STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ROBERT ANTHONY SAVONA, D.O.; ) JOHN F. HULL, D.O.; )

ROBERT L. KAGAN, M.D.; and ) FLORIDA MEDICAL ASSOCIATION, INC., )

)

Petitioners, )

)

vs. ) Case No. 97-5909RU

)

AGENCY FOR HEALTH )

CARE ADMINISTRATION, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, a formal administrative hearing was held in the above-styled cause on January 5, 1998, in Tallahassee, Florida, before Don W. Davis, Administrative Law Judge with the Division of Administrative Hearings.

APPEARANCES

For Petitioners Robert Anthony Savona, John F. Hull and Robert L. Kagan:

M. Stephen Turner, Esquire David K. Miller, Esquire Broad and Cassel

Suite 400

215 South Monroe Street Tallahassee, Florida 32302

For Petitioner Florida Medical Association, Inc.:

John M. Knight, Esquire Jeffrey M. Scott, Esquire

Florida Medical Association, Inc. Post Office Box 10269 Tallahassee, Florida 32301

For Respondent Agency for Health Care Administration:

Gordon B. Scott, Esquire

Agency for Health Care Administration 2727 Mahan Drive, Fort Knox Building 3 Tallahassee, Florida 32308

PRELIMINARY STATEMENT

This proceeding was brought to challenge the unpromulgated reimbursement policy of the Agency For Health Care Administration (AHCA) regarding the payment of Medicare Part B physician crossover claims by the Florida Medicaid program.

At the final hearing, Petitioners presented ten exhibits.

Respondent presented four exhibits and testimony of one witness, Robert Sharpe, Chief of Medicaid Program Development.

The transcript of the final hearing was filed on January 20, 1998. Proposed final orders were submitted by the parties and have been reviewed in the course of preparation of this final order.

STATEMENT OF THE ISSUE

Whether AHCA’s non-rule policy regarding the reimbursement of Medicare Part B physician crossover claims is invalid as a consequence of noncompliance with requirements of Section 120.54(1)(a), Florida Statutes.

FINDINGS OF FACT

1. The parties have stipulated that Petitioners have standing to bring this proceeding.

2. In July of 1996, portions of AHCA’s reimbursement rule and handbook provisions pertaining to Medicare Part B physician

   crossover claims ("physician crossover claims") were declared invalid as violating federal law. Subsequently, the Agency was ordered to pay physician crossover claims at full Medicare rates rather than up to Florida’s Medicaid rates.

3. In August of 1997, federal legislation was passed by Congress to clarify existing law. The legislation specifically authorizes the States to reimburse Medicare Part B crossover claims, including those at issue in this proceeding, at Medicaid rates. This clarification permits the States to realize significant Medicaid cost savings. AHCA is the single state agency responsible for administering the Florida Medicaid program. Section 409.902, Florida Statutes.

4. Prior to formally promulgating a change in its rule, AHCA implemented a non-rule physician crossover reimbursement policy effective on October l, 1997 -- the effective date of the federal legislation. On or about October 31, 1997, AHCA inserted a banner message into its claim denials which apprised claimants of the new policy.

5. Promulgation of this policy in the context of formal changes to Rule 59G-3.010, Florida Administrative Code, was a matter that had completed internal review by Agency personnel prior to the final hearing, and, as established by testimony of Robert Sharp, the draft rule amendments had just been submitted for publication in the Florida Administrative Weekly, shortly after submission of the new proposed policy to the federal Health

   Care Financing Agency (HCFA) on December 29, 1997. On

   
   

   January 16, 1998, the proposed rule changes were published in the Florida Administrative Weekly.

   CONCLUSIONS OF LAW

   
   

6. The Division of Administrative Hearings has jurisdiction of the parties and the subject matter of this proceeding. Section l20.56(4), Florida Statues.

7. While AHCA did not have changes to the reimbursement rule at issue in this matter published prior to the final hearing in this matter, publication of the proposed changes was under way. Ultimately, the proposed rule changes were published in the Florida Administrative Weekly on January l6, 1998, pursuant to Section 120.54(3)(a), Florida Statutes.

8. Section 120.56(4)(e), Florida Statutes, reads as follows:

   Prior to entry of a final order that all or part of an agency statement violates s.120.54(1)(a), if an agency publishes, pursuant to s. 120.54(3)(a), proposed rules which address the statement and proceeds expeditiously and in good faith to adopt rules which address the statement, the agency shall be permitted to rely upon the statement or a substantially similar statement as a basis for agency action if the statement meets the requirements of s. 120.57(1)(e).

   If an agency fails to adopt rules which address the statement within 180 days after publishing proposed rules, for purposes of this subsection, a presumption is created that the agency is not acting expeditiously and in good faith to adopt rules. If the agency’s proposed rules are challenged pursuant to subsection (2), the 180-day

   period for adoption of rules is tolled until a final order is entered in that proceeding.

   
   

9. ACHA appears to have proceeded expeditiously and in good faith to publish the proposed rule changes covering the subject matter of the challenged non-rule policy. Consequently, substantially affected claimants may challenge ACHA’s proposed rule in proceedings initiated in accordance with Section 120.56(1), Florida Statutes, or avail themselves of proceedings pursuant to Section 120.57(1), Florida Statutes.

DISPOSITION

Based upon the foregoing Findings of Fact and Conclusions of Law, the Petition For Determination Of Invalidity Of Non-Rule Policy is denied.

DONE AND ORDERED this 12th day of February, 1998, in Tallahassee, Leon County, Florida.

DON W. DAVIS

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9645

Fax Filing (850) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 12th day of February, 1998.

COPIES FURNISHED:

M. Stephen Turner, P.A. David K. Miller, P.A. Broad and Cassel

Suite 400

215 South Monroe Street Tallahassee, Florida 32302

John M. Knight, Esquire Jeffrey M. Scott, Esquire

Florida Medical Association, Inc. Post Office Box 10269 Tallahassee, Florida 32301

Gordon B. Scott, Esquire

Agency for Health Care Administration 2727 Mahan Drive, Fort Knox Building 3 Tallahassee, Florida 32308

Jerome W. Hoffman, Esquire

Agency for Health Care Administration 2727 Mahan Drive

Tallahassee, Florida 32308

Douglas M. Cook, Director

Agency for Health Care Administration 2727 Mahan Drive

Tallahassee, Florida 32308

Carroll Webb, Executive Director

Joint Administrative Procedure Committee

120 Holland Building Tallahassee, Florida 32399-1300

Liz Cloud, Chief

Bureau of Administrative Code The Elliott Building Tallahassee, Florida 32399-0250

Sam Power, Agency Clerk

Agency for Health Care Administration 2727 Mahan Drive, Suite 3431

Tallahassee, Florida 32308

NOTICE OF RIGHT TO APPEAL

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 the 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: 97-005909RU

Orders for Case No: 97-005909RU