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Hoffman v. Dept. of Registration & Education





APPEAL from the Circuit Court of Cook County; the Hon. ARTHUR L. DUNNE, Judge, presiding.


Rehearing denied September 22, 1980.

Defendant, the Illinois Department of Registration and Education (Department) suspended the chiropractic registration of plaintiff Frank A. Hoffman, D.C., for 15 days. Hoffman was suspended because of receiving Medicare kickbacks. Hoffman brought an administrative review action (Ill. Rev. Stat. 1977, ch. 110, par. 264 et seq.) in the circuit court of Cook County, challenging his suspension. The circuit court reversed the Department's decision and the Department appeals.

The parties raise four issues on appeal: (1) whether the circuit court had jurisdiction to entertain plaintiff's complaint; (2) whether the director of the Department exceeded her statutory authority by overruling the Board's determination; (3) whether plaintiff's misconduct constituted "dishonorable, unethical or unprofessional conduct of a character likely to deceive, defraud or harm the public" under section 16 of the Medical Practice Act (Ill. Rev. Stat. 1975, ch. 91, par. 16a4); and (4) whether the Department's disposition was contrary to the manifest weight of the evidence.

Our disposition of this case concerns only the first issue. Accordingly, only a short account of the case is necessary.

On April 28, 1977, the Department filed a complaint against Hoffman seeking to suspend or revoke his certificate of registration. The complaint charged Hoffman's violation of 42 U.S.C. § 1395nn (b)(1) (1976) (receiving Medicare kickbacks) as grounds. On March 31, 1977, before the United States District Court for the Northern District of Indiana, Hoffman had pleaded nolo contendere to the charge contained in count 18 of a 25-count Federal indictment. This count charged plaintiff with receiving kickbacks from Chem-Tech Co. in the amount of $425 for the month of September 1973. The court imposed a one-year prison sentence but suspended execution of the sentence. Plaintiff was placed on probation for one year, fined, and ordered to make restitution. On motion of the government, the remaining counts of the indictment were dismissed by the court.

The thrust of the resultant disciplinary controversy involves conflicting characterizations of Hoffman's misconduct. Briefly, Hoffman obtained blood and tissue specimens from patients who were eligible Medicaid and Medicare recipients. He prepared and referred these specimens to Chem-Tech Laboratory, a licensed Medicare and Medicaid provider. Chem-Tech received Federal reimbursement for diagnostic testing it performed on the specimens. Certain payments were then made to Hoffman from Chem-Tech. The Department characterizes the payments as "kickbacks." It asserts that plaintiff received these monies knowing that Medicare and Medicaid coverage was limited to chiropractic services but not any laboratory service or preparation on his part. Hoffman, on the other hand, asserts the monies were "handling fees" intended as payment for the professional component of handling the specimens. He concedes a "technical" violation of Federal law, but denies any criminal intent or willful misconduct which would warrant professional disciplinary sanctions.

Procedurally, Hoffman received an administrative hearing before the Medical Disciplinary Board of the Department (Board). On July 6, 1977, the Board filed written findings: (1) that Hoffman pleaded nolo contendere to a Federal misdemeanor charge of receiving Medicare kickbacks; (2) that these actions did not constitute violations of section 16 of the Medical Practice Act (Ill. Rev. Stat. 1975, ch. 91, par. 16a4) (unprofessional conduct). The Board recommended to the director that Hoffman's license remain in good standing.

On January 12, 1978, the director of the Department entered a written order remanding the cause to the Board for reconsideration with directions. *fn1 On March 1, 1978, the Board, upon reconsideration, reaffirmed its recommendation.

On February 1, 1979, the director entered a written order rejecting the Board's findings of fact, conclusions of law and recommendation. The director suspended Hoffman's license for 15 days. As required by the Medical Practice Act (Ill. Rev. Stat. 1977, ch. 111, par. 4449), the director filed specific written reasons for rejecting the Board's recommendation with the Secretary of State. In part, she stated that:

"[I]t is my opinion that a review of the complete record to date in this matter indicates that Frank A. Hoffman, by his conduct (well detailed throughout the transcript of the administrative proceedings before the Board), subverted both the letter and the spirit of the law governing Medicare payments to his personal advantage. Such law provides that requests for Public Aid reimbursement for services rendered to Public Aid patients must be submitted by the person who actually rendered the services. In the matter with which we are concerned, an independent laboratory actually performed certain professional services, billed the patients for them, received Medicare reimbursement, and in turn remitted portions of such reimbursement to Hoffman as so-called `handling fees' * * * Hoffman received these payments of Public Aid funds from the laboratory without making any public record of such receipts as required. I can see no reason why Hoffman could not have transacted his billing practices in an `up-front' manner, rather than hiding them from patient, governmental and public scrutiny, as he chose to do. Simply stated, Hoffman knew, or should have known that his actions in this regard violated the law."

Notice of the February 1, 1979, order was served on Hoffman and his counsel on February 6, 1979, by certified mail. On February 9, 1979, Hoffman filed a motion to vacate and set aside the director's order. On March 13, 1979, the director denied this motion.

On March 28, 1979, Hoffman filed a complaint for administrative review of the March 13, 1979, order. On May 24, 1979, the Department moved that the circuit court dismiss Hoffman's complaint for failure to timely file it under the Administrative Review Act. The court denied the motion to dismiss and subsequently reversed the decision of the director as contrary to the manifest weight of the evidence and law.

We find that the administrative review complaint was not timely filed and that the circuit court was without ...

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