STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MANUEL J. FERNANDEZ, M.D., )

)

Petitioner, )

)

vs. ) Case No. 00-3921F

) DEPARTMENT OF HEALTH, BOARD OF ) MEDICINE, )

)

Respondent. )

)

FINAL ORDER

Pursuant to agreement of the parties, this matter has been submitted on stipulated facts without an evidentiary hearing for preparation of a Final Order by Administrative Law Judge

Michael M. Parrish of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Michael Manthei, Esquire

Broad & Cassel

Broward Financial Centre, Suite 1130

500 East Broward Boulevard Fort Lauderdale, Florida 33394

For Respondent: Amy M. Jones, General Counsel

Department of Health

2020 Capital Circle Southeast, Bin A02 Tallahassee, Florida 32399-1703

ISSUE

The issue in this case is whether the Petitioner is entitled to an award of costs and attorney's fees pursuant to Section 57.111, Florida Statutes.

PRELIMINARY STATEMENT

The background of this proceeding goes back to a Final Order dated December 30, 1999, in which the Department of Health, Board of Medicine ("Department") adopted a Consent Agreement to bring an end to disciplinary proceedings against Manuel J. Fernandez, M.D. ("Dr. Fernandez") in Agency for Health Care Administration's ("AHCA's") Case No. 95-16820. In the Consent Agreement, Dr. Fernandez agreed to pay an administrative fine in the amount of $5,000.00 and agreed to attend two specific medical education courses. In the Consent Agreement, Dr. Fernandez specifically states that he "neither admits nor denies the allegations of fact contained in the Administrative Complaint."

On January 7, 2000, the Division of Medical Quality Assurance filed an "Adverse Action Report" with the Healthcare Integrity and Protection Data Bank, maintained by the United States Department of Health and Human Services, in which it reported the entry of the Final Order in AHCA Case No. 95-16820 against Dr. Fernandez.

Dr. Fernandez was of the view that the subject Final Order was not the type of order that should be reported to the Healthcare Integrity and Protection Data Bank. Accordingly, Dr. Fernandez promptly requested that the report be withdrawn.

The Department initially took the view that the Adverse Action Report was properly filed and refused to take action to withdraw it. Dr. Fernandez then filed two petitions, one under Section 120.57(1), Florida Statutes, challenging the Department's refusal to withdraw the Adverse Action Report, and one under Section 120.56, Florida Statutes, challenging the Department's reporting policy on the grounds that it was an unpromulgated rule.

Eventually, the Department conceded that the Adverse Action Report had been inappropriately filed, and took effective action to have the report rescinded and expunged. Such action had the effect of granting the relief sought in the Section 120.57(1) case and, by agreement of the parties, that case was dismissed as moot. By reason of receiving the relief sought in the Section 120.57(1) case, Dr. Fernandez no longer had standing in the rule challenge case, and that case was dismissed.

Dr. Fernandez is now before the Division of Administrative Hearings asserting entitlement to his costs and attorney's fees pursuant to Section 57.111, Florida Statutes.

Early in this proceeding the parties agreed to bifurcate the issues of entitlement and amount. Consistent with that agreement, this Final Order addresses only the issue of entitlement. Prior to the hearing date in this case, the parties stipulated that an evidentiary hearing would not be

necessary to resolve the issue of entitlement. Accordingly, on April 19, 2001, the parties filed a Joint Stipulation in which they stipulated to the material facts and described additional documents to be relied upon in the disposition of the entitlement issue.

Pursuant to the request of the parties, oral argument was heard on April 20, 2001. At the conclusion of the oral argument, the parties requested 30 days within which to file their proposed orders. At the joint request of the parties, that deadline was extended until June 5, 2001. Both parties filed timely proposed orders containing proposed findings and conclusions of law. The parties' proposals have been carefully considered during the preparation of this Final Order.

FINDINGS OF FACT

In their Joint Stipulation, the parties have stipulated to the following facts:

1. Dr. Fernandez is a physician licensed in the State of Florida since 1973. He is a small business party as defined in Section 57.111(3)(d)(1), Florida Statutes.

2. Dr. Fernandez was the subject of a disciplinary action by AHCA on behalf of the Board of Medicine. The action was commenced by an administrative complaint being filed by AHCA. It was resolved by a Consent Agreement adopted by the Board of Medicine as a Final order on December 30, 1999. The relevant

   terms of the Consent Agreement included Dr. Fernandez's paying a

   
   

   $5,000 fine and attending continuing education classes; and while denying liability, the Petitioner neither admitted nor denied the facts in the administrative complaint. There is no mention of the reporting of the Consent Agreement in either the National Practitioner Data Bank ("NPDB") or the Healthcare Integrity and Protection Data Bank ("HIPDB").

3. Subsequent to the action by the Board of Medicine, on January 7, 2000, the Respondent submitted a report of the disposition of Dr. Fernandez's disciplinary action to the HIPDB.

4. HIPDB was established by Pub Law 104-191 enacted in 1996. Federal legislation establishing HIPDB was enacted in August 1996 with instructions to the Secretary of Health and Human Services ("HHS") to adopt rules implementing the law. Draft rules were published in October 1998 with final rules being adopted in October 26, 1999. The Guidebook was released in February 2000.

5. Dr. Fernandez objected to the report to HIPDB on February 3, 2000, but was advised by the Respondent in a letter dated February 23, 2000, that his discipline was correctly reported "based on Federal Register 64 CFR Part 61: Healthcare Fraud and Abuse Data Collection Program: Reporting of Final Adverse Actions; Final Rule."

6. On March 6, 2000, the Petitioner's counsel wrote the Respondent an 8-page letter requesting the report be removed from HIPDB. The letter set forth extensive legal analysis based in large part on the Federal Register citation in the Respondent's February 23, 2000, letter with attachments in support, and included that disciplinary action involving only a fine and continuing education courses was not reportable to HIPDB under the prevailing statutes and the administering instructions issued by the federal agency in charge of operating the HIPDB. Also in the letter, the Petitioner put the Respondent on notice that the Petitioner was going to file Petitions for Administrative Hearings if the Respondent did not respond by March 13, 2000. The Respondent did not contact Petitioner until after March 13, 2000.

7. The Petitioner filed a Petition for Formal Administrative Hearing with the Board of Medicine on March 16, 2000. On the same day, the Petitioner filed a challenge to an alleged unpromulgated rule of the Respondent regarding the reporting of disciplinary actions to HIPDB where no liability was admitted. The cases were DOAH Case Nos. 00-1562 and 00- 1253RU, respectively.

8. In DOAH Case No. 00-1562, the Petitioner requested the Report be rescinded or, alternatively, the Consent Agreement be

   rescinded to allow the Petitioner the opportunity to argue the merits of the case.

9. In DOAH Case No. 00-1253RU, the Petitioner requested that the Administrative Law Judge ("ALJ") issue a Final Order determining that the Respondent issued an unpromulgated rule in violation of Section 120.54(1)(a), Florida Statutes, that the Respondent immediately discontinue reliance upon the statement as a basis for agency action, and that the Report be rescinded.

10. The Department was seeking clarification of the issues surrounding the reporting of discipline as demonstrated by Exhibits A and B. By letter dated March 17, 2000, the Respondent informed the Petitioner that it had removed the report of Dr. Fernandez's disciplinary action from HIPDB. To confirm the Respondent's assertion, the parties agreed that

    Dr. Fernandez would initiate a "self-query" to the HIPDB to verify removal of the report. On May 15, 2000, the Petitioner's counsel received confirmation that a query to the HIPDB would not reveal the existence of an expunged report.

11. On April 5, 2000, the Respondent filed a Motion to Dismiss for Mootness because relief had been granted to the Petitioner since the disciplinary report had been removed from HIPDB on March 17, 2000. On September 26, 2000, the Respondent's Motion to Dismiss was granted by the ALJ in DOAH Case No. 00-1562.

12. The Petitioner filed an Application for Attorney's Fees and Costs on July 14, 2000.

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over this proceeding pursuant to Sections 57.111 and 120.57, Florida Statutes.

14. With regard to the underlying Section 120.56 rule challenge case (DOAH Case No. 00-1253RU), Dr. Fernandez is not entitled to an award of costs and attorney's fees pursuant to Section 57.111, Florida Statutes, because that proceeding was not "initiated by a state agency" and Dr. Fernandez was not a prevailing party in that proceeding. See definitions at Section 57.111(3)(b) and (c), Florida Statutes.

15. With regard to the Section 120.57 case (DOAH Case

    
    

    No. 00-1562), the parties have stipulated that Dr. Fernandez was at all material times a ”small business party." But the Respondent asserts that Dr. Fernandez is not entitled to an award of costs and attorney's fees because: (a) he filed his petition for fees too late; (b) he was not a "prevailing" party;

    1. the Respondent's action was "substantially justified"; and

       
       

    2. "special circumstances exist which would make the award unjust."

16. Hayes Group Home, Inc. v. Agency for Health Care Administration, DOAH Case No. 99-0148F (Final Order issued

    March 23, 1999), was a proceeding seeking costs and attorney's fees pursuant to Section 57.111, Florida Statutes. In Hayes the ALJ concluded:

    Section 57.111(4)(b)2, Florida Statutes, requires that the application for an award of attorney's fees and costs be made within

    60 days after the date on which the small business party becomes a prevailing party. In this cause, the underlying proceeding involved Petitioner's application for licensure. According to the Renewed Petition for Attorneys' Fees and Costs, Petitioner received its license to operate an assisted living facility by transmittal letter dated April 10, 1998. That is the date upon which Petitioner obtained the relief sought by Petitioner in the underlying proceeding. Since more than 60 days elapsed between April 10, 1998, the date on which Petitioner's application for licensure was granted, and January 11, 1999, the date on which Petitioner filed its Renewed Petition for Attorneys' Fees and Costs, the Petition filed in this cause is untimely.

    
    

17. The same result must be reached here. On March 17, 2000, the Department informed Dr. Fernandez that it had removed the report regarding his disciplinary action from the HIPDB. The removal was the relief sought by Dr. Fernandez. Accordingly, that is the date upon which Dr. Fernandez became a prevailing party, and on which the 60-day time period began to

    run. The Application for Attorney's Fees and Costs was filed on July 14, 2000, almost two months too late. As in Hayes, the

    petition seeking costs and attorney's fees under Section 57.111, Florida Statutes, was untimely filed and must be dismissed.

18. Normally it would not be necessary to address the additional issues raised by the Department, but because the rationale in Hayes has not yet been directly addressed by the

    Florida appellate courts, it is prudent to address the remaining issues raised by the Department.

19. The Department argues that Dr. Fernandez is not a prevailing party within the meaning of any of the definitions of the term "prevailing small business party" at Section 57.111(3)(c), Florida Statutes. The statutory definitions of the quoted term include when a "settlement has been obtained by the small business party which is favorable to the small business party on the majority of issues which such party raised during the course of the proceeding." The Department's action of granting the substantive relief sought by Dr. Fernandez, however denominated, is the functional equivalent of a settlement. Dr. Fernandez was a "prevailing small business party" in DOAH Case No. 00-1562.

20. The Department argues that its action was "substantially justified." Section 57.111(3)(e), Florida Statutes, states: "A proceeding is 'substantially justified' if it had a reasonable basis in law and fact at the time it was initiated by a state agency." The Department had a reasonable

    basis in law and fact at the time it took the action about which Dr. Fernandez complained. At the time of the Department's action, the federal legislation, regulations, and guidelines were all new and not all of the regulations and guidelines were final. Further, there was a great deal of ambiguity and uncertainty in the federal legislation, regulations, and guidelines. Faced with such ambiguity and uncertainty, the Department made a reasonable interpretation of the requirements; an interpretation that was substantially justified. Such being the case, Dr. Fernandez is not entitled to recover his costs and attorney's fees.

21. The ambiguous and uncertain nature of the federal statutory and regulatory provisions discussed in paragraph 20, above, also constitute "special circumstances . . . which would make the award unjust."

22. For all of the foregoing reasons, it is concluded that Dr. Fernandez is not entitled to recover costs and attorney's fees under Section 57.111, Florida Statutes, and his petition seeking same is hereby DENIED and DISMISSED.

DONE AND ORDERED this 31st day of July, 2001, in Tallahassee, Leon County, Florida.

MICHAEL M. PARRISH

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 31st day of July, 2001.

COPIES FURNISHED:

Amy M. Jones, General Counsel Department of Health

2020 Capital Circle, Southeast Bin A02

Tallahassee, Florida 32399-1703

M. Catherine Lannon, Esquire Lee Ann Gustafson, Esquire Department of Legal Affairs The Capitol, Plaza Level 01

Tallahassee, Florida 32399-1050

Michael Manthei, Esquire Broad & Cassel

Broward Financial Centre, Suite 1130

500 East Broward Boulevard Fort Lauderdale, Florida 33394

Theodore M. Henderson, Agency Clerk Department of Health

4052 Bald Cypress Way, Bin A02 Tallahassee, Florida 32399-1701

Dr. Robert G. Brooks, Secretary Department of Health

4052 Bald Cypress Way, Bin A00 Tallahassee, Florida 32399-1701

William W. Large, General counsel Department of Health

4052 Bald Cypress Way, Bin A02 Tallahassee, Florida 32399-1701

NOTICE OF RIGHT TO JUDICIAL REVIEW

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: 00-003921F

Orders for Case No: 00-003921F