Trust Care Health Serv. v. Agency for Health Care Admin.

• Decision Date: 14 January 2011
• Docket Number: No. 3D09-2568.,3D09-2568.
• Citation: 50 So.3d 13
• Parties: TRUST CARE HEALTH SERVICES, Appellant, v. AGENCY FOR HEALTH CARE ADMINISTRATION, Appellee.
• Court: Florida District Court of Appeals

50 So.3d 13

TRUST CARE HEALTH SERVICES, Appellant,

v.AGENCY FOR HEALTH CARE ADMINISTRATION, Appellee.

No. 3D09-2568.

District Court of Appeal of Florida,

Third District.

Oct. 6, 2010.

Rehearing and Rehearing En Banc Denied Jan. 14, 2011.

G. Richard Strafer; Scott A. Srebnick, Miami, and Manuel Alex Arteaga Gomez for appellant.

Tracy Lee Cooper, Chief Appellate Counsel, for appellee.

Before COPE, GERSTEN, and SALTER, JJ.

SALTER, J.

Trust Care Health Services, Inc. appeals the denial of its application for a change in ownership of a licensed home health agency by the Agency for Health Care Administration (AHCA). We affirm.

Facts

In May 2006, a licensed Florida home health agency known as All Med Network Corp. was terminated by the Medicare program for site visit deficiencies. AHCA revoked All Med's license for the same reasons five months later.¹ At the relevant times, Roberto Marrero was All Med's administrator and vice president. On the record before us, Marrero was not the subject of any personal administrative or disciplinary action relating to All Med's termination from Medicare and the license revocation by AHCA.

In August 2007, Trust Care (an existing home health agency) filed an application for change of ownership based on Marrero's purchase of all of the issued and outstanding stock of Trust Care. The printed application form required "yes or no" answers to these questions:

9(c) Has the applicant, owner or any individual having 5% or more financial interest been excluded, suspended, terminated or involuntarily withdrawn from participation in Medicare, Medicaid in any state or any other governmental or private health care/insurance program? __ Yes __ No

If yes, enclose the following information: the full name of the person, the position held and a description/explanation of any exclusions, permanent suspensions, terminations or involuntary withdrawals from any of the above listed programs. Proof of compliance with the requirements for disclosure of ownership and control interest under the Medicare or Medicaid programs may be accepted in lieu of this submission.

9(d) Has the applicant, owner or any individual having 5% or more financial interest previously been found by any licensing, certifying or professional standards board to have violated the standards or conditions that relate to home health-related licensure or certification, or to the quality of home health-related services provided? __ Yes __ No

If yes, enclose the following information: the full name of the person, the position held and a written description/explanation of any violations and the actions taken by the relevant board.

Trust Care, through Marrero, answered each of these questions "no." After a review of the application, AHCA sent Trust Care an "omission letter" describing corrections, omissions, or revisions necessary to complete the application. Under section 408.806(3)(b), Florida Statutes (2007), the requested information "must be filed with the agency within 21 days after the agency's request ... or the application shall be deemed incomplete and shall be withdrawn from further consideration and the fees shall be forfeited." The omission letter identified two items that were subsequently remedied by Trust Care and are not at issue here. The omission letter also asserted that Marrero's responses to items 9(c) and 9(d) were incomplete. As to 9(c), AHCA stated "Mr. Marrero was a controlling interest of All Med Network Corp. at the time their Medicare was terminated. Please provide the explanation for the exclusion as requested in item 9c." As to 9(d), AHCA stated "As a corporation director and an administrator, Mr. Marrero was previously found to have violated conditions that relate to home health licensure. Please provide the explanation for the violations as requested in item 9d."

Through its attorney, Trust Care replied that its answers regarding items 9(c) and (d) were "legally and factually accurate in response to the specific wording of the application's question." Regarding item 9(c), Trust Care further stated:

The "owner" of 100% of the stock in this matter is Roberto Marrero. Roberto Marrero has never received any of the sanctions requested of him in Q. 9c. A facility for which Roberto Marrero was the former Administrator at [sic] was terminated from the Medicare/Medicaid program based upon site-visit deficiencies. He did not own any stock and as such could not have a "controlling interest" as you indicate.

Regarding item 9(d), Trust Care also replied:

The "owner" of 100% of the stock in this matter is Roberto Marrero. Roberto Marrero, personally, as the question states "owner," has never received any of the sanctions requested of him in Q. 9d. A facility for which Roberto Marrero was the former Administrator at [sic] voluntarily surrendered its AHCA-HHA license based upon site-visit deficiencies. However, this information is not elicited in Q. 9d for which you are referring.

In response, AHCA issued a "notice of intent to deny" regarding the application for a change of ownership. The pertinent statutes and rules cited by AHCA for the action included section 408.815(1)(a) and (e), Florida Statutes (2007):

(1) In addition to the grounds provided in authorizing statutes, grounds that may be used by the agency for denying and revoking a license or change of ownership application include any of the following actions by a controlling interest:

(a) False representation of a material fact in the license application or omission of any material fact from the application.

....

(e) The applicant, licensee, or controlling interest has been or is currently excluded, suspended, or terminated from participation in the state Medicaid program, the Medicaid program of any other state, or the Medicare program.

Trust Care requested a formal administrative hearing regarding the matter. An administrative law judge considered memoranda of law and undisputed facts submitted by Trust Care and AHCA in lieu of a formal hearing and oral argument. The final administrative order upheld AHCA's application of the applicable statutes and denial of Trust Care's change of ownership application. The order included this analysis:

4. Trust Care argues that Section 408.815(1) applies only to controlling interests of the current applicant or licensee. Marrero was the controlling interest of All Med at the time All Med's Medicare participation was terminated. All Med is neither the applicant nor licensee here. Trust Care therefore maintains that Marrero's former status as a controlling interest of All Med is not within the reach of the statute for purposes of Trust Care's CHOW [change of ownership] application. Trust Care takes the position that Marrero personally would have had to have been terminated from Medicare in order for Section 408.815(1) to apply to Trust Care's CHOW application.

5. Trust Care's interpretation does not comport with the plain meaning of the language in Section 408.815(1). The statute clearly states that certain past actions by a controlling interest may serve as a basis for denial of a license or CHOW. The disqualifying actions include the situation in which the "applicant, licensee, or controlling interesthas been ... terminated from participation in ... the Medicare program [emphasis supplied]." This language lists "applicant," "licensee" and "controlling interest" in the alternative. Thus the statutory language provides that the termination of any one of those entities from Medicare supports a denial of the application. It does not require, for purposes of this termination, that the controlling interest be associated with the current applicant or licensee at the time the controlling interest was terminated. Nothing in the statute states that a denial of an application based on the termination of a controlling interest from Medicare is restricted to a Medicare termination that took place when the controlling interest was the controlling interest of the applicant. The statute allows a past termination of an applicant's controlling interest from participation in Medicare to serve as grounds for denial of that applicant's application whether or not the controlling interest was associated with the applicant when the termination occurred.

6. The Agency's interpretation is not unreasonable. As the Agency points out, the interpretation offered by Trust Care would allow a 100% owner of a home health agency to commit Medicare fraud, be terminated from Medicare, and then simply form a new corporation as the 100% owner and be eligible for licensure. It is precisely this type of activity that Section 408.815(1) appears to have been intended to prevent.

Trust Care's appeal to this Court followed.

Analysis

The starting point for this type of purely interpretive, administrative issue is our deference to an agency's interpretations of law on matters within the agency's legislatively-defined scope of authority and expertise. Pub. Employees Relations Comm'n v. Dade County Police Benevolent Ass'n, 467 So.2d 987 (Fla.1985). An agency develops important technical and practical expertise in the area it oversees. Rizov v. State, Bd. of Professional Engineers, 979 So.2d 979 (Fla. 3d DCA 2008). For these reasons, we will affirm an agency's interpretation of law regarding such a matter unless it is shown to be "clearly erroneous." Verizon Florida, Inc. v. Jacobs, 810 So.2d 906, 908 (Fla.2002).

In the present case, the record includes an affidavit from the Deputy Secretary, Division of Health Quality Assurance of AHCA. The Deputy Secretary stated under oath that she "was involved in the drafting and review of the revision of Florida Statutes related to health care facility regulation including Chapter 408 Florida Statutes." Her affidavit continues:

[W]ith regard to Section 408.815(1)(e) Florida Statutes (2007), Affiant states that part of the intent of this legislation was to ensure that individuals that have been controlling interests in licensed entities that were terminated

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