Viera Hospital, Inc. v. Agency For Health Care Administration
230 So. 3d 973
| Fla. Dist. Ct. App. | 2017Background
- Sixty-seven hospitals (petitioners) challenged AHCA’s posted Medicaid outpatient reimbursement rates for FY 2016–17 and sought administrative hearings under §120.57(1), Fla. Stat.
- Petitioners alleged AHCA adopted a new methodology (affecting the Medicaid Trend Adjustment) that produced substantially lower unaudited reimbursement rates effective July 1, 2016.
- AHCA moved to dismiss as premature, arguing final agency action occurs only after issuance of audited rates under §409.908(1)(f)1.
- AHCA later asserted the petitions were moot after Oct. 31, 2016 under §409.905(6)(b)1. (which limits adjustments to rates after that date).
- The agency dismissed the petitions with prejudice, holding: (1) unaudited rates are not final agency action; and (2) it lacked authority to adjust rates after Oct. 31, 2016.
- The District Court of Appeal reversed, concluding the announced (unaudited) rates were final as to the amount because methodology was fixed and the rates took immediate effect, and remanded for formal hearings under §120.57(1).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether posting unaudited outpatient rates constitutes final agency action permitting a §120.57 hearing | Posting of rates affected substantial interests and is final as to amount because methodology is fixed and rates take immediate effect | Final agency action occurs only after AHCA issues audited rates per §409.908(1)(f)1.; challenges are premature | Posting unaudited rates can constitute final agency action as to the reimbursement amount; petitioners entitled to hearings |
| Whether §409.908(1)(f)1. forecloses pre-audit challenges to methodology | Statute does not preclude pre-audit challenges because it only authorizes challenges to audited-rate calculations and excludes methodology from that specific auditing remedy | AHCA reads statute to require audit first and give point of entry only upon audited notice | Court: §409.908(1)(f)1. does not prohibit pre-audit challenges to methodologies; it authorizes post-audit correction of calculations but is silent as to pre-audit finality of rates determined by methodology |
| Whether §409.905(6)(b)1. (no adjustments after Oct. 31) renders petitions moot or strips agency of remedial authority | Petitioners filed before Oct. 31 and hearings remained pending through no fault of petitioners; §409.905(6)(b)1. does not mean errors discovered after Oct.31 are never corrected | AHCA: statute prohibits adjustments after Oct. 31, so agency lacks jurisdiction to grant relief and petitions became moot | Court: AHCA’s reading is untenable and clearly erroneous; the statute contemplates correction in subsequent periods for errors discovered after Oct.31 and does not preclude hearings filed before that date |
| Whether there is a disputed issue of material fact to warrant §120.57 hearing | Petitioners alleged methodology change and resulting financial injury — factual disputes exist | AHCA did not contest that petitioners’ interests were affected or that disputed facts exist; focused on finality/jurisdiction | Court: factual disputes were alleged and must be accepted for dismissal-review; thus hearings warranted |
Key Cases Cited
- Herbits v. Bd. of Trs. of Internal Improvement Trust Fund, 195 So. 3d 1149 (Fla. 1st DCA 2016) (on review of dismissal, court must accept petition allegations as true)
- Raymond James Fin. Servs., Inc. v. Phillips, 126 So. 3d 186 (Fla. 2013) (statutory interpretation reviewed de novo)
- Friends of the Hatchineha, Inc. v. Dep’t of Envtl. Reg., 580 So. 2d 267 (Fla. 1st DCA 1991) (final agency action and disputed material fact required for §120.57 hearing)
- Florida Soc’y of Ophthalmology v. State Bd. of Optometry, 532 So. 2d 1279 (Fla. 1st DCA 1988) (standing/substantial interest for administrative hearing)
- Save Our Creeks v. Fla. Fish & Wildlife Conservation Comm’n, 112 So. 3d 128 (Fla. 1st DCA 2013) (reiterating final action plus disputed material fact principle)
- Verizon Florida, Inc. v. Jacobs, 810 So. 2d 906 (Fla. 2002) (agency interpretation of statute entitled to deference unless clearly erroneous)