Fla. Agency for Health Care Admin. v. Best Care Assurance, LLC

• Decision Date: 17 August 2020
• Docket Number: Nos. 1D19-326,No. 1D19-838,1D19-355,s. 1D19-326,1D19-838
• Citation: 302 So.3d 1012
• Parties: State of Florida AGENCY FOR HEALTH CARE ADMINISTRATION and Molina Healthcare of Florida, Inc., Appellants, v. BEST CARE ASSURANCE, LLC, Appellee. Best Care Assurance, LLC, Appellant, v. State of Florida Agency for Health Care Administration and Molina Healthcare of Florida, Inc., Appellees.
• Court: Florida District Court of Appeals

302 So.3d 1012

State of Florida AGENCY FOR HEALTH CARE ADMINISTRATION and Molina Healthcare of Florida, Inc., Appellants,

v.BEST CARE ASSURANCE, LLC, Appellee.

Best Care Assurance, LLC, Appellant,

v.State of Florida Agency for Health Care Administration and Molina Healthcare of Florida, Inc., Appellees.

Nos. 1D19-326

1D19-355

No. 1D19-838

District Court of Appeal of Florida, First District.

August 17, 2020

Rehearing Denied October 2, 2020

Joseph M. Goldstein, Daniel E. Nordby, and Andrew E. Schwartz of Shutts & Bowen LLP, Tallahassee; Tracy Lee Cooper George and Joseph Helton, Florida Agency for Health Care Administration, Tallahassee, for Agency for Health Care Administration.

Eduardo S. Lombard and Brittany Adams Long of Radey Law Firm, Tallahassee, for Molina Healthcare of Florida, Inc.

D. Ty Jackson, George Levesque, and Allison Goodson of GrayRobinson, P.A., Tallahassee, for Best Care Assurance, LLC.

Winokur, J.

This appeal involves two orders: a circuit court's final judgment and an agency final order. Molina Healthcare of Florida, Inc. (Molina) and the Agency for Health Care Administration (AHCA) appeal the circuit court's final judgment in favor of Best Care Assurance, LLC (Best Care). Best Care appeals AHCA's final order dismissing Best Care's petition to challenge a contract award to Molina. We reverse the circuit court's final judgment and direct the circuit court to enter a final judgment in favor of AHCA and Molina. We affirm AHCA's final order.

I.

AHCA issued an invitation to negotiate, seeking vendors to provide Statewide Medicaid Managed Care (SMMC) Program services for Region 8. AHCA posted its Initial Notice of Intent to Award Contracts in April 2018. Best Care was identified as an original intended awardee for Region 8. AHCA awarded three other contracts for Region 8 to the following plan providers: Humana Medical Plan, Inc., Sunshine State Health Plan, Inc., and Wellcare of Florida, Inc.

Humana was identified as a provider receiving an "additional contract" in Region 8 by virtue of its contract award in Regions 1 or 2. See § 409.966(3)(e), Fla. Stat. (stating that "the agency shall award an additional contract to each plan with a contract award in Region 1 or Region 2" and that "[s]uch contract shall be in any other region in which the plan submitted a responsive bid and negotiates a rate acceptable to the agency").

AHCA did not initially select Molina as an intended awardee in any region. Molina filed a protest of AHCA's Initial Notice of Intent to Award Contracts. AHCA and Molina entered into a settlement agreement under which AHCA would award a contract in Region 8 (and in Region 11) to Molina in exchange for Molina dismissing its protests in all 11 regions. AHCA issued a Final Order incorporating the settlement agreement. AHCA posted its notice of intent to award a contract to Molina.

Best Care then protested the additional award to Molina, arguing that the additional award violated section 409.974(1)(h), Florida Statutes, which—according to Best Care—limits the number of service providers in Region 8 to four. Best Care also argued that Molina was not a responsive or responsible bidder for purposes of the additional contract. AHCA referred the matter to the Division of Administrative Hearings (DOAH), and Molina intervened.

Molina moved to dismiss Best Care's protest, asserting that Best Care lacked standing to challenge the additional award to Molina because it would not suffer an injury, and alternatively requested the Administrative Law Judge (ALJ) to relinquish jurisdiction to AHCA, arguing the material facts were not in dispute. The ALJ relinquished jurisdiction to AHCA, finding that Best Care lacked standing.

AHCA then conducted an informal hearing pursuant to section 120.57(2), Florida Statutes. The informal hearing officer's recommended order found that Best Care lacked standing.

Prior to AHCA making its final decision, Best Care filed an action in circuit court, seeking a declaration that AHCA's additional award to Molina was without colorable statutory authority, and to enjoin AHCA from entering into any such contract. Molina and AHCA filed motions to dismiss and motions for summary judgment, arguing, in part, that Best Care could not seek relief from the circuit court because Best Care did not exhaust all available administrative remedies. Best Care also filed a motion for summary judgment.

In January 2019, the circuit court entered final judgment for Best Care, holding that "AHCA's attempted award of a fifth Region 8 Medicaid Managed Care contract to Molina is invalid, void as a matter of law, and contrary to Florida law, including section 409.9[7]4(1)(h), Florida Statutes." AHCA and Molina timely appealed the order.

In February 2019, AHCA issued its final order, adopting the findings of fact and conclusions of law set forth in the recommended order. Best Care appealed AHCA's final order. Both the appeal of the circuit court's final judgment and appeal of AHCA's final order are before this Court.

II.

A.

We first address the circuit court's final judgment. Appellate courts review orders granting summary judgment de novo. See Major League Baseball v. Morsani , 790 So. 2d 1071, 1074 (Fla. 2001) ("The standard of review governing a trial court's ruling on a motion for summary judgment posing a pure question of law is de novo."). "A trial court's ruling on a motion to dismiss ... is subject to de novo review." Rudloe v. Karl , 899 So. 2d 1161, 1162 (Fla. 1st DCA 2005) (quoting Execu-Tech Bus. Sys., Inc. v. New Oji Paper Co. Ltd. , 752 So. 2d 582, 584 (Fla. 2000) ). Likewise, "[s]tatutory interpretation is a question of law subject to de novo review." Bay County v. Town of Cedar Grove , 992 So. 2d 164, 167 (Fla. 2008) (quoting BellSouth Telecomms., Inc. v. Meeks , 863 So. 2d 287, 289 (Fla. 2003) ).

Generally, a party must exhaust available administrative remedies before filing suit in circuit court. See Fla. Marine Fisheries Comm'n v. Pringle , 736 So. 2d 17, 19–20 (Fla. 1st DCA 1999) ; Bankers Ins. Co. v. Fla. Residential Prop. & Cas. Joint Underwriting Ass'n , 689 So. 2d 1127, 1129 (Fla. 1st DCA 1997). The exhaustion requirement includes "pursuing an appeal from an administrative ruling where a method of appeal is available." Robinson v. Dep't of Health , 89 So. 3d 1079, 1081 (Fla. 1st DCA 2012). We discussed exceptions to the exhaustion requirement in Bankers :

[R]elief is available as a remedy for adverse administrative action "only in those extraordinary cases where a party has no other adequate administrative remedy to cure egregious agency errors or where a party's constitutional rights are endangered," Metropolitan Dade County v. Department of Commerce, 365 So. 2d 432, 433 (Fla. 3d DCA 1978), or "where the agency is alleged to have acted without colorable statutory authority and in excess of its delegated powers ." Department of Revenue v. Brock, 576 So. 2d 848, 850 (Fla. 1st DCA), rev. denied, 584 So. 2d 997 (Fla. 1991).

689 So. 2d at 1129 (emphasis added) (quoting State Dep't of Envtl. Prot. v. PZ Constr. Co. , 633 So. 2d 76, 78 (Fla. 3d DCA 1994) ). "[I]t is permissible to pursue ... relief in a circuit court—without first pursuing and exhausting administrative remedies—if ‘an agency acts without colorable statutory authority that is clearly in excess of its delegated powers.’ " Baker Cty. Med. Servs., Inc. v. State , 178 So. 3d 71, 75 (Fla. 1st DCA 2015) (quoting Dep't of Agric. & Consumer Servs. v. City of Pompano Beach, 792 So. 2d 539, 546 (Fla. 4th DCA 2001) ). However, "[t]his narrow exception is inapplicable, and exhaustion of administrative remedies will be required, where the agency's assertion of jurisdiction has apparent merit ...." State, Dep't of Revenue v. Brock , 576 So. 2d 848, 850 (Fla. 1st DCA 1991).

It is undisputed that Best Care did not exhaust its administrative remedies, either before AHCA or by appealing any AHCA action, before filing suit. Regarding exceptions to the exhaustion requirement, we note that Best Care does not claim that AHCA violated its constitutional rights. Nor is this an "extraordinary case[ ] where [Best Care] has no other adequate administrative remed[ies] to cure egregious agency errors ...." Bankers , 689 So. 2d at 1129 (quoted source omitted). Section 120.57(3)(b), Florida Statutes, explicitly permits an adversely affected party to file a bid protest against an agency. This is precisely what Best Care did. Shortly after AHCA issued its notice of the additional contract awards to Molina, Best Care filed a protest in accordance with section 120.57(3)(b). Once Best Care's petition for protest was referred to DOAH and then back to AHCA for informal hearing, Best Care was permitted to submit argument in favor of its position. Moreover, Best Care—pursuant to section 120.68, Florida Statutes —is timely appealing AHCA's final order with this Court. Accordingly, Best Care has an "adequate administrative remedy" to address its grievance with AHCA. See Bankers , 689 So. 2d at 1129 (quoted source omitted).

Finally, we reject Best Care's claim that AHCA was acting "without colorable statutory authority that [was] clearly in excess of its delegated powers" when it granted Molina a contract in Region 8. See City of Pompano Beach , 792 So. 2d at 546 (quoting State, Dep't of Envtl. Regulation v. Falls Chase Special Taxing Dist. , 424 So. 2d 787, 796 (Fla. 1st DCA 1982) ). As discussed below, AHCA did not violate section 409.974(1)(h), when it awarded the contract to Molina. We need not address the arguments on the merits here, other than to state that AHCA was acting with colorable authority. Accordingly, because Best Care had not exhausted its administrative remedies, and because no exception to the exhaustion requirement is applicable, the circuit court erred in ruling in favor of Best Care.

B.

1.

We now address whether AHCA erred in its final order. First, we review AHCA's denial of Best Care's petition based on a lack of standing. "Whether a party has...