Court Opinion

ID: 9952649
Source: CourtListenerOpinion
Date Created: 2024-03-20 15:03:29.942889+00
Date Added: 2024-06-11T14:43:40.132380
License: Public Domain

FIRST DISTRICT COURT OF APPEAL
                STATE OF FLORIDA
                  _____________________________

                         No. 1D2023-0020
                  _____________________________

STATE OF FLORIDA, AGENCY FOR
HEALTH CARE ADMINISTRATION,

    Petitioner,

    v.

ALFRED IVAN MURCIANO, M.D.,

    Respondent.
                  _____________________________

Petition for Review of Non-Final Agency Action.

                         March 20, 2024

PER CURIAM.

     The Agency for Health Care Administration (“AHCA”)
petitioned for review of non-final agency action. AHCA challenges
an order of an administrative law judge (“ALJ”) declining a
remand for additional factual findings. For the reasons discussed
below, we grant the petition.

                          Background

     AHCA is the state agency responsible for administering
Florida’s Medicaid program. Dr. Alfred Murciano is a Medicaid
provider. Medicaid providers file claims with AHCA to receive
payment for medical services provided to patients. AHCA audits
claims to identify overpayments.
     AHCA issued a Final Audit Report to Dr. Murciano, stating
that he was overpaid $1,846,120.10 for claims he filed during the
audit period. The audit also assessed administrative fines and
costs.

     Dr. Murciano disputed the alleged overpayments and
requested a formal administrative hearing under sections 120.569
and 120.57(12), Florida Statutes. The matter was referred to the
Division of Administrative Hearings and assigned to ALJ John G.
Van Laningham. The administrative hearing on the disputed
claims spanned 22 days, included tens of thousands of pages in
exhibits, involved the testimony of multiple fact and expert
witnesses, and has a 32-volume transcript. At the conclusion, the
ALJ issued a Recommended Order that did not make any findings
of fact on the disputed Medicaid claims. Instead, the ALJ
concluded, as a matter of law, that the physician who conducted
the peer review of the claims, Dr. Jenkins, did not qualify as a
“peer” under section 409.9131(5)(b), Florida Statutes. In reaching
this conclusion, he considered a decision from our sister court that
addressed the very same “peer” question involving the same
parties. See Murciano v. State, 208 So. 3d 130 (Fla. 3d DCA 2016)
(Murciano II) (holding that the reviewing doctor was a “peer”
within the meaning of the statute). The ALJ took time to explain
why that decision “was wrongly decided,” “cannot be correct,”
“essentially ignored” the proper grammatical reading of the
statute, and contradicts what “[l]ogic dictates.” He decided,
however, to “reluctantly” follow that binding decision. He then
found another reason to conclude Dr. Jenkins was not a peer. And
on that basis, he recommended AHCA dismiss the proceeding.

      AHCA then remanded the matter, requesting the ALJ make
findings of fact on the disputed Medicaid claims. To make the
matter clear, AHCA indicated that it intended to reject the ALJ’s
legal interpretation of the peer requirement and would find that
Dr. Jenkins was a peer. AHCA therefore asked the ALJ to make
the findings of fact on the individual claims that were necessary
for the issuance of a final order. AHCA also pointed to our decision
in State v. Murciano, 163 So. 3d 662 (Fla. 1st DCA 2015) (Murciano
I), in which we addressed the same issue, again with the same
parties, and required the ALJ to follow the law and make the
required findings.

                                 2
     The ALJ then issued another order, declining remand and
refusing to make any other findings of fact. This time, the ALJ
explained that our decision in Murciano I was wrong. He said that
our conclusion that factual findings are necessary for a lawful final
order on the disputed overpayments was “plainly not true.” He
said that we “dodged” the central issue in the case, that our
“rationale . . . is logically flawed,” and our reasoning
“unpersuasive.” He then refused to comply with it. Instead, he
engaged in a constitutional analysis and determined our decision
conflicted with article V, section 21. While on this constitutional
flight of fancy, the ALJ also determined that the requirements of
section 21 go well beyond its text. He found that section 21
“prohibits an ALJ from taking any action in furtherance of an
agency’s statutory interpretation that conflicts with his . . . own de
novo interpretation of the statute.” The ALJ ultimately concluded
he was not bound by this Court’s holding in Murciano I. He also
refused AHCA’s request to, at least, make findings of fact as to the
claims that did not require a peer review. But even this the ALJ
refused, claiming “[t]he ALJ should not be required to perform
such a laborious task.”

     In response, AHCA issued a Partial Final Order, concluding
that Dr. Jenkins was a “peer” under section 409.913(2), Florida
Statutes, and again remanded to the ALJ to engage in factfinding
on the disputed claims. The ALJ once again refused to accept
remand or make additional findings of fact. He issued a third
order, informing AHCA, and apparently this Court, that he “will
conduct no further proceedings in this matter except pursuant to
an appellate mandate, and then only—it is to be hoped—if the
court of appeal has decided, on the merits” of the peer question.
AHCA then filed the instant petition, asking us to direct the ALJ
to make the required findings of fact in compliance with his
statutory duty under section 120.57(1)(k), Florida Statutes.

                              Analysis

     AHCA filed this petition for review of the ALJ’s order arguing
it was immediately reviewable because review of final agency
action would not provide an adequate remedy. See § 120.68(1)(b),
Fla. Stat. (“A preliminary, procedural, or intermediate order of . . .
an administrative law judge . . . is immediately reviewable if

                                  3
review of the final agency decision would not provide an adequate
remedy.”). We have held that a section 120.68(1)(b) petition is
analogous to review by common law certiorari. See Murciano I,
163 So. 3d at 664; Charlotte Cnty. v. Gen. Dev. Utilities, Inc., 653
So. 2d, 1081, 1084 (Fla. 1st DCA 1995). We therefore require a
showing that the ALJ has departed from the essential
requirements of the law and that the error cannot be adequately
remedied on final appeal. Murciano I, 163 So. 3d at 665. AHCA
argues that the ALJ has departed from the essential requirements
of law by refusing to make the required findings of fact on the
individual Medicaid claims for which overpayments were
identified. AHCA argues these factual findings are necessary to
issue a lawful final order. We reaffirm Murciano I; for the reasons
stated there, and those that follow here, we find AHCA has met its
burden for non-final review.

     Section 120.57(1)(k), Florida Statutes, provides, “[t]he
presiding officer shall complete and submit to the agency and all
parties a recommended order consisting of findings of fact,
conclusions of law, and recommended disposition or penalty, if
applicable, and any other information required by law to be
contained in the final order.” Thus, as we have said before, ALJs
are required by law to submit a recommended order which includes
findings of fact on the disputed claims.

     We have already addressed this precise issue with the same
parties. We held that “the ALJ must make express factual findings
on each of the contested Medicaid claims, because those factual
findings are necessary in order for AHCA to enter a final order. It
would be a due process violation for AHCA to enter a final order
that lacked ‘specific factual findings upon which its ultimate action
is taken.’” Murciano I, 163 So. 3d at 665 (citing Borges v. Dep’t of
Health, 143 So. 3d 1185, 1187 (Fla. 3d DCA 2014)).

     We also held that the ALJ had “departed from the essential
requirements of the law in declining AHCA’s second request to
make factual findings on all of the contested Medicaid claims in
light of AHCA’s legal conclusion that [the reviewing physician] met
the statutory definition of ‘peer.’” Id. We then remanded the case
to the ALJ with directions to make factual findings on each of the
contested Medicaid claims.

                                 4
     The ALJ, here, maintains the position that Murciano I is no
longer “good law” because of the adoption of article V, section 21.
He claims he need not make findings of fact because article V,
section 21 prohibits administrative hearing officers from deferring
to an agency’s statutory interpretation. But we see no connection
between the constitutional charge to make de novo legal
conclusions and his refusal to make the statutorily required
findings of fact. The argument takes the constitutional text
beyond that which it can bear—that not only must the hearing
officer make de novo legal conclusions but also that agencies can
no longer reject a hearing officer’s legal conclusions and make their
own. But, of course, Florida law has long authorized just that.
Section 120.57(1)(l) expressly authorizes agencies to reject an
ALJ’s legal conclusions and substitute the order with its own.
Acknowledging this, Dr. Murciano advocates the ALJ’s position by
encouraging us to hold that section 120.57(1)(l) is unconstitutional.
But that argument misunderstands the Administrative Procedure
Act. The adoption of article V, section 21 was an important shift
in Florida law, but it means what it says—article V courts and
administrative hearing officers are to make de novo legal
conclusions without deference to an agency’s preferred
interpretation. 1 It does not prohibit, as the ALJ argues, an
administrative hearing officer from taking any action “in
furtherance” of an agency interpretation. And it does not upend
the Administrative Procedure Act’s framework which calls for a
“recommended order” from an ALJ (which now must be based on
the ALJ’s non-deferential view of the law) and a “final order” from
the agency. The agency gets to determine what legal conclusions
to reject and what to accept from the ALJ’s recommendation.
Agency action is just that, the agency’s action. The conclusions of
law in a final order are the conclusions of the agency, not the
ALJ’s. 2 To adopt the proposed constitutional interpretation would

    1 We appreciate and respect the experience of the amici in this

case. We agree that article V, section 21 represents a sea change
in Florida law and is applicable to hearing officers at the
Department of Administrative Hearings.
    2 We address here only the administrative process set out in

section 120.57. We do not speak to other statutory provisions, like
section 120.56(4)(d), which say an ALJ’s decision can “constitute a
                                 5
be to effectively convert agency hearing officers’ recommended
orders into final orders and ALJs into article V courts. Such a
result is not just at odds with the language of the provision at
issue, but with our most basic concepts of republican constitutional
government.

     The ALJ here seems to have a fundamental misunderstanding
of his role. He characterizes the issue as “a disagreement between
a judge and a party regarding the interpretation of a controlling
statute.” And so, we pause here to remind this ALJ that he is not
an article V judge. We caution him, as we have before, that the
Division of Administrative Hearings is an executive agency,
exercising executive powers. State v. Smathers, 264 So. 3d 256,
258 (Fla. 1st DCA 2019) (Wetherell, J., concurring) (warning this
same ALJ about his “novel” jurisdictional conclusions, explaining
that the APA does not grant ALJs the power to invalidate statutes
on constitutional or any other grounds, and that ALJs must follow
the law even if “in the ALJ’s view, the statute is ‘inoperative,’
ineffectual, or otherwise invalid.”). Our government is “divided
into legislative, executive and judicial branches. No person
belonging to one branch shall exercise any powers appertaining to
either of the other branches unless expressly provided herein.”
Art. II, § 3, Fla. Const. Even when convinced that a statute will
ultimately be held unconstitutional, until it has been successfully
challenged in an article V court, an ALJ is “not free to ignore the
law.” Dortch v. Alachua Cnty. Sch. Bd., 330 So. 3d 976, 979 (Fla.
1st DCA 2021). “Laws are presumed to be, and must be treated
and acted upon by subordinate executive functionaries as,
constitutional and legal, until their unconstitutionality or
illegality has been judicially established; for in a well-regulated
government obedience to its laws by executive officers is absolutely
essential and of paramount importance.” State ex rel. Atl. Coast
Line R. Co. v. State Bd. of Equalizers, 94 So. 681, 685 (Fla. 1922).

final order.” § 120.56(4)(d), Fla. Stat.; see also § 120.56(1)(e)
(stating that the ALJ’s “order shall be final agency action.”). While
ALJ orders may sometimes constitute final agency action, their
acts are always an exercise of executive power. ALJs do not, and
cannot, exercise judicial power.

                                 6
     Finally, AHCA argues the ALJ has “vacated his role as
impartial tribunal” and “may lack . . . the appropriate state of mind
to carry out his duty to make the findings of fact.” Yet AHCA
requests no remedy for this. We will not unilaterally craft one. We
do, however, copy the Division of Administrative Hearings Chief
Judge on this disposition so that he may take whatever action he
determines appropriate.

     For these reasons, we grant the petition. When, on remand,
an ALJ issues a supplemental recommended order, it will not
mean the ALJ is deferring to the agency’s legal interpretation.
Instead, the ALJ will be satisfying a necessary precondition for
issuing a final order and, in turn, effecting due process. The ALJ
may include language reflecting reservations on the statute’s
interpretation or constitutionality, but he may not side-step his
statutory obligation. We grant the requested relief and remand
the case for an ALJ to enter findings of fact on each Medicaid claim
for which overpayment was identified in the Final Audit Report.

    GRANTED.

LEWIS, ROBERTS, and LONG, JJ., concur.

                  _____________________________

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

Tracy Cooper George, Chief Appellate Counsel, Agency for Health
Care Administration, Tallahassee, for Petitioner.

Chance Lyman and Blake J. Delaney of Buchanan Ingersoll &
Rooney PC, Tampa, and Raquel A. Rodriguez of Buchanan
Ingersoll & Rooney PC, Miami, for Respondent.

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