 8, 1991.
APPEARANCES
Steven T. Mindlin, Esquire For Petitioners John F. Gilroy, III, Esquire Florida League Haben, Culpepper, Dunbar
of Hospitals & French, P.A.
and Florida Post Office Box 10095 Hospital Ass'n: 306 N. Monroe Street
Tallahassee, Florida 32302
John Knight, Esquire
For Petitioner Parker, Hudson, Rainer & Dobbs Association of The Perkins House
Voluntary 118 North Gadsden Street Hospitals: Tallahassee, Florida 32301
Julia Forrester, Esquire
For Respondent: Health Care Cost Containment Board
325 Woodcrest Office Park The Atrium, Suite 301 Tallahassee, Florida 32303
Stephen M. Presnell, Esquire For Intervenor: Peter Schwarz, Esquire
Associate Public Counsels c/o The Florida Legislature
111 W. Madison Street, Room 801 Tallahassee, Florida 32399-1400
STATEMENT OF THE ISSUE
Whether respondent's proposed rule 10N-5.0605 is an invalid exercise of delegated legislative authority?
PRELIMINARY STATEMENT
After petitioners filed challenges to the version of rule 10N-5.0605 originally proposed, respondent amended the proposed rule so that it assumed the form set out in the findings of fact.
FINDINGS OF FACT
The respondent Health Care Cost Containment Board (HCCCB) published proposed Rule 10N-5.0605, "Fine for Exceeding Approved Gross Revenue per Adjusted Admission," in the Florida Administrative Weekly, Vol. 16, No. 49, on December 7, 1990.The proposed rule reads:
10N-5.0605 Fine For Exceeding Approved Gross Revenue Per Adjusted Admission.
For each hospital subject to the provisions of Section 407.50, Florida Statutes, the Board shall annually compare
the audited actual experience of each hospital to its approved budget gross revenue per adjusted admission for purposes of levying an administrative fine in accordance with Section 407.06, Florida Statutes.
Determination of Potential Excess.
For a hospital with a budget letter approved in accordance with Section 407.502(2), and Rule 10N-5.014 for the year at issue, the Board shall subtract the gross revenue per adjusted admission certified in that budget letter from the gross revenue per adjusted admission contained in its audited actual report for the year at issue. If the result is a positive integer, a potential excess for this rule exists.
For a hospital with a Board approved budget, the Board shall subtract the gross revenue per adjusted admission contained in that budget from the gross revenue per adjusted admission contained in its audited actual report for the year at issue. If the result is a positive integer, a potential excess for this rule exists.
In no case shall the provisions of section
, below, create a potential excess when the application of (2)(a) or (2)(b), above, has determined that a potential excess does not exist.
Adjusting the Excess. The Board shall adjust the potential excess by demonstrated changes in a hospital's case mix and outlier experience.
The Board shall consider changes in case mix in levying a fine. A hospital must demonstrate any changes in its case mix, to the Board's satisfaction based on case mix data, which shall include, but not be limited to, reports filed pursuant to Sections 407.02(1) and 407.50, F.S., and rules promulgated thereunder. Demonstration of changes in case mix must be based upon case mix data reported as required in the FHURS Manual. A consistent set of DRG weights shall be used for all periods of data submitted, and shall correspond to the weight set used as published by the Health Care Finance Administration.
The amount determined in paragraph (2) for budget letters or Board-approved budgets for which changes in case-mix or average length of stay for psychiatric hospitals was not used to justify cost increases, shall be adjusted for case mix as follows:
For acute care hospitals, the Board shall adjust the potential excess in the following manner. The percentage increase, or decrease, in the case mix score between the year prior to the year at issue and the year at issue less the case mix, threshold as established
in Rule 10N-5.020, shall be multiplied by the gross revenue per adjusted admission as reported in the hospital's budget letter or Board approved budget for the year at issue. The total adjustment will then be subtracted from the potential excess in determining the adjusted excess.
For psychiatric hospitals, demonstration of changes in average length of stay shall
be based upon data available to the Board for acute and intensive care patients, except for hospitals treating sub-acute patients, exclusively, for which demonstration of changes in average length of stay shall be based upon data available to the Board for all patients. The Board shall multiply the percentage increase, or decrease, in average
length of stay from the year prior to the year at issue to the year at issue, by the gross revenue per adjusted admission reported in
the hospital's budget letter or Board approved budget for the year at issue. This total
adjustment will then be subtracted from the potential excess in determining the adjusted excess.
The amount determined in paragraph (2)(b) for a hospital with a Board approved budget for which changes in case-mix or average length of stay were used to justify cost increases, shall be adjusted for case mix as follows:
For acute care hospitals, the year at issue actual case mix score will be compared to the entire case mix score used in calculating the approved budget for the year at issue. The same grouper will be utilized in computing
the entire year's case mix score as was used in the budget. The percentage increase, or decrease, without applying the threshold adjustment, will be multiplied by the
Board-approved gross revenue per adjusted admission to determine the case mix, adjustment. This total adjustment will then be subtracted from the potential excess in determining the adjusted excess.
For psychiatric hospitals, demonstration of changes in average length of stay shall be based upon data available to the Board for acute and intensive care patients, except for hospitals treating sub-acute patients, exclusively, for which demonstration of changes in average length of stay shall be based upon data available to the Board for
all patients. The year at issue actual length of stay will be compared to the length of
stay used in calculating the approved budget for the length of stay used in calculating the approved budget for the year at issue.
The Board shall multiply the percentage increase, or decrease, in average length of stay, by the Board approved gross revenue per adjusted admission. This total adjustment will then be subtracted from the potential excess in determining the adjusted excess.
The Board shall consider in levying a fine, changes in patient intensity and severity of illness documented by quantifiable evidence of changes in the hospital's actual proportion of outlier cases to total cases
and dollar increases in outlier cases' average charges per case.
An outlier case is defined as those inpatient cases in a DRG which exceed the threshold established for each DRG.
The base year is the year prior to the year at issue.
The threshold is established by multiplying the hospital's actual gross revenue per adjusted admission (GRAA) for the base year
by the HCFA weight for the DRG and multiplying the result by the mean variance factor
(MVF), 2.11. The HCFA weight shall be from the same set of DRG weights used by the hospital in calculating the case mix score submitted in (3)(a) above.
The thresholds for the year at issue are established by multiplying the hospital's approved GRAA for the year at issue by the HFCA weight for each DRG and multiplying the result by the MFV of 2.11.
Hospitals requesting a case mix outlier adjustment shall submit detailed documentation of actual outlier cases, providing an auditable record ID number sufficient to protect the confidentiality of patient identity, DRG, date of discharge and gross charges for each outlier case for all DRGs on the Outlier Detail Worksheet and Summary Outlier Report described in FHURS Chapter V-G. A consistent grouper shall be used for all data submitted. The grouper used shall be that used in calculating case mix scores submitted in (3)(a) above.
Proportional Outlier Adjustment
Determine the average actual inpatient revenue per admission for the base year by dividing total inpatient revenue by total admissions.
Calculate an outlier adjusted revenue per admission in the year at issue by:
Multiplying the year at issue outlier discharges by the average gross revenue per outlier discharge for the base year.
Multiplying the year at issue inlier discharges (defined as report admissions for the period minus outlier discharges, which do not include the discharges for outliers occurring in DRGs 390 and 391) by the average gross revenue per inlier discharge for the base year (gross revenue per inlier discharge is defined as inpatient revenue for the period minus outlier revenue, which does include the revenue generated by outliers in DRGs 390
and 391).
Sum the products in i. and ii. and divide by the total admissions in the year at issue.
Calculate the percent change between the result obtained in (3)(b)3.a. and the result obtained in (3)(b)3.b. This percent change is the proportional outlier adjustment.
Outlier Dollar Increase (Decrease)
Adjustment
Calculate the increased (decreased) outlier revenue due to the increase (decrease) in average outlier charges per case by multiplying these average increase (decrease)
in gross revenue per outlier discharge between the base period and the year at issue by the number of outlier discharges for the year at issue.
Divide the product achieved in (3)(b)4.a. above by the total admissions for the actual period and calculate the percent it represents of the amount determined in (3)(b)3.a. This percent change is the dollar increase (decrease) outlier adjustment.
The total outlier charge adjustment is the sum of the proportional outlier adjustment percentage described in (3)(b)3.c. above and the outlier dollar increase (decrease)
adjustment percentage described in (3)(b)4.c. above.
The percentage computed in (3)(b)5. above shall be reduced by the outlier adjustment percentage applied in the Board approved budget for the year at issue. The result, will be multiplied by the Board approved or budget letter gross revenue per adjusted admission for the year at issue to determine the outlier adjustment. This total adjustment will then be subtracted from the potential excess in determining the adjusted excess.
Calculating the Fine. If the adjusted excess computed in (3) above results in a negative integer, no fine will be imposed pursuant to this rule. If the integer is positive, it will be multiplied by the actual admissions for the year at issue to compute excess gross revenue. The budgeted gross revenue per adjusted admission for the year at issue will be multiplied by the actual adjusted admissions for the year at issue to compute approved total gross operating revenue. The excess gross revenue shall be divided by the approved total gross operating revenue for the year at issue to compute the excess revenue percentage.
The excess gross revenue calculated in
above shall be multiplied by the excess revenue percentage calculated in (4) above to compute the base fine amount.
The base fine amount calculated in (4)(a) shall be multiplied by the applicable occurrence factor to compute the cash fine.
For the first occurrence within in a 5-year period, the applicable occurrence factor shall be 0.25;
For the second occurrence within the 5-year period following the first occurrence as set forth in paragraph 1., the applicable occurrence factor shall be 0.55.
For the third occurrence within the 5-year period following the first occurrence as set forth in paragraph 1, the applicable
occurrence factor shall be 1.0.
The cash fine calculated pursuant to section (4) shall not exceed $365,000.
Within thirty days after the Board's action to impose a fine pursuant to this rule, the hospital shall pay any fine imposed. However, if the hospital has been assessed a cash fine in accordance with the provisions
of Rule 10N-5.062 for the same period in which a cash fine was imposed pursuant to this rule, the hospital shall pay the greater of the two cash fines. The remaining cash fine amount shall not be imposed, but shall be considered an occurrence.
Special Provisions.
A hospital with a fiscal year ending during calendar year 1992 shall not be subject to the provisions of this rule if the amount determined in paragraph (2)(a) or (2)(b), as appropriate is less than or equal to the result of multiplying its approved budget gross revenue per adjusted admission for the year at issue by 10%.
A hospital with a fiscal year ending during calendar year 1993 shall not be subject to the provisions of this rule if the amount determined in paragraph (2)(a) or (2)(b), as appropriate, is less than or equal to the result of multiplying its approved budget gross revenue per adjusted admission for the year at issue by 5%.
A hospital in its initial year of licensure shall not be subject to the provisions of this rule. For purposes of this rule, a "hospital in its initial year of licensure" shall mean a "new hospital", and shall not include any facility which has been in existence as a licensed hospital, regardless of ownership, for over one year.
For a "new hospital" in its second year of operation, the provisions of (7)(a), above, shall apply.
For a "new hospital" in its third year of operation, the provisions of (7)(b), above, shall apply.
The Board may reduce any excess or fine determined pursuant to this rule, based upon additional data that the hospital may present directly to the Board, or if the imposition of such a fine would have a severe adverse effect which would jeopardize the continued existence of an otherwise economically viable hospital.
This rule shall be in effect for fiscal years ending after January 1, 1992.
As law implemented, the notice published in the Florida Administrative Weekly lists Sections 407.002, 407.003, 407.02, 407.03, 407.06 and 407.50, Florida Statutes (1989 and 1990 Supp.) The parties stipulated to the following findings of fact, set out in paragraphs 2 through 21.
The petitioner, Florida League of Hospitals is a non-profit corporation which is organized and maintained for the benefit of the 83 investor-owned hospitals which comprise its membership. One of the primary purposes of FLH is to act on behalf of its members by representing their common interests before the various governmental entities of the state, including the HCCCB. The Florida League of Hospitals has standing to appear in this matter.
The petitioner, Florida Hospital Association is a non-profit corporation which is organized and maintained for the benefit of the hospitals which comprise its membership. One of the primary purposes of FHA is to act on behalf of its members by representing their common interests before the various governmental entities of this state, including the HCCCB. The FHA has standing to participate in this matter.
The petitioner, Association of Voluntary Hospitals of Florida, Inc., is a Florida not-for-profit corporation, which is organized and maintained for the benefit of the 91 public and non-profit Florida hospitals which comprise its membership. One of the primary purposes of AVHF is to act on behalf of its members by representing their common interests before the various governmental entities of the State of Florida, including the Health Care Cost Containment Board. The AVHF has standing to sue in this matter.
The intervenor is charged under Sections 407.54 and 350.061-350.0614, Florida Statutes, with representing the interest of the general public in any proceeding before the HCCB conducted pursuant to Section 120.57, Florida Statutes, as are provided in Sections 350.061-350.0614, Florida Statutes. Such powers include the capacity to initiate proceedings by petition in order to urge any position which is deemed by the Public Counsel to be in the public interest.
Pursuant to the powers and duties as provided in Sections 407.54 and 350.061-350.0614, Florida Statutes, the Public Counsel has standing to participate in the challenge to proposed Rule 10N-5.0605.
Both gross and net revenues are included in any hospital budget, where: gross revenues represent all charges for hospital services (as well as certain other operating revenues); and net revenues represent dollars actually received for the provision of hospital services, i.e., gross revenues less certain deductions from revenues resulting from an inability to collect payment of charges.
Gross and net revenues are not the same thing nor is there necessarily a fixed relationship between these two measures.
It is possible for a hospital to exceed its Board-approved or hospital certified GRAA while its NRAA is at or below its budget.
Hospital budgets and amended budgets are approved or certified for a specified future time period.
The GRAA contained in a hospital budget or amended budget is a calculated average which is based upon projected data for a specified future time period.
A hospital's experience for GRAA can vary from day to day during a fiscal year. Generally, a hospital's fiscal year is 365 days.
In fiscal year 1987, 154 out of 215 general acute care hospitals had gross revenues per adjusted admissions that averaged 4.4% over their Board approved budgets for a total excess of $506 million.
In fiscal year 1988, 148 out of 205 general acute care hospitals had gross revenues per adjusted admissions that averaged 5.1% over Board approved budget for a total excess of $682 million.
In fiscal year 1989, 154 out of 205 general acute care hospitals had gross revenues per adjusted admissions that averaged 7.3% over Board approved budget for a total of $1.1 billion in excess gross revenues.
The numbers referred to in paragraphs 13, 14, and 15 are not case mix and outlier adjusted.
General acute care hospitals' actual experience compared to prior year for GRAA increased 13.8% in 1987, 13.5% in 1988, and 16.6% in 1989.
Hospital input prices -- a measure of hospital inflation -- increased 3.8% in 1987, 5.0% in 1988, and 5.1% in 1989.
The Board has estimated, based upon calculations from survey results based on FY 1989 data that the charges for approximately 50% of Florida hospital patients are the responsibility of private payors and approximately 46.4% of those patients or 345,000, paid based upon a discount from charges. There is some currently undetermined number of patients in Florida who pay full charges.
Hospitals generally exercise direct control over charges and charge structures. Hospitals influence, but do not directly control utilization of facilities, goods and services, and mix of patients treated. Hospitals do not generally directly control case mix or outliers. Hospitals influence, but do not directly control physician practice or admission patterns.
Fifty-five out of 282 hospitals submitted budgets for fiscal year 1989 in which the approved GRAA was less than the hospital's 1988 actual GRAA experience.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of petitions like the present ones challenging proposed administrative rules as an invalid exercise of delegated legislative authority. Section 120.54(4), Florida Statutes (1990 Supp.)
As the "one who attacks the proposed rule," Agrico Chemical Co. v. State Department of Environmental Regulation, 365 So.2d 759, 763, (Fla. 1st DCA 1978) cert. den. 376 So.2d 74 (Fla. 1979) each petitioner shares the burden to:
show that (1) the agency adopting the rule has exceeded its authority; (2) that the requirements of the rule are not appropriate to the ends specified in the legislative act; and (3) the requirements contained in the rule are not reasonably related to the purpose of the enabling legislation but are arbitrary or capricious.
Department of Administration, Division of Retirement v. Albanese, 455 So.2d 639, 641 (Fla. 1st DCA 1984). The challengers' burden "is a stringent one indeed." Agrico Chemical Co. v. State Department of Environmental Regulation, 365 So.2d 759, 763, (Fla. 1st DCA 1978) cert. den. 376 So.2d 74 (Fla. 1979).
"[T]he validity of . . . [a challenged] rule must be upheld if it is reasonably related to the purpose of the legislation interpreted and it is not arbitrary and capricious." Department of Professional Regulation v. Durrani,
455 So.2d 515, 517 (Fla. 1st DCA 1984). Florida Beverage Corp. v. Wynne, 306 So.2d 200 (Fla. 1st DCA 1975).
Moreover, the agency's interpretation of a statute need not be the sole possible interpretation or even the most desirable one; it need only be within the range of possible interpretations. Department of Health and Rehabilitative Services v. Wright, 439 So.2d 937 (Fla. 1st DCA 1983) (Ervin, C.J.,
dissenting); Department of Administration v. Nelson 424 So.2d 852 (Fla. 1st DCA 1982); Department of Health and Rehabilitative Services v. Framat Realty Inc., 407 So.2d 238 (Fla. 1st DCA 1981). 455 So.2d at 417.
Special deference is owed, moreover, to "an administrative agency's exercise of delegated discretion in respect to technical matters requiring substantial expertise." Island Harbour Beach Club, Ltd. v. Department of Natural Resources, 495 So.2d 209 (Fla. 1st DCA 1986).
On the other hand, "administrative agencies are creatures of statute and have only such powers as statutes confer." Fiat Motors of North America, Inc. v. Calvin, 356 So.2d 908, 909 (Fla. 1st DCA 1978). Rules must be authorized by statute. Florida League of Cities, Inc. v. Department of Insurance and Treasurer, 540 So.2d 850 (Fla. 1st DCA 1989). The legislature may authorize administrative agencies to interpret, but never to alter statutes. See Department of Health and Rehabilitative Services v. Framat, Inc., 407 So.2d 238 (Fla. 1st DCA 1981).
Statutes Implemented
Itself listed among the statutes to be implemented by the proposed rule, Section 407.002, Florida Statutes (1990 Supp.) contains definitions of terms used in the proposed rule and in Chapter 407, including the following:
"Adjusted admission" means the sum of acute admissions and intensive care admissions divided by the ratio of inpatient revenues generated from acute, intensive, ambulatory, and ancillary patient services to gross revenues.
. . .
(3) "Board" means the Health Care Cost Containment Board created by s. 407.01.
. . .
(10) "Department" means the Department of Health and Rehabilitative Services.
. . .
(12) "Gross revenue" means the sum of daily hospital service charges, ambulatory service charges, ancillary service charges, and other operating revenue. Gross revenues do not include contributions, donations, legacies, or bequests made to a hospital without restriction by the donors.
. . .
(17) "Maximum allowable rate of increase" or "MARI" means the maximum rate at which a hospital is normally expected to increase its average gross revenues per adjusted admission for a given period. The board, using the most recent audited actual experience for each hospital, shall claculate the MARI for each hospital as follows: the projected rate of increase in the market basket index shall be divided by a number which is determined by subtracting the sum of one-half of the proportion of Medicare days plus onr-half of the proportion of CHAMPUS days plus the proportion of Medicaid days plus the proportion of charity care days from the number one. Two percentage points shall be added to this quotient. The formula to be employed by the board to calculate the MARI shall take the following form:
MARI = NHIPI + 2 1-[(Me x 0.5)+(Cp x 0.5)+Md + Cc]
where:
MARI = maximum allowable rate of increase applied to gross revenue.
NHIPI = national hospital input price index, which shall be the projected rate of change in the market basket index.
Me = proportion of Medicare days, including when available and reported to the board Medicare HMO days, to total days.
Cp = proportion of Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) days to total days.
Md = proportion of Medicaid days, including when available and reported to the board Medicaid HMO days, to total days.
Cc = proportion of charity care days to total days with a 50-percent offset for restricted grants for charity care and unrestricted grants from local governments.
. . .
(19) "Net revenue" means gross revenue minus deductions from revenue.
. . .
(28) "Total deductions from gross revenue" or "deductions from revenue" means reductions from gross revenue resulting from inability to collect payment of charges. Such reductions include bad debts, contractual adjustments; uncompensated care; administrative courtesy, and policy discounts and adjustments; and other such revenue deductions, but also includes the offset of restricted donations and grants for indigent care.
Section 407.003, Florida Statutes (1989), announces the legislative intent to "[e]stablish a program which will contain hospital charges that exceed certain thresholds where competition-oriented methods do not adequately contain costs." Section 407.003(3)(a), Florida Statute (1989). To this end, Section 407.03, Florida Statutes (1989) confers broad rulemaking powers on the HCCCB along with "all other powers which are reasonably necessary or essential to carry out the expressed objects and purposes of this chapter."
By statute, the HCCCB is directed to "approve, disapprove, or disapprove in part the budget of each hospital requesting increases above the maximum allowable rate of increase, including its projected expenditures and projected revenues." Section 407.02(2), Florida Statutes (1989). Each hospital "requesting approval of a rate of increase in gross revenue per adjusted admission in excess of its applicable maximum allowable rate of increase," Section 407.05(6), Florida Statutes (1989), must file with the HCCCB. In part, Section 407.50, Florida Statutes (1989) provides:
(2)(a) Except for hospitals filing a budget pursuant to subsection (3), each hospital, at least 90 days prior to the commencement of its next fiscal year, shall file with the board a certified statement, hereafter known as the "budget letter," acknowledging its applicable maximum allowable rate of increase in gross revenue per adjusted admission from the previous fiscal year as calculated pursuant to s. 407.002(17) and its maximum
projected gross revenue per adjusted admission for the next fiscal year, and shall affirm that the hospital shall not exceed such applicable maximum allowable rate of increase.
Such letter shall be deemed to be the budget for the hospital for that fiscal year and shall be automatically approved by operation of law. However, the board shall have 30 days from receipt of the budget letter to determine if the gross revenues per adjusted admission submitted by the hospital are within the maximum allowable rate of increase for that hospital.
. . .
(3) At least 90 days prior to the beginning of its fiscal year, each hospital requesting a rate of increase in gross revenue per adjusted admission in excess of the maximum allowable rate of increase for the hospital's next fiscal year, or each hospital utilizing
banked percentage points pursuant to paragraph (2)(b) and requesting a rate of increase in excess of the maximum allowable rate of increase plus the available banked percentage points, shall be subject to detailed budget review and shall file its projected budget with the board for approval. No
hospital submitting a budget for approval shall operate at a level of expenditures or revenues which exceeds the maximum allowable rate of increase minus 1 percentage point unless a higher rate of increase has been approved by the board.
. . .
(5) The board shall review each budget filed pursuant to section (3) and amendments filed pursuant to subsection (6) to determine whether the rate of increase contained in the budget or amendment is just, reasonable, and not excessive.
. . .
(9)(a) Upon receipt of a budget or an amendment to a budget, the staff of the board shall review the budget and executive staff members designated by the board shall make preliminary findings and recommendations in writing as to whether the budget should be approved, disapproved, or disapproved in part.
. . .
(e) During the pendency of any hearing or an appeal of final order of the board, no hospital shall operate at a level of expenditures and revenues which exceeds the maximum allowable rate of increase minus 1 percentage point unless a higher rate of increase has been approved by the board. However, a hospital with banked percentage points requesting a rate of increase which exceeds the maximum allowable rate of increase plus the banked percentage points shall not operate at a level of expenditures or
revenues in excess of 1 percentage point below the maximum allowable rate of increase plus the banked percentage points.
. . .
(13) In addition to any gross or net revenues for a budget or any budget amendment approved by the board pursuant to subsection (5), the board shall also approve gross and net revenues necessary to fund any increases in costs arising from the implementation of s. 766.314(4)(b), (5)(a), and (7), using the same ratio of gross or net revenue to expense as approved by the board for the budget or any budget amendment. It shall be the responsibility of the hospital to document
any such increases in costs.
(Emphasis supplied.) On the view that these provisions make it unlawful for a hospital's gross revenue per adjusted admission to exceed what has been budgeted and approved, the HCCCB has proposed to adopt the rule under challenge, imposing a fine in such cases. Section 407.06, Florida Statutes (1989) provides that "violation of any . . . provision of this chapter . . . be punished by a fine not exceeding $1,000 a day."
Challengers' Contentions
Although hospital cost containment legislation was already on the books, it underwent "sunset" review during the 1988 session. The first drafts of legislation proposed to the House Health Care Committee in the 1988 legislative session included provisions like Section 28 of proposed committee bill HC 88-08, said by staff to set "penalties on gross revenues instead of net." Exhibit B to Joint Motion for Official Recognition. But no such language appeared in the version of the bill that passed the committee, and none was inserted on the floor.
From this meager "legislative history," petitioners argue that the statute as enacted does not authorize penalties for excess gross revenue per adjusted admission. But petitioners are relying on the wording of preliminary drafts apparently never voted on, even by a subcommittee, of any committee in either house.
Discussing the "instructional Florida State Supreme Court case of State ex rel. Finlayson v. Amos, 76 Fla. 26, 79 So. 433 (1918)," Rabren v. Board of Pilot Commissioners, 497 So.2d 1245, 1248 (Fla. 1st DCA 1986), the First District said:
The Florida Supreme Court, speaking through Justice Brown, wrote that due to the conflicting provisions of that law, the court could seek light in the history of that passage of the act through the Legislature.
Justice Brown referred to Lewis' Sutherland on Statutory Construction section 470:
The proceedings of the Legislature in reference to the passage of an act may be taken into consideration in construing the act. Thus the reports of committees made to
the Legislature have been held to be proper sources of information in ascertaining the intent or meaning of the act. Amendments made, or proposed and defeated, may also throw light on the construction of the act as finally passed, and may properly be taken into consideration.
In the Amos case, when the Senate Bill passed the Senate and went to the House, series B read "Automobiles of not more than
25 h.p. $7.00." In the House an amendment was adopted to strike out the words "automobiles of not more that 25 h.p. $7.00" and insert in lieu thereof the following:
"For any automobile and other motor-driven vehicle with a seating capacity of one and not more than five persons $5.00." This
amendment was then rejected in the Senate, but later considered by a conference committee composed of members from both houses, and thereafter adopted by the Senate upon recommendation of the conference committee.
Justice Brown noted that the ruling of the comptroller would nullify the amendment and restore to the bill that part of it which the legislature rejected. The supreme court held:
. . . If the amendment had not been adopted, the comptroller's interpretation would be correct, but he ignores the amendment and interprets the law as it had passed as originally introduced in the Senate. There
is no authority for a department of the government charged with the execution of a law, to restore a provision which the Legislature strikes from the act when in progress of its passage. Whatever the Legislature does within its constitutional authority, no other department of the government may change, modify, alter, or amend.
It seems quite clear to us that, when the Legislature struck from the act under consideration, as originally introduced, language identical with the construction now placed upon series B by the comptroller, the Legislature in the clearest and most positive manner showed its disapproval of his construction, and this court must enforce the clearly expressed legislative will.
Rabren v. Board of Pilot Commissioners, 497 So.2d 1245, 1248-9 (Fla. 1st DCA 1986) (Emphasis supplied.) In the present case, conflicting provisions do not require reconciliation, as petitioners themselves concede; no committee made any report on the point to the legislature; and apparently no official action (beyond staff drafts) was taken.
The "legislative history" on which petitioners rely is also highly ambiguous. Petitioners contend the staff proposals reflect an intention to create authority to base fines on gross revenue per adjusted admission, which did not then exist. But staff's objective might equally plausibly have been to eliminate net revenue per adjusted admission as a separate basis for administrative fines. Under this view, staff's stated objective of setting "penalties on gross revenues instead of net" can be understood as an intention to base penalties only on gross revenues, instead of also on net revenues.
Looking only to gross revenue per adjusted admission rather than also to net revenue per adjusted admission for such purposes is clearly fairer and more rational. The deductions from gross revenue which determine net revenue are much less susceptible to control by hospital management than are unadjusted gross revenues, which reflect more closely the charges management sets. See Finding of Fact No. 20. Management does not, of course, control the number of admissions or the mix of cases but these variables affect net revenue per adjusted admission no less than gross revenue per adjusted admission.
The challengers' principal contention is that the only statutory authority for administrative fines on account of excess revenues is to be found in Section 407.51, Florida Statutes (1989), which provides:
Exceeding approved budget or previous year's actual experience by more than maximum rate
of increase; allowing or authorizing operating revenue or expenditures to exceed amount in approved budget; penalties. -
The board shall annually compare the audited actual experience of each hospital to the audited actual experience of that hospital for the previous year.
For hospitals submitting budget letters, if the board determines that the audited actual experience of a hospital exceeded its previous year's audited actual experience by more than the maximum allowable rate of increase as certified in the budget letter, the amount of such excess shall be determined by the board and a penalty shall be levied against such hospital pursuant to subsection (2).
For hospitals subject to budget review, if the board determines that the audited actual experience of a hospital exceeded its previous year's audited actual experience by more than the most recent approved budget or the most recent approved budget as amended, the amount of such excess shall be determined by the board, and a penalty shall be levied against such hospital pursuant to subsection (2).
For hospitals submitting a budget letter and for hospitals subject to budget review, the board shall annually compare each hospital's audited actual experience for net revenues per adjusted admission to the hospital's audited actual experience for net
revenues per adjusted admission for the previous year. If the rate of increase in net revenues per adjusted admission between the previous year and the current year was less than the market basket index plus 2 percentage points, up to a cumulative maximum of 3 banked net revenue percentage points.
Such banked net revenue percentage points shall be available to the hospital to offset in any future year penalties for exceeding the approved budget or the maximum allowable rate of increase as set forth in subsection (2). Nothing in this paragraph shall be used by a hospital to justify the approval of a budget or a budget amendment by the board in excess of the maximum allowable rate of increase pursuant to s. 407.50.
Penalties shall be assessed as follows:
For the first occurrence within a 5-year period, the board shall prospectively reduce the current budget of the hospital by the amount of the excess up to 5 percent; and,
if such excess is greater than 5 percent over the maximum allowable rate of increase, any amount in excess of 5 percent shall be levied by the board as a fine against such hospital to be deposited in the Public Medical Assistance Trust Fund, as created in s.
409.2662.
For the second occurrence within the
5-year period following the first occurrence as set forth in paragraph (a), the board shall prospectively reduce the current budget of
the hospital by the amount of the excess up to 2 percent; and, if such excess is greater than 2 percent over the maximum allowable rate of increase, any amount in excess of 2 percent shall be levied by the board as a fine against such hospital to be deposited in the Public Medical Assistance Trust Fund.
For the third occurrence within the 5-year period following the first occurrence as set forth in paragraph (a), the board shall:
Levy a fine against the hospital in the total amount of the excess to be deposited in the Public Medical Assistance Trust Fund.
Notify the Department of Health and Rehabilitative Services of the violation, whereupon the department shall not accept any application for a certificate of need pursuant to ss. 381.701-381.7155 from or on behalf of such hospital until such time as the hospital has demonstrated to the satisfaction of the board that, following the date the penalty
was imposed under subparagraph 1., the hospital has stayed within its projected or amended budget or its applicable maximum
allowable rate of increase for a period of at least 1 year. However, this provision does not apply with respect to a certificate-of- need application filed to satisfy a life or safety code violation.
Upon a determination that the hospital knowingly and willfully generated such excess, notify the Department of Health and Rehabilitative Services, whereupon the department shall initiate disciplinary proceedings to deny, modify, suspend, or revoke the license of such hospital or impose an administrative fine on such hospital not
to exceed $20,000.
The determination of the amount of any such excess shall be based upon net revenues per adjusted admission excluding funds distributed to the hospital pursuant to s. 409.266(7) or
s. 409.2663. However, in making such determination, the board shall appropriately reduce the amount of the excess by the total amount of the assessment paid by such hospital pursuant to s. 395.101 minus the amount of revenues received by the hospital through the operation of s. 409.266(7) or s. 409.2663.
It is the responsibility of the hospital to demonstrate to the satisfaction of the board its entitlement to such reduction. It is the intent of the Legislature that the Health Care Cost Containment Board, in levying any penalty imposed against a hospital for exceeding its maximum allowable rate of increase or its approved budget pursuant to this subsection, consider the effect of changes in the case
mix of the hospital. It is the responsibility of the hospital to demonstrate to the satisfaction of the board any change in its case mix. For psychiatric hospitals, the board shall also reduce the amount of excess by utilizing as a proxy for case mix the change in a hospital's audited actual average length of stay as compared to the previous year's audited actual average length of stay without any thresholds or limitations.
(Emphasis supplied.) In short, Section 407.51, Florida Statutes (1989) authorizes administrative fines in the event a hospital's net revenue per adjusted admission exceed budgeted and approved levels or "the maximum allowable rate of increase as certified in the budget letter." Section 407.51(1)(a), Florida Statutes (1989).
Section 407.51, Florida Statutes (1989) authorizes no penalty against a hospital with excessive gross revenue per adjusted admission, so long as net revenue per adjusted admission does not reach levels proscribed by statute. Section 407.002, Florida Statutes (1989) distinguishes between "gross revenue" and "net revenue." Inclusio unius exclusio alterius. Nor have respondent and
intervenor ever contended that Section 407.51, Florida Statutes (1989) authorizes the rule under challenge here. Nowhere listed among the statutes the challenged rule is proposed to implement is Section 407.51, Florida Statutes (1989).
Seeing the Forest
But no latin maxim answers the question whether other statutory provisions -- those that are listed as "law implemented" by the proposed rule -
- authorize penalties for excess gross revenue per adjusted admission. Section 407.50, Florida Statutes (1989) explicitly requires HCCCB approval of increases (above certain levels) in gross revenue per adjusted admission. Boiled down, petitioners' argument amounts to a claim that they are free to flaunt this provision with impunity. They maintain that the HCCCB is powerless, when increases in gross revenue per adjusted admission occur, although the HCCCB has never approved (or has even disapproved) a particular increase. Petitioners' interpretation flies in the teeth of the statute, and subverts the stated statutory purpose; and ignores altogether Section 407.06, Florida Statutes (1989), which authorizes administrative fines for "violation of any . . . provision of this chapter."
Authority for the proposed rule inheres in the regulatory scheme, viewed as a whole and in the light of legislative intent to "[e]stablish a program which will contain hospital charges." Section 407.003, Florida Statutes (1989)."An administrative agency must have some discretion when a regulatory mandate is in need of construction in its implementation." General Telephone Co. v. Marks, 500 So.2d 142, 145 (Fla. 1986); Fairfield Communities v. Florida Land and Water Adjudicatory Commission, 522 So.2d 1012 (Fla. 1st DCA 1988); State Department of Labor and Employment Security v. Mission Insurance Co., 507 So.2d 137 (Fla. 1st DCA 1987); Austin v. Department of Health and Rehabilitative Services, 495 So.2d 777 (Fla. 1st DCA 1986).
The agreed facts amply explain the need for a rule like the one respondent has proposed to adopt, if the statutory purpose is to be accomplished. As respondent argues in its proposed recommended order,
the statutory scheme set forth in Chapter 407 requires regulation of GRAA [gross revenue per adjusted admission.] During the period 1987-1989, the total excess of gross revenues over approved budgets has increased from $506 million, to $1.1 billion. . . . Though the statistical evidence of this diminishing compliance described in paragraphs 13-15 has not been adjusted for changes in the severity or intensity of illness in the patient population ("case mix" or "outliers," respectively, para. 15 supra), the increase from $506 million in 1987 to $1.1 billion in 1989, in gross budget excess, is massive and reflects a clear trend toward non-compliance.
. . .Although petitioners contend that to some extent case mix and outlier are unpredictable and justify excess GRAA, the fact that nearly 20% of Florida's hospitals submitted budgets for 1989, estimating gross revenues less than their actual 1988
experience (para. 20, supra), despite continuing inflation for hospital services (para. 17, supra), suggests that hospital are not the innocent victims of untoward events. Hospital can control GRAA by exercising direct control over charges and charge structures.
Moreover, hospitals have influence over the utilization of their facilities, goods, and services, and mix of patients treated, all of which, in turn, influence GRAA. (See para. 19, supra.) Unexpected events which influence
GRAA can be accounted for by filing a budget amendment which justifies a higher GRAA.
See s. 407.50(6), Fla. Stat.
At page 12. Gross revenue "means the sum of daily hospital service charges." Section 407.002(12), Florida Statutes (1990 Supp.) Controlling such charges was the legislature's primary purpose when it enacted Chapter 407, Florida Statutes. A challenged "rule must be upheld if it is reasonably related to the purpose of the legislation interpreted and it is not arbitrary and capricious." Department of Professional Regulation v. Durrani, 455 So.2d 515, 517 (Fla. 1st DCA 1984).
Finally, petitioners complain that the proposed rule provisions concerning calculating the fine might result in penalizing a hospital more than the $1,000 daily maximum authorized by statute. The rule contemplates a maximum fine of $365,000, on the theory that every day of the fiscal year is taken into account, when average revenues are calculated. But it is possible, as petitioners point out, that a hospital might keep gross revenues within the approved range for some portion of the year before raising charges to a level that would yield an excess average for the whole year.
One answer to petitioners' concern is that hospitals would do well to eschew such mid-year increases, unless authorized by the HCCCB. But it is also true that circumstances beyond a hospital's control may derail efforts to keep gross revenue per adjusted admission within approved limites, and may do so as of a discernible point in time. A new hospital's opening nearby could cause a drop in census that would push gross revenue per adjusted admission above approved limits, for example. In such a case, assuming the rule formula indicated a fine in excess of $1,000 per day (when only the days after the new hospital opened were considered), the HCCCB can resort to section eight of the proposed rule, which authorizes reduction of fines "based upon additional data." If, as petitioners argue, Section 407.06, Florida Statutes (1989) would require the use of section eight in this fashion, it is no objection to the proposed rule, which clearly allows such a reduction, that it does not parrot or echo the requirement.
The petitions seeking a determination of the invalidity of proposed Rule 10N-5.0605 are denied.
DONE and ENTERED this 29th day of March, 1991, in Tallahassee, Florida.
ROBERT T. BENTON, II
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, FL 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 29th day of March, 1991.
COPIES FURNISHED:
Steven T. Mindlin, Esquire Haben & Culpepper, P.A. Post Office Box 10095 Tallahassee, FL 32302
Julia P. Forrester, General Counsel Health Care Cost Containment Board
301 The Atrium
325 John Knox Road Tallahassee, FL 32301
Stephen Presnell, Esquire Pete Schwarz, Esquire
Office of the Public Counsel Claude Pepper Building
121 West Madison Street Suite 801
Tallahassee, FL 32399-1400
John Knight, Esquire 1200 Carneige Building
133 Carneige Way Atlanta, GA 30303
John R. Gilroy, III, Esquire
P.O. Box 10095 Tallahassee, FL 32302
Robert T. Klingbell, Jr,. Esquire Robert P. Mudge, Esquire
P.O. Box 1596 Venice, FL 34284
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 RULE 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.
================================================================= DISTRICT COURT OPINION
=================================================================
IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA
FLORIDA HOSPITAL ASSOCIATION, NOT FINAL UNTIL TIME EXPIRES TO INC. FLORIDA LEAGUE OF FILE MOTION FOR REHEARING AND HOSPITALS, INC. and DISPOSITION THEREOF IF FILED. ASSOCIATION OF VOLUNTARY
HOSPITALS INC., CASE NOS. 91-1311, 91-1317 DOAH CASE NOS. 90-8145RP
Appellant, 90-8146RP
90-8147RP
vs.
HEALTH CARE COST CONTAINMENT BOARD
Appellee.
AND
CITIZENS OF THE STATE OF FLORIDA, OFFICE OF THE PUBLIC COUNSELOR,
Intervenor.
/ Opinion filed February 7, 1992.
An Appeal from an order of the Department of Administrative Hearings.
Steven T. Mindlin, and John F. Gilroy, III, of Haben, Culpepper, Dunbar & French P.A., Tallahassee, for Appellant Florida League of Hospitals.
John M. Knight and Robert A. Weiss, of Parker, Hudson, Rainer & Dobbs, Tallahassee, for Appellant Association Voluntary Hospitals.
Julia P. Forrester, Tallahassee, for Appellee.
Jack Shreve and Stephen M. Presnell, Office of Public Counsel, Tallahassee, Intervenor.
ERVIN, J.
Florida Hospital Association, Inc., Florida League of Hospitals, Inc., and the Association of Voluntary Hospitals, Inc., appeal an order in favor of the Health Care Cost Containment Board (Board) upholding the validity of proposed Florida Administrative Code Rule 10N-5.0605. The essential issues for our determination are whether certain provisions of Chapter 407, Florida Statutes (1989), provide authority to promulgate the proposed rule, and whether the proposed rule enlarges, modifies, or contravenes the requirement of Section 407.06, Florida Statutes (1989), that penalties are to be calculated per day of violation. We affirm, but certify the latter question to the Florida Supreme Court.
Section 407.50, Florida Statutes (1989), authorizes the Board to, among other things, review and approve hospital budgets, which must include projected gross revenues per adjusted admission (GRAA) 1/ for the following year. The Board is required to calculate for each hospital the maximum rate at which a hospital is expected to increase its GRAA during a given period, which is called its maximum allowable rate of increase (MARI). In establishing a yearly budget, a hospital has two options under section 407.50. First, after its independent determination that it can operate within a certain statutorily defined rate for increase, which is determined by multiplying the hospital's MARI times the hospital's prior year actual experience of GRAA, the hospital may submit a "budget letter," which becomes the budget of the hospital by operation of law.
A hospital that files a budget letter must affirmatively state in the letter that it will not exceed its MARI in gross revenue during the next fiscal year. The Board then has 30 days to determine whether the GRAA in the letter is within the MARI established for that hospital.
In the alternative, hospitals specifically seeking an increased GRAA for the year, beyond their previously approved MARI, must submit a detailed budget to the Board for approval. In presenting their budgets pursuant to this option, hospitals are required to comply with section 407.50(3) which states, "No hospital submitting a budget for approval shall operate at a level of expenditures or revenues which exceeds the maximum allowable rate of increase minus 1 percentage point unless a higher rate of increase has been approved by the board." The Board must then determine whether the rate of increase of GRAA the hospital requested is just, reasonable, and not excessive, using the twelve criteria enumerated in section 407.50(5). Although Section 407.51, Florida Statutes (1989), specifically penalizes hospitals which receive more net revenue 2/ per adjusted admission (NRAA) than was permitted by their approved budgets for that year, there is no similar statutory provision or rule specifically penalizing hospitals for exceeding GRAA without approval.
The hearing officer concluded that the legislature intended to control gross revenue when it enacted chapter 407, and that the provisions therein make it unlawful for a hospital's GRAA to exceed that which has been budgeted and approved. In reaching his conclusions, the hearing officer made the following findings of fact: Gross revenues constitute all charges for hospital services,
while net revenues constitute dollars actually received for the provision of hospital services, and it is possible for a hospital to exceed its approved or certified GRAA while its NRAA remains at or below budget. In fiscal year 1987,
154 out of 215 general acute care hospitals had GRAA averaging 4.4% over their board-approved budgets, for a total excess of $506,000,000. In 1988, 148 out of
205 hospitals had GRAA averaging 5.1% more than their approved budgets, for a total excess of $682,000,000. In 1989, 154 out of 205 hospitals had GRAA averaging 7.3% in excess of their approved budgets, for a total of
$1,500,000,000 in excess gross revenues. The actual experience of general acute care hospitals, as compared to their prior year's GRAA, revealed increases of 13.8% in 1987, 13.5% in 1988, and 16.6% in 1989, while hospital inflation
experienced increases of only 3.8% in 1987, 5% in 1988, and 5.1% in 1989. Moreover, 55 out of 282 hospitals submitted budgets for fiscal year 1989 in which the approved GRAA was less than their actual GRAA experience in 1988.
From this stipulated data, it appears that although hospitals' proposed GRAAs are being reviewed each year, certain hospitals are continuing to raise their charges beyond the approved rates. The Board logically contends that without being subjected to any sanctions for violating section 407.50 by exceeding stated GRAA limits, too many hospitals are flouting the requirements of section 407.50. The dispute in this case is whether there is statutory authority for the proposed rule which penalizes excessive GRAA. We conclude that there is.
Article I, Section 18 of the Florida Constitution 3/ prohibits agencies from imposing penalties that are not authorized by statute. The legislature's intent is explicitly stated in Section 407.003, Florida Statutes (1989), which provides in subsection (3)(a) that by enacting chapter 407, the legislature intended to "[e]stablish a program which will contain hospital charges that exceed certain thresholds where competition oriented methods do not adequately contain costs." Section 407.03, Florida Statutes (1989), which authorizes adoption of rules to implement the chapter, and section 407.06, which authorizes the Board to penalize hospitals for violations of any statute or rule authorized by chapter 407, together permit promulgation of rules providing penalties for violations of chapter 407. The legislature articulated a hospital's obligations in preparing a yearly budget. The provisions of section 407.50, discussed above, clearly demonstrate that exceeding approved or certified GRAA is not permitted by law. As the administrative body charged with administering this law, the Board is given broad discretion to execute the law. Florida League of Cities, Inc. v. Administration Comm., 586 So.2d 397, 410-11 (Fla. 1st DCA 1991). We therefore conclude that section 407.06 authorizes the Board to promulgate a rule imposing penalties against hospitals which exceed their budgeted GRAA, as outlined in section 407.50 and pertinent rules.
Our determination of whether the procedure provided in the proposed rule for calculating the penalty to be imposed for exceeding an approved GRAA complies with delegated legislative authority is, however, more difficult. It appears that the only way to calculate excess GRAA is to take into account a hospital's total charges during the entire preceding fiscal year. As a result, the formula in the proposed rule requires the actual excess charges to be averaged over 365 days, which thus assumes that the hospital was in violation each day of the year, and provides that the fine shall not exceed $365,000.
These requirements reflect the Board's attempt to promulgate a rule within the confines of section 407.06, which specifically provides that no fine shall exceed $1,000 per day, and that "[e]ach day in violation shall be considered a separate offense." Appellants contend that because the formula in the proposed rule is based upon amounts calculated over the full year, it does not penalize
violations on a per-diem basis, but instead retroactively penalizes a hospital for a full-year period, and thus exceeds or is contrary to the limits imposed by section 407.06. We conclude that it is reasonable for the Board to have decided that if a hospital exceeds a projected GRAA which was certified or approved in a budget, after factoring in any unusual or unavoidable conditions, as the proposed rule requires, this does constitute a daily violation over the year long period. An agency's construction of the statute it is charged with administering must be afforded great weight and should not be rejected unless such interpretation is clearly erroneous. Pan American World Airways Inc. v.
Public Serv. Comm., 427 So.2d 716, 719 (Fla. 1983); Board of Optometry v.
Society of Opthalmology, 538 So.2d 878, 885 (Fla. 1st DCA 1988).
We AFFIRM the order below. Nevertheless, because penal provisions are generally accorded a narrow construction, we certify the following question to the supreme court as one of great public importance:
DOES SECTION 407.06, FLORIDA STATUTES (1989), SPECIFICALLY AUTHORIZE, AS REQUIRED BY ARTICLE I, SECTION 18 OF THE FLORIDA CONSTITUTION, THE PENALTY" FORMULA OF PROPOSED FLORIDA ADMINISTRATIVE CODE RULE 10N-5.0605?
KAHN AND WOLF, JJ., CONCUR.
ENDNOTES
1/ Section 407.002(12), Florida Statutes (1989), defines "gross revenue" as "the sum of daily hospital service charges, ambulatory service charges, ancillary service charges, and other operating revenue Gross revenues do not include contributions, donations, legacies, or bequests made to a hospital without restriction by the donors." Subsection (1) defines "adjusted admission" as "the sum of acute admissions and intensive care admissions divided by the ratio of inpatient revenues generated from acute, intensive, ambulatory, and ancillary patient services to gross revenues."
2/ Section 407.002(19) defines "net revenue" as "gross revenue minus deductions from revenue."
3/ That section provides: "No administrative agency shall impose a sentence of imprisonment, nor shall it impose any other penalty except as provided by law."
MANDATE
From
DISTRICT COURT OF APPEAL OF FLORIDA FIRST DISTRICT
To the Honorable Robert T. Benton, II, Hearing Officer
WHEREAS, in that certain cause filed in this Court styled: Division of Administrative Hearings
FLORIDA LEAGUE OF HOSPITALS INC.
vs.
HEALTH CARE COST CONTAINMENT BOARD
and. Case No. 91-1311
CITIZENS OF THE STATE OF FLORIDA,
OFFICE OF THE PUBLIC COUNSEL Your Case No. 90-8145RP FLORIDA HOSPITAL ASSOCIATION, INC. 90-8146RP 90-8147RP
vs.
HEALTH CARE COST CONTAINMENT BOARD
and
CITIZENS OF THE STATE OF FLORIDA, OFFICE OF THE PUBLIC COUNSEL
ASSOCIATION OF VOLUNTARY HOSPITALS, INC.
vs.
HEALTH CARE COST CONTAINMENT BOARD, et al.
The attached opinion was rendered on February 7, 1992.
YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said opinion, the rules of this Court and the laws of the State of Florida.
WITNESS the Honorable James D. Joanos
Chief Judge of the District Court of Appeal of Florida, First District and the Seal of said court at Tallahassee, the Capitol, on this 10th day of March, 1992.
Clerk, District Court of Appeal of Florida, First District
MANDATE
From
DISTRICT COURT OF APPEAL OF FLORIDA FIRST DISTRICT
To the Honorable Robert T. Benton, II, Hearing Officer
WHEREAS, in that certain cause filed in this Court styled: Division of Administrative Hearings
FLORIDA LEAGUE OF HOSPITALS, INC.
vs.
HEALTH CARE COST CONTAINMENT BOARD
and Case No. 91-1317
CITIZENS OF THE STATE OF FLORIDA,
OFFICE OF THE PUBLIC COUNSEL Your Case No. 90-8145RP FLORIDA HOSPITAL ASSOCIATION, INC. 90-8146RP 90-8147RP
vs.
HEALTH CARE COST CONTAINMENT BOARD
and
CITIZENS OF THE STATE OF FLORIDA, OFFICE OF THE PUBLIC COUNSEL
ASSOCIATION OF VOLUNTARY HOSPITALS, INC.
vs.
HEALTH CARE COST CONTAINMENT BOARD, et al.
The attached opinion was rendered on February 7, 1992.
YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said opinion, the rules of this Court and the laws of the State of Florida.
WITNESS the Honorable James D. Joanos
Chief Judge of the District Court of Appeal of Florida, First District and the Seal of said court at Tallahassee, the Capitol, on this 10th day of March, 1992.
Clerk, District Court of Appeal of Florida, First District
| Issue Date | Proceedings |
|---|---|
| Mar. 29, 1991 | Final Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Mar. 29, 1991 | DOAH Final Order | Rule authorizing daily fine for excess annual gross revenue upheld. Rule not invalid though like language in bill excised by legislative staff sans vote. |
CENTRO ASTURIANO HOSPITAL, INC. vs. HOSPITAL COST CONTAINMENT BOARD, 90-008145RP (1990)
FLORIDA HOSPITAL WATERMAN vs AGENCY FOR HEALTH CARE ADMINISTRATION, 90-008145RP (1990)
THE RETREAT vs. HEATH CARE COST CONTAINMENT BOARD, 90-008145RP (1990)
THE RETREAT vs HEALTH CARE COST CONTAINMENT BOARD, 90-008145RP (1990)
