STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DISABILITY SUPPORT SERVICES, ) INC. )
)
Petitioner, )
)
vs. ) CASE NO. 97-5104RU
) DEPARTMENT OF CHILDREN AND ) FAMILIES and AGENCY FOR ) HEALTH CARE ADMINISTRATION, )
)
Respondents. )
)
FINAL ORDER
The parties presented this case by stipulation to Robert
Meale, Administrative Law Judge of the Division of Administrative Hearings.
APPEARANCES
For Petitioner: John E. Duvall
Corbin Dickinson
121 West Forsyth Street, Suite 1000 Jacksonville, Florida 32202
For Respondent: Department of Children and Families: Gregory D. Venz
Assistant General Counsel Department of Children
and Families
1317 Winewood Boulevard
Building 2, Room 204-2
Tallahassee, Florida 32399-0700
For Respondent Agency for Health Care Administration:
Gordon B. Scott Senior Attorney
Office of the General Counsel
Agency for Health Care Administration 2727 Mahan Drive
Tallahassee, Florida 32308 STATEMENT OF THE ISSUE
The issue is whether portions of a Medicaid provider agreement, monitoring instrument (including support coordination assurances), and support coordination guidebook are invalid as improperly promulgated rules.
PRELIMINARY STATEMENT
By Amended Petition for Formal Administrative Hearing dated October 29, 1996, Petitioner alleged that the Department of Health and Rehabilitative Services and Agency for Health Care Administration engaged in the improper formulation of nonrule policy, in violation of Section 120.54, Florida Statutes. Petitioner alleged that the agencies implemented the nonrule policy through written documents that Petitioner was required to sign as a condition of continued participation in the Florida Medicaid program after July 1, 1996.
The Amended Petition alleges that the nonrule policy is in a Medicaid provider agreement, monitoring instrument that includes support coordination assurances, and support coordination guidebook. The Amended Petition alleges that certain provisions of these documents are not found in relevant federal or state statutes, case law, or regulations.
The Amended Petition incorporates a table identifying such provisions.
Count I of the Amended Petition requests an order directing the relevant state agencies to discontinue reliance upon the invalid nonrule policy and awarding attorneys’ fees and costs.
Count II of the Amended Petition requests an order invalidating possible rules that neither agency had yet proposed for adoption. Count II essentially asks the Administrative Law Judge to exercise continuing jurisdiction over a rulemaking process. The Administrative Law Judge granted a motion to dismiss Count II for lack of jurisdiction.
The parties presented the case by stipulation and filed proposed final orders April 7, 1997.
FINDINGS OF FACT
A successor to the Department of Health and Rehabilitative Services, Respondent Children and Families (DCF) supervises the provision of community-based services to developmentally disabled clients.
Also a successor to the Department of Health and Rehabilitative Services, Respondent Agency for Health Care Administration (HCA), as the administrator of the Florida Medicaid program, pays providers for these services with federal Medicaid and state funds.
HCA has obtained a waiver from the federal Health Care Financing Administration (HCFA) for HCA’s Medicaid Home and Community Based Services (HCBS) program. The approved HCBS program supplies eligible persons with case management services, which are called “support coordination” services.
The HCBS program defines “support coordination” as “services which will assist waiver recipients in gaining access to needed waiver and other State plan services, as well as needed medical, social, educational and other services, regardless of the funding source for the services to which access is gained.” Coordinating support services enables DCF clients to live as independently as possible.
The HCBS program specifically describes the requirements for the approval of an individual or entity to coordinate support. The approval process requires that DCF certify that the individual or entity is an HCBS provider and that HCA or its fiscal agent enroll the individual or entity as a Medicaid provider.
The HCBS program began in 1993. Petitioner’s personnel attended in-service training in April 1993 prior to the enrollment of Petitioner as a support coordinator in the HCBS program. Since the start of the HCBS program, Petitioner has provided services to DCF clients. Petitioner is in good standing, and DCF district staff determined in May 1996 that Petitioner was in general compliance with program
requirements. Neither DCF nor HCA has ever suspended Petitioner or placed it on probation under the program.
Petitioner coordinates support for certain developmentally disabled persons who have elected to participate in the HCBS program. As clients of DCF, these developmentally disabled persons either have selected Petitioner as their support coordinator or been assigned to Petitioner by the district DCF office. In coordinating support, Petitioner serves as an independent contractor to DCF; Petitioner is not a vendor or staff.
HCA’s payment to an individual or entity coordinating support is conditioned upon the recipient’s execution and delivery of a Medicaid provider agreement and related documents.
In 1996, HCA and/or DCF revised the Medicaid provider agreement, monitoring instrument (which includes the support coordination assurances), and support coordination guidebook (Revised Documents).
On May 28, 1996, DCF informed Petitioner of the revisions to the Medicaid provider agreement and assurances and directed that Petitioner would have to sign the provider agreement and assurances for continued certification. The letter warns that DCF will withdraw Petitioner’s Medicaid certification and HCA’s fiscal agent will terminate Petitioner’s Medicaid enrollment if Petitioner does not return
a signed Medicaid provider agreement and assurances within 30 days.
Petitioner executed and delivered all Revised Documents under protest. On receipt of the executed Revised Documents, DCF certified that Petitioner was qualified to provide covered services and submitted to HCA all of Petitioner’s executed applications and agreements for enrollment in the Medicaid program. As fiscal agent of HCA, Unisys then issued Petitioner a Medicaid provider number.
The Medicaid provider agreement authorizes HCA to compensate Petitioner for services provided under the HCBS program to clients determined by DCF to be eligible for such services. The Medicaid provider agreement and assurances do not specify districts or portions of districts in which Petitioner may provide services. DCF certifies providers as eligible to provide services in specific districts or portions of districts based on district-specific criteria.
Presently, Petitioner provides services to DCF clients residing in specific locations in DCF District 4. Petitioner would have to execute and deliver a separate Medicaid provider agreement to provide compensated services at a location outside of District 4.
The assurances impose upon the HCBS support coordinator standards of performance and operational
requirements. The assurances are applicable statewide and are not subject to negotiation by individual DCF district offices.
DCF personnel prepared the assurances, which were approved by HCA. In preparing the assurances, DCF did not negotiate directly with Petitioner, but negotiated with a statewide association of support coordinators.
If a support coordinator does not sign the assurances, DCF will terminate the provider from the HCBS waiver program.
DCF and HCA require providers of other services in the HCBS program--other than support coordination services--to sign and deliver different assurances from those signed by support coordinators. DCF annually negotiates and reduces to contract the required performance and operational requirements for some of these other providers.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter. Sections 120.54 and 120.56(4), Florida Statutes. (All references to Sections are to Florida Statutes (Supp. 1996). All references to Rules are to the Florida Administrative Code.)
The Amended Petition for Formal Administrative Hearing includes three exhibits identifying specific provisions of the Revised Documents that are allegedly unsupported by federal or state law. Exhibit E cites
provisions of the Medicaid provider agreement, Exhibit F cites provisions of the monitoring instrument, and Exhibit G cites provisions of the support coordination guidebook.
Respondents have categorically defended all of the provisions of the Revised Documents, but these categorical defenses are unavailing.
Section 120.54(1)(a) states that “rulemaking is not a matter of agency discretion.” This section requires that agencies adopt “as soon as feasible and practicable” each agency statement defined as a rule by Section 120.52.
Section 120.52(15) states that a “rule” is
each agency statement of general applicability that implements, interprets, or prescribes law or policy or describes the organization, procedure, or practice requirements of any agency and includes any form which imposes any requirement or solicits any information not specifically required by statute or by an existing rule.
. . .
Section 120.56(4) allows any person “substantially affected by an agency statement” to seek an order that the statement violates Section 120.54(1)(a). The petition must “state with particularity facts sufficient to show that the statement constitutes a rule under s. 120.52 ”
Section 120.54(4)(c) provides that the administrative law judge may determine that all or part of an agency statement violates Section 120.54(1)(a).
With one exception, discussed below, Respondents have not argued that rulemaking is not feasible or practicable. Thus, if Petitioner shows that the challenged statements in the Revised Documents are rules, then Petitioner prevails and Respondents must discontinue immediately reliance on the unlawful statements “or any substantially similar statement[s],” as provided by Section 120.56(4)(d).
Respondents contend in their proposed final order that, for Petitioner to prevail, the administrative law judge must determine that the Revised Documents are not contracts and that an agency must promulgate as rules every provision contained in a contract (except for contractual provisions authorized by law).
Respondent’s contentions are unsupported by the law. An agency may enter into a contract whose provisions do not rise to the level of rules because the provisions are not generally applicable. In such a situation, the agency is not required to promulgate as rules every provision in the contract.
But an agency may prepare a contract whose provisions rise to the level of rules because the provisions are generally applicable. In such a situation, the agency has promulgated rules by incorporating generally applicable statements into a form contract. The agency cannot escape the rulemaking requirements of Section 120.54 merely by labeling
the generally applicable agency statements as contract provisions rather than rules. Legislative authorization for entering into contracts, on which Respondents rely in their categorical defense of the Revised Documents, is not a legislative invitation for Respondents to circumvent rulemaking by preparing generally applicable form contracts, such as the Revised Documents.
Respondents assign considerable importance to Section 409.907(2), which states that provider agreements are voluntary contracts between the agency and the providers. Respondents argue that, “although some form of Medicaid provider agreement is required of all Medicaid providers, the contract challenged in the instant action . . . applies only to . . . Developmental Services HCBS support coordinators.” Respondents point out that Petitioner could decline to enter into the Medicaid provider agreement and still provide support coordination services in other programs, or Respondent could simply not bill HCA for its coordination of support.
Respondents’ arguments equate generally applicable with universally applicable. It is unnecessary for Petitioner to show that the Revised Documents apply to all parties contracting with HCA or DCF for the provision of any sort of service or product subject to Medicaid reimbursement. It is enough to show that the Revised Documents are generally applicable to classes of providers.
Respondents contend that the Revised Documents are not generally applicable, asserting: “It matters not at all that the Medicaid provider agreement is a standardized contract that all . . . HCBS waiver support coordinators are required to execute.” Respondents assert that the legislature intended to remove the Medicaid provider agreement from the rulemaking process by declaring in Section 409.913(14)(e) that HCA may terminate a provider not in compliance with the conditions of its provider agreement.
The legislature never removed the Medicaid provider agreement, or any of the Revised Documents, from the requirement of rulemaking. Section 409.913(14)(e) merely provides that a provider’s failure to comply with the lawfully promulgated provisions of a Medicaid provider agreement is a basis for termination from the Medicaid program.
No statute confers upon Respondents the categorical dispensation from rulemaking for which Respondents contend. The Revised Documents contain numerous agency statements of general applicability, and these statements implement, interpret, or prescribe law or policy or describe the organization, procedure, or practice requirements of HCA or DCF.
Section 120.52(15) states that agency statements of general applicability include any form that imposes any requirement or solicits any information not specifically
required by statute or by an existing rule. Thus, by negative implication, a form imposing a requirement or soliciting information required by statute or existing rule is not a rule.
Thus, the remaining issue is whether any of the challenged provisions of the Revised Documents impose a requirement or solicit information required by statute or existing rule. If so authorized by law, such provisions are not rules. If not so authorized by law, such provisions are rules.
In their proposed final order, Respondents defend some, but not all, of the challenged provisions of the Revised Documents by citing provisions of federal or state law. The remaining conclusions of law will consider, where feasible, whether the cited provisions of law support the relevant provisions of the Revised Documents.
Petitioner has challenged a large number of provisions contained in the Revised Documents. But the number of challenged provisions is several orders of magnitude smaller than the number of provisions of federal or state statutes, rules, or decisions available as possible authority for the challenged provisions.
With one major exception, discussed below, Petitioner clearly details in its amended petition the provisions in the Revised Documents that it challenges.
However, neither party has attempted the daunting, though crucial, task of discussing the extent to which various provisions of federal or state law authorize or fail to authorize various provisions of the Revised Documents.
For instance, Petitioner challenges 27 paragraphs and subparagraphs of the Medicaid provider agreement. Petitioner does not explain in its amended petition or proposed final order why provisions of federal or state law ostensibly supportive of the cited provision of the Medicaid provider agreement actually do not authorize such contractual provisions.
Perhaps Petitioner did not undertake such a formidable task because of the difficulty of predicting those provisions of law on which Respondents would rely. If this is the case, Petitioner either did not engage in prehearing discovery to identify the details of these defenses or, if Petitioner engaged in such discovery, it inexplicably chose not to utilize in its proposed final order the information learned through discovery.
In their proposed final order, Respondents cited some provisions of law in support of the challenged provisions of the Revised Documents. However, some of these citations are so general as to approach uselessness, as is the case with the reference to “Title 19 of the Social Security Act.”
This is not the first time that these parties (in the case of Respondents, their agency predecessor) have litigated the validity of portions of the Revised Documents. In September 1996, the undersigned Administrative Law Judge entered a final order in Disability Support Services, Inc. v. Department of Health and Rehabilitative Services, DOAH Case No. 96-3141RU.
In the 1996 final order, the administrative law judge rejected the categorical defenses raised by Respondent, but dismissed the petition because Petitioner had failed to carry its burden of proving that the challenged provisions of the Revised Documents were not supported by provisions of federal or state law.
The 1996 final order suggests that Petitioner identify specifically in its petition which provisions of the Revised Documents that it is challenging. With one major exception, Petitioner did so in its amended petition initiating this case. The 1996 final order suggests that the agency identify in its answer specifically which provisions of federal or state law support the challenged provisions of the Revised Documents. Respondents did not do so by pleading and evidently did not do so during discovery, if Petitioner undertook any.
The parties have made substantial progress since the 1996 final order. Subject to the exception discussed below,
their longstanding dispute is factually now clear. Subject to this exception, Petitioner has identified which provisions of the Revised Documents are under challenge, and the parties have stipulated to all of the relevant facts.
But the parties’ dispute is still not entirely clear as to what provisions of law allegedly support the challenged provisions of the Revised Documents. Nor is the parties’ dispute sufficiently clear as to why these legal provisions do or do not support these provisions of the Revised Documents.
However, for two reasons, a certain degree of final resolution as to the Medicaid provider agreement is nonetheless possible at this time.
First, Respondents have not cited any authority in support of certain provisions challenged by Petitioner. For these provisions, Petitioner has made a sufficient showing of lack of authority. If Respondents fail to suggest that any legal authority specifically supports certain provisions of the Revised Documents, it is not necessary for Petitioner to discuss all possibly relevant federal and state authority and show why all such authority is actually inapplicable.
Second, in support of some provisions of the Revised Documents, Respondents cite sufficiently specific authority that it is feasible to determine whether such authority is applicable.
As to the Medicaid provider agreement, Respondents offer no authority in support of the challenged provisions within Paragraphs 4, 5(b), 5(i), 13-14, 16, and 18-20.
Petitioner challenges in their entirety Paragraphs 5(i), 13-14, 16, and 18-20. Respondents must immediately discontinue reliance upon these paragraphs of the Medicaid provider agreement.
Petitioner challenges the last sentences of Paragraphs 4 and 5(b). Respondents must immediately discontinue reliance upon the last sentences of Paragraphs 4 and 5(b).
Petitioner challenges Paragraph 1 of the Medicaid provider agreement as exceeding lawful authority because it prohibits discrimination on the basis of sex and other insurance. Respondents defend these provisions of Paragraph 1 by citing 42 CFR Section 430.2, but this regulation does not appear to prohibit such forms of discrimination in the HCBS program.
Although not cited by Respondents, the flush language of Section 409.907 prohibits discrimination “on the grounds of handicap, race, color, or national origin, or for any other reason . . ..” Obviously, the statutory prohibition against discrimination “for any other reason” is not intended to extend to “discrimination” against ineligible persons or eligible persons seeking Medicaid coverage for ineligible
goods or services. Possibly, provisions of federal or state law predicate eligibility on sex or the availability of other insurance, so that such “discrimination” would actually be in compliance with the law. At this stage, though, there is sufficient doubt as to the matter that the final order does not direct Respondents to discontinue reliance upon these provisions of Paragraph 1 of the Medicaid provider agreement.
Petitioner challenges Paragraph 2 of the Medicaid provider agreement as exceeding lawful authority because it requires the provider to supply only medically necessary services of a quality comparable to the provider’s peers and within the parameters of the provider’s license or certification. The challenged portion of this paragraph also requires the provider to bill only for those services performed within the specialties designated in the provider application filed with HCA and to bill for such services only after they have been actually provided to eligible Medicaid recipients.
Respondents defend these provisions of Paragraph 2 by relying on “Title 19 of the Social Security Act” and “42 CFR Parts 430 [and] 431.”
It is impossible to determine whether these broad provisions of federal law authorize the challenged provisions of Paragraph 2. Additionally, provisions of Section 409.907, although not cited by Respondents, might authorize certain of
the challenged provisions in Paragraph 2. Thus, the final order does not direct Respondents to discontinue reliance upon these provisions of Paragraph 2.
Respondents rely on the same law in defense of Paragraph 3, which Petitioner also challenges as exceeding lawful authority. Paragraph 3 requires the provider to comply with all local, state, and federal laws (including rules) and “Medicaid bulletins, manuals, handbooks and Statements of Policy as they may be amended from time to time."
Although Respondents cite the same broad authority in support of the challenged provisions of Paragraph 3, it is possible to determine the extent to which the law supports these provisions due to the specificity of Florida statutes on these points. Section 409.907(1) requires each provider agreement to require the provider "to comply fully with all state and federal laws pertaining to the Medicaid program, as well as all federal, state, and local laws pertaining to licensure, if required, and the practice of any of the healing arts.” Section 409.913(14)(e) predicates sanctions against a provider that
is not in compliance with provisions of Medicaid provider publications that have been adopted by reference as rules in the Florida Administrative Code; with provisions of state or federal laws, rules, or regulations; with provisions of the provider agreement between the agency and the provider . . ..
These statutory provisions clearly define the law with which a provider must comply. Paragraph 3 of the Medicaid provider agreement defines a broader body of law than do the cited statutory provisions. Respondents must immediately discontinue reliance on Paragraph 3.
Petitioner challenges the first sentence of Paragraph 5(d) as exceeding lawful authority because it requires the provider to furnish HCA “all information regarding any payments claimed for provided goods or services.”
Respondents defend the first sentence of Paragraph 5(d) by citing Section 409.907(3)(e). This section tracks the remaining provisions of Paragraph 5(d), but contains no language similar to the challenged first sentence of Paragraph 5(d). The first sentence refers to “all information,” without regard to whether it is Medicaid-related or incapable of easy separation from Medicaid-related information--contingencies required by Section 409.907(3)(e). Therefore, the first sentence of Paragraph 5(d) effectively nullifies the restrictions imposed upon the information which Respondents may command from a provider. Respondents must immediately discontinue reliance upon the first sentence of Paragraph 5(d).
Petitioner challenges Paragraph 5(f) (miscited in the amended petition as Paragraph 5(e)) as exceeding lawful
authority because it requires that the provider refund overpayments within 90 days.
Respondents defend Paragraph 5(f) by citing Section 409.907(3)(g). This section requires that providers refund overpayments “promptly.” Petitioner did not prove that 90 days was shorter than “prompt.” Thus, the final order does not direct Respondents to discontinue reliance on Paragraph 5(f).
Additionally, Paragraph 30 of the assurances originally approved by HCFA as part of the approval of the HCBS program requires providers to refund overpayments within
30 days. The HCBS program actually approved by the federal government--without regard to any later amendments-- constitutes part of the body of federal law within which Respondents and providers must operate. Thus, if, as here, a program provision actually approved by a federal agency authorizes a provision of the Revised Documents, then the provision of the Revised Documents is supported by law.
Petitioner challenges Paragraph 5(g) as exceeding lawful authority because it requires that the provider indemnify HCA for claims arising out of the provider’s “commissions.”
Respondents defend Paragraph 5(g) by citing Section 409.907(3)(h). This section requires provider indemnification for the “negligence or omission” of the provider.
A commission, or an act, may form the basis of negligence. If this is the meaning of the use of “commission” in Paragraph 5(g), then the provision is authorized by the statute. If Paragraph 5(g) refers to a commission as a form of intentional or reckless act, rather than negligent act, then such an act, representing greater culpability on the part of the provider than would a mere act of negligence, may also be included in Paragraph 5(g) without exceeding the scope of authority contained in Section 409.907(3)(h). Thus, the final order does not direct Respondents to discontinue reliance on Paragraph 5(g).
Petitioner challenges Paragraph 5(j) as exceeding lawful authority because it requires the provider to supply HCA with information--for each officer, director, manager, and person owning at least five percent of the provider-- concerning any conviction, regardless of adjudication, for any federal or state felony and any violation, fine, suspension, termination, or other administrative action taken under the Medicaid or Medicare program or federal or state laws.
Respondents defend Paragraph 5(j) by citing Section 409.907(9). This section authorizes HCA to deny Medicaid enrollment to individuals or entity representatives who are described in the various subsections of Section 409.907(9).
Respondents contend that Section 409.907(9) supports several challenged provisions of the Revised Documents.
However, Section 409.907(9) applies only to enrollment denials; it is inapplicable to enrollment revocations or suspensions. The only subsection not entirely consistent with this interpretation is Section 409.906(9)(k), which refers to a failure to pay a fine or overpayment under the Medicaid program. This suggests that the failure must be by an
already-enrolled provider. However, this failure might have taken place during a previous Florida enrollment or during an enrollment in another state.
More importantly, Section 409.913(12) authorizes HCA to terminate a provider’s participation in the Medicaid program under clearly defined conditions, which, as to convictions at least, are more limited than the conditions under which HCA may deny Medicaid enrollment. Thus, Section 409.906(9)(k) cannot support a provision applicable to an already-enrolled provider. The same is true of Section 409.907(7), which applies only to individuals or entities applying to be providers and not to already-enrolled providers.
Paragraph 5(j) of the Medicaid provider agreement applies to already-enrolled providers, so the supporting statute would be Section 409.913(12), as well as Sections 409.913(13) or (14), which also address revocations and suspensions of already-enrolled Medicaid providers.
But none of these subsections of Section 409.913 permits HCA to impose sanctions on any conviction regardless of adjudication or on any conviction for any felony under state or federal law. Although the grammar of Paragraph 5(j) is confusing, it appears that the only lawfully authorized conditions mentioned in Paragraph 5(j are the provider’s suspension or termination--but not violation, fine, or “other administrative action”--under the Medicaid or Medicare program by the federal government or any state government. This is authorized by Section 409.913(13).
Respondent must immediately discontinue reliance on Paragraph 5(j) except to the extent that it requires a provider to identify, as to itself but not its principals, any suspension or termination by the federal or any state government under the Medicaid or Medicare program.
Petitioner challenges Paragraph 6(a) as exceeding lawful authority because it requires that the provider acknowledge that HCA has the authority to pay only for “medically necessary services” furnished to an “eligible recipient.”
Respondents defend this provision of Paragraph 6(a) by citing Section 409.906(12). This section allows HCA to pay for services “that are rendered to a recipient in accordance with a federally approved waiver program.” The point of the HCBS program is obviously to limit reimbursable services to
“eligible recipients,” so this portion of Petitioner’s challenge is misplaced.
But nothing in the HCBS program limits services to what is “medically necessary.” Other statutory provisions, such as Section 409.913(1)(a), deal with “medical necessity,” but also speak in the alternative of “unnecessary cost,” without regard to “medical necessity.” The coordination of support under the HCBS program requires the provision of some services and goods that are not medically necessary because they are not medical in nature. Respondent must immediately discontinue reliance upon the portion of Paragraph 6(a) that limits all payments to providers for “medically necessary” services or goods.
Petitioner challenges Paragraph 6(c) as exceeding lawful authority because it allows HCA to require a bond, letter of credit, or other collateral from certain types of providers unless they have been Medicaid providers for at least one year and have not been the subject of sanctions. Petitioner also challenges a provision of Paragraph 6(c) that exempts government-owned or -operated entities from these bonding requirements.
Respondents defend these provision of Paragraph 6(c) by citing Section 409.907(7). This section allows HCA to require a provider to post a surety bond for not more than
$50,000. Paragraph 6(d) limits the duration of the security
to 12 months and the value of the security to $50,000. Section 409.907(7), which is permissive and not mandatory, grants considerable discretion to HCA as to setting security, and Paragraph 6(c), as limited by Paragraph 6(d), is authorized by this state statute. Thus, the final order does not direct Respondents to discontinue reliance on the challenged provisions of Paragraph 6(c).
Petitioner challenges Paragraph 6(d) as exceeding lawful authority because it limits the term of the security agreement to 12 months and the value of the security to
$50,000. Petitioner also challenges provisions of Paragraph 6(d) that require that the form of the security be acceptable to HCA and that any surety company be licensed to do business in Florida.
Respondents defend these provisions of Paragraph 6(d) by citing Section 409.907(7). This section authorizes HCA to require up to $50,000 in security and places no limit on the duration of time for posting such security. The requirements that the form of the security be acceptable to HCA and any surety company be licensed to do business in Florida represent a sensible implementation of statutory requirements. Inclusion of such implementing provisions in the Medicaid provider agreement is thus authorized by Section 409.907(5)(c), which allows HCA to “adopt, and include in the provider agreement, such other requirements . . . as the
agency finds necessary to properly and efficiently administer the Medicaid program.” Thus, the final order does not direct Respondent to discontinue reliance on the challenged provisions of Paragraph 6(d).
Petitioner challenges Paragraph 7 as exceeding lawful authority because it allows either party to terminate the agreement on 30 days’ written notice, allows HCA to terminate the agreement for cause, and allows HCA to apply for injunctive or other relief in Leon County Circuit Court to enforce Paragraph 7 or any other provisions of the Medicaid provider agreement.
Respondents defend Paragraph 7 by citing Section 409.907(2). The last sentence of this section states: “Each provider agreement 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.”
Petitioner did not prove that 30 days’ notice was unreasonable, and this provision of Paragraph 7 is supported by the last sentence of Section 409.907(2). The provision allowing HCA to terminate the agreement for cause--presumably on less than 30 days’ notice--follows state law that provides that, following a breach of the contract by the provider, HCA may treat the contract as terminated. Also, the provision allowing HCA to sue in Leon County for injunctive and other relief likewise follows Florida law. Thus, the final order
does not direct Respondents to discontinue reliance on the challenged provisions of Paragraph 7.
Petitioner challenges Paragraph 9 as exceeding lawful authority because it allows HCA to terminate the agreement and revoke the provider’s Medicaid provider number if the provider files a misleading application.
Respondents defend Paragraph 9 by citing Section 409.907(9)(a), which allows HCA to deny enrollment in the Medicaid program for a provider that has made a false representation or omitted a material fact in its application. As noted above, Section 409.907(9)(a) applies only to an enrollment denial and not to an enrollment revocation.
Although not cited by Respondents, Section 409.913(14)(i) allows HCA to terminate a Medicaid provider if it “has submitted . . . a Medicaid provider enrollment application . . . that contains materially false or incorrect statements.” Additionally, Florida law would allow HCA to nullify a contract into which it was induced to enter on the basis of fraud. Thus, the final order does not direct Respondents to discontinue reliance on the challenged portion of Paragraph 9.
Petitioner challenges Paragraph 10 as exceeding lawful authority because it allows HCA to revoke the provider’s Medicaid provider number and withhold from a provider’s reimbursement all sums due from the provider to HCA
if the provider fails to adhere to an agreed-upon repayment schedule.
Respondents defend the challenged provisions of Paragraph 10 by citing Section 409.907(9)(k). This section allows HCA to deny enrollment in the Medicaid program for any provider that has failed to pay an overpayment properly assessed, unless HCA has approved a repayment schedule. As noted above, this section allows HCA only to deny enrollment for a failure to repay an overpayment; this section does not authorize termination.
Although not cited by Respondents, Section 409.913(24) allows HCA to withhold Medicaid payments, up to the amount of the overpayment. But the statute allows HCA to withhold no more than 10 percent of each payment otherwise due the provider. Paragraph 10 is in contravention of this limitation because it expressly allows HCA to withhold the entire amount of the payment otherwise due.
As to termination for nonpayment of an agreed-upon overpayment, Section 409.913(24)(b), although not cited by Respondents, allows termination of a provider that does not adhere to an agreed-upon repayment schedule.
Respondents must immediately discontinue reliance on Paragraph 10, except for the provision allowing termination of a provider that fails to adhere to an agreed-upon repayment schedule.
Lastly, as to the Medicaid provider agreement, Petitioner challenges Paragraph 12 (miscited as Paragraph 11) as exceeding lawful authority because it requires that the agreement be construed under Florida law, allows HCA to prove overpayments by statistical methods, and shifts the burden of proof to the provider upon a prima facie showing of correctness by HCA.
Respondents defend Paragraph 12 by citing Section 409.913(19). This section requires HCA to determine overpayments through the use of, among other methods, statistical proof. No statute requires that the Medicaid provider agreement be construed under Florida law, but Florida law so provides because this is the site where the goods and services are delivered and at least one of the contracting parties resides in Florida. Thus, the final order does not direct that Respondents discontinue reliance upon the provisions of Paragraph 12 concerning the use of statistical evidence or construction of the provider agreement under Florida law.
However, the statutes do not provide for the shifting of the burden of proof from HCA to the provider upon a prima facie showing of correctness. The last sentence of Section 409.913(19) acknowledges that HCA has the burden of proving an overpayment. If the legislature or courts wish to shift the burden of proof, they may do so, but Florida law
does not give such authority to the executive branch. Respondents must immediately discontinue reliance on the portion of Paragraph 12 that shifts the burden of proof to the provider upon a prima facie showing of correctness of the overpayment by HCA.
Petitioner challenges various paragraphs of the assurances as exceeding lawful authority.
Rather than defend the paragraphs of the assurances individually, Respondents argue in their proposed final order that the monitoring instrument, of which the assurances are a part, is an “internal management document” that instructs agency representatives “whether a . . . waiver support coordinator has breached the Medicaid provider agreement.” Respondents suggest that a provider that concludes that the agency “has misconstrued the contract” may challenge the misinterpretation in circuit court. In the alternative, Respondents argue that the monitoring instrument has not been tested in an adjudicatory proceeding and is still undergoing revision, so it is “incipient policy for which formal rule promulgation is not yet required.”
At best, these arguments betray a grave misunderstanding of what Respondents have required of providers, such as Petitioner, through the assurances. As the assurances themselves provide, “the assurances . . . specify the requirements to which [providers] shall adhere while
rendering support coordination services.” Further, “any provider that renders support coordination services through the [HCBS program] . . . shall attest to these assurances.” And in boldface, the assurances state that the provider and agencies “agree that the . . . assurances are incorporated within the Medicaid provider agreement . . . and are legal and binding.”
The most casual reading of these assurances belies Respondents’ arguments that the document is in some way internal--it is signed by a provider; that it addresses only requirements already set forth in the Medicaid provider agreement--otherwise, why incorporate the assurances into the provider agreement; or that it is some form of incipient policy not yet ripe for rulemaking--to the contrary, it is ripe enough to require providers to assure compliance the assurances, so that a breach of an assurance is a breach of the Medicaid provider agreement.
Assurances amply disclosing Respondents' intent to enforce the assurances include Paragraph 8.1, which provides that each provider is subject to annual review to determine the extent to which it has complied with the assurances, and Paragraph 9.3, which provides that any breach of the assurances allows either Respondent to terminate the “Agreement” (evidently, the Medicaid provider agreement) on 30 days’ written notice.
The first assurance challenged by Petitioner illustrates the specificity of the assurances. Paragraph 2.0 of the assurances generally limits each support coordinator to a caseload of 35 persons. The other provisions of the assurances challenged by Petitioner are as specific as Paragraph 2.1. All of these provisions are generally applicable rules.
Respondents do not attempt an individual defense of selected assurances, as they maintain for selected provisions of the Medicaid provider agreement. However, as to the assurances, Respondents’ claim of “incipient policy” for which rulemaking would be premature is their sole attempt at contending that rulemaking is not feasible or practicable.
Section 120.54(1)(a) requires agencies to promulgate rules and establishes the presumption that rulemaking is feasible and practicable unless the agency shows that it is not. Respondents have made no showing that rulemaking as to the assurances is not both feasible and practicable.
The final order thus directs Respondents to discontinue reliance on the assurances challenged by Petitioner. The challenged assurances are Paragraphs 2.1; 2.2; 2.3; 2.4; 2.5; 2.6; 2.13; 2.14; 3.1; 3.2(d), (e), (f), (g), (h), (i), and (j); 4.1; 4.3; 4.5; 4.6; 4.7; 4.8; 5.3; 5.5(b), (c), (d), and (f); 5.6; 5.12; 5.13; 5.14; 6.2; 7.1;
7.2; 7.3; 7.4; 7.5; 7.6; 7.7; 7.8; 8.1; 8.2; 8.3(a), (b), and
(c); 8.4; 9.1; 9.3; and 10.1.
The third source of agency statements that Petitioner challenges is the coordination guidebook. The guidebook, which “sets forth the requirements for implementing the support coordination system . . .,” applies to coordinators of support, among others. As distinguished from Petitioner’s challenges to the Medicaid provider agreement and monitoring instrument (including the assurances), Petitioner does not challenge individual provisions in the thick guidebook.
The guidebook is the major exception to the conclusion above that Petitioner has identified clearly the specific provisions of the Revised Documents that it is challenging. In effect, Petitioner has challenged the entire guidebook, which clearly contains some provisions that are supported by law.
In general, then, as to the guidebook only, Petitioner has not met its statutory burden of stating with particularity the facts on which it relies in asserting that these agency statements are rules; Petitioner has not even identified the specific statements that it contends are rules. Thus, the final order does not direct Respondents to discontinue reliance on the guidebook.
Petitioner’s claim for attorneys’ fees and costs is dismissed.
ORDER
It is
ORDERED that Respondents shall, pursuant to Section 120.56(4)(d), immediately discontinue all reliance on the above-noted provisions of the Revised Documents and any substantially similar statements as bases for agency action.
ENTERED in Tallahassee, Florida, on June 4, 1997.
ROBERT E. MEALE
Administrative Law Judge
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(904) 488-9675 SUNCOM 278-9675
Fax Filing (904) 921-6847
Filed with the Clerk of the Division of Administrative Hearings June 4, 1997.
COPIES FURNISHED:
John E. Duvall Corbin Dickinson Suite 1000
121 West Forsyth Street Jacksonville, Florida 32202
Gregory D. Venz
Assistant General Counsel Department of Children
and Families Building 2, Room 204-2
1317 Winewood Boulevard
Tallahassee, Florida 32399-0700
Gordon B. Scott Senior Attorney
Office of the General Counsel
Agency for Health Care Administration 2727 Mahan Drive
Tallahassee, Florida 32308
Carroll Webb, Executive Director Administrative Procedures Committee
120 Holland Building Tallahassee, Florida 32399-1300
Liz Cloud, Chief
Bureau of Administrative Code Department of State
The Elliott Building Tallahassee, Florida 32399-0250
Jerome W. Hoffman General Counsel
Agency for Health Care Administration 2727 Mahan Drive
Tallahassee, Florida 32308-5403
Richard A. Doran General Counsel
Department of Children and Families Building 2, Room 204
1317 Winewood Boulevard
Tallahassee, Florida 32399-0700
NOTICE OF RIGHT OF JUDICIAL REVIEW
A party who is adversely affected by this final order is entitled to judicial review. 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.
| Issue Date | Proceedings |
|---|---|
| Dec. 08, 1998 | Mandate from the First DCA filed. |
| Nov. 20, 1998 | BY ORDER of the COURT (Joint motion Ford rehearing, clarification en banc is DENIED)rec`dd. |
| Oct. 14, 1998 | (First DCA) Opinion (Affirmed) filed. |
| Jan. 29, 1998 | Index, Record, Certificate of Record sent out. |
| Jan. 16, 1998 | Payment for indexing in the amount of $32.00 JT filed. |
| Sep. 11, 1997 | BY ORDER of the COURT (Appellant`s motion for extension of time granted) First DCA filed. |
| Aug. 27, 1997 | Supplemental Index sent out. |
| Aug. 26, 1997 | BY ORDER OF THE COURT (Appellant`s motion to consolidation of appeals) filed. |
| Aug. 21, 1997 | Invoice in the amount of $32.00 for indexing sent out. |
| Aug. 20, 1997 | Index sent out. |
| Jul. 08, 1997 | Letter to DOAH from DCA filed. DCA Case No. 1-97-2570, 1-97-2588. |
| Jul. 01, 1997 | Certificate of Notice of Administrative Appeal sent out. |
| Jun. 30, 1997 | Notice of Administrative Appeal (filed by Gorden B. Scott, AHCA) filed. |
| Jun. 26, 1997 | Certificate of Notice of Appeal sent out. |
| Jun. 26, 1997 | Notice of Appeal (filed by Gregory Venz) filed. |
| Jun. 04, 1997 | CASE CLOSED. Final Order sent out. Hearing held 03/24/97. |
| Apr. 11, 1997 | (Respondent) Notice of Correction (filed via facsimile). |
| Apr. 07, 1997 | (Respondent) Proposed Final Order (filed via facsimile). |
| Apr. 07, 1997 | Petitioner`s Proposed Findings of Fact, Proposed Conclusions of Law, and Proposed Final Order filed. |
| Mar. 25, 1997 | Joint Stipulation of Facts and Exhibits w/exhibits filed. |
| Feb. 26, 1997 | Order Granting Motion to Dismiss as to Count II, Setting Case for Final Hearing, and setting Deadlines for Proposed Final Orders sent out. |
| Feb. 21, 1997 | Petitioner`s Response to Motion to Dismiss "Amended" Complaint filed. |
| Feb. 05, 1997 | Letter to REM from J. Duvall Re: Confirming telephone conversation regarding status of response to motion to dismiss "Amended" petition filed. |
| Jan. 10, 1997 | Letter to REM from Gregory Venz (RE: finalizing stipulation) (filed via facsimile). |
| Jan. 10, 1997 | (Gregory Venz) Notice of Name Change/Substitution of Party; (Respondent) Motion to Dismiss Amended Petition (filed via facsimile). |
| Nov. 15, 1996 | Notice of Hearing sent out. (hearing set for 12/6/96; 9:00am; Tallahassee) |
| Oct. 30, 1996 | Amended Petition for Formal Administrative Hearing (Exhibits); Agency Action letter filed. |
| Issue Date | Document | Summary |
|---|---|---|
| Oct. 13, 1998 | Mandate | |
| Oct. 13, 1998 | Opinion | |
| Jun. 04, 1997 | DOAH Final Order | Certain provisions of medicaid provider agreement are invalid rules due to general applicability. They aren't authorized by federal or state law. |
