STATE OF FLORIDA. AGENCY FOR HEALTHCARE ADMINS FLORIDA HOSPITAL WATERMAN, | Petitioner, Case No. 06-01VW vs. / AGENCY FOR HEALTH CARE -3Uu7T2 ADMINISTRATION, O T — 3 Respondent, / _—-s EINAL ORDER “The Agency for Health Care Administration (the “Agency” or “AHCA”) finds and . concludes as follows: , FINDINGS OF FACT 1. On January 5, 2006, Florida Hospital Waterman “Waterman” or “Petitioner”) filed . Petition for Variancé (the “Petition”) with ABCA. - 2. At the request of AHCA, Petitioner agreed to waive the 30 day deadline to request additional documentation (pursuant to Séction 120.542, Florida Statites) extend the deailline until April 7,2006. : ) | ) 3. On April 7, 2006, and pursuant to Section 120.542, Florida Statutes, AHCA issued to Petitioner a Request for Additiorial Documentation, asking for specific records that would support the allegations set forth in their Petition. . 4. Petitioner submitted additional documentation to AHICA, and the parties farther agreed to allow the Agency until. October 20, 2006, to render its decision. 5. The documentation submitied by Petitioner does not satisfy the requirements of Section 120.542 (2), Florida Statutes . | 6. More specifically, the Petitioner failed to present documentation o sufficiently demonstrate or otherwise prove that the underlying statute will or has been achieved by other means. ) . _ 1. The Betitioner failed to present documentation to sufficiently demonstrate or otherwise prove that a substantial economic, technological, legal or other hardship to Petitioner. 8. The Petitioner failed to present documientation to sufficiently demonstrate or otherwise prove that the application of the rile affects Petitioner in a manner significantly different from the way it affects other similarly situated, persons subject to the mule. CONCLUSIONS OF LAW 9. The Agency has jurisdiction over Respondent and the Paltion, ; 10. The Agency finds that the Petition fails to meet the requirements of Section 120.542(2), Florida Statutes, in that Petitioner failed to sufficiently show that the underlying purpose of the statute will or has been achieved by other means by Petitioner. 11. The Agency finds that the Petition fails to meet the requirements of Section . 120.542(2), Florida Statutes, in that Petitioner failed to sufficiently show that application of the rule would create a Substantial Hardship. 12. The Agency finds that the Petition fails to meet the requirements of Section. = 120.542(2) Florida Statutes, in that Petitioner failed to sufficiently show that application of. the mule would violate the principles of fairness. 13. For these reasons, the Petition for Variance fails to meet the requirements of Section 120.542, Florida Statutes, and the Requirements of the Reimbursement Plan. IT IS THEREFORE ORDERED AND ADJUDGED THAT: The Petition for Variance is denied. DONE and ORDERED on this 20" day of October, 2006, in Tallahassee, Florida. CHRISTA GALAMAS, SECRETARY _ Agency for Health | Care Administration PURSUANT TO SECTION 120.569, FLA. STAT., YOU HAVE THE RIGHT TO REQUEST AN ADMINISTRATIVE HEARING. IN ORDER TO. OBTAIN A . FORMAL PROCEEDING BEFORE THE DIVISION OF ADMINISTRATIVE HEARINGS UNDER. SECTION 120.57(1), FLA. STAT., YOUR REQUEST MUST CONFORM TO THE REQUIREMENTS OF RULE 28-106.201, FLORIDA ADMINISTRATIVE CODE (@.A.C.), AND MUST STATE THE MATERIAL FACTS YOU DISPUTE, PURSUANT TO SECTION 120,542(8), FLA. STAT., AND.SUCH .. BEARING SHALL BE LIMITED TO THE AGENCY ACTION ON THE REQUEST FOR THE VARIANCE’ OR. WAIVER. . IF You po NOT DISPUTE ANY ISSUES oF MATERIAL FACT (YOU ADMIT THEN), YOU WILL BE AFFORDED AN INFORMAL HEARING UNDER SECTION 120.57(2),. FLA. STAT. AT AN INFORMAL HEARING, YOU WILL BE ' GIVEN AN OPPORTUNITY TO PRESENT BOTH WRITTEN AND ORAL EVIDENCE IN MITIGATION. MEDIATION UNDER SECTION 120.573, FLA. STAT. IS NOT AVAILABLE IN THIS MATER. ALL REQUESTS FOR HEARING MUST BE FILED (RECEIVED) BY THE AGENCY WITHIN TWENTY-ONE (21) DAYS OF RECEIPT OF THIS ORDER. - FAILURE TO REQUEST A HEARING WILL RESULT IN THE: FORFEITURE OF THE RIGHT TO ANY HEARING. ALL REQUESTS FOR HEARING SHALL BE SENT TO THE AGENCY CLERK, AGENCY FOR HEALTH CARE ADMINISTRATION, 2727 MAHAN DRIVE, MAIL STOP 3, TALLAHASSEE, _ FLORIDA 32308. PLEASE INCLUDE A COPY OF THIS ORDER WITH THE .REQUEST. CERTIFICATE OF SERVICE . | HEREBY CERTIFY that a tre and cizet of the frei Fina Order has bon furnished by U.S. of interoffice mail to the parsons named below on this 20th day of October, 2006. Agency Clerk OO Agency for Health Care Administration " 2727 Mahan Drive, Building #3 Tallahassee, FL 32308-5403 _ COPIES FURNISHED TO: Joanne B. Erde, Esquire Duane Morris, LLP . 200 South Biscayne Boulevard, Suite #3400. Miami, Florida 33131 Anthony L. Conticello Agency for Health Care Administration 2727 Mahan Drive, Building #3 Tallahassee, Florida 32308 Agency for Health Care Administration 2727 Mahan Drive, Building #3 Tallahassee, Florida 32308 FLORIDA | \ MEDICAID JEB BUSH, GOVERNOR ; : RHONDA M. MEDOWS, MD, FAAFP, SECRETARY . December 31, 2003 Joanne B. Erde, P.A. Broad and Cassel _ 201 South Biscayne Blvd. Suite 3000 Miami, FL 33131 RE: Florida Hospital Waterman Medicaid Provider No..0101095-00 Dear Ms. Erde: This is in response to your letter dated November 11, 2003 and our follow-up conference call with you on November 26, 2003. As stated in your letter, the facility is requesting a rate adjustment to reflect the significant change in operations due to the replacement of the facility. As we discussed, the Medicaid Program cannot approve your request for a rate adjustment. Presently there are no provisions in the Florida Title XIX Inpatient or Outpatient Hospital Reimbursement Plans, which allow a hospital’s prospective rate to be adjusted for capital improvements of capital replacements that have been incurred, but not yet reported to the Agency. However, when the facility files its 12/31/03 cost report, any néw costs associated with these operational changes will be determined in accordance with the current Reimbursement Plans. : — : If you have any questions regarding this decision, please call me at 850-414-2756. | Sincerely, Kibet Cbglly Robert C. Butler, Chief Medicaid Program Analysis RCB:1s 2727 Mahan Drive ® Mail Stop #21 Visit AHCA online at Tallahassee, FL 32308 : 7 www.fdhe.state.fil.us . : 201 SOUTH BISCAYNE BOULEVARD . : Surre 3000 Muss, FLORA 33131 ———————— ‘TELEPHONE: 305.373.9400 _ : FACSIMILE: 305.373.9443 BROAD ano CASSEL wove broadandsaielcom _ ATTORNEYS AT LAW ; vm BDI . DIRECT FACSIMILE: (305) 995-6429 EMAIL: jerde@broadandeassel.com ‘November 11, 2003 CERTIFIED MAIL . Robert Butler - Agency for Health Care Administration 2727 Mahan Drive Mail Stop 21° : Tallahassee, FL 32308 Re: . Florida Hospital Waterman Medicaid Provider No. 0101095-00 Dear Robert: As you may be aware, Florida Hospital Waterman recently moved to a brand new replacement facility. In doing so, it increased its gross square feet by 198,000 square feet and its total employees by 250. Pursuant to long-standing program policy, we would request a rate adjustment to reflect the significant change in operations of this facility. ‘We would like to meet with you to discuss how to move forward on this request. Sincerely, BROAD AND CASSEL JBE:pe ce: Yvette Cummings, Senior Revenne Officer “BOCA RATON - FT. LAUDERDALE + MIAMI + ORLANDO - TALLAHASSEE - TAMPA + WEST PALM BEACH MIATIHEALTH(281502.1 24B52/0039 JBE pe 11/5/2003 1:20 PM 18/27/1999 13:37 858-922-8461 | - AHCA/PDMA PAGE 82 400903 ~ 1997/07- Florida Agency For Health Care Administration . Office of Medicaid Cost Reimbursement Planning and Analysis P.O. Box 12400 Tallahassee Florida 32317-2400 . Florida Hospital Heartland Medical Center : Provider Number: "_pt00901-00 * Highway 27 North Date: 30/27/99 Avon Park FL 33825 Fiscal Year Enrt: | 1245/98 _- ; ; Andit Status; Unaudited Cost Report 1] Provider Typ iH HOSPITAL Current Rate _NewRate. Effective Date Inpatient _ "$727.33 79495 10/7/97 - Outpatient , _ $48.54 10539 10/7/97 ite Type: X Moterim Prospective _, Total Interim Total Prospective KX Settlement Based on Cost BASIS: Budget X — Unandited Cost Field Andited Cost Revised Field Audit & ‘W. Rydell Sammel Bij 'e ‘Hospitals: UNISYS Cantract Management Area Adm, 6 Children's Medical Services Florida Hospital ABCA - County Hillings Vocational Rehabilitation For Information Only (No Change In Rate) V345.9.2.11 Updated 10/26/99 Produced Wednesday, Oct 27 1999 at 9:11:44 AM Printed 10/27/9 46114100901 1997071999102 707122 30/27/1993 13:37 858-922-2462 " AHCA/PDMA PAGE 87 Florida Agency For Health Care Administration | 100901 - 1997/07 _| Office of Medicaid Cost Reimbursement Planning aud Analysis Computation of Hospttal Prospective Payment Rates For Rate Seniester October 7,1997 throngh December 31, 1997 Florida Hospital Heartland Medical Center Type 2 of Comtral: Non-Profit (Church) (2) : County: Highlands (28) Fisal Yoar 10/ 7/97-12/31/98 : an fl District 6 Classification: New Provider ee el Le =m 1,328,376.00 0,00 9, Total Cost T10e20045 . 10. Charpe: 92,798,166.00| __59,973,523.00] __9,076-508.00 6,438,955.00 3 052,049.54 (-) 629,789.57 2,423,159.97 “Total Medicaid Coxt ‘Apportioned Medicaid Fixed Costa = Total Fixed Costs x (Medicaid Charges/Total Charges) Total Medicaid Variable Operating Cost = (AA-AB) Vatisble Opernting Cost =NOT Inflated duc to Intooim status 1,615,616.02 1,615,616,02 ce eee dict ty Boj GP or Motinaid Pui Chim (OF) . Variable Cout Target = Bane Rate Semesterx Rate of Inoscaie (G2 x F4) Lester of Inflated ‘Variable Cost Rata (AG) or Target Rate (AH) Se Sar Obe brain & 0 bx Oapaiod) am the 96 Floridla Prioe Level Index (0.9604) for Highlands county County Ceiling Target Rate = ~ County Cxing Bex Rate oflerene (61 x4) ‘Leaser of Variable Cost (AT) oc County Coiling (AL) Plus Rate for Fixed costs and Property Allowancs = (CLU/AF) x E9 9,076,508,00 4,907,585.00 2,465,10 320.13 2,465.10 320.13 Total Medicaid Charges, Inpaticnt (C10): Outpatient (010) Chaps vide by Modal Duy Gaps) ot Metoaid Paid Chis (Onin) Rats based on Medicaid Charges adjusted for Inflation (AR x. B : Prospective Rate ( Lesset of rate based on Cost (AP) or Charges (A5)) . i V3IASO211 Report Caledloteds Wedneiday, Oct 27 LOPS at 2:18:05 AM Repoct Printed: 10/27/99 246114100901 199707 1999102709172 16/27/1999 13:37 858-922-8461 AHCA/PDMA : ‘PAGE 63 100901 - 1998/01 Florida Agency For Health Care Administration Office af Medicaid Cost Reimbmsement Plauning and Analysis £0. Box 12400 Tallahassee Florida 32317-2400 Florida Hospital Hearfland Medical Center . : Provider Number, 0100901-00_ Highway 27 North me Date: 1027199 Avon Paik FL 33825 Fiscal Year End ~__ 12198 HOSPITAL Current Rate + _NewRate __Effective Date atient “+ $727.33 794,95 1/1/98 Outpatient $48.74 105,39 1/ 1/98. Rate 22 ‘ xX Interim ‘Prospective Total Interim ”. pgtal Prospective X Settlement Based on Cost BASIS: __ Budget X __ Unaudited Cost Field Andited Cost Revised Field Audit Ww. ny Samuel Medicaid Cost Reimbursement Analysis =~ DISTRIBUTION: oepiinks UNISYS Contract Area Adm 6 Children's Medical Services Florida Hospital Association ABCA - County Billings Vocational Rehabilitation - For Information Only Qo Change In Rete) V3459-211 Updated LORE/99 Produced ‘Wedneaday, Oct 27 1999 at 9:18:46 4M Printed 10/t79 ; 461142009011998011999102709182 18/27/1999 13:37 858-922-v461 AHCA/PDMA PAGE 8B ¢ Florida Agency For Health Care Administration 100901 - 1998/01 Office of Medicaid Cost Reimbursement Planning sid Anaiyit Compntation of Hospital Prospective Payment Rates . For Rate Semester January 1,1998 through June 30, 1998 Florida Hospital Heartland Medical Center Type of Control; Non-Profit (Church) (2) County: Highlands (28) Fisoal ‘Year: 10/ 7/97-12/3 1/98 ‘Type of Action:Unamdited Cost Report [I] District — 6 _—__ = | . 3,052,949.54, 1,615,616,02 _Apportionsd Misdieaid Fixed Caste = Total Fined Costs x (Modicaid Chargeo/Total Charges) © 629,789.57 Total Medicaid Variable Operating Cost= (AA-AB) ; 2,423, 159.97 1,615,616.02 ade pertng Cot- NOT Taft doe sin satn __- esas | 616.02 Vislable Coat Rate Coot Divlled Gy Dep GE) or Modiold Fold Chloe (OP) Variable Gost Target = Base Rate Semester x Rate of Inorease (G2 x F4) County Rais Calling = Stata Ceiling (70% Gor lpaticnt 80%: fr Outpaion Wace the 96 Florida Price Leva! Index (0.9604) for Highiands county County Ceffing Target Rate = County Celing te x Rate of Taarease (GixF4) Lesger of Variable Se : Plus Rate for Fixed costs and Property Allowance = (C1I/AF) x B9 Plus Rate For Retum on Equity BEGERR BRR BRBS BE Total Medicaid Charges, Inpatient (C10): Outpatient (2110) : 9, 076,508, 00 4,907,585.00 Charges divided by Medio Dar Gnpationt) or Medicaid Paid Chime (Qutpation . 2,465.10 320.13 2,465.10 320.13 TS Prospective Rao (Leer fats based on Cost (AP) or args 5) ¥3.45.9.2.11 Report Calculated; Wedneadzy, 004.27 1999 at 9:18:45 AM Report Printed: 10/27/99 :461 14200901 2998011999 102708182 18/27/1999 13:37 B5B-922-pd61 AHCA/PDMA _ PAGE 64° 100903 - 1998/07 Florida Agency For Health Care Administration Office of Medicaid Cost Reimbursement Planning atid Analysis ® 0. Box 12400 Tallahassee Florida 32317-2400 icaid Ret 1 Form ’ Florida Hospital Heartiand Medical Center - Provider Number: 6100901-00 Highway 27 North, : : 10/27/99 Avon Park FL 33825 Fiscal Year Eni: 12/31/98 Proyider aH HOSPITAL CurrentRate __NewRats_ _Effective'Date Inpatient "$735.69 79495 7/1/98 Outpatient _ $49.23 105.39 "T1798 ~ Rate e; X_ Interim Prospective Total Interim Total Prospective X__ Unattdired Cost , Field Audited Cost Revised Field Andit kz. W.Rytell Same DISTRIBUTION: Hospitals: UNISYS Contract Manapement Area Adm 6 Children's Medical Services AHCA ~- County Billings Vocational Rehabilitation. For Information Only (No Change In Rate) V3AS D211 ‘Dpdated 10/26/95 Produced Wednesday, Oct 27 1999 nt 9:39:38 AM Printed 10/27/9 461141009011998071999102709192 16/27/1999 . 13:37 858-922-4461 AHCA/PDMA . , PAGE -89 ae Florida Agency For Health Care Administration Office of Medicaid Cost Reimbnrsement Planning and Analysis Computation of Hospital Prospective Payment Rates For Rate Semester Jnly 1,1998 through December 31, 1998 - Florida Hospital Heartland Medical Center Type af Controt: Non-Profit (Church) (2) : County; Highlands (28) Fiscal Year ; 10/ 7/97-12/31/98 --. Type of Action-Unandited Cost Report [1] District 6 Hospital Classification: New Provider : : reyeye 2 Reine 3. Special Care 4, Newborn Routine 5. Intern-Resident 6, Home Health, 7, Malpractie: S Adiusiments O} 454 -26. 876,46 214.222,38 9. Total Cost 33,106,290.45 17,547,075 55 __3,052,949.54| _ 1,625,616.02 10. Charges. 92,798,166.00| __ 59,973,523.00 ~_ 9,076,508.00 4,907,585.00 11. Fixed Coste 6,438,965.00 629,789.57 | AA 1,615,616.02 AB Apportioied Mediosid Freed Costs — Total Freed Coste x (Medicaid Chargew/Totsl Charges) [o) 629,789.57 AD | Total Medicald Variable Operating Cost = (AA»AB) 2,423,159,97 1,615,616.02 AE | Variable Operating Cost -NOT Inflated due to Interim status 2,423,159.97 1,615,616.02 AF Total Modicaid Days (npaticnt BA+E5) or Medicaid Paid Claims (Outpatient) j [8682 TS, 330 | Variable Cost Rate: Cost Divided by Days (IP) or Madicald Paid Claims (OP) Variable ost Target ~ Base Rate Semester x Rate of lneate (62 x4) Conmity Rate Ceiling = State Ceiling (70% Srp 90% fe Otc is the 97 Florida Price Level Index (0.9775) for Bighlands county road Gains Target Rate ~ County Celling Base x Rate of Increase (G1 xF4) - Tessar of Vasable Cot (AN) or County Celing (AZ) lus Rate for Fixed costs and Property Allowance = (C1LI/AF) x E9 Plus Rate For Rerum on Equity Total Medioald Charges, Inpatlont (C10): Outpatient (D10) 9,076,508,00 4,907,585.00 Charges divided by Modioaid Days (Inpatient) Medi Put Claims (Outpatient) 2,465,10 320.13 Histc based on Mesiicaid Charges adjusted for Inflation (4 2,465.10 320,13 Drape Ral (Lane ae bred on Cont (AP) or Gmc OS) V3.45.9.2.11 Report Caleclated: Wednesday, Oct 27 1999 at 9:19:38 4M Report Printed: 10/27/99 :46114100901 1998071998 102709 192 ‘had been achieved by other means, failed to demonstrate that there was a substantial STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION itn G ‘ AN GE Zu AG FLORIDA HOSPITAL WATERMAN, _ Petitioner, AHCA NO. 06-01VW Vv. STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Respondent. : / /- FINAL ORDER THIS CAUSE concerns a Petition for Formal Administrative Hearing (“Petition”) ' that the Agency for Health Care Administration received on November 12, 2006. . On January 5, 2006, the Petitioner filed a Petition for Variance of Rules 59G- 6.020 and 59G-6.030, Florida Administrative Code. Thereafter, the Petitioner agreed to waive the 30 day deadline for the Agency to request additional documentation, and to extend that deadline to April 1, 2006. On April 7, 2006, the Agency issued a Request for Additional Documentation to the Petitioner. Petitioner submitted the additional documentation to the Agency and agreed fo allow the Agency until October 20, 2006 to render a decision on its Petition for Variance. On October 20, 2006, the Agency issued a Final Order denying the Petition for Variance because the Petitioner failed to demonstrate that the underlying statute would or JAN 29 2007 demonstrate that the application of rules affected Petitions in a manner significantly different from the way they affected other similarly situated persons subject to the rules. The Final Order provided the Petitioner with the ‘right to request a formal or informal hearing within 21 days of the date that the Final Order was rendered, pursuant to Section . 120.57, Florida Statutes. ; On November 12, 2006, the Petitioner timely filed its Petition, disputing the factual findings in the Final Order. However, regardless of Petitioner’s factual disputes with the Final Order, the Petition must be dismissed with prejudice due to the fact that the Agency does not have jurisdiction to grant the rélief requested by the Petitioner in its Petition. Specifically, Section 120.542(1), Florida Statutes (2005), states in pertinent part that ; , [this section does not authorize agencies to grant variances or waivers to statutes or to rules required by the Federal Government for the agency's implementation or retention of any federally approved or delegated program, except as allowed by the program or when the variance or waiver is also approved by the appropriate agency of the Federal Government. - Rules 59G-6.020 and 59G-6.030, Florida Administrative Code, are required by the Federal Government for the Agency’s implementation ‘of the Medicaid program in "Florida. There is nothing in the state plan that would allow for the granting of such a variance as the one the Petitioner requested. Further, the federal government has not authorized the Agency to grant such,a variance as the one requested by the Petitioner. Section 120.569(2)(c), Florida Statutes, and Rule 28-106.201(4), Florida Administrative Code, requires the Agency to provide a petitioner with an opportunity to correct or amend a deficient petition unless it conclusively appears from the face of the petition that the defect cannot be cured. See also Brookwood Extended Care Center of © Homestead, LLP v. Agency for Health Care Administration, 870 So.2d 834 (Fla. 3° DCA 2003). The Agency’s lack of. jurisdiction to prant the relief ‘requested by the Petitioner in its Petition is not a curable defect. Thus, the Agency must dismiss the Petifioner’s Petition with prejudice. ITIS THEREFORE ORDERED AND ADJUDGED THAT: The Petition is dismissed with. prejudice. " Petitioner Shall be govemed accordingly. Florida, ANDREW C. AGWUNOBI, MD., SECRETARY _ AGENCY FOR HEALTH CARE ADMINISTRATION NOTICE OF RIGHT TO JUDICIAL REVIEW A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER OF" DISMISSAL WITH PREJUDICE IS ENTITLED TO JUDICIAL REVIEW, WHICH SHALL BE INSTITUTED BY FILING THE ORIGINAL NOTICE OF. APPEAL WITH THE AGENCY CLERK OF AHCA, AND A COPY,.ALONG WITH THE FILING FEE PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE. THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF THE RENDITION OF THE ORDER TO BE REVIEWED. DONE and ORDERED this yytay of N) Ansa of 2007, in Tallahassee, _ a CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Final Order has been furnished by U.S. or interoffice mail to the persons named below on this ow . Agency for Health Care Administration 2727 Mahan Drive, MS #3 Tallahassee, FL 32308 (850) 923-5873 COPIES FURNISHED TO: Joame B. Erde, Esquire Duane Morris, LLP - 200 South Biscayne Boulevard - Suite 3400 - Miami, Florida 33151-2397 David W. Nam, Esquiré Assistant General Counsel Agency for Health Care Administration 2727 Mahan Drive, MS #3 Tallahassee, Florida 32308 Tom Amold, Deputy Secretary _ Division of Medicaid

Docket for Case No: 07-003473