Cataract Surgery Center v. Health Care Cost Containment Bd.
| Decision Date | 06 June 1991 |
| Docket Number | No. 90-02205,90-02205 |
| Citation | 581 So.2d 1359 |
| Parties | CATARACT SURGERY CENTER, Cortez Foot Surgery Center, Ambulatory Surgery Center of Bradenton, Tampa Outpatient Surgical Facility, Naples Day Surgery, Ambulatory Surgery Center, Specialty Surgery Center, and Tallahassee Single Day Surgery, Appellants, v. HEALTH CARE COST CONTAINMENT BOARD, Appellee. 581 So.2d 1359, 16 Fla. L. Week. D1533, 16 Fla. L. Week. D1577 |
| Court | Florida District Court of Appeals |
Louise T. Jeroslow, Martin J. Kurzer and Joshua D. Lerner, Matzner, Ziskind, Hermelee & Jaffee, P.A., Miami, for appellants.
Julia P. Forrester, General Counsel, Health Care Cost Containment Bd., Tallahassee, for appellee.
Before us is an appeal from a challenge to the validity of the Health Care Cost Containment Board's (HCCCB) proposed rules 10N-6.002, 10N-6.003, 10N-6.004, 10N-6.005, and 10N-6.006, Florida Administrative Code, relating to collection of data from freestanding ambulatory surgery centers. The hearing officer upheld the validity of the proposed rules. Appellants, freestanding ambulatory surgical centers, allege that the hearing officer erred in upholding the validity of the proposed rules because (1) the HCCCB lacks the statutory authority to require the collection and submission of 45 data items from all patients of freestanding ambulatory surgical centers, and (2) the economic impact statement is fatally deficient. We find merit in both of appellants' contentions, and reverse.
On March 23, 1990, the HCCCB published the Notice of Proposed Rulemaking as required by section 120.54, Florida Statutes. The notice stated that the proposed rules would provide for the collection of 45 data items on a quarterly basis by computer tape or diskette from all freestanding ambulatory surgery centers and hospitals providing ambulatory surgery services; the stated purpose, "to accomplish the board's legislative mandate to collect data and conduct analysis and studies relating to health care costs and to meet the requirement that the board report to the governor and the Legislature the extent to which shifts from institutional to ambulatory care may be affecting health care costs." In the notice, the HCCCB identified their statutory authority for the proposed rules as sections 407.003, 407.03, 407.07, and 407.08, Florida Statutes (1990).
In preparing the economic impact statement (EIS) for the notice, the HCCCB sent survey requests to all freestanding and hospital-based ambulatory surgery centers. Based upon an analysis of these surveys, the HCCCB made an estimate of the cost of initial compliance with the data submission requirements. The surveys did not deal with ongoing costs of compliance. The only reference to ongoing costs in the EIS was that "[o]ngoing costs will be substantially less after the initial development of the program." At the hearing on the rule challenge, appellants presented several witnesses concerning these ongoing costs. Their evidence demonstrated that in a number of cases these costs would be substantial. The EIS also indicated that there was no anticipated effect on small business. Following the hearing on the proposed rules, the hearing officer determined that there was legislative authority for the rules and that any defect in the EIS was harmless.
An agency rule may be declared to be an invalid exercise of delegated legislative authority if, among other things,
The agency has materially failed to follow the applicable rulemaking procedures set forth in s. 120.54;
The rule enlarges, modifies, or contravenes the specific provisions of law implemented, citation to which is required by s. 120.54(7); or
The rule is arbitrary or capricious.
Sec. 120.52(8)(a), (c) and (e), F.S. (1989). In the instant case, we are asked to determine whether the provisions of chapter 407, Florida Statutes, allow the the HCCCB to exercise regulatory authority (require submission of data) over freestanding ambulatory surgical centers. A reading of the entire chapter indicates that the HCCCB does not have this authority. We do not believe the cited sections indicated by the HCCCB confer jurisdiction upon it.
An agency's construction of the statute it administers is entitled to great weight and is not overturned unless clearly erroneous. Pan American Airways, Inc. v. Florida Pub. Serv. Comm'n, 427 So.2d 716 (Fla.1983). 1 An agency is given broad discretion in the exercise of its lawful authority and the burden is on a petitioner to demonstrate that a rule is arbitrary and capricious. Department of Professional Regulation, Bd. of Medical Examiners v. Durrani, 455 So.2d 515 (Fla. 1st DCA 1984).
A slightly different analysis takes place, however, where the jurisdiction of the agency is in question. An agency may not enlarge, modify, or contravene legislative pronouncements. Sec. 120.52(8), F.S. (1989); United States Shoe Corp. v. Department of Professional Regulation, Bd. of Opticianry, 578 So.2d 376 (Fla. 1st DCA 1991). This court held in Florida League of Cities, Inc. v. Department of Insurance and Treasurer, 540 So.2d 850 (Fla. 1st DCA 1989), that proposed rules which expand the authority of the state agency beyond that established by the statutory scheme were invalid. 2 Any attempt by an agency to extend or enlarge its jurisdiction beyond its statutory authority will be declared to be invalid. Board of Trustees of Internal Improvement Trust Fund v. Board of Professional Land Surveyors, 566 So.2d 1358 (Fla. 1st DCA 1990); Board of Optometry v. Florida Medical Ass'n, 463 So.2d 1213 (Fla. 1st DCA 1985), rev. denied, 475 So.2d 693 (Fla.1985). Regulatory jurisdiction of an agency may only be exercised when authorized by law. Department of Health and Rehabilitative Services v. Florida Psychiatric Soc'y, Inc., 382 So.2d 1280 (Fla. 1st DCA 1980). In determining whether the agency has enlarged upon its statutory authority, the court may look at the entire statutory framework as well as the specific provisions cited as statutory authority. United States Shoe Corp., supra, 578 So.2d at 377.
Section 407.03(1), Florida Statutes (1989), gives the board the power to
adopt, amend, and repeal rules respecting the exercise of the powers conferred by this chapter which are applicable to the promulgation of rules.
(Emphasis added). The general grant of rulemaking power quoted above is of limited help, however, in determining an agency's specific jurisdiction or authority. It is of little legal significance because it is generally a restatement of the common law concerning agency powers. State Dep't of Ins. v. Insurance Serv. Office, 434 So.2d 908, 910 (Fla. 1st DCA 1983), rev. denied, 444 So.2d 416 (Fla.1984). In fact, in light of the underlined language above, the general grant of power to the HCCCB in this case may be viewed as more limited than the general authority given to many agencies. The grant of power to the HCCCB appears to only apply where specific sections of the chapter confer such rulemaking power.
The other sections relied on by the board as statutory authority for its rulemaking power are sections 407.003, 407.07, and 407.08, Florida Statutes. The relevant portions are quoted below.
Section 407.003(1)(a) and (d) provides as follows:
(1) It is the intent of the Legislature to assure that adequate health care is affordable and accessible to all the citizens of this state. To further the accomplishment of this goal, the Health Care Cost Containment Board is created to:
(a) Advise the Governor, the President of the Senate, and the Speaker of the House of Representatives regarding health care costs, inflationary trends in health care costs, the impact of health care costs on the state budget, the impact of hospital and other provider charges, and third- party reimbursement mechanisms on health care costs.
(d) Recommend to the Governor, the President of the Senate, and the Speaker of the House of Representatives appropriate strategies necessary to foster health care cost containment and improve access to health care services.
Section 407.07(1)(a) provides as follows:
(1) The board shall have the authority to:
(a) Collect data and conduct analyses and studies relating to health care costs, making maximum use of local health councils and the designated state health planning agency whenever appropriate. 3
Section 407.08 provides as follows:
On or before March 1 of each year, the board shall prepare and transmit to the Governor and the Legislature a report ... [to include] the extent to which other factors in the health care marketplace may be affecting health care costs, including ... shifts from institutional to ambulatory care....
At first glance, these sections may appear to give the HCCCB authority to gather information from all portions of the health care industry. When read in para materia with the rest of chapter 407, however, it is apparent that the Legislature intended that information would be provided by hospitals and nursing homes. Chapter 407 provides a detailed framework of regulation and reporting requirements for hospitals and nursing homes, but there is no indication of legislative intent to allow the HCCCB to exercise jurisdiction over freestanding ambulatory surgery centers.
Section 407.02(1) mandates that the board adopt rules requiring hospitals to submit information which is essential to budget review and approval. The HCCCB is to gather all information from hospitals which is necessary to carry out its statutory responsibility to provide public information and education. This subsection also goes into detail concerning what data may be required from hospitals. Section 407.025, Florida Statutes (1989), grants hospitals immunity from any liability as a result of reporting patient data to the HCCCB. Section 407.05(1), Florida Statutes (1989), allows the HCCCB to set up a uniform system of financial reporting for hospitals. The rest of this subsection sets out with...
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