Lebajo v. Department of Public Aid, 1-88-2722

• Decision Date: 19 February 1991
• Docket Number: No. 1-88-2722,1-88-2722
• Citation: 210 Ill.App.3d 263,569 N.E.2d 70,155 Ill.Dec. 70
• Parties: , 155 Ill.Dec. 70 Dario LEBAJO, M.D., Plaintiff-Appellant, v. DEPARTMENT OF PUBLIC AID of the State of Illinois and Gregory Coler, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 70

569 N.E.2d 70

210 Ill.App.3d 263, 155 Ill.Dec. 70

Dario LEBAJO, M.D., Plaintiff-Appellant, v. DEPARTMENT OF PUBLIC AID of the State of Illinois and Gregory Coler, Defendants-Appellees.

No. 1-88-2722.

Appellate Court of Illinois First District, Second Division.

Feb. 19, 1991.

Nunc Pro Tunc Oct. 23, 1990.

Douglas R. Carlson, Wildman, Harrold, Allen & Dixon, Chicago, for plaintiff-appellant.

Neil F. Hartigan, Atty. Gen. (James C. Stevens, Sp. Asst. Atty. Gen., of counsel), Chicago, for defendants-appellees.

Justice BILANDIC delivered the opinion of the court:

In an administrative review action, the trial court affirmed the order of the Illinois Department of Public Aid (IDPA or Department) terminating plaintiff, Dario Lebajo, M.D., from participating in the Medical Assistance Program and ordering plaintiff to repay the IDPA the sum of $15,118.11. Plaintiff appeals. Ill.Rev.Stat.1987, ch. 110, par. 3-112.

On appeal, plaintiff contends that: (1) the trial court erred in striking a portion of his reply memorandum; (2) the trial court erred in affirming the IDPA's decision to terminate plaintiff as a participant in the Medical Assistance Program; (3) the trial court erred in affirming the IDPA's decision to recover from plaintiff $15,118.11 in overpayments; and (4) the trial court erred in refusing to order production of documents used by an IDPA witness to refresh her recollection.

The relevant facts of the instant action are undisputed. On September 13, 1983, plaintiff applied to participate in the IDPA's Medical Assistance Program. As a participant in this program, plaintiff agreed to dispense medical care to public aid recipients and receive payment from the State for medical services rendered. As a condition of participation, plaintiff was required to keep accurate patient records and bill for his professional services within the limits of a fee schedule.

Plaintiff was employed by Enbeef Health Associates (Enbeef), a group medical practice whose employees were all participants in the Medical Assistance Program. Pursuant to an agreement between Enbeef and plaintiff, plaintiff executed an IDPA "Power of Attorney" form, which authorized Noemi N. Borrillo, M.D., a principal of Enbeef, to bill the IDPA in plaintiff's name for patient services rendered individually by plaintiff. Plaintiff also assigned Enbeef his right to receive payment from the IDPA for medical services rendered by plaintiff and billed in his name. Plaintiff notified the IDPA of this agreement by signing the Department's "Professional Practice as Alternate Payee" form, which designated Enbeef as the payee for medical services rendered by plaintiff.

Plaintiff began working at Enbeef on September 16, 1983 and resigned from Enbeef two months later, on November 19, 1983. During his employment with Enbeef, plaintiff gave medical care to 553 patients and Enbeef billed and received payments from the IDPA for these medical services rendered by plaintiff. Shortly before his resignation from Enbeef, on November 4, 1983, plaintiff terminated his arrangement with Enbeef by notifying the IDPA, in writing, that the power of attorney he granted to Enbeef was revoked. When plaintiff left the employ of Enbeef, he did not take any patient records with him, nor did he maintain his own private records.

On December 6, 1984, the IDPA notified plaintiff that he had been selected for an audit of the records of the 553 patients he treated during his employ with Enbeef. Plaintiff was notified that he was required to submit 344 patient records to the Department auditors. Pursuant to Department policy, the auditors would examine the 344 produced records for billing discrepancies and then extrapolate this amount over the entire 553 patient record universe. Plaintiff informed the auditors that he left the requested records with Enbeef upon termination of his employment there.

Plaintiff did not produce any of the 344 requested records to the IDPA. The auditors maintained that it was plaintiff's responsibility to maintain and produce the records and, therefore, made no attempts to gain access to the records from Enbeef.

Ms. Little, the department auditor, conducted the first audit without any of the requested records. Since no records were produced to substantiate the services billed to the Department, the Department sought to recover the total amount paid for services rendered by plaintiff during the audit period. Pursuant to the first audit, the IDPA sought to recover from plaintiff $15,932 in overpayments.

Plaintiff requested an administrative hearing on the Department's determination. At that hearing, held on August 14, 1985, plaintiff's counsel appeared before the hearing officer and tendered 64 of the requested records to the Department. Plaintiff's counsel further requested the hearing officer to issue subpoenas to Enbeef for the remainder of the records. Over the objection of the Department, the hearing officer issued the subpoenas and set a return date of October 24, 1985.

The subpoenas were served on September 30, 1985. On October 24, 1985, the parties appeared before the hearing officer to receive the subpoenaed records from Enbeef. However, none of the parties subpoenaed appeared at the hearing and no records were tendered pursuant to the subpoenas. At this hearing, plaintiff's counsel announced that he would pursue enforcement of the administrative subpoenas through the circuit court of Cook County. The administrative hearing was continued to December 5, 1985.

Meanwhile, Ms. Little, the Department auditor, conducted a re-audit utilizing only the 64 records tendered by plaintiff's counsel at the August 14 administrative hearing. The re-audit disclosed that out of the 344 records requested, plaintiff failed to produce 280 records. Because plaintiff failed to substantiate these billings with any records, the Department sought to recover the full amount paid in these 280 instances. The re-audit further disclosed that the 64 records produced contained 18 instances of failure to specify services rendered for which billings were made and 26 instances of misuse of procedure billing codes. The auditors then took the total dollar discrepancy between the audited sample of records and the total services paid and extrapolated this sum over the universe of 553 records. The re-audit disclosed a total discrepancy of $15,118.11, for which the IDPA sought repayment from plaintiff.

The administrative hearing was resumed on December 5, 1985. Between October 24, 1985 and the resumption of the administrative hearing on December 5, 1985, plaintiff did not attempt to enforce the administrative subpoenas in the circuit court. Plaintiff did not offer any explanation for his inaction.

At the hearing, the IDPA presented the testimony of auditor Little, who testified to the procedure and the results of the re-audit. Ms. Little testified that she refreshed her recollection for her testimony with certain notes taken by her during two interviews with plaintiff. Plaintiff requested that the IDPA produce these documents, which the hearing officer denied.

On March 12, 1986, the IDPA issued a final administrative decision finding that plaintiff, as a participant in the Medical Assistance Program, had breached his duty to the Department to maintain and produce patient records in 280 instances. The IDPA terminated plaintiff as an IDPA medical vendor and ordered plaintiff to repay the IDPA the sum of $15,118.11.

Plaintiff filed a timely complaint for administrative review in the circuit court of Cook County. The trial court granted the IDPA's motion to strike a portion of plaintiff's reply memorandum for plaintiff's failure to raise the argument at the administrative hearing or in his initial memorandum submitted to the trial court. The trial court affirmed the decision of the IDPA terminating plaintiff as a medical vendor and entered a monetary judgment against plaintiff in the amount of $15,118.11. Plaintiff appeals.

I.

Plaintiff argues that the trial court erred in striking an argument contained in his reply memorandum. The argument asserted that the Department's "Professional Practice as Alternate Payee" form established separate rules regarding maintenance of medical records for participants in the Department's "alternate payee system."

The law in Illinois is well-established that, if an argument is not presented in an administrative hearing, it is waived and may not be raised for the first time before the trial court on administrative review. (Village of Hillside v. John Sexton Sand & Gravel Corp. (1st Dist.1983), 113 Ill.App.3d 807, 69 Ill.Dec. 612, 447 N.E.2d 1047.) The rule is particularly applicable where, as here, the issue is one of construction or interpretation of the statutes and rules that most directly concern the agency's operations. Skale v. Department of Public Aid (1st Dist.1987), 165 Ill.App.3d 776, 780, 117 Ill.Dec. 398, 520 N.E.2d 749.

After careful review of the record of the administrative hearing and plaintiff's initial memorandum submitted to the trial court, we find that nowhere did plaintiff make the argument stricken by the trial court from plaintiff's reply memorandum. Therefore, plaintiff waived that argument. Accordingly, we find that the trial court properly struck the argument contained in plaintiff's reply memorandum.

II.

Plaintiff's next assignment of error is that the trial court erred in affirming the IDPA's decision to terminate his participation as a dispenser of medical services in the Medical Assistance Program. Plaintiff argues that, in the context of a group practice, it is the group practice, not the individual practitioner, that has the duty to maintain and provide records to the IDPA.

With the enactment of the Illinois Public Aid Code, the legislature enabled individuals such as plaintiff to participate in the Medical Assistance Program. (Ill.Rev.Stat.1987, ch. 23, par. 5-1, et seq.) Section 5-5 of the...