FIRST DISTRICT COURT OF APPEAL

STATE OF FLORIDA

_____________________________

No. 1D17-2027

_____________________________

SOUTHERN BAPTIST HOSPITAL OF 

FLORIDA d/b/a BAPTIST MEDICAL 

CENTER NASSAU; SOUTHERN 

BAPTIST HOSPITAL OF FLORIDA 

d/b/a BAPTIST MEDICAL CENTER 

OF THE BEACHES; SOUTHERN 

BAPTIST HOSPITAL OF FLORIDA 

d/b/a BAPTIST MEDICAL CENTER;

MARTIN MEMORIAL MEDICAL 

CENTER; SOUTH LAKE HOSPITAL;

ORLANDO HEALTH, INC. d/b/a

ORLANDO HEALTH; ORLANDO 

HEALTH CENTRAL, INC. d/b/a

HEALTH CENTRAL,

Appellants,

v.

AGENCY FOR HEALTH CARE 

ADMINISTRATION,

Appellee.
2

_____________________________

No. 1D17-2028

_____________________________

SOUTHERN BAPTIST HOSPITAL OF 

FLORIDA d/b/a BAPTIST MEDICAL 

CENTER NASSAU; SOUTHERN 

BAPTIST HOSPITAL OF FLORIDA 

d/b/a BAPTIST MEDICAL CENTER 

OF THE BEACHES; SOUTHERN 

BAPTIST HOSPITAL OF FLORIDA 

d/b/a BAPTIST MEDICAL CENTER;

MARTIN MEMORIAL MEDICAL 

CENTER; SOUTH LAKE HOSPITAL;

ORLANDO HEALTH, INC. d/b/a

ORLANDO HEALTH; ORLANDO 

HEALTH CENTRAL, INC. d/b/a

HEALTH CENTRAL,

Appellants,

v.

AGENCY FOR HEALTH CARE 

ADMINISTRATION,

Appellee.
3

_____________________________

No. 1D17-2033

_____________________________

THE PUBLIC HEALTH TRUST OF 

MIAMI-DADE COUNTY, FLORIDA,

which governs and operates 

JACKSON HEALTH SYSTEM, 

including JACKSON MEMORIAL 

HOSPITAL, JACKSON NORTH 

MEDICAL CENTER and JACKSON 

SOUTH COMMUNITY HOSPITAL,

Appellants,

v.

AGENCY FOR HEALTH CARE 

ADMINISTRATION,

Appellee.
4

_____________________________

No. 1D17-2034

_____________________________

MIAMI BEACH HEALTHCARE 

GROUP, LTD., d/b/a AVENTURA 

HOSPITAL AND MEDICAL CENTER;

HCA HEALTH SERVICES OF 

FLORIDA, INC., d/b/a BLAKE 

MEDICAL CENTER; GALENCARE,

INC., d/b/a BRANDON REGIONAL 

HOSPITAL; TALLAHASSEE 

MEDICAL CENTER, INC., d/b/a

CAPITAL REGIONAL MEDICAL 

CENTER; CENTRAL FLORIDA 

REGIONAL HOSPITAL, INC., d/b/a

CENTRAL FLORIDA REGIONAL 

HOSPITAL; CITRUS MEMORIAL 

HOSPITAL, INC., d/b/a CITRUS 

MEMORIAL HOSPITAL; SARASOTA 

DOCTORS HOSPITAL, INC., d/b/a

DOCTORS HOSPITAL OF 

SARASOTA; ENGLEWOOD 

COMMUNITY HOSPITAL, INC.,

d/b/a ENGLEWOOD COMMUNITY 

HOSPITAL; FAWCETT MEMORIAL 

HOSPITAL, INC., d/b/a FAWCETT 

MEMORIAL HOSPITAL; FORT 

WALTON BEACH MEDICAL 

CENTER, INC., d/b/a FORT 

WALTON BEACH MEDICAL 

CENTER; BAY HOSPITAL, INC.,

d/b/a GULF COAST MEDICAL 

CENTER; JFK MEDICAL CENTER 

LIMITED PARTNERSHIP, d/b/a

JFK MEDICAL CENTER; JFK

MEDICAL CENTER LIMITED 

PARTNERSHIP, d/b/a JFK

MEDICAL CENTER-NORTH 

CAMPUS; KENDALL HEALTHCARE 
5

GROUP, LTD., d/b/a KENDALL 

REGIONAL MEDICAL CENTER;

NOTAMI HOSPITALS OF FLORIDA,

INC., d/b/a LAKE CITY MEDICAL 

CENTER; LARGO MEDICAL 

CENTER, INC., d/b/a LARGO 

MEDICAL CENTER; LARGO 

MEDICAL CENTER, INC., d/b/a

LARGO MEDICAL CENTER-INDIAN 

ROCKS; LAWNWOOD MEDICAL 

CENTER, INC., d/b/a LAWNWOOD 

REGIONAL MEDICAL CENTER &

HEART INSTITUTE; NEW PORT 

RICHEY HOSPITAL, INC., d/b/a

MEDICAL CENTER OF TRINITY;

NEW PORT RICHEY HOSPITAL,

INC., d/b/a MEDICAL CENTER OF 

TRINITY WEST PASCO CAMPUS;

MEMORIAL HEALTHCARE GROUP,

INC., d/b/a MEMORIAL HOSPITAL 

JACKSONVILLE; WEST FLORIDA –

MHT, LLC, d/b/a MEMORIAL 

HOSPITAL OF TAMPA;

PLANTATION GENERAL HOSPITAL 

LIMITED PARTNERSHIP, d/b/a

MERCY HOSPITAL, A CAMPUS OF 

PLANTATION GENERAL 

HOSPITAL; NORTH FLORIDA 

REGIONAL MEDICAL CENTER,

INC., d/b/a NORTH FLORIDA 

REGIONAL MEDICAL CENTER;

GALENCARE, INC., d/b/a

NORTHSIDE HOSPITAL;

NORHTWEST MEDICAL CENTER,

INC., d/b/a NORTHWEST MEDICAL 

CENTER; HCA HEALTH SERVICES 

OF FLORIDA, INC., d/b/a OAK 

HOLL HOSPITAL; MARION 

COMMUNITY HOSPITAL, INC.,

d/b/a OCALA REGIONAL MEDICAL 

CENTER; MARION COMMUNITY 
6

HOSPITAL, INC., d/b/a WEST 

MARION COMMUNITY HOSPITAL;

ORANGE PARK MEDICAL CENTER,

INC., d/b/a ORANGE PARK 

MEDICAL CENTER; OSCEOLA 

REGIONAL HOSPITAL, INC., d/b/a

OSCEOLA REGIONAL MEDICAL 

CENTER; WEST FLORIDA – PPH,

LLC, d/b/a PALMS OF PASADENA 

HOSPITAL; PALMS WEST 

HOSPITAL LIMITED 

PARTNERSHIP, d/b/a PALMS WEST 

HOSPITAL; PLANTATION 

GENERAL HOSPITAL LIMITED 

PARTNERSHIP, d/b/a PLANTATION 

GENERAL HOSPITAL; POINCIANA 

MEDICAL CENTER, INC., d/b/a

POINCIANA MEDICAL CENTER;

PUTNAM COMMUNITY MEDICAL 

CENTER OF NORTH FLORIDA,

LLC, d/b/a PUTNAM COMMUNITY 

MEDICAL CENTER; OKEECHOBEE 

HOSPITAL, INC., d/b/a

RAULERSON HOSPITAL; HCA

HEALTH SERVICES OF FLORIDA,

INC., d/b/a REGIONAL MEDICAL 

CENTER BAYONET POINT; HCA

LONG TERM HEALTH SERVICES 

OF MIAMI, INC., d/b/a SISTER 

EMMANUEL HOSPITAL; SUN CITY 

HOSPITAL, INC., d/b/a SOUTH BAY 

HOSPITAL; MEMORIAL 

HEALTHCARE GROUP, INC., d/b/a

SPECIALTY HOSPITAL 

JACKSONVILLE; HCA HEALTH 

SERVICES OF FLORIDA, INC., d/b/a

ST. LUCIE MEDICAL CENTER;

GALEN OF FLORIDA, INC., d/b/a

ST. PETERSBURG GENERAL 

HOSPITAL; WEST FLORIDA –

TCH, LLC, d/b/a TAMPA 
7

COMMUNITY HOSPITAL;

OKALOOSA HOSPITAL, INC., d/b/a

TWIN CITIES HOSPITAL;

UNIVERSITY HOSPITAL, LTD.,

d/b/a UNIVERSITY HOSPITAL AND 

MEDICAL CENTER; WEST 

FLORIDA REGIONAL MEDICAL 

CENTER, INC., d/b/a WEST 

FLORIDA HOSPITAL; and

COLUMBIA HOSPITAL 

CORPORATION OF SOUTH 

BROWARD, d/b/a WESTSIDE 

REGIONAL MEDICAL CENTER,

Appellants,

v.

AGENCY FOR HEALTH CARE 

ADMINISTRATION,

Appellee.
8

_____________________________

No. 1D17-2035

_____________________________

THE PUBLIC HEALTH TRUST OF 

MIAMI-DADE COUNTY, FLORIDA,

which governs and operates 

JACKSON HEALTH SYSTEM, 

including JACKSON MEMORIAL 

HOSPITAL, JACKSON NORTH 

MEDICAL CENTER and JACKSON 

SOUTH COMMUNITY HOSPITAL,

Appellants,

v.

AGENCY FOR HEALTH CARE 

ADMINISTRATION,

Appellee.
9

_____________________________

No. 1D17-2038

_____________________________

MIAMI BEACH HEALTHCARE 

GROUP, LTD., d/b/a AVENTURA 

HOSPITAL AND MEDICAL CENTER;

HCA HEALTH SERVICES OF 

FLORIDA, INC., d/b/a BLAKE 

MEDICAL CENTER; GALENCARE,

INC., d/b/a BRANDON REGIONAL 

HOSPITAL; TALLAHASSEE 

MEDICAL CENTER, INC., d/b/a

CAPITAL REGIONAL MEDICAL 

CENTER; CENTRAL FLORIDA 

REGIONAL HOSPITAL, INC., d/b/a

CENTRAL FLORIDA REGIONAL 

HOSPITAL; CITRUS MEMORIAL 

HOSPITAL, INC., d/b/a CITRUS 

MEMORIAL HOSPITAL; SARASOTA 

DOCTORS HOSPITAL, INC., d/b/a

DOCTORS HOSPITAL OF 

SARASOTA; ENGLEWOOD 

COMMUNITY HOSPITAL, INC.,

d/b/a ENGLEWOOD COMMUNITY 

HOSPITAL; FAWCETT MEMORIAL 

HOSPITAL, INC., d/b/a FAWCETT 

MEMORIAL HOSPITAL; FORT 

WALTON BEACH MEDICAL 

CENTER, INC., d/b/a FORT 

WALTON BEACH MEDICAL 

CENTER; BAY HOSPITAL, INC.,

d/b/a GULF COAST MEDICAL 

CENTER; JFK MEDICAL CENTER 

LIMITED PARTNERSHIP, d/b/a

JFK MEDICAL CENTER; JFK

MEDICAL CENTER LIMITED 

PARTNERSHIP, d/b/a JFK

MEDICAL CENTER-NORTH 

CAMPUS; KENDALL HEALTHCARE 
10

GROUP, LTD., d/b/a KENDALL 

REGIONAL MEDICAL CENTER;

NOTAMI HOSPITALS OF FLORIDA,

INC., d/b/a LAKE CITY MEDICAL 

CENTER; LARGO MEDICAL 

CENTER, INC., d/b/a LARGO 

MEDICAL CENTER; LARGO 

MEDICAL CENTER, INC., d/b/a

LARGO MEDICAL CENTER-INDIAN 

ROCKS; LAWNWOOD MEDICAL 

CENTER, INC., d/b/a LAWNWOOD 

REGIONAL MEDICAL CENTER &

HEART INSTITUTE; NEW PORT 

RICHEY HOSPITAL, INC., d/b/a

MEDICAL CENTER OF TRINITY;

NEW PORT RICHEY HOSPITAL,

INC., d/b/a MEDICAL CENTER OF 

TRINITY WEST PASCO CAMPUS;

MEMORIAL HEALTHCARE GROUP,

INC., d/b/a MEMORIAL HOSPITAL 

JACKSONVILLE; WEST FLORIDA –

MHT, LLC, d/b/a MEMORIAL 

HOSPITAL OF TAMPA;

PLANTATION GENERAL HOSPITAL 

LIMITED PARTNERSHIP, d/b/a

MERCY HOSPITAL, A CAMPUS OF 

PLANTATION GENERAL 

HOSPITAL; NORTH FLORIDA 

REGIONAL MEDICAL CENTER,

INC., d/b/a NORTH FLORIDA 

REGIONAL MEDICAL CENTER;

GALENCARE, INC., d/b/a

NORTHSIDE HOSPITAL;

NORHTWEST MEDICAL CENTER,

INC., d/b/a NORTHWEST MEDICAL 

CENTER; HCA HEALTH SERVICES 

OF FLORIDA, INC., d/b/a OAK 

HOLL HOSPITAL; MARION 

COMMUNITY HOSPITAL, INC.,

d/b/a OCALA REGIONAL MEDICAL 

CENTER; MARION COMMUNITY 
11

HOSPITAL, INC., d/b/a WEST 

MARION COMMUNITY HOSPITAL;

ORANGE PARK MEDICAL CENTER,

INC., d/b/a ORANGE PARK 

MEDICAL CENTER; OSCEOLA 

REGIONAL HOSPITAL, INC., d/b/a

OSCEOLA REGIONAL MEDICAL 

CENTER; WEST FLORIDA – PPH,

LLC, d/b/a PALMS OF PASADENA 

HOSPITAL; PALMS WEST 

HOSPITAL LIMITED 

PARTNERSHIP, d/b/a PALMS WEST 

HOSPITAL; PLANTATION 

GENERAL HOSPITAL LIMITED 

PARTNERSHIP, d/b/a PLANTATION 

GENERAL HOSPITAL; POINCIANA 

MEDICAL CENTER, INC., d/b/a

POINCIANA MEDICAL CENTER;

PUTNAM COMMUNITY MEDICAL 

CENTER OF NORTH FLORIDA,

LLC, d/b/a PUTNAM COMMUNITY 

MEDICAL CENTER; OKEECHOBEE 

HOSPITAL, INC., d/b/a

RAULERSON HOSPITAL; HCA

HEALTH SERVICES OF FLORIDA,

INC., d/b/a REGIONAL MEDICAL 

CENTER BAYONET POINT; HCA

LONG TERM HEALTH SERVICES 

OF MIAMI, INC., d/b/a SISTER 

EMMANUEL HOSPITAL; SUN CITY 

HOSPITAL, INC., d/b/a SOUTH BAY 

HOSPITAL; MEMORIAL 

HEALTHCARE GROUP, INC., d/b/a

SPECIALTY HOSPITAL 

JACKSONVILLE; HCA HEALTH 

SERVICES OF FLORIDA, INC., d/b/a

ST. LUCIE MEDICAL CENTER;

GALEN OF FLORIDA, INC., d/b/a

ST. PETERSBURG GENERAL 

HOSPITAL; WEST FLORIDA –

TCH, LLC, d/b/a TAMPA 
12

COMMUNITY HOSPITAL;

OKALOOSA HOSPITAL, INC., d/b/a

TWIN CITIES HOSPITAL;

UNIVERSITY HOSPITAL, LTD.,

d/b/a UNIVERSITY HOSPITAL AND 

MEDICAL CENTER; WEST 

FLORIDA REGIONAL MEDICAL 

CENTER, INC., d/b/a WEST 

FLORIDA HOSPITAL; and

COLUMBIA HOSPITAL 

CORPORATION OF SOUTH 

BROWARD, d/b/a WESTSIDE 

REGIONAL MEDICAL CENTER,

Appellants,

v.

AGENCY FOR HEALTH CARE 

ADMINISTRATION,

Appellee.
13

_____________________________

No. 1D17-2040

_____________________________

SACRED HEART HEALTH SYSTEM,

INC. d/b/a SACRED HEART 

HOSPITAL OF PENSACOLA,

SACRED HEART HEALTH SYSTEM,

INC. d/b/a SACRED HEART 

HOSPITAL ON THE EMERALD 

COAST AND SACRED HEART 

HEALTH SYSTEM, INC. d/b/a

SACRED HEART HOSPITAL ON THE 

GULF, ST. VINCENT’S MEDICAL 

CENTER, INC. d/b/a ST.

VINCENT’S MEDICAL CENTER 

RIVERSIDE, ST. LUKE’S-ST.

VINCENT’S HEALTHCARE, INC.

d/b/a ST. VINCENT’S MEDICAL 

CENTER SOUTHSIDE and ST.

VINCENT’S MEDICAL CENTERCLAY COUNTY, INC. d/b/a ST.

VINCENT’S MEDICAL CENTERCLAY COUNTY,

Appellants,

v.

AGENCY FOR HEALTH CARE 

ADMINISTRATION,

Appellee.
14

_____________________________

No. 1D17-2041

_____________________________

CGH HOSPITAL, LTD d/b/a CORAL 

GABLES HOSPITAL, DELRAY 

MEDICAL CENTER, INC. d/b/a

DELRAY MEDICAL CENTER, GOOD 

SAMARITAN MEDICAL CENTER,

INC. d/b/a GOOD SAMARITAN 

MEDICAL CENTER, HIALEAH 

HOSPITAL, INC. d/b/a HIALEAH 

HOSPITAL, NORTH SHORE 

MEDICAL CENTER, INC. d/b/a

NORTH SHORE MEDICAL CENTER,

NORTH SHORE MEDICAL CENTER,

INC. d/b/a FLORIDA MEDICAL 

CENTER – A CAMPUS OF NORTH 

SHORE, PALM BEACH GARDENS 

COMMUNITY HOSPITAL, INC.

d/b/a PALM BEACH GARDENS 

MEDICAL CENTER, LIFEMARK 

HOSPITALS OF FLORIDA, INC.

d/b/a PALMETTO GENERAL 

HOSPITAL, ST. MARY’S MEDICAL 

CENTER, INC. d/b/a ST. MARY’S 

MEDICAL CENTER and WEST 

BOCA MEDICAL CENTER, INC.

d/b/a WEST BOCA MEDICAL 

CENTER,

Appellants,

v.

AGENCY FOR HEALTH CARE 

ADMINISTRATION,

Appellee.
15

_____________________________

No. 1D17-2042

_____________________________

SACRED HEART HEALTH SYSTEM,

INC. d/b/a SACRED HEART 

HOSPITAL OF PENSACOLA,

SACRED HEART HEALTH SYSTEM,

INC. d/b/a SACRED HEART 

HOSPITAL ON THE EMERALD 

COAST AND SACRED HEART 

HEALTH SYSTEM, INC. d/b/a

SACRED HEART HOSPITAL ON THE 

GULF AND ST. VINCENT’S 

MEDICAL CENTER, INC. d/b/a ST.

VINCENT’S MEDICAL CENTER 

RIVERSIDE, ST. LUKE’S-ST.

VINCENT’S HEALTHCARE, INC.

d/b/a ST. VINCENT’S MEDICAL 

CENTER SOUTHSIDE AND ST.

VINCENT’S MEDICAL CENTERCLAY COUNTY, INC. d/b/a ST.

VINCENT’S MEDICAL CENTERCLAY COUNTY,

Appellants,

v.

AGENCY FOR HEALTH CARE 

ADMINISTRATION,

Appellee.
16

_____________________________

No. 1D17-2045

_____________________________

CGH HOSPITAL, LTD d/b/a CORAL 

GABLES HOSPITAL, DELRAY 

MEDICAL CENTER, INC. d/b/a

DELRAY MEDICAL CENTER, GOOD 

SAMARITAN MEDICAL CENTER,

INC. d/b/a GOOD SAMARITAN 

MEDICAL CENTER, HIALEAH 

HOSPITAL, INC. d/b/a HIALEAH 

HOSPITAL, NORTH SHORE 

MEDICAL CENTER, INC. d/b/a

NORTH SHORE MEDICAL CENTER,

NORTH SHORE MEDICAL CENTER,

INC. d/b/a FLORIDA MEDICAL 

CENTER – A CAMPUS OF NORTH 

SHORE, PALM BEACH GARDENS 

COMMUNITY HOSPITAL, INC.

d/b/a PALM BEACH GARDENS 

MEDICAL CENTER, LIFEMARK 

HOSPITALS OF FLORIDA, INC.

d/b/a PALMETTO GENERAL 

HOSPITAL, ST. MARY’S MEDICAL 

CENTER, INC. d/b/a ST. MARY’S 

MEDICAL CENTER AND WEST 

BOCA MEDICAL CENTER, INC.

d/b/a WEST BOCA MEDICAL 

CENTER,

Appellants,

v.

AGENCY FOR HEALTH CARE 

ADMINISTRATION,

Appellee.
17

_____________________________

No. 1D17-2047

_____________________________

ADVENTIST HEALTH 

SYSTEM/SUNBELT, INC., d/b/a

FLORIDA HOSPITAL HEARTLAND 

MEDICAL CENTER, FLORIDA 

HOSPITAL ORLANDO, and

FLORIDA HOSPITAL WACHULA;

FLORIDA HOSPITAL ORLANDO,

and FLORIDA HOSPITAL 

WACHULA; FLORIDA HOSPITAL 

WATERMAN, INC.; FLORIDA 

HOSPITAL ZEPHYRHILLS, INC.;

MEMORIAL HEALTH SYSTEMS,

INC. d/b/a FLORIDA HOSPITAL 

MEMORIAL MEDICAL CENTER;

MEMORIAL HOSPITAL FLAGLER,

INC.; MEMORIAL HOSPITAL-WEST 

VOLUSIA, INC., d/b/a FLORIDA 

HOSPITAL DELAND; PASCOPINELLAS HILLSBOROUGH 

COMMUNITY HEALTH SYSTEM,

INC., d/b/a FLORIDA HOSPITAL 

WESLEY CHAPEL; SOUTHEAST 

VOLUSIA HEALTHCARE 

CORPORATION, d/b/a FLORIDA 

HOSPITAL NEW SMYRNA;

SOUTHWEST VOLUSIA 

HEALTHCARE CORPORATION,

d/b/a FLORIDA HOSPITAL FISH 

MEMORIAL; TARPON SPRINGS 

HOSPITAL FOUNDATION, INC.,

d/b/a FLORIDA HOSPITAL NORTH 

PINELLAS; and UNIVERSITY 

COMMUNITY HOSPITAL, INC.,

d/b/a FLORIDA HOSPITAL NORTH 

PINELLAS; and UNIVERSITY 

COMMUNITY HOSPITAL, INC.,
18

d/b/a FLORIDA HOSPITAL 

CARROLLWOOD, FLORIDA 

HOSPITAL AT CONNERTONLTACH, and FLORIDA HOSPITAL 

TAMPA,

Appellants,

v.

AGENCY FOR HEALTH CARE 

ADMINISTRATION,

Appellee.
19

_____________________________

No. 1D17-2049

_____________________________

BAYFRONT HMA MEDICAL 

CENTER, LLC, d/b/a BAYFRONT 

HEALTH – ST. PETERSBURG;

CITRUS HMA, LLC, d/b/a SEVEN 

RIVERS REGIONAL MEDICAL 

CENTER; CRESTVIEW HOSPITAL 

CORPORATION, d/b/a NORTH 

OKALOOSA MEDICAL CENTER;

HAINES CITY HMA, LLC, d/b/a

HEART OF FLORIDA REGIONAL 

MEDICAL CENTER; HERNANDO 

HMA, LLC, d/b/a BAYFRONT 

HEALTH-BROOKSVILLE AND 

BAYFRONT HEALTH – SPRING 

HILL; HMA SANTA ROSA 

MEDICAL CENTER, LLC; KEY 

WEST HMA, LLC, d/b/a LOWER 

KEYS MEDICAL CENTER; LAKE 

SHORE HMA, LLC, d/b/a SHANDS 

LAKE SHORE REGIONAL MEDICAL 

CENTER; LAKE WALES HOSPITAL 

CORPORATION d/b/a LAKE WALES 

MEDICAL CENTER; LIVE OAK 

HMA, LLC, d/b/a SHANDS LIVE

OAK REGIONAL MEDICAL 

CENTER; NAPLES HMA, LLC,

d/b/a PHYSICIANS REGIONAL 

MEDICAL CENTER – PINE RIDGE 

AND PHYSICIANS REGIONAL 

MEDICAL CENTER – COLLIER 

BOULEVARD; MELBOURNE HMA,

LLC; MUNROE HMA HOSPITAL,

LLC, d/b/a MUNROE REGIONAL 

MEDICAL CENTER; OSCEOLA SC,

LLC, d/b/a ST. CLOUD REGIONAL 

MEDICAL CENTER; PASCO 
20

REGIONAL MEDICAL CENTER,

LLC, d/b/a BAYFRONT HEALTH –

DADE CITY; PORT CHARLOTTE 

HMA, LLC d/b/a BAYFRONT 

HEALTH – PORT CHARLOTTE;

PUNTA GORDA HMA, LLC, d/b/a

BAYFRONT HEALTH PUNTA 

GORDA; ROCKLEDGE HMA, LLC;

SEBASTIAN HOSPITAL, LLC, d/b/a

SEBASTIAN RIVER MEDICAL 

CENTER; SEBRING HOSPITAL 

MANAGEMENT ASSOCIATES, LLC,

d/b/a HIGHLANDS REGIONAL 

MEDICAL CENTER; STARKE HMA,

LLC, d/b/a SHANDS STARKE 

REGIONAL MEDICAL CENTER;

AND VENICE HMA, LLC, d/b/a

VENICE REGIONAL BAYFRONT 

HEALTH,

Appellants,

v.

AGENCY FOR HEALTH CARE 

ADMINISTRATION,

Appellee.
21

_____________________________

No. 1D17-2051

_____________________________

CAPE CANAVERAL HOSPITAL,

INC., HOLMES REGIONAL 

MEDICAL CENTER, INC., and

VIERA HOSPITAL, INC.

Appellants,

v.

AGENCY FOR HEALTH CARE 

ADMINISTRATION,

Appellee.
22

_____________________________

No. 1D17-2053

_____________________________

BAYFRONT HMA MEDICAL 

CENTER, LLC, d/b/a BAYFRONT 

HEALTH – ST. PETERSBURG;

CITRUS HMA, LLC, d/b/a SEVEN 

RIVERS REGIONAL MEDICAL 

CENTER; CRESTVIEW HOSPITAL 

CORPORATION, d/b/a NORTH 

OKALOOSA MEDICAL CENTER;

HAINES CITY HMA, LLC, d/b/a

HEART OF FLORIDA REGIONAL 

MEDICAL CENTER; HERNANDO 

HMA, LLC, d/b/a BAYFRONT 

HEALTH-BROOKSVILLE AND 

BAYFRONT HEALTH – SPRING 

HILL; HMA SANTA ROSA 

MEDICAL CENTER, LLC; KEY 

WEST HMA, LLC, d/b/a LOWER 

KEYS MEDICAL CENTER; LAKE 

SHORE HMA, LLC, d/b/a SHANDS 

LAKE SHORE REGIONAL MEDICAL 

CENTER; LAKE WALES HOSPITAL 

CORPORATION d/b/a LAKE WALES 

MEDICAL CENTER; LIVE OAK 

HMA, LLC, d/b/a SHANDS LIVE 

OAK REGIONAL MEDICAL 

CENTER; NAPLES HMA, LLC,

d/b/a PHYSICIANS REGIONAL 

MEDICAL CENTER – PINE RIDGE 

AND PHYSICIANS REGIONAL 

MEDICAL CENTER – COLLIER 

BOULEVARD; MELBOURNE HMA,

LLC; MUNROE HMA HOSPITAL,

LLC, d/b/a MUNROE REGIONAL 

MEDICAL CENTER; OSCEOLA SC,

LLC, d/b/a ST. CLOUD REGIONAL 

MEDICAL CENTER; PASCO 
23

REGIONAL MEDICAL CENTER,

LLC, d/b/a BAYFRONT HEALTH –

DADE CITY; PORT CHARLOTTE 

HMA, LLC, d/b/a BAYFRONT 

HEALTH – PORT CHARLOTTE;

PUNTA GORDA HMA, LLC, d/b/a

BAYFRONT HEALTH PUNTA 

GORDA; ROCKLEDGE HMA, LLC;

SEBASTIAN HOSPITAL, LLC, d/b/a

SEBASTIAN RIVER MEDICAL 

CENTER; SEBRING HOSPITAL 

MANAGEMENT ASSOCIATES, LLC,

d/b/a HIGHLANDS REGIONAL 

MEDICAL CENTER; STARKE HMA,

LLC, d/b/a SHANDS STARKE 

REGIONAL MEDICAL CENTER; and

VENICE HMA, LLC, d/b/a VENICE 

REGIONAL BAYFRONT HEALTH,

Appellants,

v.

AGENCY FOR HEALTH CARE 

ADMINISTRATION,

Appellee.
24

_____________________________

No. 1D17-2054

_____________________________

ADVENTIST HEALTH 

SYSTEM/SUNBELT, INC., d/b/a

FLORIDA HOSPITAL HEARTLAND 

MEDICAL CENTER, FLORIDA 

HOSPITAL ORLANDO, and

FLORIDA HOSPITAL WACHULA;

FLORIDA HOSPITAL ORLANDO,

and FLORIDA HOSPITAL 

WACHULA; FLORIDA HOSPITAL 

WATERMAN, INC.; FLORIDA 

HOSPITAL ZEPHYRHILLS, INC.;

MEMORIAL HEALTH SYSTEMS,

INC. d/b/a FLORIDA HOSPITAL 

MEMORIAL MEDICAL CENTER;

MEMORIAL HOSPITAL FLAGLER,

INC.; MEMORIAL HOSPITAL-WEST 

VOLUSIA, INC., d/b/a FLORIDA 

HOSPITAL DELAND; PASCOPINELLAS HILLSBOROUGH 

COMMUNITY HEALTH SYSTEM,

INC., d/b/a FLORIDA HOSPITAL 

WESLEY CHAPEL; SOUTHEAST 

VOLUSIA HEALTHCARE 

CORPORATION, d/b/a FLORIDA 

HOSPITAL NEW SMYRNA;

SOUTHWEST VOLUSIA 

HEALTHCARE CORPORATION,

d/b/a FLORIDA HOSPITAL FISH 

MEMORIAL; TARPON SPRINGS 

HOSPITAL FOUNDATION, INC.,

d/b/a FLORIDA HOSPITAL NORTH 

PINELLAS; and UNIVERSITY 

COMMUNITY HOSPITAL, INC.,

d/b/a FLORIDA HOSPITAL 

CARROLLWOOD, FLORIDA 

HOSPITAL AT CONNERTON-
25

LTACH, and FLORIDA HOSPITAL 

TAMPA,

Appellants,

v.

AGENCY FOR HEALTH CARE 

ADMINISTRATION,

Appellee.

_____________________________

No. 1D17-2057

_____________________________

CAPE CANAVERAL HOSPITAL,

INC., HOLMES REGIONAL 

MEDICAL CENTER, INC., and

VIERA HOSPITAL, INC.

Appellants,

v.

AGENCY FOR HEALTH CARE 

ADMINISTRATION,

Appellee.

_____________________________

On appeal from a Final Order of the Division of Administrative 

Hearings.

J. Lawrence Johnston, Administrative Law Judge.

April 26, 2019

M.K. THOMAS, J.
26

In this consolidated matter, Appellants1 (“the Hospitals”) 

appeal a final order declaring valid the Agency for Health Care 

Administration’s (“the Agency”) existing and proposed rules which 

implement legislative mandates to reduce reimbursement rates for 

Medicaid outpatient hospital services. The Hospitals argue the

existing and proposed versions of Florida Administrative Code 

Rule 59G-6.030 are an invalid exercise of delegated legislative 

authority. We agree and reverse.

I. Facts

The Hospitals provide inpatient and outpatient hospital care

in Florida to Medicaid patients. Reimbursement for the services 

provided is based on Medicaid rates calculated by the Agency each 

year. The Agency is the single state agency authorized to make 

Medicaid payments for services rendered. See § 409.902(1), Fla. 

Stat.

Historically, the Agency reimbursed hospitals on a fee-forservice basis. Under the fee-for-service model, hospitals submitted

claims to the Agency, and reimbursement 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-established 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 included provisions in its General Appropriations Acts 

(“GAA”), directing the Agency to reduce hospital outpatient 

reimbursement rates to comply with specific budget reductions for 

that year. These reductions are referred to as Medicaid Trend 

Adjustments (“MTA”).

In 2005, the GAA reported that funds appropriated for 

Medicaid outpatient hospital services 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 amended the Outpatient Plan to provide: “Effective 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 

Plan 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 known as “cuts 2-4” and “cuts 7-8.”2

The Agency used similar language in the Outpatient Plans 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

approximately $224 million.

From 2005 through 2009, the Agency, after collaboration with 

the hospitals, achieved the MTA reductions using each hospital’s

unaudited costs and actual occasions of service3 in the year of the 

reduction. The Agency then utilized an Excel spreadsheet and the 

“goal seek” function therein to proportionally calculate the 

reduction to each hospital’s outpatient rates. The Agency’s goal 

was to spread the rate reductions equally among the hospitals.

In 2011, the Legislature instituted what became known as the 

“unit cost cap,” a ceiling on Medicaid outpatient rates. Section 

409.908, Florida Statutes, was amended to provide: “The 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. 

3The Outpatient Plan provides the following definition: 

“Florida Medicaid outpatient occasions of service – the 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 represent covered Florida Medicaid outpatient services.”
28

in the General Appropriations Act.” § 409.908(23)(a), Fla. Stat. 

(2011). 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 budget.

“Unit cost” was not defined by statute or the GAA. Additionally, no 

insight was provided regarding reference to establishing rates 

through the “normal process.”

Existing Rule 59G-6.030 did not set out the methodology the 

Agency used to calculate either 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. In calculating the unit cost base, the Agency

used an 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 compared the 2011 unit 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 hospitals. Invariably, this method results in a unit cost 

that is higher than if the services of all hospitals were 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 previous cuts, which were usually in the 
29

12% range. To make the adjustment more consistent with the 

Legislature’s expectations, the Agency adjusted the method for 

calculating the reduction. The rate setting methodology used for 

cuts 1-4 applied occasions of service based on a hospital’s current 

cost report. Regarding cuts 7-8, the Agency applied 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 model, Medicaid payments are made directly by the 

Agency to hospitals; while under the managed care model, the 

payments are made by third-party Medicaid managed care plans

pursuant to rates negotiated and set forth in third-party contracts 

between Medicaid managed 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 increased 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. Three years after cut 8 was 

 4 In applying cut 1 in 2015/2016, 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 Medicaid 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 associated 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 2016/2017 hospital outpatient rates, effective July 

1, 2016. Approximately 75% to 80% of Florida Medicaid claims are 

now paid under Medicaid managed care. 

Before the 2016 legislative session, a legislative proposal

recommended determining prospective Medicaid outpatient 

reimbursement rates using a completely new method called 

Enhanced Ambulatory Patient Groups (“EAPGs”). This new 

method would eliminate dependence 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 used for the 2016/2017 fiscal year, 

the Agency basically repeated the 2015/2016 process but adjusted 

the occasions of service used for calculating 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 response, the Agency published a proposed Rule 59G6.030. Thereafter, the Hospitals filed a subsequent Petition 

challenging both the existing and proposed rules. 

In the Final Order, the ALJ found that neither the existing 

nor proposed Rule 59G-6.030 exceeds the grant of legislative 

authority; specifically, the ALJ concluded neither the existing nor

the proposed rules regarding MTAs enlarge, modify or contravene 

the specific provisions of law implemented; 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 unit cost 

cap. The Final Order further concluded that despite this 

legislatively mandated change in Medicaid reimbursement and 

corresponding budget changes, 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 as valid exercises of delegated 

legislative authority and that implementing 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 

argue that while 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. The Hospitals deny the unveiling of the proposed 

rule resolved the deficiencies because it still fails to provide 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 purportedly 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 Persons 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. If 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

The 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 agency 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 include fee schedules, reimbursement 

methods based on cost reporting, negotiated fees, 

competitive bidding pursuant to s. 287.057, and other 

mechanisms the agency 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 agency 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 agency shall implement a prospective payment methodology

for establishing reimbursement rates for outpatient hospital 

services.” § 409.905(6)(b), Fla. Stat. (emphasis 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 Statutes.
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 . . .” The companion Outpatient Plan provides,

“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 petition challenging existing Rule 59G6.030, the Agency published a proposed rule. It addressed how the 

Agency had set the 2016 rates but did not establish a recurring 

methodology. The proposed rule did not adopt the methodologies 

that the Agency applied to calculate cuts 7-8 when it set the 2011 

through 2015 outpatient rates. Nor did the proposed rule set forth 

a methodology for cuts 1-4. Rather, the stated purpose of the 

proposed rule was merely to “clarify” how the Agency had already 

set the 2016 rates. Therefore, the proposed rule, like the existing 

rule, provided no detail or announcement of a recurring MTA 

methodology.

Below, the 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. The 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 findings that 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 found the proposed rule 

simply parroted the language in the GAA—that the Agency was 

required to adopt a recurring methodology to achieve the 
34

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 rules enlarged, modified or 

contravened the specific provisions of law implemented. This 

conclusion rested entirely upon deference to the Agency’s 

interpretation of the implementing statutes. But, the ALJ’s 

deference to Agency interpretation was in error. Based on the clear 

and unambiguous language of the statute, the Agency was 

required to adopt a rule setting forth the methodology by which it 

would reimburse Medicaid providers and apply the MTAs. See § 

409.908, Fla. Stat. Prior to passage of the newly enacted article V, 

section 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, 

this deference does not extend to proposed rules which are not to 

be presumed valid or invalid. See § 120.56(2)(c), Fla. Stat.

Under 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 interpretation 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), quoted 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. . .”). 

The language of the implementing statutes and the GAAs is

clear and unambiguous. As the Final Order found, the GAAs 
35

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 

hereto.” Existing Rule 59G-6.030 does little more than restate 

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 through 2015 rates. The proposed rule certainly did not 

provide explanation as to the different methodology used for cuts 

1-4. The proposed rule states, “Additions and changes to this 

section from the preceding year(s) are intended to clarify the ratesetting 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 utilized the actual occasions of service to calculate the 2015 

rates with the addition of 14,000 claims, while the proposed rule 

directs calculation based on the budgeted occasions of service used 

to set the 2015/2016 rates but without the addition of 14,000 

claims to account for managed care transition.

At the merits hearing, the Agency argued that it had complied 

with the implementing statutes and GAAs as it adopted 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, the Agency changes its 

position and argues it exercised 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 because the use of math is not 
36

a “methodology” contemplated 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 

directive 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 findings 

that the Agency’s MTA methodology meets the definition of a 

“rule.” As the Agency has not cross-appealed these findings, it is 

bound 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), Fla. 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 its methodologies have achieved the legislative mandates

or resulted in cuts less than or in excess of the cuts authorized. The 
37

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. As 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. The Agency’s failure to verify its procedures were

achieving the legislatively directed cuts and to promulgate its 

methodologies as rules constitutes an enlargement, modification,

and contravention 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 Discretion 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 

agency decisions, or vests unbridled discretion in the Agency[.]” § 

120.52(8)(d), Fla. Stat. “An administrative 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 budgeted 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 methodologies, 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, the 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 whether 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 forth the actual methodology and certainly 

not a “recurring” methodology. Additionally, the lack of 

verification via audit or otherwise to determine if the rate 

reductions are GAA compliant further supports a vesting of 

unbridled discretion in the Agency. Thus, 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 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 in establishing the 

budget.

The Agency failed to include in its existing rule the 

methodology used to calculate the unit cost cap. Rather, the 

existing rule simply mirrors 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 existing rule does not define “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 unit cost cap in 2011, the 

Agency divided the total dollar amount of Medicaid payments 
39

made to hospitals by the number of Medicaid occasions of service 

for all hospitals. Since 2011, it has compared 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 unit cost 

cap would require a further rate reduction, after applying the MTA 

cuts.

The GAA instructed the Agency to compare the unit cost set 

in 2011 to the unit cost in future years. We find merit in the 

Hospitals’ argument that the Agency’s comparison of unit costs 

that are not calculated the same way constitutes unbridled 

discretion.6 Dividing the total amount of Medicaid payments by a 

smaller number of occasions of service inevitably results in the 

subsequent years’ unit cost being 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 unit cost cap 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 unit cost cap is 

invalid as it was not adopted through rulemaking. § 120.52(8)(a), 

Fla. Stat.

III. Conclusion

 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 

concluding the existing and proposed Rule 59G-6.030 are valid 

exercises of delegated legislative authority. The existing and 

proposed rules go beyond the powers, functions, and duties 

delegated by the Legislature, and the methodologies utilized by the 

Agency are unadopted rules. 

REVERSED.

BILBREY and WINOKUR, JJ., concur.

_____________________________

Not final until disposition 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 Rivers

of Ausley McMullen, Tallahassee; and Christopher C. Kokoruda 

and Laura E. Wade of the Miami-Dade County Attorney’s Office, 

Miami, for Appellants.

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.