The Issue The issues in this case are (1) whether the methodology for grouping hospitals adopted by the HCCB pursuant to Sections 4D-1.03, 4D-1.12(1) and 4D-1.12(2), F.A.C., constitutes an invalid exercise of delegated legislative authority as being arbitrary or capricious and whether the gross revenue per adjusted admission screen should be adjusted by the geographic price level index adjustment factor? Mercy has also raised an issue as to whether the grouping methodology is violative of constitutional guarantees of administrative equal protection and due process. This issue, however, is beyond the jurisdiction of the Division of Administrative Hearings.
Findings Of Fact As a part of its responsibilities, the HCCB is required to specify a uniform system of financial reporting for Florida hospitals. Section 395.507(1), Florida Statutes (1984 Suppl.). So that meaningful comparisons of data reported can be made, the HCCB is required by Section 395.507(2), Florida Statutes (1984 Suppl.), to provide a method of grouping hospitals. Pursuant to Section 395.509(1), Florida Statutes (1984 Suppl.), every Florida hospital is required to file a budget with the HCCB for approval. Section 395.509(2), Florida Statutes (1984 Suppl.), requires that the budgets of certain hospitals be automatically approved based upon a comparison of the gross revenue per adjusted admission of hospitals within groups established pursuant to Section 395.509(4)(a), Florida Statutes (1984 Suppl.). The language of Section 395.509(4)(a), Florida Statutes (1984 Suppl.), which requires the HCCB to establish a method of grouping hospitals, is identical to the language of Section 395.507(2), Florida Statutes (1984 Suppl.). The grouping methodology required by Sections 395.507(2) and 395.509(4)(a), Florida Statutes (1984 Suppl.), is included in Chapter V, Section B of the Hospital Uniform Reporting System Manual (hereinafter referred to as the "Manual"). This methodology has been incorporated by reference in Sections 4D-1.03 and 4D- 1.12(1) and (2), F.A.C., as the method of grouping hospitals for purposes of the uniform system of financial reporting under Section 395.507, Florida Statutes (1984 Suppl.), and the comparison of gross revenue per adjusted admission for purposes of budget review under Section 395.509, Florida Statutes (1984 Suppl.). After hospitals are grouped, Chapter V, Section C of the Manual provides that the screens used to identify hospitals subject to further review are to be adjusted by adjustment factors. Two adjustment factors are provided; one is a geographic price level index adjustment factor. Mercy is a not-for-profit corporation which operates a general acute care hospital with 550 licensed beds located in Dade County, Florida. Based upon the application of the HCCB's grouping methodology as contained in Chapter V, Section B of the Manual, Mercy was assigned to group 9. Mercy was notified of its assignment by a memorandum dated October 10, 1984. Mercy challenged its group assignment by letter dated November 13, 1984. In its letter, Mercy challenged the grouping methodology used by the HCCB and requested a "more relevant and objective method of establishing the weights utilized in the grouping methodology . . . be developed." Further, Mercy requested that "new weights be applied and that the groups be reformulated," and that "the screening value, Gross Revenue per Adjusted Admission, be adjusted for geographic influences prior to ranking, as has been done in previous budget reviews." Mercy presented its reassignment request before the HCCB on December 13-14, 1984. The HCCB orally rejected Mercy's request. By memorandum dated December 19, 1984, the HCCB denied in writing mercy's request for reassignment. Whether Mercy should be reassigned to a reformulated group depends upon whether Mercy's challenge to Sections 4D-1.03 and 4D-1.12(1) and (2), F.A.C. is successful. If that challenge is not successful, the grouping methodology was properly applied to Mercy. The Final Order issued simultaneously with this Recommended Order holds that the grouping methodology is not arbitrary and capricious and therefore, the HCCB's adoption of Sections 4D-1.03 and 4D-1.12(1) and (2), F.A.C., does not constitute an invalid exercise of delegated legislature authority. Mercy's assignment to group 9 was therefore proper. Based upon the evidence presented at the hearing, it does not appear that the point at which the geographic price level index adjustment factor is to be applied to Mercy has been reached. Despite the fact that the evidence shows that the HCCB has decided not to apply this adjustment factor, even though it is specifically provided for in the HCCB's own Manual, the HCCB has not yet failed to do so in Mercy's case. Therefore, the question of whether the geographic price level index adjustment factor should be applied to Mercy's 1985 budget is premature.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the request for reassignment to a reformulated hospital group and the request to adjust the gross revenue per adjusted admission screen for the geographic price level index adjustment factor be denied. DONE and ENTERED this, 28th day of June, 1985, in Tallahassee, Florida. LARRY J. SARTIN 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 28th day of June, 1985. COPIES FURNISHED: John H. Parker, Jr., Esquire PARKER, HUDSON, PAINER DOBBS & KELLY 1200 Carnegie Bldg. 133 Carnegie Way Atlanta, Georgia 30303 James J. Bracher Executive Director Hospital Cost Containment Board Woodcrest Office Park 325 John Knox Road, Building L, Suite 101 Tallahassee, Florida 32303 Douglas A. Mang, Esquire Charles T. Collette, Esquire MANG & STOWELL, P.A. P.O. Box 1019 Tallahassee, Florida 32302 Robert A. Weiss, Esquire PARKER, HUDSON, RAINER, DOBBS & KELLY The Perkins House, Suite 101 118 N. Gadsden Street Tallahassee. Florida 32301
The Issue Whether proposed rule 64B16-27.830 of the Board of Pharmacy (Board) is an invalid exercise of delegated authority pursuant to Section 120.52(8), Florida Statutes?
Findings Of Fact Respondent, Board of Pharmacy is the state entity charged with regulating the practice of pharmacy in the State of Florida pursuant to Section 20.43 and Chapters 456 and 465, Florida Statutes. Petitioner, the FMA, is organized and maintained for the benefit of the approximately 16,000 licensed Florida physicians who comprise its membership. One of the primary purposes of the FMA is to act on behalf of its members by representing their common interests before various governmental entities in the State of Florida, including the Department of Health and its Boards. Intervenors comprise 33 medical societies representing physicians licensed pursuant to Chapters 458 and 459, Florida Statutes. The membership totals for each of the Intervenors is listed in Petitioner's Exhibit 1. A primary purpose of each of the Intervenors is to act on behalf of its membership by representing their common interests before the various governmental entities of the State of Florida, including the Department of Health and its Boards. The Proposed Rule The text of the proposed rule is as follows: 64B16-27.830 Standards of Practice - Drug Therapy Management. through (3) No change A pharmacist may dispense a drug pursuant to a prescription where the practitioner indicates on the prescription "formulary compliance approval" either in the practitioner's own handwriting or preprinted with a box where the practitioner indicates approval by checking the box when: The pharmacist receives a formulary change as a consequence of the patient's third party plan or Medicaid. The product that the third party formulary designates as its preferred product is a therapeutic equivalent for the prescribed product. A therapeutic equivalent is a product that is in the same therapeutic class as the prescribed drug. The pharmacist, within 24 hours of the formulary compliance substitution, shall provide to the practitioner either in writing or by facsimile a statement indicating that the pharmacist engaged in formulary compliance and the therapeutic equivalent that the pharmacist dispensed. The pharmacist has complied with the requirements of Rule 64B16-27.530 with regard to the notification to the patient. The pharmacist may make adjustments in the quantity and directions to provide for an equivalent dose of the preferred formulary therapeutic alternative. (5)(4) No change. Specific authority 465.005, 465.0155 F.S. Law implemented 465.003(13), 465.0155, 465.022(1)(b) F.S. Section 465.005, Florida Statutes, listed as specific authority, provides the Board's general rulemaking authority. Section 465.0155, Florida Statutes, listed as both specific authority and law implemented, directs the Board to adopt by rule standards of practice relating to the practice of pharmacy. Section 465.003(13), Florida Statutes, listed as law implemented, defines the practice of pharmacy. Section 465.022(1)(b), Florida Statutes, listed as law implemented, provides: The board shall adopt rules pursuant to ss. 120.536(1) and 120.54 to implement the provisions of this chapter. Such rules shall include, but shall not be limited to, rules relating to: . . . . (b) Minimum standards for the physical facilities of pharmacies. The Rulemaking Process On October 22, 2004, in Volume 30, Number 43, Florida Administrative Weekly, the Board published its Notice of Development of Proposed Rule 64B16-27.830, entitled "Standards of Practice - Drug Therapy Management." On October 29, 2004, the FMA requested a rule workshop. On November, 19, 2004, in Volume 30, Number 47, Florida Administrative Weekly, the Board published a notice of a rule workshop on the proposed rule to be held December 7, 2004, in Jacksonville, Florida. On December 7, 2004, the Board held a rule workshop on the proposed rule. On December 17, 2004, in Volume 30, Number 51, Florida Administrative Weekly, the Board published a notice of withdrawal of the proposed rule. On April 29, 2005, in Volume 31, Number 17, Florida Administrative Weekly, the Board published the same rule language again, this time as a proposed rule. On April 29, 2005, the FMA requested a rule hearing. On May 12, 2005, Suzanne G. Printy, Chief Attorney for the Joint Administrative Procedures Committee (JAPC), sent to Ann Cocheu, Assistant Attorney General for the Board of Pharmacy, a letter indicating that she had "completed a review" of the rule and questioning the Board's authority to promulgate the rule. On May 20, 2005, in Volume 31, Number 20, Florida Administrative Weekly, the Board published a notice of a rule hearing on the proposed rule to be held June 14, 2005, in Tampa, Florida. On June 14, 2005, the rule hearing was held before the Board. At that time, several individuals spoke in opposition to the proposed rule. The Board voted to conduct a further public meeting with respect to the proposed language. On July 14, 2005, F. Scott Boyd, Executive Director and General Counsel for JAPC sent to Ann Cocheu a letter advising her of the deadlines applicable to the rulemaking process. Specifically, Mr. Boyd's letter stated: According to our records, the above-styled rule was noticed in the Florida Administrative Weekly on April 29, 2005. Paragraph 120.54(3)(e), F.S., requires that rules be filed for adoption not more than 90 days from the date of the original notice unless specified circumstances prevail. The 90-day period for filing the rule expires on July 28, 2005. If you intend to adopt the rule, we remind you that paragraph 120.54(3)(d), F.S., requires that if the rule has not been changed since the rule was filed with the Committee, or if the rule contains only technical changes, you must file a notice to that effect with this Committee at least 7 days prior to filing the rule for adoption. If any change has been made in the rule, other than a technical change, you must publish a notice, and file a copy with the committee, at least 21 days prior to filing the rule for adoption. If the rule is not filed within 90 days, and if an exception is not applicable, you must notice withdrawal of the rule. Any further action to adopt the rule must comply with the rulemaking procedures of § 120.54, F.S. Please advise us of any exceptions which apply to the rule so that we may keep our records current. On July 21, 2005, a paralegal from the Office of the Attorney General wrote to Suzanne Printy at JAPC and requested to "toll" the proposed rule. The July 21, 2005, letter advised that the Board had scheduled a review of the rule at a committee meeting to be held on August 15, 2005. While the July 21, 2005, letter refers to a copy of the meeting notice for August 15, 2006, no notice for the meeting is included in the record. At no time did JAPC notify the Board that an objection to the proposed rule was being considered. On August 15, 2005, the Board's Rules Committee met again to review the proposed rule. Minutes from the committee meeting reflect that the Rules Committee reviewed letters from the Florida Medical Association and the Chair of the Osteopathic Board of Medicine in opposition to the rule. These written materials, however, are not included in Respondent's Exhibit 1, which purports to be the Board's entire record with respect to the rulemaking proceedings for amendments to Rule 64B16-27.830. The Executive Director of the Board acknowledged receiving letters from Laurie Davies, M.D., Chair of the Board of Medicine and from the Coalition to Protect Health Care Access, representing several patient advocacy organizations expressing opposition to the proposed rule. These documents, likewise, are not in the Board's rulemaking record. The minutes of the August 15, 2005, meeting indicate that the Committee voted to hold the rule until statutory authority was obtained to enact it. Ms. Poston, the Board's Executive Director, was to send a letter to the Attorney General's office asking for a formal opinion regarding the Board's statutory authority. There is no indication in the record of any activity with respect to the proposed rule from August 15, 2005, until April 26, 2006, when Suzanne Printy wrote to Reginald Dixon, Assistant Attorney General, regarding its status. Her letter states in part: On July 21, 2005, the Office of the Attorney General, Administrative Law Bureau, notified this office that the board was tolling the 90 day time limit for adoption of those amendments in order to accommodate review of the amendments by this Committee. That original 90 day time limit would have expired on July 28, 2005. As of this date, we have not received any proposed revisions or notices of change in response to my concerns. Please be aware that if I have not received a notice of change or a notice of additional public hearing on the amendments within the next two weeks, I will have to conclude that my review of the rule is complete. The tolling of the adoption will then come to an end, and the board will have 7 days within which to change, adopt or withdraw the amendments. On May 19, 2006, in Volume 32, Number 20, Florida Administrative Weekly, the Board noticed an additional public meeting on the proposed rule to be held June 6, 2006, in Fort Lauderdale. A copy of the notice was provided to Suzanne Printy on May 11, 2006, one day after the two-week period set out in her letter of April 26, 2006, expired. Nothing in the Notice of Public Hearing for the June 6, 2006, public hearing gives any indication that this will be the final public hearing related to proposed amendments to Rule 64B16-27.830. On May 22, 2006, Suzanne Printy acknowledged receipt of the Notice of Public Hearing published May 19, 2006. In a letter addressed to Reginald Dixon, she stated: Please be advised that at the conclusion of the hearing, presumably June 6, 2006, the Board of Pharmacy will have 45 days from the conclusion of the hearing, or until July 21, 2006, within which to either publish a notice of change, publish another notice of public hearing, or to adopt the rules. On June 6, 2006, the rule hearing was held. The Board did not publish a notice of change, publish another notice of public hearing or adopt the proposed rule by July 21, 2006. Nor did the Board publish any notice that would indicate the June 6, 2006, hearing was intended to be the last public hearing on the proposed rule. However, Rebecca Poston, Executive Director for the Board of Pharmacy, testified that the Board voted to "move forward" with the rule. On July 20, 2006, Reginald Dixon advised Suzanne Printy of the Board's consideration of JAPC's concerns regarding the proposed amendments to Rule 64B16-27.830, and stated that the Board believed the amendment to the rule was authorized by the 1999 change to Section 465.003(15), adding "other pharmaceutical services" to the definition of the practice of the profession of pharmacy. Mr. Dixon stated that "The Board believes that this explanation addresses JAPC's concerns regarding the 64B16- 27.830(4), F.A.C., and has voted to go forward with the promulgation of the rule." On August 11, 2006, Ms. Printy again wrote to Mr. Dixon, reiterating JAPC's concerns about the rule: This rule authorizes pharmacists to dispense drugs from the same therapeutic class as the prescribed drug, pursuant to a prescription where the practitioner authorizes on the prescription "formulary compliance approval." Please explain whether a "therapeutic equivalent" of a prescribed drug which is in the same "therapeutic class" constitutes a generic equivalent. If a "therapeutic equivalent" of a prescribed medication does not constitute a general generic equivalent, please explain why changing the practitioner's prescription does not violate the following prohibition in s. 465.003(13), F.S.: However, nothing in this subsection may be interpreted to permit an alteration of a prescriber's directions, the diagnosis or treatment of any disease, the initiation of any drug therapy, the practice of medicine, or the practice of osteopathic medicine, unless otherwise permitted by law. On August 14, 2006, the FMA filed its petition to challenge the proposed rule. On August 30, 2006, Mr. Dixon wrote to Ms. Printy advising that a "therapeutic equivalent" is not a "generic" equivalent." He advised that the Board was relying on the "other pharmaceutical services" portion of Section 465.003(13) as authority for the proposed rule. The Contents of the Rule There is no generally accepted definition of "therapeutic equivalent" or "therapeutic class." The proposed rule simply states: "The product that the third party formulary designates as its preferred product is a therapeutic equivalent for the prescribed product. A therapeutic equivalent is a product that is in the same therapeutic class as the prescribed drug." The Board of Pharmacy did not conduct any research or determine whether any studies existed that examined the safety, benefits or detriments of following the course of conduct permitted by the proposed rule. Likewise, no studies were conducted regarding the definition of "therapeutic equivalent." A "generically equivalent drug product" is defined by statute as "a drug product with the same active ingredient, finished dosage form, and strength." § 465.025, Fla. Stat. Section 465.025(6) allows the Boards of Pharmacy and Medicine to establish a formulary of generic drug type and brand name products which the boards determine "demonstrate clinically significant biological or therapeutic inequivalence and which, if substituted, would pose a threat to the health and safety of patients receiving prescription medication." No pharmacist may substitute a generically equivalent drug product for a prescribed name brand product, if the brand name drug or generic drug is included in the formulary established by the Boards of Medicine and Pharmacy. § 465.025(6)(b), Fla. Stat. Thus, there are instances where even drugs having the same active ingredient, finished dosage form, and strength cannot be substituted for a brand name drug prescribed by a health care practitioner. According to John O'Brien, The United States Food and Drug Administration defines "therapeutic equivalent" to mean drugs that contain the same active ingredients and route of administration and strength; and they are assigned by the FDA the same therapeutic equivalence codes starting with the letter "A." There is no indication on the record presented that the Board's definition of therapeutic equivalent, i.e., a product in the same therapeutic class, is tied to or consistent with the Food and Drug Administration's use of that term. Formularies differ based upon the third party entity developing the formulary. As a consequence, a drug may be designated as part of different therapeutic classes, depending on the persons making up the formulary. For example, the drug Digoxin is listed on the Capital Health Plan formulary as an anti-eurhythmic, while it is listed under Blue Cross Blue Shield's formulary as a cardiac glycoside. The drug can be used for both purposes. Similarly, drugs with different side effects and contra-indications may be listed under the same class under a particular formulary. There is a group of blood pressure drugs known as angiotensin receptor blockers (ARBs). These drugs have a low side effect profile. There is another group of blood pressure medications called ACE inhibitors. These drugs have a higher side effect profile than ARBs. Under Florida's Medicaid formulary, ACE inhibitors and ARBs are both in the hypotensive category of drugs, as are beta blockers. Some studies suggest that beta-blockers may either mask the symptoms of or cause diabetes. Likewise, beta blockers should not be taken by patients who have asthma. It is possible, should the proposed rule be adopted, that a physician would prescribe a drug with the chemical make-up of an ARB and check the formulary compliance box thinking only another ARB could be substituted. Florida's Medicaid formulary, however, would allow a pharmacist to substitute either an ACE inhibitor or a beta-blocker for the originally prescribed ARB. This substitution could have significant negative effects on patient care. The proposed rule also removes any requirement the pharmacist currently has to speak to the prescribing physician before substituting a drug on the compliance formulary for the drug specified by the physician. Instead, the pharmacist need only notify the physician, in writing or by facsimile, within 24 hours after the substitution, that the pharmacist has engaged in formulary compliance and what "therapeutic equivalent" has been dispensed to the patient. While pharmacies keep records regarding drugs already prescribed to patients, those records are limited to those medications dispensed by that pharmacy. They would not necessarily have access to patient records indicating problems with another drug. By the time the physician knows of a substitution made by a pharmacist, the patient may have already received, and used, a medication that is not consistent with that person's particular needs.
Conclusions Having reviewed the four Notices of Intent to Deny Application issued May 13-18, 2010, attached hereto and incorporated herein (Ex. 1, 2, 3, and 4), and all other matters of record, the Agency for Health Care Administration (“Agency”) has entered into a Settlement Agreement (Ex. 5) with the other party to these proceedings, and being otherwise well-advised in the premises, finds and concludes as follows: ORDERED: 1. The attached Settlement Agreement is approved and adopted as part of this Final Order, and the parties are directed to comply with the terms of the Settlement Agreement. 2. The Petitioner shall remit to the Agency, within thirty (30) days of the entry of a Final Order adopting this agreement, an administrative fee in the sum of thirty thousand dollars ($30,000.00) to resolve the Agency's allegations of unlicensed activity, in the interest of expediently resolving these matters and in recognition of the expense and uncertainty of litigation. 3. Checks should be made payable to the “Agency for Health Care Administration.” The check, along with a reference to this case number, should be sent directly to: Filed January 10, 2012 1:47 PM Division of Administrative Hearings Agency for Health Care Administration Office of Finance and Accounting Revenue Management Unit 2727 Mahan Drive, MS# 14 Tallahassee, Florida 32308 4. Unpaid amounts pursuant to this Order will be subject to statutory interest and may be collected by all methods legally available. 5. Any requests for an administrative hearing are withdrawn. The parties shall bear their own costs and attorney’s fees. This matter is closed. DONE and ORDERED this [0 day of ~ Bettie: ; 20/2, in Tallahassee, Leon County, Florida. — Ds we { izabeth Dudek, retary fey ir wacked 0. th€are Administration A PARTY WHO JS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY, ALONG WITH FILING FEE AS 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 OF PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED. Copies furnished to: Lance P. Cohen, Esquire Warren J. Bird, Asst. General Counsel Cohen & Thurston, P.A. Office of the General Counsel 1723 Blanding Boulevard, Suite # 102 Agency for Health Care Administration Jacksonville, Florida 32310 2727 Mahan Drive, Bldg #3, MS #3 (U. S. Mail) Tallahassee, Florida 32308 (Interoffice Mail) Jan Mills Agency for Health Care Administration 2727 Mahan Drive, Bldg #3, MS #3 Tallahassee, Florida 32308 (Interoffice Mail) Roger Bell Health Care Clinic Unit Manager Agency for Health Care Administration 2727 Mahan Drive, MS #53 Tallahassee, Florida 32308 (Interoffice Mail) Agency for Health Care Administration Office of Finance and Accounting Revenue Management Unit 2727 Mahan Drive, MS# 14 Tallahassee, Florida 32308 (Interoffice Mail) Suzanne F. Hood Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399 (U.S. Mail) CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of this Final Order was served on the oa above-named person(s) and entities by U.S. Mail, or the method designated, on this the 10 day of aaa » 2012" Agency for Health Care Administration 2727 Mahan Drive, Building #3 Tallahassee, Florida 32308-5403 (850) 412-3630 Certified Article Number , ?bbO 390) Y5778 8971 SEMDERS RECORD i", Certified Article Number (?160 3901 9846 7935 1337 SENDERS RECORD One Nofice $1149/1° CHARLIE CRIST FIORDAAGENCY FOR HEATH CARE ADMINS TRATION Better Health Care for ail Floridians THOMAS W. ARNOLD GOVERNOR SECRETARY May 12, 2010 Physicians Medical Centers - Jax Inc File Number: 8428 1680 Dunn Ave Case #: 2010004935 Ste 39 Jacksonville, FL 32218 F INTENT TO DENY APP TION It Is the decision of this Agency that the application for certificate of exemption from health care clinic licensure for Physicians Medical Centers - Jax Inc, located at 1680 DUNN AVE, STE 39, JACKSONVILLE, FL, 32218, be DENIED. The specific basis for this determination is based on the fact that: Requested information was not complete or timely received by the Agency pursuant to Section 408.806(3)(b), Florida Statutes. You were notified by correspondence dated April 9, 2010 to provide further Information addressing identified apparent errors or omissions within twenty-one days (21) from the receipt of the Agency's correspondence. Our records indicate you received this correspondence by certified mail on April 15, 2010. The outstanding issues remaining are: A copy of the closing documents, stock or similar certificates signed and dated by both the buyer and seller is required, In addition, the Agency received information that the facility does not meet exemption requirements as it is not wholly owned by a Florida licensed health care practitioner, pursuant to Section 400.9905(4)(g). EXPLANATION OF RIGH Pursuant to Section 120.569, F.S., 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), F.S., your request for an administrative hearing must conform to the requirements in Section 28-106.201, Florida Administrative Code (F.A.C), and must state the material facts you dispute. SEE ATTACHED ELECTION AND EXPLANATION OF RIGHTS FORMS. ce: Agency Clerk, Mail Stop 3 ; Legal Intake Unit, Mall Stop 3. EXHIBIT 14 Visit AHCA online at http://ahca.myflorida.com 2727 Mahan Drive,MS-53 Tallahassee, Florida 32308 " Certified Article Number , 7260 3901 9648 57748 8995 SENDERS RECORD FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION CHARLIE CRIST THOMAS W. ARNOLD GOVERNOR Better Health Care for all Floridians SECRETARY May 12, 2010 Physicians Medical Centers - Jax Inc File Number: 8430 9826 San Jose Blvd Case #: 2010004881 Jacksonville, FL 32257 .. : NOTICE OF INTENT TO DENY APPLICATION It is the decision of this Agency that the application for certificate of exemption from health care clinic licensure for Physicians Medical Centers - Jax Inc, located at 9826 San Jose Bivd, Jacksonville, FL, 32257, be DENIED. The specific basis for this determination is based on the fact that: Requested information was not complete or timely received by the Agency pursuant to Section 408.806(3)(b), Florida Statutes. You were notified by correspondence dated March 27, 2010 to provide further information addressing identified apparent errors or omissions within twenty- one days (21) from the receipt of the Agency's correspondence. Our records indicate you received this correspondence by certified mail on April 8, 2010, The outstanding issues remaining are: Subpart 1.B, Name-of.Applicant: The name of the applicant must be the corporation or legal entity as it is registered with. the Division of Corporations, it must also match-the FEIN indicated in section 1.C. This subpart was submitted as a response to the omissions, but the. applicant's name indicated does not match the FEIN# listed in section 1.C. of the application. : As this facility did a change of ownership, provide a copy of the closing documents signed and dated by both the buyer (new owner) and seller (previous owner). Acceptable documentation may include any one of the following: Copy of final sale/transfer documents showing date of final transfer and signatures of buyer(s) and seller(s), or a signed, written statement from an attorney, on letterhead, that confirms sale/transfer completion and provides the date of final action. : In addition, the Agency received information that the facility does not meet exemption requirements as it is not wholly owned by a Florida licensed health care practitioner, pursuant to Section 400.9905(4)(g). TION OF HT! Pursuant to Section 120.569, F.S., 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), F.S., your request for an administrative hearing-must conform to the - requirements in Section 28-106.201, Florida Administrative Code (F.A.C), and must state the material facts you dispute. ; : : Visit AHCA online at http://ahca.myflorida,com 2727 Mahan Drive,MS-53 Tallahassee, Florida 32308 EXHIBIT 2 Physicians Medical Centers -. . Inc Page 2 : May 12, 2010 SEE ATTACHED ELECTION AND EXPLANATION OF RIGHTS FORMS. ce: Agency Clerk, Mail Stop 3 Legal Intake Unit, Mail Stop 3 Te thictee-Va thet [9 Number fd60 3901 9848 7495 a2, SENDERS RECORD FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION CHARLIE CRIST THOMAS W. ARNOLD GOVERNOR Better Health Care for all Floridians SECRETARY May 13, 2010 Physicians Medical Centers - Jax Inc File #8427 5960 Beach Blvd : Case #2010004956 Ste3 ; Jacksonville, FL 32207 NOTICE OF INTENT TQ DENY APPLICATION It is the decision of this Agency that the application for certificate of exemption from health care clinic licensure for Physicians Medical Centers - Jax Inc, located at 5960 Beach Bivd., Ste 3, Jacksonville, FL, 32207, be DENIED. The specific basis for this determination is based on the fact that: Requested information was not complete or timely received by the Agency pursuant to Section 408.806(3)(b), Florida Statutes. You were notified by correspondence dated April 7, 2010 to provide further information addressing identified apparent errors or omissions within twenty- one days (21) from the receipt of the Agency's correspondence. Our records indicate you received this correspondence by certified mail on Apri! 9, 2010. The outstanding issues remaining are: As this facility did a change of ownership, provide a copy of the closing documents signed and dated by both the buyer (new owner) and seller (previous owner). Acceptable documentation may include any one of the following: Copy of final sale/transfer documents showing date of final transfer and signatures of buyer(s) and seller(s), or a signed, written statement from an attorney, on letterhéad, that confirms sale/transfer completion and provides the date of final action. ; In addition, the Agency received information that the facility does not meet exemption requirements as it is not wholly owned by a Florida licensed health care practitioner, pursuant to Section 400.9905(4)(g). EXPLANATION OF RIGHTS Pursuant to Section 120.569, F.S., 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), F.S., your request for an administrative hearing must conform to the requirements in Section 28-106.201, Florida Administrative Code (F.A.C), and must state the material facts you dispute. EXHIBIT 3 Visit AHCA online at http://ahca.myflorida.com 2727 Mahan Drive,MS-53 Tallahassee, Florida 32308 Physicians Medical Centers - Jax Page 2 May 13, 2010 SEE ATTACHED ELECTION AND EXPLANATION OF RIGHTS FORMS. Health Cae Clinic Unit ce: Agency Clerk, Mail Stop 3 Legal Intake Unit, Mail Stop 3 RTE ecm 3901 94a 7935 yy74 SENDERS RECORD FLORIDA AGENCY TOR HEALTH CARE ADMINISTRATION oe ERNGS Better Health Care for all Floridians THOMAS W. ARNOLD May 18, 2010 CERTIFIED MAIL / RETURN RECEIPT REQUESTED File Number: 8429 Physicians Medical Centers - Jax, Inc 2020 Kingsley Ave Case #: 2010005135 Suite A Orange Park, FL 32073 NOTICE OF INTENT TO DENY APPLICATION It is the decision of this Agency that the application for certificate of exemption from health care clinic licensure for Physicians Medical Centers - Jax Inc, located at 2020 Kingsley Avenue, Suite A, Orange Park, Florida, 32073 be DENIED. The specific basis for this determination is based on the fact that: Requested information was not complete or timely received by the Agency pursuant to Section 408.806(3)(b), Florida Statutes, You were notified by correspondence dated April 9, 2010 to provide further information addressing identified apparent errors or omissions within twenty-one days (21) from the receipt of the Agency’s correspondence, Our records indicate you received this correspondence by certified mail on April 12, 2010, The outstanding issues remaining are: Evidence of Ownership — Information received by the Agency states that Victoria Critzer is the owner of Physicians Medical Centers-Jax Inc. Provide the following documentation as evidence of ownership: * A copy of the final closing documents such as a bill of sale or stock purchase agreement. signed and dated by both the buyer and seller including the effective date sale or transfer. The closing documents should contain the signature of Gordon Garver DC, previous owner of Physicians Medical Center-Jax Inc and Joseph Thomas MD, new owner of Physicians Medical Center-Jax Inc. ¢ A copy of the cancelled and reissued stock certificates transferring shared to Joseph Thomas MD. ¢ Acopy of the lease agreement that includes the name(s) of the owner(s). e Acopy of the business tax receipt that includes the name of the corporation and owner. In addition, the Agency received information indicating that the facility does not meet exemption requirements as it is not wholly owned by a Florida licensed health care practitioner, pursuant to Section 400.9905(4)(g). EXHIBIT 2727 Mahan Drive,MS-53 Tallahassee, Florida 32308 Visit AHCA online at http://ahca.myflorida.com . Physicians Medical Centers - Ja... .nc Page 2 May 18, 2010 EXPLANATION OF RIGHTS Pursuant to Section 120,569, F.S., 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), F.S. your request for an administrative hearing must conform to the requirements in Section 28-106.201, Florida Administrative Code (F.A.C), and must state the material facts you dispute. ey SEE ATTACHED ELECTION AND EXPLANATION OF RIGHTS FORMS, For questions regarding this notice, please contact Ruby Schmigel, Health Services & Facilities Consultant with the Health Care Clinic Unit at (850) 412-4413. oger Bgl, Mandger Health Care Clinic Unit ce: Agency Clerk, Mail Stop 3 Legal Intake Unit, Mail Stop 3 STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS PHYSICIANS MEDICAL CENTERS-JAX, INC., Petitioner, DOAH Case Nos. 10-3202, 10-3203, 10-3204 and 10-3205 vs. AHCA CASE Nos.: 2010004881, 2010004956 AGENCY FOR HEALTH CARE 2010004935 and 2010005135, ADMINISTRATION, Respondent. / SETTLEMENT AGREEMENT Respondent, State of Florida, Agency for Health Care Administration (hereinafter the “Agency”), through its undersigned representatives, and Petitioner, Physicians Medical Centers- Jax, Inc. (hereinafter “Petitioner”), pursuant to Section 120.57(4), Florida Statutes, each individually, a “party,” collectively as “parties,” hereby enter into this Settlement Agreement (“Agreement”) and agree as follows: WHEREAS, the Petitioner applied for four certificates of exemption from licensure pursuant to Section 400.9935(6), Florida Statutes and Chapter 59A-33, Florida Administrative Code; and WHEREAS, Victoria Critzer has applied for four initial health care clinic licenses, expressly intending to purchase the interest of Dr. Joseph Thomas in Petitioner upon issuance by the Agency of those licenses; and WHEREAS, the Agency has jurisdiction of the license and exemption applications described in the foregoing paragraphs, by virtue of being the regulatory and licensing authority over the said licenses and exemptions; and EXHIBIT 5 WHEREAS, the Agency served the Petitioner with four Notices of Intent to Deny Application on or about May 13, 2010, notifying the Petitioner of the Agency’s intent to deny the certificates of exemption for the reasons stated thereon, in Agency cases numbered 2010004881, 2010004956, 2010004935 and 2010005135; and WHEREAS, Petitioner timely requested a formal hearing pursuant to Section 120.57(2), Florida Statutes, and in response to said request the matters were forwarded to the Division of Administrative Hearings (DOAH), and were designated as cases numbered 10-3202, 10-3203, 10-3204 and 10-3205 in that tribunal; and subsequently the parties agreed to, and did abate those cases in DOAH, for the purpose of discussing settlement; and WHEREAS, the Agency alleges, and Petitioner denies, that during the period of processing of the aforementioned applications, Petitioner operated one or more unlicensed health care clinics in violation of Florida law as to which no formal administrative, civil or criminal action has thus far been brought; and WHEREAS, the parties have agreed that a fair, efficient, and cost effective resolution of this dispute would avoid the expenditure of substantial sums to litigate the dispute; and WHEREAS, the parties stipulate to the adequacy of consideration exchanged; and WHEREAS, the parties have negotiated in good faith and agreed that the best interest of all the parties will be served by a settlement of these proceedings; and NOW THEREFORE, in consideration of the mutual promises and recitals herein, the parties intending to be legally bound, agree as follows: 1. All recitals are true and correct and are expressly incorporated herein. 2. Both parties agree that the “whereas” clauses incorporated herein are binding findings of the parties. 3. Joseph Thomas, M.D. hereby acknowledges, affirms and certifies that, at the time this agreement is executed by him, he is the sole owner of the Florida corporation Physicians Medical Center-Jax, Inc. 4, Victoria Critzer hereby acknowledges, affirms and certifies that, at the time this agreement is executed by her, she is the sole owner of the Florida corporation Physicians Medical Center, Inc. 5. Upon full execution of this Agreement, Petitioner agrees to waive any and all proceedings and appeals to which it may be entitled including, but not limited to, an informal proceeding under Subsection 120.57(2), a formal proceeding under Subsection 120.57(1), appeals under Section 120.68, Florida Statutes; and declaratory and all writs of relief in any court or quasi-court (DOAH) of competent jurisdiction; and further agrees to waive compliance with the form of the Final Order (findings of fact and conclusions of law) to which it may be entitled. Provided, however, that no Agreement herein, shall be deemed a waiver by either party of its right to judicial enforcement of this Agreement. 6. Upon full execution of this Agreement, the parties agree to the following: a. Petitioner's four (4) applications for exemption from licensure are hereby withdrawn, and Petitioner expressly waives its right to challenge or appeal, or both, in DOAH or elsewhere, the denial by the Agency of the exemptions. b. The Agency will resume processing the four initial licensure applications submitted by Victoria Critzer as intended future 100% owner of Physicians Medical Centers-Jax, Inc., now pending, and if the applications are complete and the applicant qualified under applicable law, the Agency will issue the licenses upon full payment by Petitioner of an agreed upon sum, as set forth below, to resolve the Agency's claim of unlicensed activity against Physicians Medical Center, Inc. Ms. Critzer agrees to use reasonable diligence to timely remedy any omissions from the applications cited by the Agency, to make the facilities available as required by law for all inspections required in connection with the licensure of the facilities, and to otherwise comply with all requirements of the application process, and all statutes and administrative rules thereunto appertaining, including background screening as may be applicable. c. The Agency agrees to use all reasonable diligence to process the initial license applications, and to issue the initial licenses as expeditiously as reasonably possible, provided that Ms. Critzer timely complies with all reasonable requests for additional information to which the Agency is entitled as a component of the application and licensure process, and provided that Victoria Critzer, and the applications she presented, are qualified for the licenses under all applicable statutes and administrative rules. d. Victoria Critzer will maintain the health care clinic license #HCC6732 currently held by Physicians Medical Center Inc. (PMC), for purposes of billing health care services provided solely at the licensed location, 9826 San Jose Boulevard, Suite B, Jacksonville, Florida. Whereas, Ms. Critzer, through counsel, has advised the Agency of a change of address for the license from 9826 San Jose Boulevard, to 9826 San Jose Boulevard, Suite B, PMC will submit a change of address application to the Agency together with the appropriate fee, within 10 days of execution of this agreement, and prior to resumption by the Agency of processing of the subject licensure applications. The license will be maintained 7. under a different federal employer identification number from any other licenses issued to Victoria Critzer or any entity in which she has a controlling interest. A separate health care clinic license must be obtained for any other location at which any health care services will be provided and third-party reimbursement sought for on behalf of Physicians Medical Centers Inc. e. Physicians Medical Centers, Inc. agrees to pay the sum of thirty thousand and no/100s dollars ($30,000.00) to the Agency, to resolve the Agency's allegations of unlicensed activity, in the interest of expediently resolving these matters and in recognition of the expense and uncertainty of litigation. The sum will be paid in lump sum at the time that the initial licenses referenced in paragraph b., above, are issued, or within 30 days following rendition of a Final Order by the Agency that incorporates this Agreement, whichever occurs first. f. Nothing in this Agreement shall prohibit the Agency from denying Petitioner’s application for licensure based upon any statutory and/or regulatory provision, including, but not limited to, the failure of Petitioner to satisfactorily complete a survey reflecting compliance with all statutory and rule provisions as required by law. By executing this Agreement, the Petitioner neither admits nor denies the allegations raised in the Notices of Intent to Deny referenced herein. 8. Upon full execution of this Agreement, the Agency shall enter a Final Order adopting and incorporating this Agreement in its entirety, and closing the above-styled case(s). The cases resident in DOAH, referenced above as DOAH cases numbered 10-3202, 10-3203, 10- 3204 and 10-3205, are currently closed by Order entered in that tribunal on October 7, 2010. The parties hereby further agree that those cases shall remain closed permanently, and each party hereby waives its right to seek to have any of those cases re-opened. 9. Each party shall bear its own costs and attorney’s fees. 10. This Agreement shall become effective on the date upon which it is fully executed by all the parties. 11. The Petitioner for itself and for its related or resulting organizations, its successors or transferees, attorneys, heirs, and executors or administrators, does hereby discharge the Agency and its agents, representatives, and attorneys of all claims, demands, actions, causes of action, suits, damages, losses, and expenses, of any and every nature whatsoever, arising out of or in any way related to this matter and the Agency’s actions, including, but not limited to, any claims that were or may be asserted in any federal or state court or administrative forum, including any claims arising out of this Agreement, by or on behalf of the Petitioner or related or resulting organizations. 12. This Agreement is binding upon all parties herein and those identified as a party, or a beneficiary, of the provisions of this Agreement, and each signatory acknowledges same and the adequacy of consideration therefor. 13. In the event that Petitioner is or was a Medicaid provider, this settlement does not prevent the Agency from seeking Medicaid overpayments or from imposing any sanctions pursuant to Rule 59G-9.070, Florida Administrative Code. This Agreement does not prohibit the Agency from taking action regarding Petitioner’s Medicaid provider status, conditions, requirements or contract. 14. The undersigned have read and understand this Agreement and have authority to bind their respective principals to it. Both parties have been represented by counsel in the negotiation and execution of this Agreement. The Petitioner fully understands that counsel for the Agency represents solely the Agency and Agency counsel has not provided legal advice to or influenced the Petitioner in its decision to enter into this Agreement. 15. This Agreement contains the entire understandings and Agreements of the parties. 16. | This Agreement supersedes any prior oral or written Agreements between the parties. This Agreement may not be amended except in writing. Any attempted assignment of this Agreement shall be void. 17. Venue for any action brought to interpret, challenge or enforce the terms of this Agreement or the Final Order entered pursuant hereto shall lie solely in the Circuit Court in Leon County, Florida. 18. ‘Ifa court of competent jurisdiction finds any part of this Agreement to be void, voidable, or unenforceable, then the remainder of the contract shall remain in full force and effect. 19. All parties agree that a facsimile signature suffices fe 20. The following representatives and beneficiaries hereby ae duly S. to enter into this Agreement. Molly McKéns eputy Secretary {_ panes P. Céhen, Esquire Health Quality ance Cohen & Thurston, P.A. Agency for Health Care Administration 1723 Blanding Boulevard, Suite 102 2727 Mahan Drive, Bldg #3 Jacksonville, Florida 32310 Tallahassee, Florida 32308 Counsel to Petitioner DATED: (frolir DATED: 1-1 U~ aye William R. Roberts Acting General Counsel Agency for Health Care Administration 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308 DATED: /7 [(3l 4 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308 DATED: Uf (5) WH Physicians Medical Centers-Jax, Inc. 9826 San Jose Boulevard Jacksonville, Florida 32257 patep: _})-14~!/ ~~ x. 1 _f- Victoria Critzer as president, sole director and 100% Owner Physicians Medical Center, Inc. 9826-B San Jose Boulevard Jacksonville, Florida 32257 DATED: _|1- (4-//
