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Judge rejects Medicaid minimum wage challenges

Rhode Island's minimum wage will increase from $7.40 to $7.75.
Rhode Island's minimum wage will increase from $7.40 to $7.75.

TALLAHASSEE — An administrative law judge has rejected challenges by two health-care groups to the way state Medicaid officials have carried out a requirement that “direct care” workers get paid a minimum of $15 an hour.

Judge Robert Cohen on Monday issued a 26-page decision that backed the state Agency for Health Care Administration in the challenges filed by the Florida Assisted Living Association and the Florida Ambulance Association. The groups also are pursuing a separate case in Leon County circuit court.

The disputes involve fine print in this year’s state budget that directed money to the Agency for Health Care Administration to adjust reimbursement rates so Medicaid providers would pay at least $15 an hour to direct-care employees. Also, the budget said employees could file civil lawsuits against providers that do not pay $15 an hour, including possibly class-action lawsuits.

In the cases filed at the state Division of Administrative Hearings, the health-care groups contended, in part, that the agency should have gone through a formal rule-making process to define the workers who would be subject to the $15 minimum wage. Also, they contended that a rule-making process was needed for agreements that Medicaid providers would sign to show compliance.

They said the agency’s interpretation of direct-care workers and its use of the agreements were improper “unadopted” rules.

But Cohen rejected the arguments, saying that the agency’s interpretation of the term “direct care” workers is not a rule.

“The undersigned (judge) will not attempt to define the phrase ‘direct care employee’ here,” Cohen wrote. “A literal reading of the phrase, however, would be an employee who provides care directly. Certainly, there are countless employees of the many healthcare providers represented by petitioners … who provide administrative, clerical, maintenance and other tasks for the providers that do not provide care directly to the patients, customers and clients of the providers. It is hard to imagine that these experienced health-care providers cannot parse out which employees provide care directly to their patients, customers and clients and distinguish those from others who do not provide their respective services directly to Medicaid recipients so as to trigger the minimum wage increase.”

Cohen added that in “the context of those segments of the healthcare industry represented by petitioners … and as testified by witnesses for them, it appears that employees who ‘put their hands on a Medicaid beneficiary’ would fall within the ordinary and plain meaning of ‘direct care employees.’ If more is required in a Medicaid rule, such as an exhaustive list of direct versus non-direct care employees, then most every healthcare-related rule from AHCA might need a similar list of every possible situation encompassed by a rule. The law does not require that every word or phrase used by an agency be tailored and defined for every conceivable situation or individual.”

But a document filed Jan. 17 by the health-care groups pointed to confusion about the definition.

“Although the agency strained to insist that ‘direct care employee’ has a common and plain meaning that is known throughout the Medicaid industry, it never actually stated what that definition is,” the document said. “Nor did it offer testimony from any substantially-affected Medicaid provider or other knowledgeable member of the industry concurring with this assessment.”

The separate case in Leon County circuit court focuses on the constitutionality of the part of the budget that could open providers to lawsuits if they don’t comply with the minimum-wage requirement. It contends that, under the Florida Constitution, creating such a “legal cause of action” must be done in state law, rather than in the annual budget

Leon County Circuit Judge Angela Dempsey in December rejected a request for a temporary injunction to block that part of the budget.

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