STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

HILLSBOROUGH COUNTY HOSPITAL )

)

Petitioner, )

)

vs. ) CASE NO. 87-5185RX

) HOSPITAL COST CONTAINMENT ) BOARD, )

)

Respondents. )

) TAMPA GENERAL HOSPITAL, )

)

Petitioner, )

)

vs. ) CASE NO. 87-5186RX

) HOSPITAL COST CONTAINMENT ) BOARD, )

)

Respondent. )

)

FINAL ORDER

The formal administrative hearing in these cases was held before William C. Sherrill, Jr., in Tallahassee, Florida, on December 10, 1987. The issue in these cases is whether rule 27J-1.0075, now renumbered rule 10N01.0075, is an invalid exercise of delegated legislative authority. Appearing for the parties were:

For Petitioner: John H. Parker, Jr., Esquire

1200 Carnegie Building

133 Carnegie Way Atlanta, Georgia 30303

For Respondent: Gary Walker, Esquire

Hospital Cost Containment Board

325 John Knox Road Building L, Suite 101 Tallahassee, Florida 32303

The Petitioner presented 39 exhibits, which were admitted into evidence, with the exception of exhibit 30, and the testimony of Paul Powers, George Morgan, and Michael Polland. The Respondent presented 4 exhibits, which were admitted into evidence, and the testimony of Bill Summers and James Bracher. There is a transcript. The testimony of James Bracher was presented by deposition which will be deemed to be a transcript of that testimony. The parties submitted proposed finding of fact and conclusions of law.

These rule challenges were consolidated with cases numbered 87-5207H and 87-5208H for hearing, and the record is consolidated with those cases. This

final order is entered separately, however, since the order in the section 120.57(1) cases will be a recommended order to the agency.

FINDINGS OF FACT

1. Tampa General Hospital is a 530 bed short term general acute care hospital. Hillsborough County Hospital is a 157 bed general acute care hospital. Both are divisions of Hillsborough County Hospital Authority, a public hospital system located in Tampa, Florida. T. 25; Hearing Officer E. 1.

   
   

2. Tampa General Hospital and Hillsborough County Hospital filed timely petitions and have standing to seek such hearings.

   
   

3. On January 29, 1987, both petitioners filed fiscal year 1986 actual reports as required by statute and rules of Tampa General Hospital.

   
   

4. On April 23, 1987, Tampa General Hospital filed in revision to its actual report with respect to RPICC charges and receipts. It is officially recognized that a recommended order has been entered on this date in the consolidated DOAH case numbers 87-5207H and 87-5208H recommending that the April 23, 1987, revision be deemed final and not a correction submitted pursuant to section 12, chapter 87-92, Laws of Florida. If this conclusion is correct, the question of approval or disapproval of the April 23, 1987, revision is moot.

   The Board, however, contends that it has generally has the authority to disapprove a report of this nature pursuant to its rules and the statutes establishing the Board.

   
   

5. On June 9, 1987, and the weeks thereafter, both Petitioners sought to correct their 1986 actual reports with respect to funds received by the Petitioners from Hillsborough County pursuant to the special sales tax enacted pursuant to chapters 84-373 and 85-555, Laws of Florida. These proposed corrections were submitted pursuant to section 12, chapter 87-92, Laws of Florida.

   
   

6. The Hospital Cost Containment Board contends that it generally has authority to disapprove reports filed with the Board by hospitals regulated by the Board, and specifically contends that authority extends to revisions sought by the Petitioners with respect to both the sales tax funds and the RPICC funds.

   
   

7. The Board has proposed to adopt rule 27J-1.0075 pursuant to its interpretation of it is authority and cites section 395.505, Fla. Stat. (1987) as general authority for such rulemaking.

   
   

8. The portion of rule 27J-1.0075 challenged in this case provides;

   
   

   (2) A hospital may correct its 1986 fiscal year data for purposes of the redistribution of the Public Medical Assistance Trust Fund

   surplus, if such correction is verified by the hospital's independent certified auditors.

   Such corrections shall not be considered if received at the Board office after September 29, 1987.

   All such corrections shall comply

   with the following criteria, to the Board's satisfaction.

   (E.S.)

   
   

9. The proposed rule was not published in the Florida Administrative Weekly until September 4, 1987, well into the period for filing corrections to 1986 actual reports pursuant to section 12, chapter 87-92, Laws of Florida.

   
   

10. Since the record in these cases is consolidated with the section 120.57(1), Fla. Stat., cases, all of the findings of fact in the recommended order in DOAH case numbers 87-5207H and 87-5208H entered this same date, including the Appendix to that recommended order, are incorporated in this order by reference for purposes of background information in this rule challenge.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction of the parties and subject matter of these cases.

    
    

12. The Petitioners timely filed their petitions and have substantial interests sufficient to entitle them to a formal administrative hearing.

    
    

13. Petitioners have the burden to prove all factual contentions by a preponderance of the evidence. Section 395.5135. Fla. Stat. (1987).

    
    

14. The two objections on pages 55-56 of the deposition of James Bracher are overruled. The objections as to predicate relate to credibility, not admissibility. The best evidence rule (section 90.952, Fla. Stat. (1987)) does not apply due to the operation of a statute, section 120.58(1)(a), Fla. Stat. (1987), which applies only the hearsay and relevancy rules to administrative hearings. Moreover, hearsay is not involved since the testimony relates to what Mr. Bracher observed when he read the other contracts. The fact of the existence of the statements in the contracts is at issue, not the truth of the statements in the contracts.

    
    

15. The motion to strike and the response thereto have been considered as argument pertaining to proposed findings of fact previously submitted, and have been relied upon in making findings of fact, but the rerelief requested in the motion to strike is denied.

16. Section 12(5), Chapter 87-92, Laws of Florida, provides that: A hospital may correct, subject to verifi-

    cation by the hospitals' (sic) independent

    certified auditors, its 1985 fiscal year data up until 90 days after the effective

    date of this act. Based upon this corrected data, the board (the Hospital Cost Containment Board) shall recalculate the distribution due under this act no later than October 15, 1987, and shall certify to the department [HRS] a revised formula by October 25, 1987. Amounts previously distributed may be adjusted based upon this final determination. (E.S.)

17. The Petitioners argue that the Hospital Cost Containment Board must accept the corrected fiscal year 1986 data, once it has been verified by an independent certified auditor, and has no authority to reject the corrections to the fiscal year 1986 data. The argument is premised upon the phrase emphasized above the Board "shall" recalculate the distribution due "based upon this corrected data."

    
    

18. Section 12(3), Chapter 87-92, Laws of Florida, provides that the redistribution of trust funds "shall be based upon the fiscal 1986 hospital data as reported to the board." Both parties in this case agree that "fiscal 1986 hospital data" means the hospital's report of "its actual audited experience:" for the fiscal year as required by section 395.507(7), Fla. Stat. (1987).

    
    

19. The report of "actual audited experience" must be filed on forms adopted by the Hospital Cost Containment Board and must be "based on the uniform system of financial reporting" established by the Board. Section 395,507(7), Fla. Stat. (1987).

    
    

20. The Board is also required by subsection (1) of the same statute to establish by rule a uniform system of financial reporting based upon "a uniform chart of accounts developed after considering: certain industry standards and "generally accepted accounting principles" The Hospital Cost Containment Board has adopted a number of procedural rules establishing the uniform system of financial reporting, and the system established includes the Florida Hospital Uniform Reporting System (FHURS) manual. Section 395.507(1) further provides that:

    
    

    As a part of such uniform system of financial reporting, the board may require the filing of any information related to the cost...of any service provided in such hospital...(E.S.)

    
    

21. Thus, the report of actual audited experience for the preceding fiscal year must be filed on forms adopted by the board and must comply with the uniform system of financial reporting which, by statute, the Board was required to establish by rule.

    
    

22. While section 12(8) of Chapter 87-92, Laws of Florida, does not explicitly state that the correction to 1986 fiscal year data must be reported pursuant to the uniform financial reporting system established by the Board,k that surely must have been the intent of the Legislature. It would be unreasohnable to infer that the Legislature intended that such corrective reports might be filed without uniformity, given the mandate of section 395.507(1), Fla. Stat. (1987) that reporting be uniform. This is especially true given the purpose of section 12 of Chapter 87-92: that the Public Medical Assistance Trust Fund was established to provide "equity among hospitals," and the redistribution was "needed in order to accomplish the original intent." Section 12(1), Chapter 87-92, Laws of Florida.

    
    

23. Thus, it is concluded that the corrective report must be filed pursuant to the uniform financial reporting system established by the Board.

    
    

24. Does, then the Board have authority to disapprove a corrective report for failing to comply with the uniform accounting system? Since the Board is required to establish the system of uniformity, and since equity is to be done among the hospitals in the redistribution of trust funds, then the answer surely

    is yes. Verification by an independent auditor is a step toward uniformity, but independent auditors, in good faith, can be expected to reach differing accounting conclusions at least some of the time. As in most cases that are litigated, the experts in this case disagreed. Neither uniformity nor equity can be expected nor will it be achieved if the final accounting in the various corrected reports depends solely upon the various opinions of different auditors.

    
    

25. An express grant of power to an agency includes, by implication, such powers as are necessarily or reasonably incident to the powers expressed. Hall

    v. Career Service Commission, 478. So. 2d 1111, 1112 (Fla. 1st DCA 1985). Implicit in the requirement that the Board establish a uniform financial reporting system is that there be power in a single entity, the Board, to reject reports that are not uniform.

    
    

26. Therefore, it is concluded that the Hospital Cost Containment Board has authority to disapprove a corrective report for noncompliance with the uniform accounting system.

    
    

27. Petitioners have failed to establish that proposed rule 27J-1.0075, Fla. Admin. Code, is an invalid exercise of delegated legislative authority.

FINAL ORDER

It is therefore ORDERED that the petitions are hereby dismissed. DONE and ENTERED this 9th of March, 1988.

WILLIAM C. SHERRILL, JR.

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 9th day of March, 1988.

COPIES FURNISHED:

John H. Parker, Jr., Esquire 1200 Carnegie Building

133 Carnegie Way Atlanta, Georgia 30303

Gary Walker, Esquire

Hospital Cost Containment Board

325 John Knox Road Building L. Suite 101 Tallahassee, Florida 32303

James J. Bracher Executive Director

Hospital Cost Containment Board

325 John Knox Road Building L, Room 101 Tallahassee, Florida 32303

Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Liz Cloud, Chief

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

Carroll Webb, Executive Director Administrative Procedures Committee

120 Holland Building Tallahassee, Florida 32399-1300

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY; ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

Docket for Case No: 87-005185RX

Orders for Case No: 87-005185RX