STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA FARM BUREAU )

INSURANCE COMPANIES, )

)

Petitioner, )

)

vs. ) CASE NO. 80-1605RX

) STATE OF FLORIDA, DEPARTMENT OF ) LABOR AND EMPLOYMENT SECURITY, ) DIVISION OF WORKER'S )

COMPENSATION, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William E. Williams, held a Public hearing in this cause on September 17, 1980, in Tallahassee, Florida.

APPEARANCES

For Petitioner: James N. McConnaughhay, Esquire

Post Office Drawer 229 Tallahassee, Florida 32302

For Respondent: Dan Turnbull, Jr., Esquire

General Counsel Department of Labor and

Employment Security

Suite 131, Montgomery Building 2563 Executive Center Circle, East Tallahassee, Florida 32301

By Petition filed with the Division of Administrative Hearings on September 2, 1980, Petitioner, Florida Farm Bureau Insurance Companies ("Petitioner") challenges the validity of Rule 38F-7.01, Florida Administrative Code, pursuant to the provisions of Section 120.56, Florida Statutes. Final hearing in this cause was scheduled for September 17, 1980, by Notice of Hearing dated September 15, 1980, with the consent of both Petitioner and Respondent, State of Florida, Department of Labor and Employment Security, Division of Worker's Compensation ("Respondent").

At the final hearing the parties called no witnesses, and submitted Joint Exhibits 1 and 2, which were received into evidence. At the conclusion of the hearing, both Petitioner and Respondent waived the requirement of Section 120.56(3), Florida Statutes, that a final order be entered within thirty days of the date of final hearing.

FINDINGS OF FACT

1. Both petitioner and Respondent stipulated that Petitioner is a duly licensed insurance company organized and existing in the State of Florida, and is subject to the requirements of Rule 38F-7.01, Florida Administrative Code, the validity of which is the subject matter of this proceeding. It was further stipulated by the parties that there are no disputed issues of material fact.

   
   

   CONCLUSIONS OF LAW

   
   

2. The Division of Administrative Hearings has jurisdiction over the subject matter of, and the parties to, this proceeding. Section 12-.56, Florida Statutes.

   
   

3. Petitioner and Respondent stipulated that the sole legal issue involved in this proceeding is whether Respondent can, by rule, distinguish between charges payable under the Worker's Compensation Law to "health care providers" and those charges payable to hospitals for the same services. By Rule 38F-7.01, Florida Administrative Code, Respondent has attempted to restrict the applicability of the medical and surgical fee schedule contained therein to "health care providers", which term is defined in Section 440.13(3)(d)1.d., Florida Statutes, to include only physicians, osteopaths, chiropractors, podiatrists, optometrists and dentists. Since hospitals are not included in the statutory definition of "health care providers", the challenged rule, in effect, exempts medical and surgical fees charged by hospitals from the limits contained in the medical and surgical fee schedule contained in Chapter 38F-7, Florida Administrative Code, which became effective July 1, 1980, provides as follows:

   
   

   All fees and other charges for medical services, surgical procedures, anesthesia, radiology, radiology, radiotherapy, physical medicine, and pathology furnished or rendered pursuant to Section 440.13(3)(a), Florida Statutes, by any health care provider as defined by Section 440.13(3)(d)1.d., Florida Statutes, shall be limited to the health care provider's usual and customary charges or fees for such treatment or services or the maximum charge provided in the Medical and Surgical Fee Schedule set forth below, whichever is less. (Emphasis added)

   
   

   Petitioner contends that the portion of the rule underlined above is invalid, since there is no statutory authority for Respondent to make any distinction between fees charged by "health care providers" and those charged by hospitals for the same services.

   
   

4. The statutory authority for the adoption of Rule 38F-7.01, Florida Administrative Code, is found in Section 440.13(3)(a), Florida Statutes (1979), which provides that:

   
   

   All fees and other charges for such treatment or service, including treatment or service provided by any hospital or other health care provider, shall be limited to such charges as prevail in the same community for similar treatment of injured persons of like standard

   of living and shall be subject to rules adopted by the division, which shall adopt schedules of maximum charges for such treatment or services. An individual health care provider shall be paid either his usual and customary charge for a treatment or service or the maximum charge, whichever is less. A hospital shall be paid the lowest charge currently assessed for such treatment or service in the community in which the hospital is located. (Emphasis added)

   
   

5. The last sentence of Section 440.13(3)(a), Florida Statutes (1979), quoted above, is the apparent basis upon which Respondent adopted the challenged rule which rendered the medical and surgical fee schedule inapplicable to hospitals. There is no apparent disagreement that, viewed in light of the language contained in the 1979 statute quoted above, the challenged rule would be valid. However, the 1980 Florida Legislature passed House Bill No. 1677, which was approved by the Governor on June 27, 1980, and went into effect on June 30, 1980, which provided, in part, that ". . .paragraphs (a) and (d) of subsection (3) of section 440.13, Florida Statutes, are amended to read" . . .:

   
   

   All fees and other charges for such treatment or service, including treatment or service provided by any hospital or other health care provider, shall be limited to such charges as prevail in the same community for similar treatment of injured persons of like standard of living and shall be subject to rules adopted by the division, which shall annually incorporate schedules of maximum charges for such treatment of service as determined by a three member panel consisting of the Secretary of Labor and Employment Security, the Insurance Commissioner, and the state medical consultant of the division of worker's compensation. An individual health care provider shall be paid either his usual and customary charge for a treatment or service or the maximum charge, whichever is less. Chap. 80-236, Laws of Fla. (1980). (Emphasis in original to show added provisions.)

   
   

6. The 1980 legislative amendment to Section 440.13(3)(a), Florida Statutes, omitted the last sentence contained in the 1979 version of the statute which served as legislative authority for paying hospitals for services rendered on a different basis than that authorized for "health care providers." The effect of the 1980 amendment was to repeal the last sentence of the 1979 version of Section 440.13(3)(c), Florida Statutes. See, e.g. Basnett v. Jacksonville,

   19 Fla. 644 (1883); see also, 30 Fla. Jr., Statutes, Section 164 (1974).

   
   

7. Absent the last sentence of the 1979 version of the statute, Section 440.13(3)(a), Florida Statutes, is virtually identical in all material respects to the statute construed by the Florida Supreme Court in Dade County v Southern Florida Sanitarium and Hospital Corporation, 173 So.2d 131 (Fla. 1965). In Dade County, the Court held that, on the basis of the statute then in effect:

   we find no basis for applying the medical fee schedule only to fees charged for treatments given by a private practitioner and not to charges for the same treatment given in a hospital. 173 So.2d at 133.

   
   

8. Section 120.54(14), Florida Statutes, provides, in part, that "[n]o agency has inherent rulemaking authority. . .", and that ". . .rules may not be enforced until the statute upon which they are based is effective." Conversely, a validly promulgated rule becomes invalid upon repeal by the Legislature of the statutory authority for adoption of the rule. See, Eli Witt Company v. Dept. of Business Regulation, Case No. SS-495 (Fla. 1st DCA October 10, 1980).

   
   

9. Accordingly, it is determined as a matter of law that passage by the Legislature in 1980 of House Bill 1677 repealed the statutory authority for promulgation of that portion of Rule 38F-7.01, Florida Administrative Code, limiting applicability of the medical and surgical fee schedule to "health care providers", so that that portion of the rule which reads ". . .by any health care provider as defined by Section 440.13(3)(d)1.d., Florida Statutes. . ." constitutes an invalid exercise of delegated legislative authority. Section 120.56(1), (3), Florida Statutes. The last-quoted clause of Rule 38F-7.01, Florida Administrative Code, is therefore declared to be invalid, and of no further force and effect.

DONE AND ORDERED this 16th day of October, 1980, in Tallahassee, Florida.

WILLIAM E. WILLIAMS

Hearing Officer

Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 16th day of October, 1980.

COPIES FURNISHED:

James M. McConnaughhay, Esquire post Office Drawer 229 Tallahassee, Florida 32302

Dan Turnbull, Jr., Esquire General Counsel Department of Labor and

Employment Security

Suite 131, Montgomery Building 2563 Executive Center Circle,

East

Tallahassee, Florida 32301

Mr. Carroll Webb Executive Director Administrative Procedures

Committee

120 Holland Building Tallahassee, Florida 32301

Ms. Liz Cloud

Bureau Chief, Administrative Code

Department of State Room 1802, The Capitol

Tallahassee, Florida 32301

Docket for Case No: 80-001605RX

Orders for Case No: 80-001605RX