Panama City Medical Diagnostic Ltd. v. Williams
| Decision Date | 15 February 1994 |
| Docket Number | No. 92-2826,92-2826 |
| Parties | PANAMA CITY MEDICAL DIAGNOSTIC LTD., Dr. Frank Syfrett, and Dr. Steve Taylor, Plaintiffs-Appellees, Am-Med Associates, A Florida General Partnership, Winter Park MRI Partners, Ltd., Medi-Tek Winter Park, Inc., MRI of Wellington, Ltd., Meditek-Wellington, Inc., Meditek-Palm Beach Gardens, Inc., Clay Medco, d/b/a Orange Park Diagnostic Center, Prime Care Diagnostic, Inc., d/b/a Prime Care Diagnostic Center, Magnedocs, Ltd., A Florida Limited Partnership, by and through its general partner, Magnadoc, Inc., a Florida Corporation, Magwest Ltd., a Florida Limited Partnership, by and through its general partner, Westdoc, Inc., a Florida Corporation, Kendall Therapy Center, Ltd., d/b/a Kendall Therapy Center, a Florida Limited Partnership, by and through its general partner, CHC of South Miami, Inc., a Florida Corporation, Medical Park Diagnostic Multicenter, d/b/a Medical Park, a Florida Limited Partnership, by and through its general partner, CHC of South Miami, Inc., a Florida Corporation, Kendall Medical Enterprises, Inc., d/b/a Kendall Diagnostic Center, a Florida Corporation, Health Images, Inc., Robert Kagan, M.D., Magnetic Imaging Systems I, Ltd., a Florida Limited Partnership, by and through its general partner, Nuclear Magnetic Imaging, Inc., a Florida Corporation, Intervenors-Appellees, v. Robert B. WILLIAMS, in official capacity as Sec. of Florida Dept. of HRS, George Stuart, in his official capacity as Sec. of Florida Dept. of Professional Reg., Board of Medicine, Board of Osteopathic Medical Examiners, Board of Chiropractic, et al., Defendants-Appellants, Citizens of the State of Florida, Intervenor-Appellant. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Stephanie A. Daniel, Asst. Atty. Gen., Dept. of Legal Affairs, Tallahassee, FL, for Williams, et al.
Stephen M. Presnell, Office of Public Counsel, Tallahassee, FL, for Citizens of Florida.
Robert J. Winicki, Don H. Lester, Mahoney Adams & Criser, P.A., Jacksonville, FL, for Panama City Medical Diagnostics, Ltd., Frank Syfrett, Steve Taylor.
Dennis A. Richard, Richard and Richard, P.A., Miami, FL, for Winter Park MRI Partners, Meditek-Winter Park, MRI Wellington, Meditek-Wellington, Meditek-Palm Beach Gardens.
John H. Pelzer, Ruden, Barnett, McClosky, Smith, Schuster & Russell, P.A., Ft. Lauderdale, FL, for Robert Kagan, Magnetic Imaging Systems.
Michael W. Moskowitz, Borkson, Simon, Moskowitz & Mandell, P.A., Ft. Lauderdale, FL, for Magnedocs, Magwest, Kendall Therapy Center, Medical Park Diagnostic Multicenter, Kendall Medical Enterprises.
Barry S. Richard, Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, Tallahassee, FL, for intervenors/appellees Meditek Entities.
Appeal from the United States District Court for the Northern District of Florida.
Before DUBINA and CARNES, Circuit Judges, and MORGAN, Senior Circuit Judge.
This is an appeal from an order of the district court permanently enjoining the state of Florida from enforcing a statute which imposes fee caps on providers of diagnostic imaging services. Specifically, appellants Robert B. Williams, et al. ("Williams"), challenge the district court's finding that the exemption from the fee cap for hospitals and group practices has no rational basis and thus, violates the Equal Protection Clause of the United States Constitution. Alternatively, Williams argues that even if the exemption is unconstitutional, the proper remedy is severance of the offending provision, as opposed to an injunction applied to the entire section. We hold that the fee cap exemption for hospitals and group practices has a conceivable rational basis and thus does not violate the Equal Protection Clause. Accordingly, we reverse the district court's order enjoining the enforcement of Chapter 92-178, Section 16, Laws of Florida.
For almost two decades, the Florida Legislature has grappled with the extremely difficult and complex issue of health care reform. In 1979, to aid in regulation of the health care industry, the legislature created the Health Care Cost Containment Board ("HCCB"). Although the HCCB was originally empowered only to review hospital budgets and certificates of need, its power has expanded greatly over the years. Currently, the HCCB has broad-based authority to review the costs of health care in the state of Florida.
In reaction to concern about physician referral practices and cost containment issues, the legislature in 1989 authorized the HCCB to conduct a study of joint venture arrangements, in which health care providers owned an interest in the clinics to which they referred patients for diagnostic imaging services. Diagnostic imaging services include, among other things: magnetic resonance imaging (MRI) procedures, computerized axial tomography (CAT) scans, and x-rays. The study revealed that both the cost and the utilization of diagnostic services in Florida is significantly higher than the national average. For example, it was reported that in 1989, Florida had more diagnostic imaging machines than the entire nation of Canada, with a population twice that of Florida, and West Germany, with a population five times that of Florida. The study also revealed that joint venture arrangements predominated in this sphere of health care service.
The legislature prepared a bill, "The Patient Self-Referral Act of 1992" ("the Act"), which incorporated the findings of the HCCB study. Section 7(2) of the Act contains a statement of legislative intent, which explains that the Act was created in order to address concerns over referral of patients to a provider of health care services in which the referring health care provider is an investor. The legislature intended to discourage such self-referral, and it was the stated intent to provide guidelines to health care providers regarding prohibited patient referrals. The Act was passed and became effective on April 8, 1992.
The original bill did not include fee caps as a cost containment measure. The fee schedule embodied in Section 16 of the Act, with which we are concerned here, was first proposed shortly before the Act was passed. As observed by the district court, Section 16 was passed with "little discussion" and was afforded only "cursory treatment;" it was both proposed and passed without meaningful debate.
Section 16 of the Act imposes a fee schedule on all providers of "designated health services," defined by the Act in section 7(3)(d) to mean "clinical laboratory services, physical therapy services, comprehensive rehabilitative services, diagnostic imaging services, and radiation therapy services." The fee schedule set a maximum cap on the fees for designated health services "limited to no more than 115% of the Medicare limiting charge for non-participating physicians for such services, including technical and professional components." As drafted, the Section 16 fee schedule applies regardless of whether or not the patient referral is from a health care provider who has an investment interest in the entity offering the designated service. The fee cap does not apply to patients eligible for Medicaid or Medicare reimbursement; rather, it applies to "private payors" who pay personally or through insurance coverage. The effect of the fee cap will be significant; an HCCB study completed after the legislation was passed indicates that providers subject to the fee cap could be put out of business.
Specifically exempt from the fee schedule are designated health services provided by hospitals and physician group practices. Thus, all other entities or persons providing such services, including physicians who are sole practitioners or who serve patients outside their group practices, are subject to the Section 16 fee restrictions. It is the constitutionality of this exemption which is at issue in the present case.
In response to the fee schedule legislation, Panama City Medical Diagnostics, Ltd., Dr. Frank Syfrett, and Dr. Steve Taylor (collectively, "the plaintiffs"), filed a complaint for damages. Named as defendants were Robert Williams ("Williams"), in his official capacity as Secretary of the Department of Health and Rehabilitative Services, George Stuart ("Stuart"), in his official capacity as Secretary of the Department of Professional Regulation, and the Boards of Medicine, Optometry, Dentistry, Podiatric Medicine, Chiropractic and Osteopathic Medical Examiners ("the Board defendants"). In general, the plaintiffs challenge the constitutionality of the Act, alleging for our purposes that the hospital and group exemptions to the fee cap violate the Equal Protection Clause.
The plaintiffs filed a motion for a preliminary injunction, seeking an order enjoining the enforcement of Section 16 of the Act. This motion was joined by a variety of intervenors. A lengthy hearing was held on the motion, and it was agreed by the parties that the hearing would be final in terms of the equal protection issue. Following the hearing, the district court issued an oral ruling that there existed no rational basis for the group practice exemption to the fee schedule provided in Section 16, and that Section 16 therefore violated the Equal Protection Clause. The court held that the plaintiffs were entitled to a preliminary injunction, which would be made permanent.
Stuart and Williams then filed a motion for amendment or clarification of judgment, asking that the court cure the equal protection defect in Section 16 by severing the group practice exemption. The court entered a written order enjoining enforcement of Section 16, and further, denied the motion for severance. The issuance of the permanent injunction and the denial of the motion to sever are the subjects of this appeal. 1
A district court's grant of an injunction will be reversed only when the district court abused its discretion. Planned Parenthood...
To continue reading
Request your trial
-
Yahweh v. U.S. Parole Com'n
... ... See Panama City Med. Diagnostic, Ltd. v. Williams, 13 F.3d ... ...
-
Lofton v. Secretary of Dept. of Children & Family
... ... , American Civil Liberties Union, New York City, for Plaintiffs-Appellants ... an applicant's physical and psychiatric medical history, previous marriages, arrest record, ... See Panama City Med. Diagnostic Ltd. v. Williams, 13 F.3d ... ...
-
Kilcullen v. New York State Dept. of Transp.
... ... 992, 994-98 (D.Kan.1997); Williams v. Ohio Dept. of Mental Health, 960 F.Supp ... (McAvoy, C.J.) (concluding that Family and Medical Leave Act, 29 U.S.C. §§ 2601, et seq., was not ... The Court is guided principally by City of Boerne v. Flores, 521 U.S. 507, 117 S.Ct ... by the legislative body.'") (quoting Panama City Medical Diagnostic Ltd. v. Williams, 13 ... ...
-
Doe v. Austin
... ... formulation" and "interchangeabl[e]" for medical purposes. See ECF No. 1-6 at 3 n.8. 5 On ... Panama City Med. Diagnostic, Ltd. v. Williams , 13 F.3d ... ...