## F IRST 

## D ISTRICT 

## C OURT OF 

## A PPEAL 

## S TATE OF 

## F LORIDA

_____________________________

No. 1D 17

- 2027

_____________________________

S OUTHERN B APTIST H OSPITAL O F F LORIDA d/b/a B APTIST M EDICAL C ENTER N ASSAU ; S OUTHERN B APTIST H OSPITAL OF F LORIDA d/b/a B APTIST M EDICAL C ENTER
OF THE B EACHES ; S OUTHERN B APTIST H OSPITAL OF F LORIDA d/b/a B APTIST M EDICAL C ENTER ; M ARTIN M EMORIAL M EDICAL C ENTER ; S OUTH L AKE H OSPITAL ; O RLANDO H EALTH
, I NC

. d /b/a O RLANDO H EALTH ; O RLANDO H EALTH C ENTRAL
, I NC

. d/b/a H EALTH C ENTRAL
,
Appellant s ,

v.

A GENCY F OR H EALTH C ARE A DMINISTRATION
,
Appellee.2 _____________________________

No. 1D 17

- 2028

_____________________________

S OUTHERN B APTIST H OSPITAL O F F LORIDA d/b/a B APTIST M EDICAL C ENTER N ASSAU ; S OUTHERN B APTIST H OSPITAL OF F LORIDA d/b/a B APTIST M EDICAL C ENTER
OF THE B EACHES ; S OUTHERN B APTIST H OSPITAL OF F LORIDA d/b/a B APTIST M EDICAL C ENTER ; M ARTIN M EMORIAL M EDICAL C ENTER ; S OUTH L AKE H OSPITAL ; O RLANDO H EALTH
, I NC

. d/b/a O RLANDO H EALTH ; O RLANDO H EALTH C ENTRAL
, I NC

. d/b/a H EALTH C ENTRAL
,
Appellant s ,

v.

A GENCY F OR H EALTH C ARE A DMINISTRATION
,
Appellee.3 _____________________________

No. 1D 17

- 2033

_____________________________

T HE P UBLIC H EALTH T RUST OF M IAMI

- D ADE C OUNTY
, F LORIDA
, which governs and operates J ACKSON H EALTH S YSTEM
, including J ACKSON M EMORIAL H OSPITAL
, J ACKSON N ORTH M EDICAL C ENTER and J ACKSON S OUTH C OMMUNITY H OSPITAL
,
Appellant s ,

v.

A GENCY F OR H EALTH C ARE A DMINISTRATION
,
Appellee.4 _____________________________

No. 1D 17

- 2034

_____________________________

M IAMI B EACH H EALTHCARE G ROUP
, L TD

. , d/b/a A VENTURA H OSPITAL AND M EDICAL C ENTER ; HCA H EALTH S ERVICES OF F LORIDA
, I NC
., d/b/a B LAKE M EDICAL C ENTER ; G ALENCARE
, I NC
., d/b/a B RANDON R EGIONAL H OSPITAL ; T ALLAHASSEE M EDICAL C ENTER , I NC
., d/b/a C APITAL R EGIONAL M EDICAL C ENTER ; C ENTRAL F LORIDA R EGIONAL H O SP ITAL
, I NC
., d/b/a C ENTRAL F LORIDA R EGIONAL H OSPITAL ; C IT R US M EMORIAL H OSPITAL
, I NC
., d/b/a C ITRUS M EMORI AL H OSPITAL ; S ARASOTA D OCTORS H OSPITAL
, I NC
., d/b/a D OCTORS H OSPITAL OF S ARASOTA ; E NGLEWOOD C OMMUNITY H OSPITAL
, I NC
., d/b/a E NGLEWOOD C OMMUNITY H OSPITAL ; F AWCETT M EMORIAL H OSPITAL
, I NC
., d/b/a F AWCETT M EMORIAL H OSPITA L ; F ORT W ALTON B EACH M EDICAL C ENTER , I N C
., d/b/a F ORT W ALTON B EACH M EDICAL C ENTER ; B AY H OSPITAL
, I NC
., d/b/a G ULF C OAST M EDICAL C ENTER ; JFK M EDICAL C ENTER L IMITED P ARTNERSHIP
, d/b/a JFK M EDICAL C ENTER ; JFK M EDICAL C ENTER L IMITED P ARTNERSHIP
, d/b/a JFK M EDICAL C ENTER

- N ORTH C AMPUS ; K ENDALL H EALTH CARE5 G ROUP
, L TD ., d/b/a K ENDALL R EGIONAL M EDICAL C ENTER ; N OTAMI H OSPITALS OF F LORIDA
, I NC
., d/b/a L AKE C ITY M EDICAL C ENTER ; L ARGO M EDICAL C ENTER , I NC
., d/b/a L ARGO M EDICAL C ENTER ; L ARGO M EDICAL C ENTER , I NC
., d/b/a L ARGO M EDICAL C ENTER

- I NDIAN R OCKS ; L AWNWOO D M EDICAL C ENTER , I NC
., d/b/a L AWNWOOD R EGIONAL M EDICAL C ENTER & H EART I NSTITUTE ; N EW P ORT R ICHEY H OSPITAL
, I NC
., d/b/a M EDICAL C ENTER OF T RINITY ; N EW P ORT R ICHEY H OSPITAL
, I NC
., d/b/a M EDICAL C ENTER OF T RINITY W EST P ASCO C AMPUS ; M EMORIAL H EALTHCARE G ROUP
, I NC
., d/b/a M EMORIAL H OSPITAL J ACKSONVILLE ; W EST F LORIDA

– MHT, LLC, d/b/a M EMORIAL H OSPITAL OF T AMPA ; P LANTATION G ENERAL H OSPITAL L IMITED P ARTNERSHIP
, d/b/a M ERCY H OSPITAL
, A C AMPUS OF P LANTATION G ENERAL H OSPITAL ; N ORTH F LORIDA R EGIONAL M EDICAL C ENTER , I NC
., d/b/a N ORTH F LORIDA R EGIONAL M EDICAL C ENTER ; G ALENCARE
, I NC
., d/b/a N ORTHSIDE H OSPITAL ; N ORHTWEST M EDICAL C ENTER , I NC
., d/b/a N ORTHWEST M EDICAL C ENTER ; HCA H EALTH S ERVICES
OF F LORIDA
, I NC
., d/b/a O AK H OLL H OSPITAL ; M ARION C OMMUNITY H OSPITAL
, I NC
., d/b /a O CALA R EGIONAL M EDICAL C ENTER ; M ARION C OMMUNITY6 H OSPITAL
, I NC
., d/b/a W EST M ARION C OMMUNITY H OSPITAL ; O RANGE P ARK M EDICAL C EN TER , I NC
., d/b/a O RANGE P ARK M EDICAL C ENTER ; O SCEOLA R EGIONAL H OSPITAL
, I NC
., d/b/a O SCEOLA R EGIONAL M EDICAL C ENTER ; W EST F LORIDA

– PPH, LLC, d/b/a P ALMS OF P ASADENA H OSPITAL ; P ALMS W EST H OSPITAL L IMITED P ARTNERSHIP
, d/b/a P ALMS W EST H OSPITAL ; P LANTATION G ENERAL H OSPITAL L IMITED P ARTNERSHIP
, d/b/a P LANTATION G ENERAL H OSPITAL ; P OINCIANA M EDICAL C ENTER , I NC
., d/b/a P OINCIANA M EDICAL C ENTER ; P UTNAM C OMMUNITY M EDICAL C ENTER OF N ORTH F LORIDA
, LLC, d/b/a P UTNAM C OMMUNITY M EDICAL C ENTER ; O KEECHOBEE H OSPITAL
, I NC
., d/b/a R AULERSON H OSPITAL ; HCA H EALTH S ERVICES OF F LORIDA
, I NC
., d/b/a R EGIONAL M ED ICAL C ENTER B AYONET P OINT ; HCA L ONG T ERM H EALTH S ERVICES
OF M IAMI
, I NC
., d/b/a S ISTER E MMANUEL H OSPITAL ; S UN C ITY H OSPITAL
, I NC
., d/b/a S OUTH B AY H OSPITAL ; M EMORIAL H EALTHCARE G ROUP
, I NC
., d/b/a S PECIALTY H OSPITAL J ACKSONVILLE ; HCA H EALTH S ERVICES OF F LORI DA
, I NC
., d/b/a S T

. L UCIE M EDICAL C ENTER ; G ALEN OF F LORIDA
, I NC
., d/b/a S T

. P ETERSBURG G ENERAL H OSPITAL ; W EST F LORIDA

– TCH, L LC

, d/b/a T AMPA7 C OMMUNITY H OSPITAL ; O KALOOSA H OSPITAL
, I NC
., d/b/a T WIN C ITIES H OSPITAL ; U NIVERSITY H OSPITAL
, L TD ., d/b/a U NIVERSI TY H OSPITAL AND M EDICAL C ENTER ; W EST F LORIDA R EGIONAL M EDICAL C ENTER , I NC
., d/b/a W EST F LORIDA H OSPITAL ; and C OLUMBIA H OSPITAL C ORPORATION OF S OUTH B ROWARD
, d/b/a W ESTSIDE R EGIONAL M EDICAL C ENTER ,
Appellant s ,

v.

A GENCY F OR H EALTH C ARE A DMINISTRATION
,

A ppellee.8 _____________________________

No. 1D 17

- 2035

_____________________________

T HE P UBLIC H EAL T H T RUST OF M IAMI

- D ADE C OUNTY
, F LORIDA
, which gover ns and operates J ACKSON H EALTH S YSTEM
, including J ACKSON M EMORIAL H OSPITAL
, J ACKSON N ORTH M EDICAL C ENTER and J ACKSON S OUTH C OMMUNITY H OSPITAL
,
Appellant s ,

v.

A GENCY F OR H EALTH C ARE A DMINISTRATION
,
Appellee.9 _____________________________

No. 1D 17

- 2038

_____________________________

M IAMI B EACH H EALTHCARE G ROUP
, L TD ., d/b/a A VENTURA H OSPITAL AND M EDICAL C ENTER ; HCA H EALTH S ERVICES OF F LORIDA
, I NC
., d/b/a B LAKE M EDICAL C ENTER ; G ALENCARE
, I NC
., d/b/a B RANDON R EGIONAL H OSPITAL ; T ALLAHASSEE M EDICAL C ENTER , I NC
., d/b/a C APITAL R EGIONAL M EDICAL C ENTER ; C ENTRAL F LORIDA R EGIONAL H O SP ITAL
, I NC
., d/b/a C ENTRAL F LORIDA R EGIONAL H OSPITAL ; C IT R US M EMORIAL H OSPITAL
, I NC
., d/b/a C ITRUS M EMORIAL H OSPITAL ; S ARASOTA D OCTORS H OSPITAL
, I NC
., d/b/a D OCTORS H OSPITAL OF S ARASOTA ; E NGLEWOOD C OMMUNITY H OSPITAL
, I NC
., d/b/a E NGLEWOOD C OMMUNITY H OSPITAL ; F AWCETT M EMORIAL H OSPITAL
, I NC
., d/b/a F AWCETT M EMORIAL H OSPITA L ; F ORT W ALTON B EACH M EDICAL C ENTER , I NC
., d/b/a F ORT W ALTON B EACH M EDICAL C ENTER ; B AY H OSPITAL
, I NC
., d/b/a G ULF C OAST M EDICAL C ENTER ; JFK M EDICAL C ENTER L IMITED P ARTNERSHIP
, d/b/a JFK M EDICAL C ENTER ; JFK M EDICAL C ENTER L IMITED P ARTNERSHIP
, d/b/a JFK M EDICAL C ENTER

- N ORTH C AMPUS ; K ENDALL H EALTHCARE10 G ROUP
, L TD ., d/b/a K ENDALL R EGIONAL M EDICAL C ENTER ; N OTAMI H OSPITALS OF F LORIDA
, I NC
., d/b/a L AKE C ITY M EDICAL C ENTER ; L ARGO M EDICAL C ENTER , I NC
., d/b/a L ARGO M EDICAL C ENTER ; L ARGO M EDICAL C ENTER , I NC
., d/b/a L ARGO M EDICAL C ENTER

- I NDIAN R OCKS ; L AWNWOOD M EDICAL C ENTER , I NC
., d/b/a L AWNWOOD R EGIONAL M EDICAL C ENTER & H EART I NSTITUTE ; N EW P ORT R ICHEY H OSPITAL
, I NC
., d/b/a M ED ICAL C ENTER OF T RINITY ; N EW P ORT R ICHEY H OSPITAL
, I NC
., d/b/a M EDICAL C ENTER OF T RINITY W EST P ASCO C AMPUS ; M EMORIAL H EALTHCARE G ROUP
, I NC
., d/b/a M EMORIAL H OSPITAL J ACKSONVILLE ; W EST F LORIDA

– MHT, LLC, d/b/a M EMORIAL H OSPITAL OF T AMPA ; P LANTATION G ENERAL H OSPITAL L IMITED P ARTNERSHIP
, d/b/a M ERCY H OSPITAL
, A C AMPUS OF P LANTATION G ENERAL H OSPITAL ; N ORTH F LORIDA R EGIONAL M EDICAL C ENTER , I NC
., d/b/a N ORTH F LORIDA R EGIONAL M EDICAL C ENTER ; G ALENCARE
, I NC
., d/b/a N ORTHSIDE H OSPITAL ; N ORHTWEST M EDICAL C ENTER , I NC

. , d/b/a N ORTHWEST M EDICAL C ENTER ; HCA H EALTH S ERVICES
OF F LORIDA
, I NC
., d/b/a O AK H OLL H OSPITAL ; M ARION C OMMUNITY H OSPITAL
, I NC
., d/b/a O CALA R EGIONAL M EDICAL C ENTER ; M ARION C OMMUNITY11 H OSPITAL
, I NC
., d/b/a W EST M ARION C OMMUNITY H OSPITAL ; O RANGE P ARK M EDICA L C EN TER , I NC
., d/b/a O RANGE P ARK M EDICAL C ENTER ; O SCEOLA R EGIONAL H OSPITAL
, I NC
., d/b/a O SCEOLA R EGIONAL M EDICAL C ENTER ; W EST F LORIDA

– PPH, LLC, d/b/a P ALMS OF P ASADENA H OSPITAL ; P ALMS W EST H OSPITAL L IMITED P ARTNERSHIP
, d/b/a P ALMS W EST H OSPITAL ; P LANTAT ION G ENERAL H OSPITAL L IMITED P ARTNERSHIP
, d/b/a P LANTATION G ENERAL H OSPITAL ; P OINCIANA M EDICAL C ENTER , I NC
., d/b/a P OINCIANA M EDICAL C ENTER ; P UTNAM C OMMUNITY M EDICAL C ENTER OF N ORTH F LORIDA
, LLC, d/b/a P UTNAM C OMMUNITY M EDICAL C ENTER ; O KEECHOBEE H OSPITAL
, I NC
., d/b/a R AULERSON H OSPITAL ; HCA H EALTH S ERVICES OF F LORIDA
, I NC
., d/b/a R EGIONAL M EDICAL C ENTER B AYONET P OINT ; HCA L ONG T ERM H EALTH S ERVICES
OF M IAMI
, I NC
., d/b/a S ISTER E MMANUEL H OSPITAL ; S UN C ITY H OSPITAL
, I NC
., d/b/a S OUTH B AY H OSPITAL ; M EMORIAL H EA LTHCARE G ROUP
, I NC
., d/b/a S PECIALTY H OSPITAL J ACKSONVILLE ; HCA H EALTH S ERVICES OF F LORIDA
, I NC
., d/b/a S T

. L UCIE M EDICAL C ENTER ; G ALEN OF F LORIDA
, I NC
., d/b/a S T

. P ETERSBURG G ENERAL H OSPITAL ; W EST F LORIDA

– TCH, L LC

, d/b/a T AMPA12 C OMMUNITY H OSPITAL ; O KALOOSA H OSPITAL
, I NC
., d/b/a T WIN C ITIES H OSPITAL ; U NIVERSITY H OSPITAL
, L TD ., d/b/a U NIVERSITY H OSPITAL AND M EDICAL C ENTER ; W EST F LORIDA R EGIONAL M EDICAL C ENTER , I NC
., d/b/a W EST F LORIDA H OSPITAL ; and C OLUMBIA H OSPITAL C ORPORATION OF S OUTH B ROWARD
, d/b/a W ESTSIDE R EGIONAL M EDICAL C ENTER ,
Appellant s ,

v.

A GENCY F OR H EALTH C ARE A DMINISTRATION
,
Appellee.13 _____________________________

No. 1D 17

- 2040

_____________________________

S ACRED H EA RT H EALTH S YSTEM
, I NC

. d/b/a S ACRED H EART H OSPITAL OF P ENSACOLA
, S ACRED H EA R T H EALTH S YSTEM
, I NC

. d/b/a S ACRED H EART H OSPITAL ON THE E MERALD C OAST AND S ACRED H EART H EALTH S YSTEM
, I NC

. d/b/a S ACRED H EART H OSPITAL ON THE G ULF , S T

. V INCENT ’ S M EDICAL C ENTER , I NC

. d/b/a S T

. V INCENT ’ S M EDI CAL C ENTER R IVERSIDE
, S T

. L UKE ’ S

- S T

. V INCENT ’ S H EALTHCARE
, I NC

. d/b/a S T

. V INCENT ’ S M EDICAL C ENTER S OUTHSIDE and S T

. V INCENT ’ S M EDICAL C ENTER

C LAY C OUNTY
, I NC

. d/b/a S T

. V INCENT ’ S M EDICAL C ENTER

C LAY C OUNTY
,
Appellant s ,

v.

A GENCY F OR H EALTH C ARE A DMINISTRATION
,
Appellee.14 _____________________________

No. 1D 17

- 2041

_____________________________

CGH H OSPITAL
, L TD d/b / a C ORAL G A BLES H OSPITAL
, D ELRAY M EDICAL C ENTER , I NC

. d/b/a D ELRAY M EDICAL C ENTER , G OOD S AMARITAN M EDICAL C ENTER , I NC

. d/b/a G OOD S AMARITAN M EDICAL C ENTER , H IALEAH H OSPITAL
, I NC

. d/b/a H IALEAH H OSPITAL
, N ORTH S HORE M EDICAL C ENTER , I NC

. d/b/a N ORTH S HORE M EDICAL C ENTER , N ORTH S HORE M EDICAL C ENTER , I NC

. d/b/a F LORIDA M EDICAL C ENTER

– A C AMPUS OF N ORTH S HORE
, P ALM B EACH G ARDENS C OM MUNITY H OSPITAL
, I NC

. d/b/a P ALM B EACH G ARDENS M EDICAL C ENTER , L IFEMARK H OSPITALS OF F LORIDA
, I NC

. d/b/a P ALMETTO G ENERAL H OSP IT AL
, S T

. M ARY ’ S M EDICAL C ENTER , I NC

. d/b/a S T

. M ARY ’ S M EDICAL C ENTER and W EST B OCA M EDICAL C ENTER , I NC

. d/b/a W EST B OCA M EDICAL C ENTER ,
Appellant s ,

v.

A GENCY F OR H EALTH C ARE A DMINISTRATION
,
Appellee.15 _____________________________

No. 1D 17

- 2042

_____________________________

S ACRED H EART H EALTH S YSTEM
, I NC

. d/b/a S ACRED H EART H OSPITAL OF P ENSACOLA
, S ACRED H EART H EALTH S YSTEM
, I NC

. d/b/a S ACRED H EART H OSPITAL ON THE E MERALD C OAST AND S ACRED H EART H EALTH S YSTEM
, I NC

. d/b/a S ACRED H EART H OSPITAL ON THE G ULF AND S T

. V INCENT ’ S M EDICAL C ENTER , I NC

. d/b/a S T

. V INCENT ’ S M EDICAL C ENTER R IVERSIDE
, S T

. L UKE ’ S

- S T

. V INCENT ’ S H EALTHCARE
, I NC

. d/b/a S T

. V INCENT ’ S M EDICAL C ENTER S OUTHSIDE AND S T

. V INCENT ’ S M EDICAL C ENTER

C LAY C OUNTY
, I NC

. d/b/a S T

. V INCENT ’ S M EDICAL C ENTER

C LAY C OUNTY
,
Appellant s ,

v.

A GENCY F OR H EALTH C ARE A DMI NISTRATION
,
Appellee.16 _____________________________

No. 1D 17

- 2045

_____________________________

CGH H OSPITAL
, L TD d/b/a C ORAL G ABLES H OSPITAL
, D ELRAY M EDICAL C ENTER , I NC

. d/b/a D ELRAY MEDICAL C ENTER , G OOD S AMARITAN M EDICAL C ENTER , I NC

. d/b/a G OOD S AMARITAN M EDICAL C ENTER , H IALEAH H OSPITAL
, I NC

. d/b/a H IALEAH H OSPITAL
, N ORTH S HORE M EDICAL C ENTER , I NC

. d/b/a N ORTH S HORE M EDICAL C ENTER , N ORTH S HORE M EDICAL C ENTER , I NC

. d/b/a F L ORIDA M EDICAL C ENTER

– A C AMPUS OF N ORTH S HORE
, P AL M B EACH G ARDENS C O MMUNITY H OSPITAL
, I NC

. d/b/a P ALM B EACH G ARDENS M EDICAL C ENTER , L IFEMARK H OSPITALS OF F LORIDA
, I NC

. d/b/a P ALMETTO G ENERAL H OSPITAL
, S T

. M ARY ’ S M EDICAL C ENTER , I NC

. d/b/a S T

. M ARY ’ S M EDICAL C ENTER AND W EST B OCA M EDICAL C ENTER , I NC

. d/b/a W EST B OCA M EDICAL C ENTER ,
Appellant s ,

v.

A GENCY F OR H EALTH C ARE A DMINISTRATION
,
Appellee.17 _____________________________

No. 1D 17

- 2047

_____________________________

A DVENTIST H EALTH S YSTEM /S UNBELT , I NC
., d/b / a F LORIDA H OSPITAL H EARTLAND M EDICAL C ENTER , F LORIDA H OSPIT AL O RLANDO
, and F LORIDA H OSPITAL W ACHULA ; F LORIDA H OSPITAL O RLANDO
, and F LORIDA H OSPITAL W ACHULA ; F LORIDA H OSPITAL W ATERMAN
, I NC .; F LORIDA H OSPITAL Z EPHYRHILLS
, I NC .; M EMORIAL H EALTH S YSTEMS
, I NC

. d/b/a F LORIDA H OSPITAL M EMORIAL M EDICAL C ENTER ; M EMORIAL H OSPITAL F LAGLER
, I NC .; M EMORIAL H OSPITAL

- W E ST V OLUSIA
, I NC
., d/b/a F LORIDA H OSPITAL D ELAND ; P ASCO

P INELLAS H ILLSBOROUGH C OMMUNITY H EALTH S YSTEM
, I NC
., d/b/a F LORIDA H OSPITAL W ESLEY C HAPEL ; S OUTHEAST V OLU SIA H EALTHCARE C ORPORATION
, d/b/a F L ORI DA H OSPITAL N EW S MYRNA ; S OUTHWEST V OLUSIA H EALTHCARE C ORPORATION
, d/b/a F LORIDA H OSPITAL F ISH M EMORIAL ; T ARPON S PRINGS H OSPITAL F OUNDATION
, I NC
., d/b/a F L OR IDA H OSPITAL N ORTH P INELLAS ; and U NIVERSITY C OMMU NI TY H OSPITA L , I NC
., d/b/a F LORIDA H OSPITAL N ORTH P I NELLAS ; and U NIVERSITY C OMMUNITY H O SP ITAL
, I NC
.,18 d/b/a F LORIDA H OSPITAL C ARROLLWOOD
, F LORIDA H OSPITAL AT C ONNERTON

L TACH
, and F LORIDA H OSPITAL T AMPA
,
Appellant s ,

v.

A GENCY F OR H EALTH C ARE A DMINISTRATION
,
Appellee.19 _____________________________

No. 1D 17

- 2049

_____________________________

B AYFRONT HMA M EDICAL C ENTER , LLC, d/b/a B AYFRONT H EALTH

– S T

. P ETERSBURG ; C ITRUS HMA, LLC, d/b/a S EVEN R IVERS R E GIONAL M EDICAL C ENTER ; C RESTVIEW H OSPITAL C ORPORATION
, d/b/a N ORTH O KALOOSA M EDICAL C ENTER ; H AINES C ITY HMA, LLC, d/b/a H EART OF F LORIDA R EGIONAL M EDICAL C ENTER ; H ERNANDO HMA, LLC, d/b/a B AYFRONT H EALTH

- B ROOKSVILLE AND B AYFRONT H EALTH

– S PRING H ILL ; HMA S ANTA R OSA M EDICAL C ENTER , LLC; K EY W E ST HMA, LLC, d/b/a L OWER K EYS M EDICAL C ENTER ; L AKE S HORE HMA, LLC, d/b/a S HANDS L AKE S HORE R E GIONAL M EDICAL C ENTER ; L AKE W ALES H OSPITAL C ORPORATION d/b/a L AKE W ALES M EDICAL C ENTER ; L IVE O AK HMA, LLC, d/b/a S HANDS L IVE O AK R E GIONAL M EDICAL C ENTER ; N APLES HMA, LLC, d/b/a P HYSICIANS R E GIONAL M EDICAL C ENTER

– P INE R IDGE
AND P HYSICIANS R E GIONAL M EDICAL C ENTER

– C OLLIER B OULEVARD ; M ELBOURNE HMA, LLC; M UNROE HMA H O SPITAL
, LLC, d/b/a M U N ROE R E GIONAL M EDICAL C ENTER ; O SCEOLA SC, LLC, d/b/a S T

. C LOUD R EGIONAL M EDICAL C ENTER ; P ASCO20 R EGIONAL M EDICAL C ENTER , LLC, d/b/a B AYFRONT H EALTH

– D ADE C ITY ; P ORT C HARLOTTE H M A, LLC d/b/a B AYFRONT H EALTH

– P ORT C HARLOTTE ; P UNTA G ORDA HMA, LLC, d/b/a B AYFRONT H EALTH P UNTA G ORDA ; R OCKLEDGE HMA, LL C; S EBASTIAN H OSPITAL
, LLC, d/b/a S EBASTIAN R IVER MEDICAL C ENTER ; S E BRING H OSPITAL M ANAGEMENT A SSOCIATES
, LLC, d/b/a H IGHLANDS R E GIONAL M EDICAL C ENTER ; S TARKE HMA, LLC, d/b/a S HANDS S TARKE R E GIONAL M EDICAL C ENTER ;
AND V EN ICE HMA, LLC, d/b/a V ENICE R EGIONAL B AYFRONT H EALTH
,
Appellant s ,

v.

A GENCY F OR H EALTH C ARE A DMINISTRATION
,
Appellee.21 _____________________________

No. 1D 17

- 2051

_____________________________

C APE C ANAVERAL H OSPITAL
, I NC
., H OLMES R EGIONAL M EDICAL C ENTER , I NC
., and V IERA H OSPITAL
, I NC

.
Appellant s ,

v.

A GENCY F OR H EALTH C ARE A DMINISTRATION
,
Appellee.22 _____________________________

No. 1D 17

- 2053

_____________________________

B AYFRONT HMA M EDICAL C ENTER , LLC, d/b/a B AYFRONT H EALTH

– S T

. P ETERSBURG ; C ITRUS HMA, LLC, d/b/a S EVEN R IVERS R E GIONAL M EDICAL C ENTER ; C RESTVIEW H OSPITAL C ORPORATION
, d/b/a N ORTH O KALOOSA M EDICAL C ENTER ; H AINES C ITY HMA, LLC, d/b/a H EART OF F LORIDA R EGIONAL M EDICAL C ENTER ; H ERNANDO HMA, LLC, d/ b/a B AYFRONT H EALTH

- B ROOKSVILLE AND B AYFRONT H EALTH

– S PRING H ILL ; HMA S ANTA R OSA M EDICAL C ENTER , LLC; K EY W E ST HMA, LLC, d/b/a L OWER K EYS M EDICAL C ENTER ; L AKE S HORE HMA, LLC, d/b/a S HANDS L AKE S HORE R E GIONAL M EDICAL C ENTER ; L AKE W ALES H OSPITAL C ORPORATION d/b/a L AKE W ALES
MEDICAL C ENTER ; L IVE O AK HMA, LLC, d/b/a S HANDS L IVE O AK R E GIONAL M EDICAL C ENTER ; N APLES HMA, LLC, d/b/a P HYSICIANS R E GIONAL M EDICAL C ENTER

– P INE R IDGE
AND P HYSICIANS R E GIONAL
MEDICAL C ENTER

– C OLLIER B OULEVARD ; M ELBOURNE HMA

, LLC; M UNROE HMA H O SPITAL
, LLC, d/b/a M U N ROE R E GIONAL M EDICAL C ENTER ; O SCEOLA SC, LLC, d/b/a S T

. C LOUD R EGIONAL M EDICAL C ENTER ; P ASCO23 R EGIONAL M EDICAL C ENTER , LLC, d/b/a B AYFRONT H EALTH

– D ADE C ITY ; P ORT C HARLOTTE H M A, LLC

, d/b/a B AYFRONT H EALTH

– P ORT C H ARLOTTE ; P UNTA G ORDA HMA, LLC, d/b/a B AYFRONT H EALTH P UNTA G ORDA ; R OCKLEDGE HMA, LLC; S EBASTIAN H OSPITAL
, LLC, d/b/a S EBASTIAN R IVER M EDICAL C ENTER ; S E BRING H OSPITAL M ANAGEMENT A SSOCIATES
, LLC, d/b/a H IGHLANDS R E GIONAL M EDICAL C ENTER ; S TARKE HMA, LLC, d/b/ a S HANDS S TARKE R E GIONAL M EDICAL C ENTER ; and V EN ICE HMA, LLC, d/b/a V ENICE R EGIONAL B AYFRONT H EALTH
,
Appellant s ,

v.

A GENCY F OR H EALTH C ARE A DMINISTRATION
,
Appellee.24 _____________________________

No. 1D 17

- 2054

_____________________________

A DVENTIST HEALTH S YSTEM /S UNBELT , I NC
., d/b / a F LORIDA H OSPITAL H EARTLAND M EDICAL C ENTER , F LORIDA H OSPITAL O RLANDO
, and F LORIDA H O SP IT AL W ACHULA ; F LORIDA H OSPITAL O RLANDO
, and F LORIDA H OSPITAL W ACHULA ; F LORIDA H OSPITAL W ATERMAN
, I NC .; F LORIDA H OSPITAL Z EPHYR HILLS
, I NC .; M EMORIAL H EALTH S YSTEMS
, I NC

. d/b/a F LORIDA H OSPITAL M EMORIAL M EDICAL C ENTER ; M EMORIAL H OSPITAL F LAGLER
, I NC .; M EMORIAL H OSPITAL

- W E ST V OLUSIA
, I NC
., d/b/a F LORIDA H OSPITAL D ELAND ; P ASCO

P INELLAS H ILLSBOROUGH C OMMUNITY H EALTH S YSTEM
, I NC
., d/b/ a F LORIDA H OSPITAL W ESLEY C HAPEL ; S OUTHEAST V OLUSIA H EALTHCARE C ORPORATION
, d/b/a F L OR IDA H OSPITAL N EW S MYRNA ; S OUTHWEST V OLUSIA H EALTHCARE C ORPORATION
, d/b/a F LORIDA H OSPITAL F ISH M EMORIAL ; T ARPON S PRINGS H OSPITAL F OUNDATION
, I NC
., d/b/a F L OR IDA H OSPITAL N ORTH P INELLAS ; and U NIVERSITY C OMMU NI TY H OSPITAL
, I NC
., d/b/a F LORIDA H OSPITAL C ARROLLWOOD
, F LORIDA H OSPITAL AT C ONNERTON

-25 L TACH
, and F LORIDA H OSPITAL T AMPA
,
Appellant s ,

v.

A GENCY F OR H EALTH C ARE A DMINISTRATION
,
Appellee.

_____________________________

No. 1D 17

- 2057

_____________________________

C APE C ANAVERAL H OSPITAL
, I NC
., H OLMES R EGIONAL M EDICAL C ENTER , I NC
., and V IERA H OSPITAL
, I NC

.
Appellant s ,

v.

A GENCY F OR H EALTH C ARE A DMINISTRATION
,
Appellee.

_____________________________

On appeal from a Final Order of the Division of Administrative Hearings. J. Lawrence Johnston

, Administrative Law Judge

.

April 26, 2019

M.K. T HOMAS
, J

.26 In t his consolidated matter , Appellants 1 (“the Hospitals”) appeal a final order declaring valid the Agency for Health Care Administration’s (“ the A gency ”) existing and proposed rules which implement l egislative mandates to reduce reimbursement rates for Medicaid outpatient hospital services. T he Hospitals argue the existing and proposed versions of Florida Administ rative Code R ule 59G

- 6.030 are an invalid exercise of delegated legislative authority

. We agree and reverse.

I. F acts

The Hospitals provide inpatient and outpatient hospital care in Florida to Medicaid patients

. R eimburs e ment for the services provided is based on Medicaid rate s calculated by the Agency each

year. The Agency is the sing le state agency authorized to make Medicaid payments for service s rendered. Se e § 409.902(1), Fla. Stat.

Historically

, the Agency reimbursed hospitals on a fee

- for

service basis. Under the fee

- for

- service model, hospitals submit ted claims to the Agency

, and reimburse ment was paid at an established rate. The Agency set reimbursement rates on the most recent complete and accurate cost reports submitted by each hospital

, re

- es tablished the Outpatient Hospital Reimbursement Plan (“ Outpatient Plan ”)

, and adopted the Outpatient Plan by reference in Rule 59G

- 6.030. Beginning in 2005, the Legislature periodically include d provisions in its General Appropriations Acts (“GAA”)

, direc ting the Agency to reduce hospital outpatient reimbursement rate s to comply with specific budget reductions for that year. The se reductions are referred to as Medicaid Trend Adjustments (“MTA”).

I n 2005, the GAA reported that funds appropriated for Medicaid outpatient hospital service s reflected a cost savings of $16,796,807.00 “as a result of modifying the reimbursement methodology for outpatient hospital rates.” The GAA further provided: “[ T ] he agency shall implement a recurring methodology in the [Outpatient Plan] that may include, but is not limited to, the

1 120 hospitals comprised of for

- profit, not

- for

- profit

, and governmental entities.27 inflation factor, variable cost target, county rate ceiling or county ceiling target rate to achieve the cost savings. ” In response, the Agency amend ed the Outpatient Plan to provide: “Effecti ve July 1, 2005, a recurring rate reduction shall be established until an aggregate total estimated saving of $16,796,807 is achieved each year.” This directive became known as “ cut 1. ” The Outpatient P lan was then adopted by reference in Rule 59G

- 6.030. After 2005, the Legislature mandated five more relevant MTA reductions through the GAAs, which are know n as “ cuts 2

- 4 ” and “cuts 7

- 8. ” 2 The Agency used s imilar language in the Outpatient Plan s to address cuts 2, 3, and 8. Regarding cut 4, in the Outpatient Plan

, the Agency restated the GAA as follows , “ [ the Agency ] shall implement a recurring methodology to reduce individual outpatient hospital rates proportionately

. . . .” In total, the Legislature directed the Agency to implement cuts of

approx imately $224 million.

F rom 2005 through 2009, the Agency , after collaboration with the hospitals, achieve d the MTA reduction s using each hospital’s unaudited costs and actual occasions of service 3 in the year of the reduction . T he Agency then utilized an Excel spreadsheet and the “goal seek” function therein t o proportionally calculate the reduction to each hospital’s o utpatient r ates. Th e Agency ’s goal
was to spread the rate reduction s equally among the hospitals.

In 2011, the Legislature instituted wh at became known as the

“ u nit c ost c ap , ” a ceiling on Medicaid o utpatient r ates

. S ection 409.908, Florida Statutes, was amended to provide: “ T he Agency shall establish rates at a level that ensures no increase in statewide expenditures resulting from a change in unit costs effective July 1, 2011. Reimbursement rates shall be as provided

2 The Legislature enacted cuts 5

- 6 in 2009 and 2010. However, these cuts were not taken pursuant to GAA instruction.

3 The Outpatient Plan provides the following definition: “Florida Medicaid outpatient occasions of service

– t he number of distinct revenue center code line items listed on a valid claim that a hospital has filed

. . . and that have been paid by the fiscal agent, which rep resent covered Florida Medicaid outpatient services.”28 in the General Appropriations Act.” § 409.908(23)(a), Fla. Stat. (2 011). The GAA that year further elaborated:

In establishing rates through the normal process, prior to including this reduction [cut 7], if the unit cost is equal to or less than the unit cost used in establishing the budget, then no additional reduction in rates is necessary. In establishing rates through the normal process, if the unit cost is greater than the unit cost used in establishing the budget, then rates shall be reduced by an amount required to achieve this reduction, but shall not be reduced below the unit cost used to establish the bud get.

“Unit cost” was not defined by statute or the GAA. Additionally, no insight was provided regarding reference to establishing rates through the “normal process.”

E xisting R ule 59G

- 6.030 d id not set out the methodology the Agency used to calculate eit her the initial 2011 unit cost base or the subsequent years’ unit cost(s)

. However, the Agency has continued to apply the unit cost cap with reference to a 2011 unit
cost base of $141.51. I n calculating the u nit c ost base

, the Agency used a n unadopted fraction methodology in which the numerator

, the total Medicaid outpatient payments to all hospitals, is divided by a denominator

, the number of Medicaid occasions of service for all hospitals.

After 2011, the Agency has compare d the 2011 uni t cost base
to each years unit cost . However, the Agency changed the fraction methodology originally used to calculate unit cost base. As instructed in the GAA, the Agency began dividing the same numerator, the total dollar amount of Medicaid payments made to all hospitals

, by a different denominator, now the number of Medicaid occasions of service for all hospitals, except in children’s and rural hosp itals

. Invariably, this method results in a unit cost that is higher than if the s ervices of all hospitals we re included.

In setting the individual hospitals ’ reimbursement rates, the Agency first applied cut 7 in the same manner as cuts 1

- 4. The result was a 16.5 % rate adjustment for cut 7, which was substantially higher than previou s cuts
, which were usually in the29 12% range

. To make the adjustment more consistent with the Legislature ’s expect ations , the Agency adjusted the method for calculating the reduction

. The rate setting methodology used for
cuts 1

- 4 applied occasions of serv ice based on a hospital’s current cost report

. Regarding cuts 7

- 8

, the Agency appl ied Medicaid budgeted occasions of service. Medicaid occasions of service are actual paid claims which match up with the cost reporting year; Medicaid budgeted occasions of service are claims which were budgeted for that upcoming fiscal year for which the cut was going to take place.

In 2014, the Legislature directed the Agency to transition from a fee

- for

- service model to a managed care model. Under the fee

- for

- service mode l, Medicaid payments are made directly by the Agency t o hospitals; while under the managed care model, the payments are made by third

- party Medicaid managed care plan s pursuant to rates negotiated and set forth in third

- party contracts between Medicaid man aged care plans and hospitals. The number of Medicaid recipients enrolled in managed care plans now far exceeds those being paid on a fee

- for

- service basis. With the decline of the number of fee

- for

- service claims, the rate reductions substantially increa sed as the cuts were being apportioned over a much smaller number of claims. 4

Although cut 8 was the last rate cut mandated by the Legislature, the Agency continued to apply the previous and recurring cuts in subsequent years. T hree years after cut 8 was

4 In applying cut 1 in 2015/ 20 16, the Agency divided $16,796,807 (GAA reduction mandate) by 6,385,424 claims, resulting in an average cut per claim of $2.63. The following year, with the transition to M edicaid managed care, that same cut 1 of $16,796,807 was divided by only 3,336,762 claims, resulting in an average cut per claim of $5.03. The same analysis is true for cuts
2

- 4. Regarding cuts 7

- 8, the Agency changed its methodology. Thus, the Hospitals provided outpatient services to essentially the same number of Medicaid recipients for rate periods 2015/16 and 2016/17 (but a significantly greater percentage were through managed care), yet there was a 91% increase in the average reduction per claim asso ciated with each of cuts 1

- 4.30 enacted, the Agency changed its method to apply cut 7 and 8 reductions. Rather than using budgeted claims as it did previously, the Agency calculated the cut 7 and 8 reductions using actual occasions of service as it did for cuts 1

- 4

.

While the transition to managed care began in 2014, the decrease in fee

- for

- service claims was first reflected in the data used to set the 2016/ 20 17 hospital o utpatient r ates, effective July 1, 2016. A pproximately 75% to 80% of Florida Medicaid claims are

now paid u nder Medicaid managed care.

Before the 2016 legislative session, a legislative proposal recommended determin ing pr o spective Medicaid outpatient reimbursem e nt rates using a completely new method called Enhanced Ambulatory Patient Groups ( “ EAPGs ” ). This ne w method would eliminate dep e nd ence on hospital cost reports and complicated calculations to determine the effects of the MTA reductions on reimbursement rates. When it became apparent that the EAPGs method would not be use d for the 2016/2017 fiscal year

, the Agency basically repeated the 2015/2016 process but adjusted the occasions of service used for calcu l ating the hospital’s rate reductions for cuts 7

- 8 by adding 14,000 occasions of service. 5 At the end of July, the Agency published new rates effective July 1,
2016. The language of the implementing statutes and GAAs remained unchanged.

The Hospitals filed actions challenging the Agency ’s MTA methodologies as invalid exercises of delegated legislative authority . In respo nse, the Agency published a p roposed Rule 59G

6.030. Thereafter, the Hospitals filed a subsequent Petition challenging both the existing and proposed rule s

.
In the Final Order, t he ALJ found that neither the existing nor proposed R ule 59G

- 6.030 exceeds the grant of legislative authority ; specifically, the ALJ concluded neither the existing nor the proposed rule s regarding MTAs enlarge, modif y or contravene the specific provisions of law implement ed; are not arbitrary or

5 The Final Order contains no factual findings as to how this number was calculated by the Agency.31 capricious; are not vague; and do not vest unbridled discretion in the Agency . The ALJ held similarly with regard to the u nit c ost

c ap. T he Final Order f urther concluded that de spite this legislatively mandated change in Medicaid reimbursement and corresponding budget ch anges, the Agency never changed its methodology to account for the transition to managed care in the calculation of cuts 1

- 4

.
The Hospitals appeal asserting the ALJ erred in declaring both the existing and proposed rules a s valid exercise s of delegated l egislative authority and that implementin g the MTA and unit cost cap methodologies does not constitute an invalid unadopted rule under section 120.52(8)(a), (c)

- (e), Florida Statutes. The Hospitals

a rgue that w hile the Agency has implemented a variety of different methodologies to apply the MTA reductions since 2005, it did not engage in rulemaking to adopt the methodologies into the Outpatient Plan

. T he Hospitals deny the unveiling of the pr oposed

r ule re solve d the deficiencies because it still fails to p rovide an MTA recurring methodology as required by implementing law

.

II. Analysis

Standard of Review

The standard of review by which we determine whether an agency has exceeded its rulemaking authority or enlarged the specific provisions of law purportedl y implemented is de novo

. See,

e.g., State Bd. of Trs. of Internal Improvement Tr

. Fund v. Day Cruise Ass'n, Inc., 794 So. 2d 696, 701 (Fla. 1st DCA 2001)

. An ALJ’s factual findings are reviewed for competent, substantial evidence. Moreland v. Agency for Per sons with Disabilities , 19 So. 3d 1009, 1011 (Fla. 1st DCA 2009) (citing § 120.68(7), Fla. Stat.). If challenging an existing rule, the petitioner has the burden of proving by a preponderance of the evidence that the existing rule is an invalid exercise of delegated legislative authority. § 120.56(3)(a), Fla. Stat. I f challenging a proposed rule, the burden shifts to the agency to prove by a preponderance of the evidence that the proposed rule is not an invalid exercise of delegated legislative authority. § 120.56(2)(a), Fla. Stat.; Fla. Bd. of Med. v. Fla. Acad

. of Cosmetic Surgery , 808 So. 2d 243, 251 (Fla. 1st DCA
2002 ).32 The Statutes and GAAs

T he Agency makes payment to qualified providers as set forth in Chapter 409, Florida Statutes, subject to the limitations or directions enumerated in the GAAs. § 409.902(1), Fla. Stat. Section 409.908, Florida Statutes, provides:

Subject to specific appropriations

, the a gency shall reimburse Medicaid providers , in accordance with state and federal law, according to methodologies set forth in the rules of the Agency and in policy manuals and handbooks incorporated by reference therein . These methodologies may inclu de fee schedules, reimbursement methods based on cost reporting, negotiated fees, competitive bidding pursuant to s. 287.057, and other mechanisms the a gency considers efficient and effective for purchasing services or goods on behalf of recipients. .

. . Further, nothing in this section shall be construed to prevent or limit the a gency from adjusting fees, reimbursement rates, lengths of stay, number of visits, or number of services, or making any other adjustments necessary to comply with the availability of moneys and any limitations or directions provided for in the General Appropriations Act, provided the adjustment is consistent with legislative intent. (Emphasis added.)

Section 409.905, Florida Statutes, also gives the Agency the authority to make any adjustments necessary to comply with the funds allocated and which are consistent with directions set forth in the GAA. Specific to outpatient services, the statute directs

,

“ [ t ] he a gency shall implement a prospective payment methodology for establishi ng reimbursement rates for outpatient hospital services.” § 409.905(6)(b), Fla. Stat. ( e mphasis added)

. The various GAAs further instruct, “ the Agency shall implement a recurring methodology in the Title XIX Outpatient Hospital Reimbursement Plan that may include, but not limited to, the inflation factor, variable cost savings.” (Emphasis added.)

A. Both the Existing and Proposed Rules Relating to the MTAs Enlarge, Modify, or Contravene the Enabling Statute s

.33 An agency may not propose or create a rule that “enlarges, modifies, or contravenes the specific provisions of . . . the language of the enabling statute.” § § 120.52(8)(c), (9)

, 120.56(2)

- (3), Fla. Stat. Existing Rule 59G

- 6.030 provides , “ [r] eimbursement to participating hospitals for services provided shall be in accordance with the Florida Title XIX Outpatient Hospital Reimbursement Plan (the Plan), Version XXVII, effective July 1, 2016, incorporated by reference . . .” T he companion Outpatient Plan pro vides

,

“ Effective July 1, 2005, a recurring rate reduction shall be established

. . . ” (Emphasis added

. ) The Outpatient Plan does not describe the methods established.

Upon the filing of the p etition challenging existing R ule 59G

6.030, the Agency publi shed a p roposed r ule . It addressed how the Agency had set the 2016 rates but did not establish a recurring methodology . The p roposed r ule did not adopt the methodologies that the Agency applied to calculate cuts 7

- 8 when it set the 2011 through 2015 o utpatient r ates. Nor did the p roposed r ule set forth a methodology for cut s 1

- 4. Rather, the stated purpose of the

p roposed r ule was mer ely to “clarify” how the Agency had already set the 2016 rates

. Therefore, the p roposed r ule, like the e xisting

r ule, pr ovided no detail or announcement of a recurring MTA methodology.

Below, t he ALJ determined that the implementing statutes require the Agency to adopt its rate

- setting methodologies as a rule in the Outpatient Plan. And specific to the MTA, the ALJ further found the GAAs require that the Agency adopt a “ recurring ” MTA methodology to achieve the mandated savings

. The Final Order, however, concluded the Agency had not adopted any recurring MTA methodologies into any version of the existing rule and Outpatient Plan . T he Final Order found that “[t]he versions of the rule 59G

- 6.030 adopted up to and including the existing rule did little more than restate language in the statutes and the GAAs.” The Final Order made specific f indings th at the Agency applied a variety of MTA methodologies to reduce hospital outpatient rates in an attempt to achieve the savings mandated by the GAAs from 2005 through 2016, and that these methodologies were not set forth in a rule. Further, the Final Order f ound the p roposed r ule simply parrot ed the language in the GAA

— that the Agency was required to adopt a recurring methodology to achieve the34 mandated savings. However, no such recurring methodology is provided.

Despite its finding that the Agency had not implemented methodologies as directed , the ALJ ultimately concluded that neither the existing nor proposed rule s enlarged, modified or contravened the specific provisions of law implemented. T his conclusion rested entirely upon deference to the Ag ency ’s interpretation of the implementing statutes

. But , t he ALJ’s deference to Agency interpretation was in error. B ased on the clear and unambiguous language of the statute, the Agency was required to adopt a rule setting forth the methodology by which i t would reimburse Medicaid providers and apply the MTAs. See §
409 .908

, Fla. Stat

. Prior to passage of the newly enacted article V,

s ection 21 of the Florida Constitution, this Court deferred to an agency’s interpretation of statutes it implemented unless such interpretation was clearly erroneous. See

, e .g. , Falk v. Beard , 614 So. 2d 1086, 1089 (Fla. 1993) ; Addison v. Agency for Persons with Disabilities , 113 So. 3d 1053, 1056 (Fla. 1st DCA 2013)

. Notably, thi s deference does not extend to proposed rules which are not to be presumed valid or invalid. See § 120.56(2)(c), Fla. Stat.

U nder the new constitutional amendment, appellate courts no longer defer to agency interpretation; rather, a de novo standard of review applies. Art. V, § 21, Fla. Const. (2019). Here, we decline to address the question of whether this amendment is retroactively applied, as it is not necessary to our legal analysis, because even if deference were provided to the Agency’s interpretat ion of the statute, “judicial adherence to the Agency’s view is not demanded when it is contrary to the statute’s plain meaning,” as is the case here. PAC for Equality v. Dep’t of State, Fla. Elections Comm’n

, 542 So. 2d 459, 460 (Fla. 2d DCA 1989), quote d in Werner v. Dep’t of Ins. & Treasurer , 689 So. 2d 1211, 1214 (Fla. 1st DCA 1997); see also Kessler v. Dep’t of Mgmt. Servs., Div. of State Grp. Ins. , 17 So. 3d 759, 762 (Fla. 1st DCA 2009) (“Judicial deference never requires that courts adopt an agency’ s interpretation of a statute or rule when the agency’s interpretation cannot be reconciled with the plain language of the statute. . .”).

T he language of the implementing statutes and the GAA s is clear and unambiguous. As the Final Order found, the GAA s35 unambiguously state that the Agency must “implement a recurring methodology in the [Outpatient Plan] . . . to achieve the cost savings.” Similarly, section 409.905(6)(b) requires the Agency to “implement a methodology” for establishing rates

, and section 409.908 requires the Agency to reimburse Medicaid providers “according to methodologies set forth in the rules of the agency and in policy manuals and handbooks incorporated by reference her eto.” Existing Rule 59G

- 6.030 does little more than restat e language in the statute and GAAs. A plain reading of section 409.908 certainly contemplates more. Thus, the existing rule is improper as it fails to adopt a methodology “set forth in the rules of the agency” in contravention of the statutes implemented.

Regarding the proposed rule, the Agency merely supplemented the existing rule with an announcement of the 2016 rates. The proposed rule does not adopt the methodologies that the Agency applied to calculate cuts 7

- 8 for the purpose of setting the 2011 thr ough 2015 rates. The proposed rule certainly did not provide explanation as to the d ifferent methodology used for cuts 1

- 4

. The proposed rule state s , “ Additions and changes to this section from the preceding year(s) are intended to clarify the rate

setting process, not to make substantive changes to it.” In fact, the Agency did not even adopt the methodology that it actually used to set the 2016 rates. In calculating cuts 7

- 8 for the 2016 rates, the Agency u tilized the actual occasions of service to calculate the 2015 rates with the addition of 14,000 claims, while the p roposed r ule directs calculation based on the budgeted occasions of service used to set the 2015/2016 rates but without the addit ion of 14,000 claims to account for managed care transition

.

A t the merits hearing, the Agency argued that it had complied with the implementing statutes and GAAs as it adopt ed a methodology in setting the rates

— that reimbursement rate reductions were to be proportionally implemented among the hospitals

. Accordingly, the specific math for achieving that proportional reduction did not have to be fixed, recurring

, or adopted into a rule. However, on appeal

, t he Agency changes its position and argues it exer cised its discretion and chose not to adopt a methodology , and no methodology existed to be adopted by rule. The Agency asserts that each year it carried out the MTA reductions using “simple math

, ” and b ecause the use of math is not36 a “methodology” contem plated by section 409.908, it did not need to promulgate its use of math as a rule. The Agency claims section 409.908, which applies to adjustments such as the MTA, grants the Agency the authority and flexibility to make adjustments to reimbursement rates that may be necessary when the Legislature chooses to impose limitations on reimbursements, without promulgating its mathematical calculations for such adjustments in a rule. The Agency claims its conclusion is bolstered by the language in the GAAs, which simply required it to “implement” (not adopt) a process for reaching the specified MTA reductions each year that were to be applied. However, this argument ignores the GAA directive that the recurring methodology be described in the Outpatient Plan.

The Agency does not suggest that the implementing statutes exempt it from the rulemaking requirement of the APA. Even if the Agency practices were “just math

, ” there is nothing in the statutes that establishes “math” as an exception to the Legislative dire cti ve that all reimbursement methodologies must be contained in the Outpatient Plan and promulgated as a rule. The APA defines a “rule” as “each agency statement of general applicability that implements, interprets, or prescribes law or policy or describes the procedure or practice requirements of an agency . . . .” § 120.52(16), Fla . Stat. The Final Order made numerous f indings that the Agency ’s MTA methodology meets the definition of a

“ rule. ” As the Agency has not cross

- appealed these f indings, it is bou nd by them

, and as such, the Agency ’s MTA methodology is a rule that the Agency must adopt through rulemaking. It is well established Florida law that rulemaking is not a matter of agency discretion. § 120.54(1), Fla. Stat. Florida courts have long recognized that “ every agency action is ‘a recognizable rule or an order’ under the APA or is ‘incipiently a rule or order.’” Friends of Hatchineha, Inc. v. State, Dep’t of Envtl

. Regulation , 580 So. 2d 267, 271 (Fla. 1st DCA 1991); see also § 120.52(2), F la. Stat.

The Final Order is silent regarding whether the Agency’s unadopted methodologies achieved the mandated savings. Thus, despite a clear legislative directive to achieve a specific dollar amount of savings, the Agency did not prove at the hearing whether it s methodologies have achieved the l egislative mandates or resulted in cuts less than or in excess of the cuts authorized. T he37 Agency defends that the absence of auditing is irrelevant to the outcome of this proceeding because the “ math ” the Agency used

was “ correct
, ” and the statutes do not impose an auditing requirement . We disagree. A s the Agency never implemented its methodology by rule or in the Outpatient Plan, and never conducted an audit, the accuracy of the MTA reductions cannot be verified. T he Agency’s failure to verify its procedures w ere achiev ing the legislatively directed cuts and to promulgate its methodologies as rules constitute s an enlarge ment , modif ication, and contraven tion of the laws implemented.

We, therefore, find that both the existing and proposed rules are invalid under section 120.52(8)(c), Florida Statutes

.

B. Both the Existing and Proposed Rules Relating to the MTAs are Vague, Fail to Establish Adequate Standards for Agency Decision, and Vest Unbridled Dis cretion in the Agency

. A rule is an invalid exercise of delegated legislative authority when “[t]he rule is vague, fails to establish adequate standards for

a gency decisions, or vests unbridled discretion in the Agency [.]” §
1 20.52(8)(d), Fla. Stat. “An a dministrative rule is invalid under section 120.52(8)(d), Florida Statutes, if it forbids or requires the performance of an act in terms that are so vague that persons of common intelligence must guess at its meaning and differ as to its application.” State, Dep’t of Fin. Servs. v. Peter R. Brown Const., Inc. , 108 So. 3d 723, 728 (Fla. 1st DCA 2013) (citing Bouters v. State , 659 So. 2d 235, 238 (Fla. 1995)).

Under the existing rule, the Agency used occasions of service to achieve cuts 1

- 4, while it used budget ed claims of service for cuts
7

- 8. Yet , the language related to cuts 1

- 4 and 7

- 8 are nearly identical. Thus, under the rule that states, “ [Agency] shall implement a recurring methodology,” the Agency was able to implement two separate methodologie s, without change to the rule. Essentially, by applying the rule as it has, the Agency has determined the language in the existing rule is so vague “persons of common intelligence” could “differ as to its application.” Id

. Despite amendment, t he proposed rule fails to establish adequate standards and vests unbridled discretion in the Agency.38 Although the proposed rule indicates cuts 1

- 4 will utilize occasions of service, while cuts 7

- 8 will utilize budgeted occasions of service

, questions remain as to wh ether these are the set methodologies which must be used by the Agency in administering the MTAs. In the first section of the proposed rule, it states “ [ the Agency ] shall implement a methodology for establishing base reimbursement rates” without setting f orth the actual methodology and certainly not a “recurring” metho d o logy

. Additionally, the lack of verification via audit or otherwise to determine if the rate reductions are GAA compliant further support s a vesting of unbridled discretion in the Agency. Th us , the proposed rule fails, just as the existing rule does

.

C. Both the Existing and Proposed Rules Concerning the Unit Cost Cap are Invalid Exercises of Delegated Legislative Authority and are Unadopted Rules

.

In 2011 , the Legislature directed that a unit cost comparison be implemented in the rate process. The GAA provided:

In establishing rates through the normal process, prior to including this reduction [cut 7], if the unit cost is equal to or less than the unit cos t used in establishing the budget, then no additional reduction in rates is necessary. In establishing rates through the normal process, if the unit cost is greater than the unit cost used in establishing the budget, then rates shall be reduced by an amou nt required to achieve this reduction, but shall not be reduced below the unit cost used in establishing the budget.

T he Agency failed to include in its existing rule the methodology used to calculate the u nit c ost c ap. Rather, the existing rule simply mi rrors the language in the GAA, stating, “Effective July 1, 2011, [ the Agency ] shall establish rates at a level that ensures no increase in statewide expenditures resulting from a change in unit costs.” The e xisting r ule does not defi ne “unit cost” or set out the methodology used to calculate either the initial 2011 unit cost base or the subsequent years’ unit cost(s ).

When originally calculating the u nit c ost c ap in 2011, the Agency divided the total dollar amount of Medicaid payments39 made to hospitals by the number of Medicaid occasions of service for all hospitals. Since 2011, it ha s compare d the 2011 unit cost base to the current unit cost, calculated by dividing the total dollar amount of Medicaid payments made to all hospitals by the number of Medicaid occasions of service for all hospitals, except in children’s and rural hospitals, to determine whether the u nit c ost

c ap would require a further rate reduction, after applying the MTA
cuts.

The GAA instructed the Agency to compare th e unit cost set in 2011 to the unit cost in future years. We find merit in the Hospital s’ argument that the Agency ’s comparison of unit costs that are not calculated the same way constitutes unbridled discretion. 6 D ividing the total amount of Medicaid pa yments by a smaller number of occasions of service inevitably result s in the subsequent years’ unit cost be ing higher, which could result in additional reductions ( where it would not if the unit cost was calculated consistent with that methodology used in 2011 ) . If the unit cost is not calculated the same way, a valid comparison is not possible

. 7

While the Agency has not adopted as a rule the methodology for the u nit co st c ap into the Outpatient Plan, it has implemented

a methodology to calculate rates. This methodology constitutes general applicability that implements, interprets, or prescribes law or policy, and meets the definition of a rule, yet the Agency did not adopt the methodology as a rule. As such, the u nit c ost c ap is invalid as it was not ado pted through rulemaking. § 120.52(8)(a), Fla. Stat.

III. C onclusion

6 The Agency argues that the Hospitals do not have standing to challenge the unit cost cap calculation. However, as found by the ALJ, the Hospitals have standing as they are substantially affected by the rule. See § 120.56(1), Fla. Stat.

7 To date, the unit cost cap has not been exceeded. However, the Hospitals argue this is an inevitable result due to the migration to managed care.40 For the foregoing reasons

, we hold that the ALJ erred in conclud ing the existing and proposed R ule 59G

- 6.030 are v alid exercises of delegated legislative authority . The existing and proposed rule s go beyond the powers, functions, and duties delegated by the Legislature

, and the methodologies utilized by the Agency are unadopted rules.

R EVERSED

.

B ILBREY and W INOKUR
, JJ., concur

.

_____________________________ Not final until disp osition of any timely and authorized motion under Fla. R. App. P. 9.330 or 9.331

.

_____________________________

Stephen A. Ecenia, David M. Maloney, Tana D. Storey, and Gabriel F.V. Warren of Rutledge Ecenia, Tallahassee; Kyle L. Kemper and Steven Mindlin of Sundstrom & Mindlin, LLP, Tallahassee; Joanne B. Erde and Donna Holshouser Stinson of Duane Morris LLP, Miami; Michael J. Glazer and E. Dylan River s of Ausley McMullen, Tallahassee; and Christopher C. Kokoruda and Laura E. Wade of the Miami

- Dade County Attorney’s Office, Miami

, for Appellant s

.
Joseph Goldstein of Shutts & Bowen LLP, Fort Lauderdale; Amber Stoner of Shutts & Bowen LLP, Tallahassee; and Stephen T. Maher of Shutts & Bowen LLP, Miami

, for Appellee.