STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BEVERLY TRANSPORT, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 95-4661

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case on January 23, 1996, before Stuart M. Lerner, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Peter E. Perettine, Esquire

Comerica Bank Building, Suite 302 1800 Corporate Boulevard, Northwest Boca Raton, Florida 33431

For Respondent: Moses E. Williams, Senior Attorney

Agency for Health Care Administration 2727 Mahan Drive, Fort Knox Number 3 Tallahassee, Florida 32308-5403

STATEMENT OF THE ISSUE

Whether Petitioner's Medicaid provider number should be cancelled for the reason given in Respondent's June 16, 1995, letter to Petitioner?

PRELIMINARY STATEMENT

By letter dated June 16, 1995, the Agency for Health Care Administration (hereinafter referred to as the "Agency") notified Petitioner of its intention to cancel Petitioner's Medicaid provider number (0887757-00), effective June 15, 1995. The Agency explained that such action was necessary because of Petitioner's "failure to successfully comply with the re-enrollment process." Petitioner ultimately requested a formal hearing on the matter. On September 20, 1995, the Agency referred the case to the Division of Administrative Hearings for the assignment of a Hearing Officer to conduct the formal hearing Petitioner had requested.

At the formal hearing, which was held on January 23, 1996, 1/ five witnesses testified: Daniel and Beverly Murtha, the co-owners of Petitioner; and Beverly Sawyer, Maria Hamann and Bette Hickey, all of whom are Agency employees involved in the Medicaid program. In addition to the testimony of

these five witnesses, a total of fourteen exhibits (Petitioner's Exhibits 1 through 7 and Respondent's Exhibits 1 through 7) were offered and received into evidence.

At the conclusion of the evidentiary portion of the formal hearing, the Hearing Officer advised the parties of their right to file post-hearing submittals and established a deadline (15 days from the date of the hearing) for the filing of such submittals. Petitioner and the Agency filed their post- hearing submittals on January 29, 1996, and February 2, 1996, respectively.

These post-hearing submittals have been carefully considered by the Hearing Officer. They each contain what are labelled as "findings of fact." These "findings of fact" proposed by the parties are specifically addressed in the Appendix to this Recommended Order.

FINDINGS OF FACT

Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made:

1. Petitioner is a provider of transportation services.

   
   

2. It provides these services to residents of Delray Beach and surrounding areas.

   
   

3. From October of 1990, until June 15, 1995, Petitioner provided transportation services to Medicaid recipients pursuant to a Medicaid provider agreement, paragraphs 8 and 9 of which provided as follows:

   
   

   1. The provider and the Department [the Agency's predecessor] agree to abide by the Florida Administrative Code, Florida Statutes, policies, procedures, manuals of the Florida Medicaid Program and Federal laws and regulations.

   2. The agreement may be terminated upon thirty days written notice by either party. The Depart- ment may terminate this agreement in accordance with Chapter 120, Florida Statutes.

      
      

4. Daniel Murtha and his wife, Beverly Murtha, own and operate Petitioner.

   
   

5. On or about April 11, 1995, the Murthas received the following letter from the Agency's Medicaid Area Nine office (hereinafter referred to as the "Agency's Medicaid office"), which was sent by certified mail:

   
   

   Dear Transportation Provider:

   
   

   This letter is to inform you that our office is currently in the process of planning for Medicaid Transportation Services to become a part of the coordinated transportation disadvantaged program in your county.

   
   

   Florida has a state law, Chapter 427, Florida Statutes, which requires all state and federally supported transportation disadvantaged services to be coordinated through a local community transportation coordinator (CTC). Our plan

   is to come under this coordinated transportation system in the near future.

   
   

   Once our plans with the CTC are finalized, Medicaid Transportation Services will be coord- inated through their office. Operators under the coordinated system will have to meet Trans- portation Disadvantaged and CTC Standards for insurance, licensing, vehicle safety inspections and driver drug-testing requirements.

   
   

   Our office will keep you informed as to our coordination progress. Thank you for your interest in our program and our clients.

   
   

6. Approximately a month later, on May 16, 1995, the Agency's Medicaid office sent, by certified mail, return receipt requested, the following letter (hereinafter referred to as the "May 16 letter") to the Murthas:

   
   

   Dear Provider:

   
   

   This is to advise you that you must re-enroll as a Medicaid provider in order to maintain your eligibility to participate in the Medicaid program.

   
   

   In order to re-enroll, you must provide our office with the following documents:

   
   

   1. A completed, signed and dated application (blank attached)

   2. A signed and dated Non-Institutional Agreement (blank attached)

   3. Proof of insurance coverage of at least

      $100,000 per person and $300,00 per incident for all vehicles, whether owned by your company or subcontracted by you.

   4. Copies of current state, county and municipal licensing documents for each vehicle and driver for all cities, counties, and towns in which you will provide "pick-up" services.

   
   

   Failure to complete and return the application, the provider agreement and the requested documentation within 30 days of your receipt of this letter, will result in your disenrollment from the Medicaid program. You will no longer receive payment for any trips you provide after that date.

   
   

   SEND THE ABOVE INFORMATION TO THE WEST PALM BEACH ADDRESS LISTED AT THE BOTTOM OF THIS LETTER. PLEASE INCLUDE YOUR PROVIDER NUMBER IN THE TOP RIGHT HAND CORNER OF THE RIGHT FRONT OF THE APPLICATION FORM FOR IDENTIFICATION. If you

   have any questions, please call our Provider Relations Section at 840-3144.

   Thank you for your prompt attention to this matter.

   
   

7. The Murthas received the May 16 letter on Wednesday, May 17, 1995.

   
   

8. They wanted to maintain Petitioner's eligibility to participate in the Medicaid program. (The provision of services to Medicaid recipients generated approximately 15 to 20 percent of Petitioner's yearly revenue.)

   
   

9. Accordingly, on the evening of Sunday, May 21, 1995, they filled out the re-enrollment application form that the Agency's Medicaid office had sent them with the May 16 letter and they gathered the necessary insurance and licensing documents referenced in the letter, including a 1995 Vehicle for Hire Business Permit (Number 95-0077) issued to Petitioner by Palm Beach County.

   
   

10. The next day, Monday, May 22, 1995, they made copies of these insurance and licensing documents.

    
    

11. On the morning of Tuesday, May 23, 1995, Mr. Murtha reviewed, signed and dated the re-enrollment application form and signed and dated the provider agreement that he and his wife had received from the Agency with the May 16 letter.

    
    

12. The Murthas then made copies of the completed, signed and dated re- enrollment application and the signed and dated provider agreement.

    
    

13. When he left for work that day (Tuesday, May 23, 1995), Mr. Murtha took with him a manila envelope containing the completed, signed and dated re- enrollment application, the signed and dated provider agreement, and copies of the insurance and licensing documents, including the 1995 Vehicle for Hire Business Permit, that the Agency had requested in the May 16, letter. The envelope bore the "West Palm Beach address [of the Agency's Medicaid office] listed at the bottom of th[e May 16] letter," as well as a return address. Before leaving, Mr. Murtha told his wife that he intended to go to the post office and mail the envelope to the Agency's Medicaid office by certified mail.

    
    

14. It was not until 5:30 or 5:45 p.m. that afternoon that Mr. Murtha arrived at the U.S. Postal Services's Delray Beach station. The station was closed when he arrived. Rather than return the next day to mail the envelope by certified mail, Mr. Murtha placed the envelope in a collection box (for regular

    U.S. States mail) located outside the entrance to the station.

    
    

15. Although the Murthas acted in a manner that was reasonably calculated to "re-enroll [Petitioner] as a Medicaid provider," through no fault of their own, such re-enrollment was not accomplished inasmuch as the Agency's Medicaid office did not receive the materials Mr. Murtha had mailed to it on May 23, 1995.

    
    

16. Not having received any response to its May 16 letter within the 30- day period prescribed in the letter, the Agency's Medicaid office, on June 16, 1995, sent, by certified mail, return receipt requested, another letter (hereinafter referred to as the "June 16 letter") to the Murthas. The letter, which was signed by Bette Hickey, the Medicaid Program Administrator, read as follows:

    Letter to Beverly Transport, Transportation Provider, advising you that your Medicaid provider number has been terminated due to failure to complete re-enrollment process.

    
    

    Dear Provider:

    
    

    This letter is to inform you that effective

    6-15-95, your Medicaid transportation provider number has been terminated due to your failure to successfully comply with the re-enrollment process.

    
    

    Currently, there is a moratorium in Palm Beach County for accepting and processing new appli- cations to become a Medicaid transportation provider. You are considered to be a new applicant to the Medicaid Transportation Program, therefore, we will not process your application to become a new provider.

    
    

    We will advise you when the moratorium for accepting applications is removed.

    
    

17. The Murthas received the June 16 letter on June 21 1995. They were "shocked" to learn of their "failure to complete [the] re-enrollment process." Before receiving the letter, they had had no idea that there was any problem with their application for re-enrollment.

    
    

18. The same day he and his wife received the June 16 letter, Mr. Murtha twice telephoned the Agency's Medicaid office to speak with Bette Hickey. He left messages on both occasions inasmuch as Hickey was unavailable to speak with him.

    
    

19. Mr. Murtha spoke with Hickey later that day when she returned his calls. He told Hickey that he had mailed the necessary re-enrollment materials to her office the previous month. He also mentioned to her that he had maintained a copy of those materials.

    
    

20. The following day (June 22, 1995), at around 2:10 p.m., Mr. Murtha went to the Agency's Medicaid office and hand-delivered the copy of the re- enrollment materials (about which he had spoken to Hickey the day before), along with a cover letter, which read as follows:

    
    

    I have attached copies of the forms we mailed on 5/23/95 (postmark would be 5/24) to your office.

    In addition, we have enclosed our business envelope to help in your search. My wife Beverly and I are going to the Delray Post Office today to see if they can initiate some level of investigation. 2/

    
    

    We appreciate your time on the phone yesterday. I guess we just needed to talk about [what] Bev and I are very concerned.

    
    

    Hope to hear positively from you soon.

21. The Murthas did not hear again from the Agency's Medicaid office until they received ("via certified mail") a letter from Hickey, dated August 7, 1995 (hereinafter referred to as the "August 7 letter"), which read as follows:

    
    

    Re: Terminated Medicaid Provider NO. 0887757-00 Dear Provider:

    This letter is a follow up to our letter dated June 15 [sic], 1995, advising you that your Medicaid provider number has been terminated

    due to the failure to respond to the re-enrollment request for documents required for transportation providers, pursuant to the Florida Administrative Code Rule 59G-4.330, Section 409.907(2), Florida [S]tatutes, and Medicaid Transportation Provider Handbook.

    
    

    If you wish to appeal this decision, a copy of Standards for requesting an Administrative Hearing is attached. Please note that a request for either a formal or informal hearing must be received by this agency within 21 days of your receipt of this notice at the address on the attached copy of standards.

    
    

    Please accept our sincere appreciation for your services to the Medicaid recipients of our State. If you have any further questions regarding this letter, please contact me at (407) 840-3142.

    
    

22. After receiving Hickey's August 7 letter, the Murthas, through counsel, filed with the Agency a Petition for Formal Review Hearing challenging the decision of the Agency's Medicaid office to terminate Petitioner's provider number.

    
    

    CONCLUSIONS OF LAW

    
    

23. "Medicaid is a governmental health care program that provides to eligible needy persons assistance in meeting the cost of medical care. The program is financed from county, state and federal funds." Rule 59G-1.002, Fla. Admin. Code.

    
    

24. Effective July 1, 1993, by operation of Section 58 of Chapter 93-129, Laws of Florida, the Agency was transferred "[a]ll powers, duties and functions, records, personnel, property, and unexpended balances of appropriations, allocations, or other funds of the Medicaid program within the Department of Health and Rehabilitative Services, as well as the infrastructure and support services that support the program, including, but not limited to, investigative, licensing, legal, and administrative activities."

    
    

25. Among the powers transferred to the Agency was the authority to regulate provider enrollment in the Medicaid program.

    
    

26. Pursuant to Section 409.907, Florida Statutes, Medicaid providers must enter into a provider agreement which "shall be effective for a stipulated

    period of time, shall be terminable by either party after reasonable notice, and shall be renewable by mutual agreement."

    
    

27. Petitioner entered into such a provider agreement in October of 1990.

    
    

28. The Agency now seeks to take final action to terminate this agreement and cancel Petitioner's Medicaid provider number on the ground that Petitioner "fail[ed] to successfully comply with the re-enrollment process." 3/ According to the express terms of the agreement, such action may be taken only "in accordance with Chapter 120, Florida Statutes."

    
    

29. Inasmuch as the termination of Petitioner's provider agreement and the cancellation of its Medicaid provider number will affect Petitioner's substantial interests, the Agency must comply with the provisions of Section 120.57, Florida Statutes, before it can effectively take such action. This includes giving Petitioner the opportunity to request a Section 120.57(1) formal hearing on the matter to challenge disputed issues of material fact and providing such a hearing if requested, which the Agency has done. See Florida League of Cities v. Administration Commission, 586 So.2d 397, 413 (Fla. 1st DCA 1991).

    
    

30. Although the provider agreement that the Agency seeks to terminate allows either party, in its discretion, to terminate the agreement "upon thirty days written notice," "in accordance with Chapter 120, Florida Statutes," the Agency had "the burden [at the Section 120.57(1) formal hearing that was held in this case at Petitioner's request] of demonstrating proof justifying the exercise of that discretion." Gonzalez v. Department of Health and Rehabilitative Services, 418 So.2d 1128, 1129-30 (Fla. 1st DCA 1982).

    
    

31. The Agency failed to meet this burden.

    
    

32. According to the June 16 and August 7 letters it sent the Murthas, the Agency seeks to its exercise its discretion to terminate Petitioner's provider agreement and cancel Petitioner's Medicaid number on the ground that the Murthas did not provide the Agency's Medicaid office with the necessary re-enrollment materials within the 30-day time period prescribed in the May 16 letter it had previously sent them.

    
    

33. This 30-day time period prescribed in the May 16 letter, however, like the 20-day time limitation for appealing an agency determination of abandonment of position that was analyzed by the Florida Supreme Court in Machules v. Department of Administration, 523 So.2d 1132 (Fla. 1988), "is not jurisdictional in the sense that failure to comply is an absolute bar to [the Agency's consideration of Petitioner's re-enrollment application] but is more analogous to statute[s] of limitations which are subject to equitable considerations such as tolling." Id. at 1133, n.2.

    
    

34. In Machules, the Florida Supreme Court made the following observations regarding the doctrine of equitable tolling:

    
    

    The doctrine of equitable tolling was developed to permit under certain circumstances the filing of a lawsuit that otherwise would be barred by a limitation period. The tolling doctrine is used in the interests of justice to accommodate both a defendant's right not to be called upon to defend a stale claim and a plaintiff's right to

    assert a meritorious claim when equitable circum- stances have prevented a timely filing. Equitable tolling is a type of equitable modification which "'focuses on the plaintiff's excusable ignorance of the limitations period and on (the) lack of prejudice to the defendant.'" Contrary to the analysis of the majority below, equitable tolling, unlike estoppel, does not require active deception or employer misconduct, but focuses rather on the employee with a reasonably prudent regard for his

    rights. As Judge Zehmer notes in his dissent below:

    
    

    "The doctrine (of equitable tolling) serves to ameliorate harsh results that sometimes flow from a strict, literalistic construction and application of administrative time limits contained in statutes and rules."

    
    

    Id. at 1133-34 (Citations and footnotes omitted).

    
    

35. The proof submitted in the instant case establishes that, as the Agency has alleged, the Agency's Medicaid office did not receive the requisite re-enrollment materials from the Murthas within the 30-day "return" period prescribed in the May 16 letter (the last day of which was Friday, June 16, 1995) and that it was not until Thursday, June 22, 1995, that these materials were received. The evidence further establishes, however, that the Murthas acted "with a reasonably prudent regard for [their] rights" in responding to the May 16 letter. In accordance with the instructions given in the letter they "complete[d] and return[ed, by placing in the mail,] the [re-enrollment] application, the provider agreement and the requested documentation within 30 days of [their] receipt of this letter." Pursuant to the directions provided in the letter, they "[s]en[t] the above information to the West Palm Beach address listed at the bottom of this letter." Although they mailed these materials on May 23, 1995, the sixth day of the 30-day "return" period prescribed in the May

    16 letter, through no fault of their own, the materials were not delivered to "the West Palm Beach address" to which they had been mailed within this 30-day period. Upon learning, shortly after the expiration of the 30-day period, that the materials had not been received by the Agency's Medicaid office, the Murthas acted swiftly to remedy the situation by hand-delivering, on June 22, 1995, a copy of the materials to the office. The Murthas' failure to have furnished the Agency's Medicaid office with these materials any sooner has not resulted in any apparent prejudice to the Agency.

    
    

36. Under such circumstances, even if the 30-day "return" period prescribed in the May 16 letter is viewed as having imposed a "filing" deadline as opposed to a "mailing" deadline, 4/ the Agency, in the interest of justice, should apply the doctrine of equitable tolling and deem Petitioner's re- enrollment application to have been timely filed and process it accordingly.

    Cf. General Motors Corporation v. Gus Machado Buick-GMC, Inc., 581 So.2d 637, 638 (Fla. 1st DCA 1991)("appellate courts have not viewed favorably arguments that short delays in requesting a hearing should result in a forfeiture of substantive rights"); Stewart v. Department of Corrections, 561 So.2d 15, 16 (Fla. 4th DCA 1990)(where career service employee filed his notice of appeal with the Public Employees Relations Commission one business day after the time limitation had run and the delay in filing did not cause the employing agency prejudice, doctrine of equitable tolling should have been applied and employee should have been permitted to pursue his appeal); Rothblatt v. Department of

    Health and Rehabilitative Services, 520 So.2d 644, 645 (Fla. 4th DCA 1988)(appellant was entitled to an administrative hearing, notwithstanding that the request therefor was filed six days after the deadline prescribed by agency rule, where the late filing was the result of "excusable neglect").

    
    

37. Because the Agency has failed to demonstrate that it would be justified in exercising its discretion to terminate Petitioner's provider agreement and cancel Petitioner's Medicaid number on the ground that Petitioner did not timely provide the Agency's Medicaid office with the re-enrollment materials requested in the May 16 letter, the Agency should not take such action.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration (1) treat as

timely filed, and process accordingly, Petitioner's application for re- enrollment in the Medicaid program as a provider of transportation services, and

(2) not terminate Petitioner's provider agreement and cancel Petitioner's Medicaid number on the ground that Petitioner did not timely provide the re- enrollment materials requested in the May 16 letter.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 5th day of March, 1996.

STUART M. LERNER, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 5th day of March, 1996.

ENDNOTES

1/ The hearing was originally scheduled for December 8, 1995, but, at Petitioner's request, was rescheduled for January 23, 1996.

2/ The Murthas went to the "Delray Post Office" on June 26, 1995, and filled out a Mail Loss/Rifling Report (Form 1510) in which they reported that the envelope that Mr. Murtha had mailed to the Agency's Medicaid office on May 23, 1995, had yet to be delivered. The Murthas have not received any response from the U.S. Postal Service indicating that the mail they reported "los[t]" has been located.

3/ Although both the June 16 letter and August 7 letter suggest that the Agency has already taken such final action, the action that the Agency has heretofore taken to terminate Petitioner's provider agreement and cancel Petitioner's Medicaid provider number must be regarded "as only preliminary irrespective of its tenor." Capeletti Brothers, Inc., v. Department of

Transportation, 362 So.2d 346, 348 (Fla. 1st DCA 1978). "Until proceedings are had satisfying section 120.57, or an opportunity for them is clearly offered and waived, there can be no agency action affecting the substantial interests of a person." Florida League of Cities v. Administration Commission, 586 So.2d 397,

413 (Fla. 1st DCA 1991). In the instant case, Petitioner has timely requested, and been granted, "proceedings satisfying section 120.57," but these proceedings have not been completed and no final action has yet been taken.

4/ The letter is reasonably susceptible to differing interpretations on this point. Contrast with Environmental Resource Associates of Florida, Inc. v.

Department of General Services, 624 So.2d 330, 332 (Fla. 1st DCA 1993)(concurring opinion of Judge Ervin)("[b]y using the term 'filed,' rather than 'served,' the notice unambiguously advised appellant that any request for hearing must be received by the agency within the time specified following the appellant's receipt of the notice of the letter terminating appellant's contract;" "[t]he term 'filed,' when used to denote a limitation period, is a legal term generally understood to mean that the agency must receive the matter required no later than the date stated").

APPENDIX TO RECOMMENDED ORDER IN CASE NO. 95-4661

The following are the Hearing Officer's specific rulings on the "findings of facts" proposed by the parties in their post-hearing submittals:

Petitioner's Proposed Findings

1. Accepted and incorporated in substance, although not necessarily repeated verbatim, in this Recommended Order.

2-7. Rejected as findings of fact because they are more in the nature of summaries of testimony adduced at hearing than findings of fact. See T.S. v. Department of Health and Rehabilitative Services, 654 So.2d 1028, 1030 (Fla. 1st DCA 1995)(hearing officer's factual findings which "merely summarize[d] the testimony of witnesses" were "insufficient").

8-9. Accepted and incorporated in substance.

The Agency's Proposed Findings

1. Rejected as a finding of fact because it is more in the nature of a statement of law.

2-3 Accepted and incorporated in substance.

1. To the extent that this proposed finding states that this advisement was received by Petitioner on May 11, 1995, as opposed to May 17, 1995, it has been rejected because it lacks sufficient evidentiary/record support. Otherwise, it has been accepted and incorporated in substance.

2. Accepted and incorporated in substance.

3. To the extent that this proposed finding states that Petitioner "submitted a . . . Medicaid provider application with a handwritten cover letter on June 22, 1995," it has been accepted and incorporated in substance. To the extent that it states that the application was "incomplete," it has been rejected because it is contrary to the greater weight of the evidence.

COPIES FURNISHED:

Peter E. Perettine, Esquire Comerica Bank Building, Suite 302 1800 Corporate Boulevard, Northwest Boca Raton, Florida 33431

Moses E. Williams, Senior Attorney Agency for Health Care Administration 2727 Mahan Drive, Fort Knox Number 3 Tallahassee, Florida 32308-5403

Jerome W. Hoffman, General Counsel Agency for Health Care

Administration

2727 Mahan Drive, Fort Knox Number 3 Tallahassee, Florida 32308-5403

Sam Power, Agency Clerk Agency for Health Care

Administration

2727 Mahan Drive, Fort Knox Number 3 Tallahassee, Florida 32308-5403

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 95-004661

Orders for Case No: 95-004661