N0. SC11-353 [LOWER TRIBUNAL NOS. 3D09-2568] In the Supreme Court of Florida TRUST CARE HEALTH SERVICES, INC., Petitioner/Appellant, v. AGENCY FOR HEALTH CARE ADMINISTRATION, Respondent/Appellee. On Appeal From the District Court of Appeal For the Third District JURISDICTIONAL BRIEF OF APPELLANT G. RICHARD STRAFER, ESQ. ALEX ARTEAGA-GOMEZ, ESQ. G. RICHARD STRAFER, P.A. SCOTT A. SREBNICK, P.A. 201 South Biscayne Blvd. 201 South Biscayne Blvd. Suite 1380 Suite 1380 Miami, FL 33131 Miami, FL 33131 Telephone: 305-374-9091 Telephone: 305-285-9019 E-mail: straferpa@aol.com E-mail: lex@srebnicklaw.com
TABLE OF CONTENTS Page TABLE OF CONTENTS... i TABLE OF AUTHORITIES... ii STATEMENT OF THE CASE AND FACTS... 1 A. Preliminary Statement... 1 B. The Administrative Proceedings... 1 C. The Divided Opinion of the Third District Court of Appeal... 5 SUMMARY OF THE ARGUMENT... 6 ARGUMENT... 7 I. The Decision Of The Third District Court of Appeal In This Case Expressly And Directly Conflicts With Decisions Of The First District Court of Appeal... 7 II. This Court Should Exercise Its Discretionary Jurisdiction To Correct The Due Process Problem Presented By The Majority=s Interpretation Of The Statute... 8 CONCLUSION... 10 CERTIFICATE OF COMPLIANCE... 11 CERTIFICATE OF SERVICE... 11 i
TABLE OF AUTHORITIES CASES Page Anderson v. Secretary of Health and Human Services, 959 F.2d 690 (8 th Cir. 1992)... 8 Aravena v. Miami-Dade County, 928 So. 2d 1163 (Fla. 2006)... 7 Cleanmaster Inds., Inc. v. Shewry, 491 F. Supp. 2d 937 (C.D. Cal. 2007)... 9 Colonnade Medical Center, Inc. v. AHCA, 847 So. 2d 540 (Fla. 4 th DCA 2003)... 2 Fla. Hospital v. AHCA, 823 So. 2d 844 (Fla. 1 st DCA 1985)... 6, 7 Friedman v. Secretary of Health and Human Services, 46 F.3d 115 (1 st Cir. 1995)... 8 Guzman v. Shewry, 552 F.3d 941 (9 th Cir. 2009)... 8 Hernandez v. Dept. of State, Div. of Licensing, 546 So. 2d 1174 (Fla. 3d DCA 1989)... 9-10 Holmes v. N.Y. City Housing Auth., 398 F.2d 262 (2d Cir. 1968)... 9 South Medical Services, Inc. v. AHCA, 653 So. 2d 440 (Fla. 3d DCA 1995)... 2 Southpointe Pharmacy v. Dept. of Health & Rehab. Services, 596 So. 2d 106 (Fla. 1 st DCA 1992)... 2 Spuza v. Dept. of Health & Board of Medicine, 838 So. 2d 676 (Fla. 2d DCA 2003)... 9 ii
Sternberg v. Dept. of Health and Human Services, 299 F.3d 1201 (10 th Cir. 2002)... 8 Sullivan v. Fla. Dep=t of Env. Prot=n, 890 So. 2d 417 (Fla. 1 st DCA 2004)... 6, 7 United States v. Wunderlich, 342 U.S. 98 (1951)... 9 Wainwright v. Taylor, 476 So. 2d 669 (Fla. 1985)... 7 Florida Constitution Art. V, ' 3(b)(3)... 1, 7, 8 Florida Rules of Appellate Procedure Rule 9.030(a)(2)(iv)... 1, 7, 8 Florida Statutes ' 120.57... 2 ' 120.57(1)... 4 ' 120.569... 2 ' 408.803(7)(b)... 3 ' 408.815... 8, 9 ' 408.815(1)(a)... 3 iii
' 408.815(1)(e)... 3, 4, 6, 7, 10 ' 409.913(14)... 2 United States Code 42 U.S.C. ' 1320a... 1 42 U.S.C. ' 1320a-7(b)(15)... 1 42 U.S.C. ' 1320a-7(f)... 2, 8 Page 42 U.S.C. ' 1320c-7(a)... 5 42 U.S.C. ' 1983... 9 iv
STATEMENT OF THE CASE AND FACTS A. Preliminary Statement Petitioner, Trust Care Health Services, Inc. (ATrust Care@), respectfully submits this brief in support of its invocation of this Court=s discretionary jurisdiction to review a decision which expressly and directly conflicts with another District Court of Appeal=s decision on the same point of law. See Art. V, 3(b)(3), Florida Constitution; Rule 9.030(a)(2)(iv), Florida Rules of Appellate Procedure. In this statement of the case and facts, Trust Care will confine itself to those facts relevant to review of the divided opinion of the Third District Court of Appeal, a copy of which is attached as Appendix 1. B. The Administrative Proceedings Under 42 U.S.C. ' 1320a-7(b)(15), the Secretary for the Department of Health and Human Services (AHHS@), through the Center for Medicare and Medicaid Services (ACMS@), may exclude Aentities@ or Aindividuals@ or both from participation in the federal Medicare Program. See 42 U.S.C. ' 1320a. However, in order to impose sanctions against individuals, CMS is required by law to provide that individual with numerous due process rights, including notice, a hearing before an impartial administrative law judge and judicial review. On May 16, 2006, CMS terminated All Med, a home health care agency, from the federal Medicare program. CMS chose not to seek individual sanctions against 1
Roberto Marrero, All Med=s administrator and vice president. 1 Hence, he did not receive B because there was no reason to provide them B any of the due process rights granted by ' 1320a-7(f). Shortly thereafter, the Agency for Health Care Administration (AAHCA@) also terminated All Med=s license to participate in Florida=s Medicaid program. See Fla. Stat. '409.913(14). 2 Like CMS, AHCA took no individual action against Mr. Marrero based on anything he allegedly did or didn=t do at All Med. Had AHCA wished to do so, Mr. Marrero would have been entitled to similar due process rights under state law, including the right to a hearing before an administrative law judge and judicial review. See Fla. Stat. '' 120.569, 120.57. 3 On August 10, 2007, Trust Care, applied for a new license due to a pending change of ownership. Mr. Marrero has a controlling interest in Trust Care. (R 7, 181, 205.) In paragraph 9(c) of the change of ownership application, Mr. Marrero 1 Mr. Marrero was not a shareholder in All Med. (R7, 181.) 2 Subsection 14 provides, in pertinent part, that a provider may be suspended or terminated from Florida=s Medicaid program A[i]f the provider has been suspended or terminated from participation in the Medicaid program or the Medicare program by the Federal Government...@ 3 See, e.g., also Colonnade Medical Center, Inc. v. AHCA, 847 So. 2d 540 (Fla. 4 th DCA 2003); South Medical Services, Inc. v. AHCA, 653 So. 2d 440 (Fla. 3d DCA 1995); Southpointe Pharmacy v. Dept. of Health & Rehab. Services, 596 So. 2d 106 (Fla. 1 st DCA 1992). 2
asserted that no applicant, owner or any individual having a 5% or more financial interest had been excluded, suspended, terminated or involuntarily withdrawn from participation in any state, federal or private health care insurance program. (R 14.) He similarly asserted in paragraph 9(d) of the application that no applicant, owner or any individual having 5% or more financial interest had 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.@ (R 14-15.) On October 26, 2007, AHCA issued a ANotice of Intent to Deny@ Trust Care=s license application, contending that Mr. Marrero, as a former corporate officer of All Med, had a Acontrolling interest@ in All Med under its interpretation of Fla. Stat. ''408.815(1)(a) and (e). (R 11.) Sections 408.815(1)(a) and (e) provide: License or application denial; revocation (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. *** 3
(Emphasis added.) (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. AHCA construed the language in subsection (e) to mean that, although neither Trust Care nor Mr. Marrero had been terminated from the Medicare or Medicaid programs, since Mr. Marrero had a Acontrolling interest@ in All Med as its former vice president, 4 the prohibition in subsection (e) nonetheless barred the application. (R 11.) This construction of '408.815(1)(e) was based on AHCA=s view that the party referenced by the term Acontrolling interest@ in the opening language of the subsection - A[t]he applicant, licensee, or controlling interest@ - includes any entity with which the controlling interest has previously been associated (in this case, All Med). AHCA based this construction on its (erroneous) belief that Medicare had been statutorily unable to sanction Mr. Marrero individually for his involvement with All Med. (R 199.) Trust Care timely filed for a petition for a formal hearing, pursuant to Fla. Stat. ' 120.57(1). (R 5, 193.) Trust Care argued that since neither Trust Care (the 4 Fla. Stat. ' 408.803(7)(b) defines a Acontrolling interest@ as A[a] person or entity that serves as an officer of, is on the board of directors of, or has a 5-percent or greater ownership interest in the applicant or licensee...@ (Emphasis added.) 4
Aapplicant@ and Alicensee@) nor Mr. Marrero (the Acontrolling interest@ in the applicant Trust Care) had been the subject of any prior Medicare or Medicaid exclusion, the application should have been granted. (R 180-190.) AHCA opposed the motion, arguing the position it advanced in the Notice: AAHCA interprets that section [' 408.815(1)(e)] to authorize the denial of a license application from an applicant where the controlling interest of the applicant was the controlling interest of an entity that previously was terminated from the Medicare program.@ (R 197; emphasis added.) After an AHCA informal hearing officer adopted AHCA=s construction of the statute (R 204-208), AHCA did so as well. (R 209.) C. The Divided Opinion of the Third District Court of Appeal A divided panel of the Third District Court of Appeal affirmed. According to the majority opinion, A[t]he starting point@ for construing the statute was not its plain language but AHCA=s desired construction to which the court owed a duty of Adeference.@ Op., at p. 6. Conceding only that the statute could have Amore precisely describe[d]@ the scope of AHCA=s power, the Panel Majority held that AHCA acted within its discretion in considering Mr. Marrero to have been individually barred from the Medicare and Medicaid programs when, in fact, neither CMS nor AHCA had ever sought, much less obtained, individual sanctions against him. According to the majority, AMarrero was still terminated from continued 5
participation in Medicare through All Med.@ Id. (underlining in original). The majority cited nothing for its claim that individuals are somehow automatically barred from federal programs when an entity they worked for is barred, even though such individuals have not been afforded any due process rights. Judge Cope dissented, arguing that Mr. Marrero=s answers to the questions on the application were both literally true and in accordance with the plain meaning of the statute itself. Op., at pp. 14-15. Judge Cope, therefore, reasoned that the deference to AHCA=s construction was improper because that construction was Asquarely contrary to the language of the statute.@ Id. at p. 16. Judge Cope also noted that AHCA had now Aadmit[ted] that Medicare and Medicaid have regulatory authority with respect to corporate officers, directors and owners.@ Id. at p. 17, citing 42 U.S.C. ' 1320c-7a. Id. Trust Care moved for rehearing or rehearing en banc, arguing that the majority opinion erred in deferring to AHCA=s construction of the statute. In addition, Trust Care argued that the construction adopted by the majority would render the statute unconstitutional and thus should be rejected. The Third District summarily denied the motion on January 14, 2011. See Appendix 2. SUMMARY OF THE ARGUMENT The majority opinion below held that an agency=s construction of a statute controlled, even when that view conflicted with the statute=s plain meaning. The 6
lower court=s opinion, therefore, expressly and directly conflicts on the same point of law with two opinions from the First District Court of Appeal holding that such deference is not appropriate when the agency=s view is contrary to the statute=s plain meaning. See Sullivan v. Fla. Dep=t of Env. Prot=n, 890 So. 2d 417, 420 (Fla. 1 st DCA 2004); Fla. Hospital v. AHCA, 823 So. 2d 844, 848 (Fla. 1 st DCA 1985). This Court should exercise its discretionary conflict jurisdiction and decide the merits of this case in order to correct the due process problem presented by the majority opinion=s interpretation of Fla. Stat. '408.815(1)(e). 7
ARGUMENT I. THE DECISION OF THE THIRD DISTRICT COURT OF APPEAL IN THIS CASE EXPRESSLY AND DIRECTLY CONFLICTS WITH DECISIONS OF THE FIRST DISTRICT COURT OF APPEAL This Court may exercise its discretionary conflict jurisdiction when the holdings of the respective conflicting opinions are irreconcilable. See Art. V, 3(b)(3), Florida Constitution; Rule 9.030(a)(2)(iv), Florida Rules of Appellate Procedure; Aravena v. Miami-Dade County, 928 So. 2d 1163, 1166-1167 (Fla. 2006). The Court=s concern is the precedential effects of decisions which are incorrect and in conflict with decisions reflecting the correct rule of law. See Wainwright v. Taylor, 476 So. 2d 669, 670 (Fla. 1985). In this instance, the decisional conflict involves a fundamental issue regarding the extent to which an agency=s decision regarding the interpretation of a statute is entitled to deference. In Sullivan v. Fla. Dept. of Env. Prot=n, 890 So. 2d 417, 420 (Fla. 1 st DCA 2004) and Fla. Hospital v. AHCA, 823 So. 2d 844, 848 (Fla. 1 st DCA 1985), the First District Court of Appeal held that a court should not defer to an agency=s construction of a statute when the agency=s view is contrary to the statute=s plain meaning. The Panel Majority=s opinion below expressly and directly conflicts with this holding because it defers to AHCA=s construction of Fla. Stat. ' 408.815(1)(e) even though AHCA=s interpretation is contrary to the statute=s plain meaning. The majority opinion below is therefore irreconcilable with Sullivan and Fla. Hospital. II. THIS COURT SHOULD EXERCISE ITS DISCRETIONARY JURISDICTION TO CORRECT THE DUE PROCESS PROBLEM PRESENTED BY THE MAJORITY=S INTERPRETATION OF THE STATUTE. When this Court is presented with conflicting lower court decisions, it may exercise its discretion to hear the merits of the appeal. See Art. V, 3(b)(3), Florida 8
Constitution; Rule 9.030(a)(2)(iv), Florida Rules of Appellate Procedure. This Court should exercise its discretion in this case because the Third District=s construction of ' 408.815 renders the statute unconstitutional. As previously noted, the applicable Medicare and Medicaid statutes in this case expressly create procedural due process protections for individuals when the agencies in charge of administering those programs seek to hold those individuals personally responsible for fraud and dishonest practices committed by their employers. These due process rights include formal notice, the right to a hearing before an impartial administrative law judge and judicial review. 5 The Third District=s opinion completely eviscerates these due process guarantees. Under its construction of ' 408.815, AHCA may unilaterally treat Mr. Marrero as if he had been personally barred from the Medicare and Medicaid programs by CMS due to his conduct at All Med but without affording him any of the rights required by the Due Process Clause of the Fourteenth Amendment, 42 U.S.C. ' 1320a-7(f) and state law. According to the Third District, the only Adue process@ Mr. Marrero can look forward to receiving concerning his conduct at All 5 See, e.g., Guzman v. Shewry, 552 F.3d 941 (9 th Cir. 2009); Sternberg v. Dept. of Health and Human Services, 299 F.3d 1201 (10 th Cir. 2002); Friedman v. Secretary of Health and Human Services, 46 F.3d 115 (1 st Cir. 1995); Anderson v. Secretary of Health and Human Services, 959 F.2d 690 (8 th Cir. 1992). 9
Med can be summed up in a single sentence: AIf the problems at All Med occurred because of unauthorized acts or omissions by subordinates and could not have been prevented by Marrero, any fair-minded person should conclude that Marrero=s proposed acquisition of the Trust Care license is entitled to a new look.@ Op. at p. 9. We respectfully submit that CMS and AHCA had their chance to charge Mr. Marrero individually for any misconduct at All Med. However, they chose not to accuse him of any personal misconduct B an accusation that would have triggered Mr. Marrero=s due process rights. AHCA should not be permitted to circumvent all of these important rights and relegate Mr. Marrero to having to bear the burden of proving a negative and trust the Afair-mindedness@ of AHCA to reverse itself. 6 That construction of '408.815 renders it unconstitutional and, therefore, would subject AHCA to liability under 42 U.S.C. ' 1983. See Cleanmaster Inds., Inc. v. Shewry, 491 F. Supp. 2d 937, 943-44 (C.D. Cal. 2007) (construing portion of California statutes authorizing provider exclusion from Medicaid program to require procedural due process in order to be 6 As Justice Douglas noted in another context: AAbsolute discretion is a ruthless master. It is more destructive of freedom than any of man=s other inventions.@ United States v. Wunderlich, 342 U.S. 98, 101 (1951) (Douglas, J., dissenting). See also Holmes v. N.Y. City Housing Auth., 398 F.2d 262, 265 (2d Cir. 1968) (A[A]bsolute and uncontrolled discretion in an agency of government vested with the administration of a vast program, such as public housing, would be an intolerable invitation to abuse@). 10
constitutional and striking one provision as unconstitutional); cf. Spuza v. Dept. of Health & Board of Medicine, 838 So. 2d 676, 678-79 (Fla. 2d DCA 2003) (reversing revocation of doctor=s license accomplished through only Aan informal hearing@ and ordering full Aformal hearing@) (citing Hernandez v. Dept. of State, Div. of Licensing, 546 So. 2d 1174 (Fla. 3d DCA 1989)). CONCLUSION Plainly, the majority opinion of the Third District Court of Appeal=s decision herein expressly and directly conflicts with two opinions from the First District. Therefore, this Court can exercise jurisdiction over this matter. As this Court has said in conflict jurisdiction cases, its concern is the precedential effects of those decisions which are incorrect and in conflict with decisions reflecting the correct rule of law. Moreover, it is necessary that this Court exercise its discretionary and hear the merits of this case in order to correct the due process violation created by the majority opinion=s interpretation of Fla. Stat. ' 408.815(1)(e). Therefore, Trust Care respectfully requests this Court to invoke its discretionary jurisdiction in this extraordinarily important case. 11 Respectfully submitted, G. RICHARD STRAFER [Fla. Bar No. 389935] G. RICHARD STRAFER, P.A. 201 S. Biscayne Blvd., Suite 1380
Miami, FL 33131 Telephone: (305) 374-9091 ALEX ARTEAGA-GOMEZ [Fla. Bar No. 18122] SCOTT A. SREBNICK, P.A. 201 S. Biscayne Blvd., Suite 1380 Miami, FL 33131 Telephone: (305) 285-9019 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true copy of the foregoing was mailed, postage prepaid, this 18 th day of February, 2011, to the following named addressee: Tracy Lee Cooper Chief Appellate Counsel Agency for Health Care Administration 2727 Mahan Drive, MS #3 Tallahassee, FL 32308 G. RICHARD STRAFER CERTIFICATE OF COMPLIANCE Pursuant to Fla. R. App. P. 9.21(a)(2), I certify that this computer-generated brief is prepared in Times New Roman 14-point font and complies with the font requirement of Rule 9.210, Florida Rules of Appellate Procedure. 12
13 G. RICHARD STRAFER